The changes in the domestic and global economy following the outbreak of the Covid-19 pandemic are altering the corporate profit league table in India. Reliance Industries (RIL), which topped the India Inc profit chart for more than a decade, lost out to State Bank of India (SBI) in the 2023-24 (FY24) April-June quarter (first quarter, or Q1). India's biggest lender reported a consolidated net profit (adjusted for exceptional gains and losses) of Rs 66,860 crore during the trailing 12-month (TTM) ended in June this year, ahead of RIL's TTM adjusted net profit of Rs 64,758 crore in the quarter.
White-collar hiring witnessed an 8.6 per cent annual decline in September, following a negative trend in sectors including IT, BPO or ITES and FMCG, a report said on Monday. On a month-on-month basis, however, there has been a growth of almost 6 per cent in job postings. In September, there were 2,835 white-collar job postings, down by 8.6 per cent compared to the same month last year when 3,103 jobs were posted, according to Naukri.com's monthly 'Naukri JobSpeak Index'.
There has been a sharp recovery in the headline corporate earnings in the April-June 2023 quarter (Q1FY24), after a dismal showing by early bird companies. The combined net profit of the 983 listed companies that have declared their quarterly results, so far, was up 64.7 per cent year-on-year to record a high of Rs 2.68 trillion in the first quarter, but growth in earnings remained lopsided because most of the incremental gains came from a handful of companies. Moreover, the quarterly numbers showed a continued slowdown in revenue growth.
'You cannot have only one product or one market or one customer segment.'
'We will have a strong exit as our third quarter is strong.'
'I don't think we have ever seen such alignment of everything that we need in the banking sector.'
The sharp rally in the markets thus far in fiscal 2023-24 (FY24) has left analysts struggling to find investment-worthy themes. The S&P BSE Sensex has surged nearly 7 per cent thus far in FY24 and hit a fresh 52-week high of 63,601.71 levels on June 22, mostly led by foreign institutional (FII) flows. "The Indian market has seen a broad rally in the past few months but headline indices have seen more modest performance. "We are not very clear about the reasons for the rally and the divergent performance and struggle to find ideas in the consumption, investment and outsourcing sectors after the sharp run-up in several of our favored sectors and stocks in the past two months," wrote Sanjeev Prasad, co-head, Kotak Institutional Equities, in a recent co-authored note with Anindya Bhowmik and Sunita Baldawa.
The S&P BSE Sensex and the Nifty50 have hit record highs amid the poll outcome-triggered bull frenzy at the bourses. Most analysts feel that the indices are on course to rise further over the next few months - till the general elections - albeit amid intermittent corrections - largely triggered by global developments. Bharatiya Janata Party's (BJP's) win in the three state elections of Madhya Pradesh (MP), Rajasthan and Chhattisgarh, analysts at Jefferies believe, reinforces the consensus expectations of a Modi win 2024 national elections with a greater likelihood of over 300 seats for the BJP.
'As our per capita income increases and various demographic segments emerge, the need for various kinds of protection and risk covers will become even more explicit.'
Despite multiple headwinds at the start of 2023, the Indian markets delivered a strong performance, posting 19-20 per cent growth for the year. Even as new records were set, investor sentiment remains strong going into 2024, given the lower inflation, expectations of steady to lower interest rates, higher economic growth, and strong inflows. However, the overriding concern for most brokerages is valuations.
The net leasing of Grade-A commercial office space in India will stagnate this financial year at 32-34 million square feet, with global uncertainties brewing caution among key tenant categories, according to the latest Crisil Ratings report. Major seven cities in India - Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR), National Capital Region (NCR) and Pune - had Grade-A office space with an operational stock of around 705 million square feet as of March 2023. India's commercial office space is dominated by technology companies, with information technology (IT) and IT-enabled services (ITeS) companies occupying 42-45 per cent of the operational stock.
More and more women are making their presence felt in jobs related to sciences, technology, and engineering across organisations.
'They have since only tried to improve systems. Also, with regulatory guidance from time to time, we are in a position to assess a situation and react in time.'
Large Indian IT services companies are expected to report "muted" sequential show in a traditionally strong second quarter, as macroeconomic challenges continue to weigh on global discretionary spending, say market watchers. The big earnings week for tech heavyweights is up ahead, with Tata Consultancy Services (TCS) scheduled to announce its results on October 11, and both Infosys and HCL Technologies on October 12. Wipro is slated to declare its Q2FY24 results next week, on October 18.
