Sensex Jumps Over 500 Points, Nifty Tops 23,800; Banks Lead, Pharma Drags | CNBC TV18

Added: 2026-05-22

[00:00:03]Good morning. You're with us here on trading hour. We're coming to you live from the CNBC TV8 Motila studios. I'm Hormas Pataka and since it's Friday, Ritu Singh is joining with us here in Bombay. Ru good morning. Well, >> good morning Hormas.

[00:00:15]>> Been a very uh well, what you can say it's been a very volatile week but you know coming into today's session the nifty had gained a precious 11 points for >> precious 11 points.

[00:00:23]>> Precious 11 points but then of course it's a good start today. We are back at the higher end of the range as of now at that 23300 to 23800 but we are now at uh at the highest point of the day 125 points higher. Still continuing to hold on to those levels. Still of course not enough conviction to cross and sustain 23800 but the bulls would at least hope that these gains sustain and we end the week on a high.

[00:00:47]>> I hope so. And you know Friday is a good time to end the week on a green industry is looking pretty good today. and the banking pack that's doing pretty much all of the heavy lifting in trade. Uh up about 590 points. That's the Bank Nifty.

[00:00:59]Uh the IT pack was seeing some weakness in trade earlier, but now it's seeing some gains about 92 points higher on the IT pack as well. The advanced decline ratio tells you that almost one and a half stocks are advancing. That's uh you know 17 80 stocks are advancing for the rest of the stocks that are declining on the national stock exchange. So the market setup looks good today. uh you know in terms of sectorally what's doing well apart from the banking pack is uh you know the metal pack the auto pack uh you know even the IT pack now back in the green but what's dragging the markets lower uh is a pharma pack realy and energy but let's uh as always go across to Hormas uh to put a spotlight on the top movers in trade >> and the bulls will definitely be hoping that we at least manage to end at the highest point of the day if not more because as has been the trend over the last six sessions the index has been managing to test both the lower end and the higher end of the range but is only managing to close between the 23600 and the 23700 zone. So at least the bulls would hope that that this level at least sustains if we don't manage to cross 23800 as well. But the nifty bank is the one as Ritu highlighted that's doing the heavy lifting today. And uh just like the nifty the nifty bank is also trading both the lower and the higher end of its range 53,000 to 54,000. Right now it's at the higher end of the range at 54,000. And it made an intraday low of somewhere close to 53500 today and since then has continued to move higher. And it is the heavyweight banks that are putting their hand up today or HDFC Bank, ICICI Bank gains of anywhere between 1 to 2%. Kotak Bank too, Access Bank is the outperformer here 2% higher now on the stock. But earnings reactions today are more predominantly on the negative side more than the positive ones. Engineers India is well off the high of the lows of the day. At one point the stock was down around 10%. Max Healthcare though is the top index loser today 6% lower. Sun TV down a similar quantum and Orurbind the Pharma after its earnings call is down 6% as well.

[00:02:50]Take a look at some more earnings reactions today. They too are on the negative side barring Honasa consumer that stock is up 5 a half% is doing well from jumping past its issue price now 380 on the stock. Wellspun and LG Electronics LG Electronics is now down well over 15% from its listing price which was over 1,700 rupees. There were a slew of block deals that took place earlier in the day before market open and JW cement was one such name. It reported results yesterday. The stock did well and now it's extending those gains after the block deal 9% higher.

[00:03:21]Now PTM is seeing a negative reaction after the block deal 4% lower and Pine Labs not significant because the stock has already corrected a lot from its issue price which is well over 220 rupees. The news makers in today's session central bank of India well the OFS has opened for non- retail today 5% lower on the stock. MTA Tech now well over 200% higher for 2026. Another order win for the stock. Another order win for VAT Techabbag as well. And lastly, stocks at 52-W week highs in today's session. Sandhar Techch D development.

[00:03:50]Both of them reported results yesterday.

[00:03:52]And Traveni Turbine 2, three and a half% higher at a 52- week high.

