The 2023-24 (FY24) July-September quarter (second quarter, or Q2) proved to be a mixed period for asset management companies (AMCs). While the two largest listed AMCs, HDFC and Nippon, reported robust growth in both revenue and profits, the other two, Aditya Birla Sun Life and UTI, experienced profit declines. HDFC AMC reported an 18 per cent year-on-year increase in Q2 revenue to Rs 765 crore, while Nippon's revenue rose 15 per cent to Rs 475 crore.
Indian frontline benchmarks - the S&P BSE Sensex and the Nifty50 - have rallied around 12 per cent each since June-end and outperformed their global peers by a wide margin. On Thursday, the US Fed hiked interest rates by another 75 basis points (bps) - the third such hike this year - and surprised the markets by projecting further sizable hikes in the coming months. With the latest hike, the Fed fund rate (FFR) now stands in the range of 3 - 3.25 per cent and is highest since January 2008.
CLSA has downgraded select real estate stocks and expects most counters from this sector to consolidate in the months ahead after the sharp run seen in them in the last few months. Most positive factors in terms of a pick-up in housing demand and office space absorption, it said, are already priced in. "We expect housing industry demand to grow around 12 per cent in 2024 and for large developers to outpace industry to grow at 15 - 20 per cent.
The Reserve Bank may raise key policy rates by up to 50 basis points in its July 27 monetary policy review to check double-digit inflation, said a member of the Prime Minister's Economic Advisory Council.
Tyre stocks have been on a tear over the past six months, with average returns exceeding 45 per cent. Except for Apollo Tyres, which has seen a slight correction in the last month and a half, limiting its gains to 16 per cent, listed peers such as MRF, CEAT Tyres (formerly Cavi Elettrici e Affini Torino), and JK Tyre & Industries have delivered returns exceeding 30 per cent during this period. Production-related constraints and sluggish demand in Europe, where sales are expected to remain flat, coupled with high valuations, have contributed to Apollo Tyres' underperformance. The tyre sector's gains can be attributed to robust growth trends driven by the replacement market, which constitutes more than two-thirds of sales.
The year 2022 saw the Reserve Bank of India (RBI) start acting on the policy repo rate after a gap of two years. The six-member monetary policy committee of the RBI reduced interest rate sharply - by 115 bps - when Covid-19 struck in 2020. In March 2020, days after the nationwide lockdown was announced, MPC in an unscheduled meeting reduced the repo rate by 75 bps, followed by another 40 bps in May. Status quo was maintained for the next two years since the May repo rate hike.
The stock of LTIMindtree finished at Rs 5,001 a piece on Monday, which means it is down about 5 per cent from its all-time high as its June quarter results for the 2023-24 financial year (Q1FY24) missed estimates. A cautious note by the management, coupled with the fact that it will miss its double digit revenue growth target for FY24 weighed on the stock price. The company delivered revenues of just over a billion dollars in the quarter with constant currency growth of 0.1 per cent.
The July-September quarter results of software companies in the engineering research and development (ER&D) segment were broadly in line with expectations, though there have been cuts in revenue growth guidance. While results were a mixed bag, and there are cautionary views on the near-term outlook, brokerages and global consulting firms highlight the strong growth trajectory for the sector. They expect this segment of the software sector to grow by 8-12 per cent going forward.
In August, the Reserve Bank of India Governor Shaktikanta Das held a meeting with chief executive officers/ managing directors (CEOs/ MDs) of large non-banking financial corporations (NBFCs). The discussions included diversifying borrowing sources for NBFCs and housing finance companies (HFCs) to contain increasing reliance on bank borrowing, risks associated with high credit growth in retail segment in unsecured loans, prioritising IT upgrades and cyber-security, improving provisioning, monitoring of stressed exposures and slippages, ensuring robust liquidity and asset-liability management, ensuring transparency in pricing, creating robust grievance redress mechanisms.
'Our unsecured loan is not exactly unsecured. It is backed by cash flow of customers.'