Corporate earnings grew in double digits during the April-June 2022 (Q1FY23) quarter but the momentum waned. Overall corporate earnings in the quarter were down sharply from their highs in FY22. The combined net profit of 2,981 listed companies across sectors in the Business Standard sample was up 22.4 per cent YoY to Rs 2.24 trillion in the June quarter, driven by a big jump in the earnings of banks, non-banking lenders, oil & producers, and FMCG companies. Also, earnings in the corresponding quarter a year ago were affected because of the second wave of the Covid pandemic, even though the numbers were a lot better than Q1FY21 when there was a nationwide lockdown.
Krithi Krithivasan is the kind of person one might look to when the need is to calm things down and put things back on track.
'The focus needs to shift towards the ability to collect payments, particularly in tier-3 to tier-4 areas where acceptance is still lacking.'
Walmart-owned fintech firm PhonePe said it has crossed 500 million lifetime registered users on its platform. With this milestone, 1 in 3 Indians are now on PhonePe. The company said it is the first Indian internet company to have reached this scale globally. This milestone has been achieved in just over 7 years since the PhonePe UPI (Unified Payments Interface) payments launched in August 2016.
The country's largest software exporter TCS on Wednesday reported a 16.83 per cent jump in its June quarter consolidated net profit to Rs 11,074 crore. The Tata Group company had reported a net profit of Rs 9,478 crore in the year-ago period and Rs 11,392 crore in the preceding quarter. Its revenue from operations increased 12.55 per cent on a year-on-year basis to Rs 59,381 crore and was marginally up from the preceding March quarter's Rs 59,162 crore.
'To the believers of crypto regulations, I have only one question to ask, how will you regulate it?'
'The World Cup alone is expected to create an additional 100,000 jobs, most of which will comprise gig workers in the delivery space, transportation, hospitality and event management.'
IT services firms' revenue growth in the fourth quarter will be affected by macro-driven headwinds, lower working-days, and the fact of the three-month period being low season. Analysts are expecting FY24 growth to be muted. Revenue growth will decline 600-700 basis points to 10-12 per cent for FY24, said a CRISIL Ratings report. The 10-12 per cent growth rate is a fall from the 18-20 per cent expected in FY23 and around 19 per cent growth in FY22, the highest in eight years, said the CRISIL Ratings report.
'Just the amount of work which is there just to become more and more successful in banking. For this to happen you need to have leaders who understand technology.'
'Some risks to this market rally include inflation, erratic weather conditions, rising crude prices, slowing global growth and the resultant impact on domestic exports, escalation in geopolitical tensions.'
The impact of the banking crisis in the US was visible in IT bellwether Tata Consultancy Services' (TCS) weak performance in the March quarter of fiscal 2023 (Q4FY23). The firm witnessed slower revenue growth in Q4FY23 and failed to meet its FY23 exit Ebit margin of 25 per cent as some clients, especially in the North American region, took to pausing projects and rising onsite costs offset utilisation gains. Sequentially, the company's revenue grew by just 0.6 per cent on a constant currency basis, which was one of the slowest paces in over 11 quarters.
India's corporate sector is likely to report a slowdown in revenue growth and earnings for the July-September 2023 period (Q2FY24), according to earnings estimates by brokerages, after the country's top listed companies posted higher than expected profits for the first quarter. The combined net profit of Nifty50 companies, based on brokerage estimates, is expected to have grown by 19.6 per cent year-on-year (Y-o-Y) to Rs 1.75 trillion in Q2FY24 - a sharp deceleration from 37.6 per cent Y-o-Y growth in the combined earnings of index companies in the April-June 2023 period. According to estimates, the combined earnings in the second quarter would be down 8.8 per cent on a quarter-on-quarter (Q-o-Q) basis and the lowest in the past three quarters.
While the economy seems to be on a firm growth path, the fight against inflation is not over yet. Shaktikanta Das seems to be in no hurry. After playing well through a five-year Test match, he doesn't want to get out hit wicket, observes Tamal Bandyopadhyay.