[00:03:56]>> All right, Hormas, thanks very much for running us through that list as always.

[00:04:00]Max Health is the top nifty loser today.

[00:04:02]That follows a subdued fourth quarter print. The top line missed what the suite was estimating. The clinician costs spiked over 200 basis points that tracked the margins. So let's go across to Aka Batra for the fine print of these earnings. A >> well yes definitely a subdued quarter which has come in for max health.

[00:04:17]Revenue was up around 10 odd percent.

[00:04:19]Street was anticipating around 14% growth. Margins uh came in under pressure on a year-on-year basis but it was better than at least what the street was anticipating at around 25%. And profit was just about higher by around three odd percent. Street was anticipating over 415 odd crores in terms of profits. Now the share of oncology has dropped this quarter to 21% from 26% and 24% sequentially due to the discontinuation of select chemo drugs for institutional patients. This is something that took place last quarter as well. So it's extended into this quarter. The margins were lower because clinician costs have risen around 230 basis points year. Iita per bed uh improved on a year-on-year basis uh or rather on a Q1Q basis but it was flattish year on year. Uh other segments did well. So Max Lab Labs were up around 14%, we had Max Home which was up around 30 odd% in terms of revenue as well. Uh overall this was uh the performance for the company this time. The street seemed to be a little disappointed in terms of the revenue as well as the marginal performance.

[00:05:22]>> Thank you for that update there. Max Health as we just highlighted the top loser on the index today 6% lower on the stock. Now the big event to watch today though is the RBI board meeting to decide on the surplus transfer to the government for FY26. Now Ritu has hopped over to the other wall and she's here to tell us all the important highlights from that. Ru >> well the street is pegging the FY26 surplus transfer around 3 lakh cr rupees with estimates that range anywhere between 2.7 lakh crores all the way to 3.6 lakh cr rupes. And if that happens, it could mark yet another year of extraordinarily large payouts from the central bank to the government. Now, the trend has already been striking if you look at it. You know, from just over 30,000 crores in FI22, the RBI surplus transfer has increased each year since to hit a record 2.68 lakh crores for FI25. So, what is going to drive this massive transfer this time around? Of course, the RBI's earning profile has strengthened significantly through FI26.

[00:06:20]The bank benefited from gains on foreign exchange interventions, higher returns on its large foreign asset holdings, elevated global bond yields through much of FI26 also boosted the income on RBI's forex reserves, while higher interest income from government security holdings. All of that would have added to the surplus. Now, a quick explainer on how the dividend math actually works.

[00:06:40]The RBI earns its money from one forex reserves of course uh the government bond holdings, dollar sales, the liquidity operations and from that then it deducts the expenses which are relatively smaller such as currency printing, operational cost, the staff expenses and monetary uh you know operation costs. But before transferring the remaining surplus to the government, what RBI does is set aside money as a safety buffer which we call the contingency risk buffer or CRB. In simple terms, RBI surplus equals income minus expenses minus the risk provisions or buffers. And the CRB, that is the key variable that markets look at because under RBI's economic capital framework, this CRB can reach between 4 and a half to 7% of RBI's total balance sheet. The higher the CRB, of course, the lower the payout to the government and the lower the CRB, the higher the surplus transfer. Now last year RBI had set the CRB at 7 and a half% which is at the upper end of the range and it still delivered a record payout. So the markets will now watch whether that continues uh you know with a conservative buffer or RBI is able to release more surplus to the government this year and that payout matters immensely for the government's finances for FI27. The government has budgeted about 3.16 lakh crores and this is combined dividends from RBI from all the PSU banks and financial institutions.

[00:07:59]Now the RBI transfer itself has become very critical uh as a source of non- tax revenue for the government. It improves the cash balances of the government. It helps contain the borrowing pressure and it of course creates more fiscal space for capex and for spending. Now in FI25 for instance the RBI dividend accounted for about half of the government's total non- tax revenue. So a large RBI payout therefore does more than just boost the coffers. an important number that the markets, economists, investors, all of them watch very keenly.