A day after the Reserve Bank of India's (RBI's) Monetary Policy Committee hiked the policy repo rate by 50 basis points (bps), several commercial banks, including ICICI Bank and Bank of Baroda, raised their external benchmark-linked loan rates by an equal amount on Thursday. HDFC, the country's largest mortgage lender, too, increased its interest rates on housing loans by another 50 bps. In total, it has raised rates by 85 bps since May 4, when the RBI had increased the repo rate by 40 bps in an off-cycle meeting.
After the massive sell-off since October, foreign portfolio investors (FPIs) are no longer the biggest non-promoter-shareholders in top Indian companies. This has happened for the first time in over a decade. "At 25.6 per cent ownership of India's largest 75 companies, domestic investors are now larger holders than FPIs for the first time since 2010," said Morgan Stanley strategists Ridham Desai, Sheela Rathi and Nayant Parekh in a note.
The Reserve Bank's rate-setting panel will start its 3-day deliberations on Wednesday amid expectations of yet another rate hike of 50 basis points to check high inflation, in line with similar actions taken by other major central banks, including the US Fed. Based on the recommendations of the Monetary Policy Committee (MPC), the RBI had effected 50 basis points increase in repo rate each in June and August after raising the short-term lending rate by 40 basis points in an off-cycle decision in May. The MPC, headed by RBI Governor Shaktikanta Das, is scheduled to meet during September 28-30.
Despite a largely stable December quarter, investors booked profit in shares of IndusInd Bank (IIB) as an increase in slippages took them by surprise. Analysts, on their part, believe investors may, now, wait for actual delivery on slippage decline, potentially limiting near-term upside. "The management has indicated that corporate slippages (from legacy stressed book) have ended and inch up in consumer finance slippages was more one-off, and should meaningfully improve Q4FY24 onwards.
StanChart Bank expects food prices to push up overall inflation to 8.3 per cent in December, which will prompt the Central Bank to raise policy rates by 50 basis points in the current fiscal.
RBI's draft guidelines on computation of base rate, if implemented in its current form, will significantly impact the profitability of banks.
The economic growth is likely to moderate to 6.1 per cent, slowest in over seven quarters, from 6.6 per cent last year same period.
The Reserve Bank of India's rate-setting panel on Wednesday began its three-day deliberations on the next bi-monthly monetary policy amid expectations of at least a 35-basis-point hike in the interest rate to check high inflation. If raised, it will be the third consecutive hike in the repo rate -- the short-term rate at which the RBI lends money to banks. The central bank has already announced to gradually withdraw its accommodative monetary policy stance.
However, the American brokerage said it continues to expect the Reserve Bank to cut policy rates by 25 bps on January 29.
SBI Q3FY24 result review: A higher-than-factored weakness in the October-to-December quarter (Q3) results of State Bank of India (SBI), for financial year 2023-24 (FY24), has prompted brokerages to cut earnings estimates for the ongoing financial year. They, however, have maintained 'Buy' ratings on the stock, revising target price upwards in some cases, owing to the stock's recent underperformance relative to its peers.
India's central bank raised its policy interest rate for the second time in as many months on Tuesday, warning that inflation is likely to remain elevated for the rest of the fiscal year, and rolled back an emergency measure put in place to support the slumping rupee.
Riding on an improved show across parameters, TVS Motor (TVS) outperformed larger two-wheeler peers Hero MotoCorp (Hero) and Bajaj Auto (Bajaj) during the September (Q2 of FY23) quarter. The Chennai-based firm, which has the most-diversified portfolio among two-wheeler majors, posted a 28 per cent jump in revenues. This compares to 18 per cent growth for Bajaj Auto and single-digit uptick for Hero MotoCorp.
Hotel companies, which have experienced substantial share price gains in the past six months, are not only expected to post robust revenue growth in the seasonally weak July-September quarter (second quarter, or Q2) of 2023-24 (FY24), with the trend continuing in the second half (H2) of FY24, but according to some analysts, they will also benefit from a structural uptrend in progress. To begin with, larger players in the listed hotel sector are expected to report strong growth in Q2 compared to the year-ago quarter. Led by higher demand from the business segment, the sector is expected to achieve a growth rate of 15-30 per cent.