Led by Tata Motors and Tata Consultancy Services (TCS), the combined revenue of the Tata group's listed firms crossed the Rs 10-trillion mark for the first time, in 2022-23. The group's 14 key listed companies in which Tata Sons holds a direct equity stake reported a combined revenue of Rs 10.07 trillion in FY23, up 15.3 per cent from Rs 8.73 trillion in FY22. The combined net profit of these companies was, however, down 10.6 per cent year-on-year (YoY) at Rs 66,670 crore in FY23, from a record high of Rs 74,540 crore in the previous financial year, when the profit had jumped 156 per cent YoY, aided by Tata Steel's strong showing.
After disappointing guidances in the first quarter (Apr-Jun) of the 2023-24 financial year (Q1FY24) and valuation downgrades, the Indian IT sector could see some positive repricing as the bad news for IT maybe easing in Q2FY24. A key negative factor was weaker demand from the US financial sector and from North America in general. The latest GDP (gross domestic product) estimates and sector-specific news suggest that the demand situation may not be quite so bad with a gradual recovery in tech spending in Q2.
The governor made it clear that the RBI is aware of what's happening and acts accordingly, but doesn't make a noise about that, points out Tamal Bandyopadhyay.
If 4,000 workers could work round the clock for the construction of the new Parliament building, then there is no reason why all infrastructure projects too cannot follow that model, asserts Dr Sudhir Bisht.
The demand for flexible office space is emerging as India's top short-term portfolio strategy, as 47 per cent of companies want to increase its use over the next 12 months, according to a survey by property consultant CBRE. Flexible office space is a workspace designed to provide employees with a variety of different places and ways to work. These spaces can be easily modified to fit the needs of any new project or role.
RBI Governor Shaktikanta Das on Friday said the entry of big tech firms into the financial sector poses systemic concerns like overleveraging at the borrowers' ends.
Regulatory capacity, hyperactivity and excessive prescription are the biggest challenges the financial sector is facing, said Meleveetil Damodaran, former chairperson, Securities and Exchange Board of India (Sebi). Speaking at the Business Standard BFSI Summit on Wednesday, Damodaran highlighted the need for simpler, clear, and continuous regulations in the financial sector. He opined that the industry had felt it challenging to keep pace with the changing regulations.
The information technology (IT) services industry could see value investors taking selective punts in the near future. While growth remains visible, managements across the board have been cautious or measured in their guidance and have also complained about a combination of margin pressures and high churn. The two factors are related in that employee compensation is a large component of IT costs and high churn has forced firms to hike compensation packages and also invest more in hiring, training, and retention.
India's largest IT services player Tata Consultancy Services (TCS) saw its $2 billion, 10-year deal with Transamerica Life Insurance Company come to an end even before the period was over. Transamerica is the subsidiary of American arm of Dutch insurer Aegon NV. This is not the first time such a long-term deal has been called off. Earlier this year, UK's National Employment Savings Trust (NEST), ended a $1.8-billion deal with French IT services player Atos.
Indian IT services companies have seen several CEO changes that have, over the past few months, led to some crucial exits at the mid-senior level in a trend that is likely to continue. According to a recent Motilal Oswal report, "Movement of mid-to-senior leadership at IT services firms is a reality, partially on account of multiple CEO-level changes.
IT major Tata Consultancy Services (TCS) has made changes to its leadership roles in North America. As part of the changes Suresh Muthuswami has been elevated to the role of chairman, North America, said sources in the know. This is one of the most significant leadership changes the company has announced for the region. The reason for the changes in the North American region, the largest in terms of revenue for TCS, is because Surya Kant who has been at the helm of North America for the past 16 years is stepping down by the end of the fiscal year, as he retires.
Benchmark equity indices Sensex and Nifty ticked higher for the ninth straight session on Thursday, buoyed by fag-end buying in banking, financial and realty stocks amid encouraging domestic retail inflation data. Weak trends in IT counters and fall in the overnight US equity markets triggered by fresh concerns over recession, however, put a check on market's uptrend. In a largely subdued session, the 30-share BSE Sensex went up marginally by 38.23 points or 0.06 per cent to settle at 60,431.
'If you want it to grow well and serve the true needs of the economy, it needs a lot of freedom and flexibility, which comes in terms of the reform objective set by the regulator.'
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