[00:08:28]>> We'll all be watching for that very keenly as well. Of course, I stand corrected. This was not the highlights.

[00:08:34]They were the expectations from the RBI board meeting uh today. Ritu, thank you for that. In fact, the currency has now appreciated past the mark of 96. So it's the fourth day uh of after 4 days is the rupee is now below 96 against the dollar and it's now appreciated nearly a percent from that record low of 9696 that it had declined to on the 20th of uh this month to take a short break on the other side back with the management of Nuclear Software to talk about their fourth quarter results and the road ahead. Stay tuned.

[00:09:38]I continue to remain at that 23750 mark on the index but the currency is the talking point right now. 95 97 is where we are. So almost a percent is what the appreciation at the currency is. But of course there are some names that are continuing to not do very well. Orbind the Pharma has extended it losses now.

[00:09:56]It's down around 5%. Wellspun Living is down a similar quantum. Glenmark is down a similar quantum as well. And well PTM of course after the block deal not doing very well. Of course there are some names that are doing very well though.

[00:10:08]Dixon Technologies has moved to the highs of the day 5% higher on that stock. So that continues to do very well for itself. Astral after its results is recovering some of those losses 4% higher here as well. And well new age names like Misho. So of the new age companies doing well. Misho has also put its hand up as well with >> uh there are other new age companies.

[00:10:27]You also have Pine Labs uh that has jumped up in the last hour of trade. In fact if you pull that up uh it's it's up almost more than 2% now. A lot of that gain coming just in the last hour.

[00:10:36]Growth Industry is another stock that is doing pretty well. Jindel saw uh you know action construction uh Concord biotech AB Capital as well after that fund raise. So yeah these stocks are doing relatively better in the last hour of trade. So uh let's see if we can go across to Manisha now to get a check on what's happening in the bond markets always or the commodity space this time around. Uh Manisha always an interesting space to track. Well, yes, commodities are bonds, both of them. But we're talking about copper right now because we've seen prices continue to gain even as most other commodities are closing this week slightly into the negative.

[00:11:11]Not the case clearly for metal prices.

[00:11:13]Aluminum is trading higher and so is the case with copper. So on the week we are 2% up for copper. For this month, it's 4 1.5% off again and for the year till time it's 11 12% up. If you look at the last 12 months more than 30% up is how the copper has been. Various reasons for that really the the prices are trading very close to its all-time highs. One it is about mine disruptions in various major producing countries like Peru or Chile for that matter. The long lead times it takes 17 years for a mine to be started to be discovered and till the production comes in. So that's another thing that continues to support copper prices and in last 20 years no new mine has been found. And then you have declining irides. The reason that you have seen miners go further down into the earth and that increases cost and of course decreases cost efficiency. It also is about sulfur shortages that we have seen because of the west Asia conflict, the smelter pressures, the AI boom, the EV, the renewables, all of that is where copper is used and we are looking at supply constraints but the demand has been on the positive side supporting the prices therein. So when you look at the price forecast for copper going forward, it mostly is for the higher side. The first quarter of this year has seen all-time high in case of copper at around $14,800 a ton. And that's exactly where the markets believe uh you could be looking at copper prices yet again. Trading economics puts copper to 14,000 to $15,500 a ton for this year. You have UBS suggesting that 13,200 is an average we could be looking at. JP Morgan puts it lower to 11,200 and Kodilko Kachilko for that matter says $12,000 a ton is where we could be looking at prices averaging so much on the higher side continuing for this year as well.

[00:12:52]>> All right Manisha, thanks very much for bringing us that update. We'll slip into a short break with that. But up next, we're going to talk more on the markets.

[00:12:58]So stay tuned.

[00:13:15]Welcome back. You still tuned into Trading Hour. The market's holding on to those gains. 23760 is where we at. Let's see if we can uh you know, perhaps get to that 23,000 or 24 uh 2400 mark. I mean, that that's the next key one to watch out for. Uh you know, bit of a recovery again in it. It's going up if you pull up some of those stocks lending support to the frontline index as well.

[00:13:35]uh uh you know names like ITC of course Maxel Bharti these are on the downside but the banking names are doing well it uh is picking up as well Reliance the heavyweight alone adding uh you know quite significantly to the nifty as well uh but uh hormas the the broader markets uh they you know they also seem to be doing better than some of the volatility we've seen through last week >> the broader markets have been fairly okay compared to the index the index has continued to meander in a range but of course the broader markets also because of the fact that there is significant stocks stock specific activity that take that is taking place there. Look at HFCL and the stock that is already up 100% this year. That's that's adding another 3% in today's session. And Kane's Tech is seeing some recovery from 52- week low. That's up another 3% today. But of course, you have to mind the fact that the stock is in the FNO ban. So, uh no new positions here on this.

[00:14:27]>> But also, you know, look at the rupee.

[00:14:29]It's gone below 96 now. I think uh psychologically that's that's a good level. And you know all of yesterday when we were seeing that fast slip towards 96 and then 97 there was a lot of intervention from RBI finally it was not on the fringes. There was quite a bit of intervention from RBI. Now you're seeing rupee actually make some recovery. 95.99 is where we're at with crude prices also seeing some improvement. Uh Mangla Malu joins us now to bring us the latest trends from the FNO space. Now Mangalam over to you.

[00:14:56]>> Well since you guys have been speaking about the market you know it's been a recovery it's on a recovery mode. Let's see whether the nifty does cross past this current congestion that we're seeing between 23 750 to 23850 or thereabouts or not. The good part is that the nifty bank is playing a fairly decent knockout here. Midcap index not participating in terms of the gains that have come by but the advanced decline tells you that far more number of stocks are on the green side as against the red one. Uh it's a large part of that has to be attributed to the macros. You guys have been speaking about the rupees strengthening past that 96 mark. Look at oil that too is contained at around 105 sub below $105 per barrel. Uh the Nifty faces some technical resistance right now and that's the only concern. It's above the 50-day moving average of 23705. It needs to close above that point number one. And if it does close above that then the next level to track will be the 23900 mark which is the 20-day moving average. So all said and done despite today's up move are we out of the woods? Perhaps not. This 23700 to 23900 zone still remains a bit of resistance. the Nifty Bank which itself is powering the Nifty ahead today around that 54,630 mark and 54,600 54,700. So between 54,600 to 54,700 we have both the 50 and the 20-day moving average. So while it's moved higher, has it gone past those congestion zones yet? Perhaps not. So which is why those option writers are fairly skittish on the upside for the front line index as well. So the good part is that put writers are active.

[00:16:19]They tell you that the base of the market has moved higher. 23700 put and the 23750 put both of them tell you that between 23500 to 23600 now we will see some support. So that's moved higher from 23300 and 23400. So about 100 points is where the support has moved higher. The congestion still remains which is why 23800 call writers are fairly active playing for some supply coming in around that 23 900 to 24,000 mark itself. But a lot of stocks are caught on the wrong side when it comes to shorts. So Dixon, Keynes in particular doing well in today's trading session with a lot of shorts unwinding their positions. If stocks are something to go by and if the nifty manages to cross past the current congestion and a lot of the shots which are present in the nifty as well will have to cover their positions and that will lead to a bit of a meltup but for that the macros have to change.

[00:17:06]>> Indeed the bulls would be hoping for that. Mangalam thank you for setting that up from the FNO desk. Shifting focus now to corporate conversations.

[00:17:14]Then nuclear software reported their first decline in topline growth since the second quarter of FY25. Overall the results were a miss. Profits were down.

[00:17:22]EITA was down as well and the company closed the year with profits of under 120 cr compared to 160 crores that it reported in FY25. Let's discuss the numbers and what lies ahead with the CFO Ashokumar Bhura who is now joining in.

[00:17:36]Ashoke good morning. Thank you for taking time out. You know there was a revenue growth of 5.3% for the full year but there was some pressure on your margins. So let's get two numbers out of the way straight away. What is the kind of revenue growth that you are penciling in for FY27 and the pressure that you have seen on margins? Does that recover in FY27? What are the kind of margins that you are anticipating as well?

[00:18:01]>> So as a policy we don't give any forward statement. So I will not be able to uh diverge on the numbers which are looking in F27.

[00:18:11]However I can share what we are doing and uh uh what you can deciper out of that and uh indicatively I'll share what we are doing on this. If we talk about margin structurally there is no issue.

[00:18:25]It is more of the regulatory thing or the legal thing law related to labor law which has come up and uh has impacted PL which is true for the industry as well.

[00:18:38]Lot of industries you will see got impacted because of this new labor and that is what is impacting us uh also in some fashion. However, if I talk about structural margin thing there is no such uh problem. Uh we are sitting on good order book. uh it is robust and if you talk about new logos which we garnered in 2526 we have we have garnered few good logos uh in FI26 much better than what we did in 3420 >> but Ashok Ashok what's the number you know with with these good logos the good order book what is the FI27 guidance both on the margins and the revenue >> so we will not be able to give future looking guidance I am sharing I think what as a company we are doing fundamentally we continue to invest in AI ready products and enhancing our capability of on AI and AI talent. So that is what we are looking at because lot of our customers are looking for AI innovations and addition in the products and we want to be ahead of the curve and that is where we are investing. So in short term you might see some pressures on margin because of this >> but however in the long run definitely that has to uh that will pay off.

[00:19:55]>> Okay. You may not want to give us a number Ashok but uh will FY27's revenue growth be better than what FY26 was? uh we we are sitting on a robust order group which is almost uh 50% better than the previous years and hopefully that should play out in coming years and uh we look forward to uh positive uh with the positive out >> Ashok uh could you spell out what the order book is now and uh you know uh the growth in the product and business services as well uh what that's like and if the >> if I talk about our closing order book it will be in the tune of above 1,000 crores.

[00:20:34]>> Okay.

[00:20:35]>> If I talk about the similar number last year, it was somewhere around uh 636.

[00:20:40]>> And just a quick clarification since you said uh you know it was the labor cost that played out uh you know in your numbers for the quarter uh you know are you expected to take a further hit in the coming quarters? Has it fully been absorbed or you know what would you be able to guide this rate?

[00:20:54]>> It is it is fully absorbed and there's nothing in addition we are looking at coming quarters because of that.

[00:21:00]>> Yeah. The last time the management had flagged off the fact that there are elongated deal cycles that are taking place and they had flagged that off as a headwind for the company. Now those delayed deals out of those has any of them moved towards signing in the fourth quarter have you signed any of those deals and does this decision-m cycle still continue to remain elongated uh even in this quarter?

[00:21:26]Yeah, it just continue to remain because a very segment product and it takes lot of time for decide and even if any customer wants to move it is difficult for them also to move on because of uh lot of impact on their customer and that is why it takes a little longer time. In quarter four we have been able to uhify quite a few deals out of that which we were discussing in the uh the last year and that is where I'm saying our group was first and then which is much heavier than the previous >> got that but could you give us a sense of you know how elongated are deal cycles actually getting I think from some of the your call takeaways you were saying the deal conversion cycles are as long as 8 to 18 months Is it getting any better? Is it getting any shorter? Any any any you know clarity on this?

[00:22:24]>> The name of the customer but we have been able to close uh dealing even 6 weeks earlier.

[00:22:33]>> Okay.

[00:22:33]>> So it depends on customer to customer and how big they are. Like say for example if a customer is a green chain customer then obviously takes a small cycle but if a customer is already sitting on a loan then obviously takes little more time to right >> uh decide and and close >> right Ashok pleasure having you today a bit of an audio issue with you but thank you for sparing time and joining us today wish you good luck for uh the rest of the year as well the management of nuclear software the stock not doing very well today 5% lower Now uh as we speak nearing the lowest point of the day. Take a short break. Continue our conversation on the markets with George Joseph from ASK Investment Managers.

[00:23:49]Welcome back. Well, a lot of these broader market names now are extending their gains. Elicon Engineering is one of them. 5 a.5% higher on that stock as well. And Hunasa consumer is now up 7% and that is at a 52- week high just 60 rupees above its issue price but is at a 52- week high. The other big news announcement that came in was with regards to Dalmia Bharat and its deal with certain cement assets of J Praash Associates that is going to acquire from the Adani group. Sudaran is here with the fine print of that. Sudaran.

[00:24:21]>> So finally Daly Bharat has got what it was trying for a long time. They had tried earlier also but this time they are getting part part assets of JP associates. So four plants total one of them is in Madhya Pradesh and remaining three are in Uttar Pradesh and deal value is done at $67 per turn and enter enterprise value is 2850 cr rupees.

[00:24:42]Financing it will be done via debt and internal acres and transaction is expected to be completed within 2 weeks.

[00:24:48]So what all Dalmiah will get? Cement capacity of 5.2 2 million tons perom clinker capacity of 3.3 million tons peranom and thermal power capacity of 99 megawatt these things they are going to get from JPO deal now why it is good for Dalmia Bhad so it will give them access to central markets and makes them a pan India player pan India cement company like other companies ultrarech or say to an extent shri cement and this will take total capacity to as high as 66.7 million tons perm and that would happen by Q3 or Q2 of FY28. So overall, it's looking good and that's the reason the stock is also reacting positively.

[00:25:27]>> All right. Uh S Daran, thanks very much for bringing us that update. Uh let's now go across to George Joseph from ASK Investment Managers who's joining us now to discuss market fundamentals and his top sectoral picks. Uh George, thanks very much for your time here since our colleague was just talking about the cement space. Any thoughts there? I think you're overweight on the construction space overall. uh do do you see further upside for cement company margins and any thoughts on this Dalmia uh JP deal that's been announced?

[00:25:58]>> So uh if you look at uh we have been what we have been telling our investors uh last whole year is that you know we are in a cyclical rally uh which started in 2020 and you know that continues. uh energy crisis has only increased our belief that you know the uh inflationary trade which started in 2020 is going to continue. So cement sector also is part of the cyclical sector but nevertheless the energy crisis which has been created by the almost uh state of homeless issues and all those things has only put more pressure on the margins because cement sector as such is a highly power inensive sector. So we are we are constructive on the overall cyclical sectors be it engineering, capital good, cement, uh auto and also uh banking and financial services along with commodities. So that is a pack which we like. Now we started liking the IT sector as well.

[00:26:59]>> Oh that's interesting. You start to like the IT sector. Well, what drives uh your optimism on this uh George? because uh the situation on ground has not changed materially barring the fact that the stocks have corrected significantly and there is some valuation comfort uh for this uh you'd want to know what's what's driving this uh optimism uh for you on it.

[00:27:23]Yeah, interestingly uh you know what as a fund manager I have been trained over the last uh 25 years uh to focus on cash flows and valuations uh and what market does later on is is all uh you know not in my hands. So when I look at from that perspective fundamentals, valuations and uh and also the uh structure at which you know the sector is poised there are a lot of negativities around you know the uh anthropic announcement and because of which the stocks have corrected as you rightly mentioned nothing has changed on ground. The companies are delivering results as usual. There was a lot of expectations saying that you know the companies will not exist going forward. You know we are of the opinion that these are all IT services companies. Technologies are under disruption and Indian companies are nowhere near in the technology space. They have technology services companies which handled companies to improve their technology uh offerings and that's where all the technology capability in various enterprises consulting as well as handholding is something done by our Indian companies and you know there is not going to be material difference in the whole scheme of things as technology is used more and more you also agree that you know the services revenues actually has to go up.

[00:28:44]So on one side people are worried about the technology services companies their repetitive jobs will go away and so and so forth but at the same time you will agree that you know the valuations are really undemanding with the concerns emerging and the growth prospects from the AIE revenues AI transformation is definitely on cards and you know that is something as a new business which will come for these companies but AI high lead revenues no visibility is there that's where the whole uh concerns are at this point and so when you get these concerns for highquality businesses like IT sector strong cash flows valuations you know we are we are turning we have turned positive and you know we have been upping the investments in those space >> I just had a followup to this uh George you know a doomsday scenario aside but you know there have been updates that anthropic and uh the all all of the other AI companies have been putting out which do a lot of things that the Indian IT companies are already doing. SAS something the the SAS the SAS bit yes and but you know so are you trying to say that valuations and cash flows are the only reasons why uh you are you've turned positive and if you have where within this have you turned positive are it the large cap IT names which are the services solutions providers or within the ER&D space uh and so on where where are you increasing your allocation within IT >> predominantly the large large cap ones you know because you know they have the capability of investing into the new newer set of requirements the clients have and having said that you know the point which you're making is very interesting so most of these technologies providers be it claude or you know all of these companies they can't be system integrators so nowhere in history it has happened that way that you know mainframes came in IBM mainframes came in you know the companies of Indian uh you know Indian context the IT services companies were the ones which will implement and do the system integration for enterprises. So that will continue for these as well.

[00:30:59]They will try out you know the technology providers they want to get a feel of it how it will get implemented.

[00:31:05]they will try out some of the services related uh aspects and then you know they will uh engage with uh uh Indian IT services companies or IT services companies in general to provide these solutions and take it to the enterprises [clears throat] you know enterprises are very very complex >> uh you know just very quickly since we're running out of time these specific names that you've exited parti Titan Baj Finance Samardana Madasan you know these have done well recently ly any particular reason I mean is there no valuation comfort here no upside you see >> the markets markets have been changing and you know at ASK you know we are running very very concentrated portfolios in the BMS uh and alter investment fund uh basket so you know the choices are uh made in such a way that where we see the valuation comfort is very high the growth prospects are reasonable and also we are not paying through the roof for various uh aspects. So margin of safety, fundamentals, opportunities at scale, you know, all these things when we look at from that context, it looks uh you know the 20 stocks what we identify will be always uh have some room for addition and deletion and it's not doesn't mean that we are negative on the telecom space or something like that but we we see some other better opportunities in place in the context of markets correction.

[00:32:34]>> All right, George, we'll leave it at that. Thanks very much for your time here today. We appreciate it. And on that note, we'll also slip into a short break. But when we're back, we're going to be back with a Wakefit management to discuss their fourth quarter numbers with Chatanya Ramaling Gora.

[00:33:03]Well, let's shift focus to Wakefit Innovations. It was a strong fourth quarter with sharp improvement in margins and a swing to profitability that was driven by robust growth in mattresses and retail. Let's get the performance and the outlook risks with the co-founder and executive director Chattan Ramaling. Chattan always a pleasure to have you and good to see you here. Uh you know now that you've swung to profitability start by telling us how sustainable that is and any guidance you could give us on the numbers for FI27 the top line and the bottom line.

[00:33:31]>> Sure. Nice to be here. Thank you. So like I [clears throat] was uh like I've already mentioned uh WakeFIT has been a largely profitable company in the last 11 years of our existence except for the two years when we went into the green field project of setting up one of India's largest furniture factories. uh so we've been profitable even in the run-up to the IPO but what is now sustained is that we've also turned pat positive once more and uh we will be on that journey continuing but in [clears throat] terms of where we are and projections for the coming year uh the two major things that are impacting where how we think about it is because of the inflationary environment will consumers continue to invest the same amount in discretionary products like ours and second one is as the price increases happen because of the raw material prices going up anywhere between 30 to 60% 30 to 80% over the last 3 months. Uh will that sustain or not? How much of it we should absorb as a company and how much we should pass it on to end consumers? That's a fine line that we are trading. So between these two despite these two we are still aspiring for a growth number of more than 20%. But we should see where we'll end up despite our best efforts.

[00:34:44]Chatanya since you uh answered what we were going to ask you, you may well as may as well answer that as well. What is what are you observing on ground with regards to what you just highlighted right the input cost inflation that you are seeing how much of it is uh impacting you as a business have you undertaken price r price price increases and if you have by how much and what has been the consumer response to all of this the rising inflation inflationary impact and any potential price hikes that you've taken.

[00:35:14]>> Sure. Sure. So the price hikes uh we took one uh measured price hike in March and another measured price hike in April uh both of which anywhere between 4 to 8% for different SKUs averaging about 5 to 6% uh aggregate each of the hikes but it was not done just by us pretty much the whole industry has taken in the organized segment at least has taken very specific measured price hikes to the similar quantity Uh the good thing is that we have always been buying raw materials when the prices are low. These are not perishable raw materials. So we are enjoying some of the benefits temporarily. Uh but if the crisis extends for a few more months then we will also end up seeing that impact in our margin.

[00:36:03]>> But having said that given that we are a multi-channel and multi-category company which means our website and our coco stores are the most profitable. Our coco stores have nearly double the average order value of the online. So we are able to find some balance to try and mitigate the impact of the risk.

[00:36:23]>> Chatanya u you know we've been asking you this question for the last few quarters and we're seeing the revenue mix also uh you know increase when it comes to furniture. That's that's a high margin business for you a focus area for you. Now it's almost a third of your total revenues. How much further do you expect it to go from your how you know how is this mix evolving quarter on quarter?

[00:36:43]>> Uh I think quarter on quarter would probably be a very short view to take because >> specific sale events uh specific festivals etc might move things up and down but over the next four to 5 years we do think that furniture can go up to nearly 40%.

[00:36:59]uh because that is a very large unadressed unorganized fragmented market and uh we have very very good founding blocks in terms of research and development large facility supply chain our own uh that will enable us to continue to grow there. M what about same store sales uh Chatanya what were they like in uh the fourth quarter and if you could say what you closed out the full year with and what are you aiming for uh in FI27 considering all the headwinds that we are facing currently >> so in [clears throat] terms of retail growth we have delivered about 49% growth FI26 versus FI25 the whole year that means it is firing very very well depending on the different months same store sales growth has howard anywhere between late teens to mid20s. Uh that's also because our store network is relatively new and we only have about 139 stores as of 31st March. As it scales up, it might reduce to mid- teens or late teens, but somewhere in the future. Even today though, we are firing on all cylinders. And we also plan to open a large number of stores in FI27.

[00:38:07]>> What is that large number Chaitana that you're you know targeting to open for the year?

[00:38:14]We are aspiring to open more than 75 to 80 stores.

[00:38:17]>> 75 to 80 stores. Okay. You know uh briefly Chhattan in terms of average spend per customer, customer retention, the customer lifetime value, frequency of product purchase, any insights you could give us from what you've seen for FI26.

[00:38:32]Since these are not KPIs, we don't have the latest audited numbers. But to give you a sense, our C nearly 40 50% of furniture customers were customers of mattresses in the past. Nearly 20% of uh furniture mattress customers were furniture customers in the past. And repeat forms a large double-digit percentage of our monthly revenue. So that means we don't rely on one and done kind of customers. uh repeat the flywheel going where customers keep coming back from different parts of the home with wakefitit uh is a very much a big part of our CRM strategy to re reactivate customers and that's the reason focus on own channel because in own channel we get their phone numbers email ids we're able to interact more deeply and keep telling them about new launches price drops sales etc >> pleasure having you today thank you so much for sparing time and joining us wish you good luck for the rest of the year as well looking forward to having you more often on the show. We'll take a short break. Back with more on the other side. Stay tuned.

[00:39:47]The markets have moved to the highs of the day. We are back at 23800. Now the only question is whether that sustains or not. The currency continues to do well for itself. the broader markets too. But oil prices though from the dip of towards 102 back towards 105. We take a leave on this edition of trading hour from Ritu and me. Thank you for watching. Halftime report on the other side.