As the policy rate has seen a steady increase since May 2022, the percentage of loans offered at interest rates below 8 per cent have declined sharply, dropping from 53 per cent in March 2022 to 18 per cent by June 2023, according to a report by the Reserve Bank of India (RBI). The share of bank loans with interest rates of 10 per cent or higher rose from 22 per cent to 34 per cent during this period, reflecting the impact of a 250 basis point (bps) hike in the policy repo rate by the RBI's Monetary Policy Committee. In response to the rise in repo rate, 32 domestic banks have made corresponding upward revisions to their repo-linked external benchmark-based lending rates (EBLRs), aligning them with the magnitude of the rate hike.
Tata Motors' 2022-23 (FY23) January-March quarter (fourth quarter, or Q4) results were better than Street estimates, with strong showing across Jaguar Land Rover (JLR), as well as commercial and passenger vehicle businesses in the domestic market. The company posted its highest consolidated top line and operating profit, with growth of 35 per cent and 46.5 per cent, respectively, over the year-ago quarter. While the top line was aided by a 49 per cent growth in the JLR unit, all key segments reported margin expansion.
ITC highlighted that legal cigarettes account for 9 per cent of tobacco consumption in India, but 80 per cent of tax collection is from tobacco products. While illicit cigarettes account for roughly one-third of the market share, legal cigarette volumes have recovered to around 96 per cent of peak FY13 volumes, after dipping to 70 per cent in FY21.
PVR-Inox is in an inherently fickle business. If there is a string of flops, the box office collections will be weak. Conversely, Q2FY24, which witnessed several hits, has brought about an upside in revenues. However, the merger has led to market share gains and synergies that helped bring breakeven down to approximately 20 per cent occupancy.
The two IT majors -- Infosys and TCS -- delivered disappointing results for the fourth quarter of the 2022-23 financial year (Q4FY23). Poor macro conditions and weak sentiment in the banking, financial services and insurance (BFSI) space accounted for the miss. For TCS, revenue in constant currency (CC) terms grew at 0.6 per cent on a quarter-on-quarter (QoQ) basis. Weakness was visible in North America, primarily due to deferred discretionary spending.
India's largest two-wheeler maker by volume - Hero MotoCorp (Hero) - posted a better-than-expected operating performance in the January-March (fourth quarter, or Q4) quarter of 2022-23 (FY23). Riding on higher average selling prices which were up 5 per cent year-on-year (YoY) and volume growth of 7 per cent, the company registered a 12 per cent growth in revenue to Rs 8,306 crore. The company sold 127,000 units in the quarter, largely driven by domestic sales which were up 11.6 per cent, while exports saw a sharp fall of 57 per cent over the year-ago quarter.
While rising interest rates and tighter liquidity are giving negative signals for the financial sector, increasing economic activity could mean higher business volumes for lenders. Liquidity in the banking system has moved from Rs 8 trillion surplus into a deficit of Rs 33,000 crore over the 2022 calendar year. By the end of November, bank credit had grown 17.5 per cent YoY (year-on-year).
The Reserve Bank of India (RBI) will maintain the policy repo rate at 6.5 per cent during its upcoming June 8 announcement, considering the easing of retail inflation in April and the potential for further decline, indicating the effectiveness of previous policy rate actions, anticipate experts. Headed by Reserve Bank Governor Shaktikanta Das, a meeting of the six-member Monetary Policy Committee (MPC) is scheduled for June 6-8. The decision of the 43rd meeting of the MPC would be announced on Thursday, June 8.
A quick look at the Q1FY23 performance of top-tier IT services players shows that they are still far away from getting a grip on managing attrition. Talent retention has eroded not only their margins but also any gains they may have made from rupee depreciation. Despite robust growth numbers and strong deal pipelines, margins for all the players -- TCS, Infosys, HCL Technologies and Wipro -- have continued to shrink at a pace that has had the street surprised.
The weak April-June quarter (first quarter, or Q1) results of the largest listed specialty chemical maker, SRF, and multiple global headwinds for the sector are expected to weigh on the prospects of Indian specialty chemical companies in 2023-24 (FY24). Stocks in the sector (down 7-18 per cent) have underperformed the benchmarks (up over 10 per cent) in the past three months, and given the multiple challenges, the trend is likely to continue. Kotak Institutional Equities expects a very weak quarter (Q1FY24) for the sector due to destocking, demand weakness across certain critical end-use industries, and price erosion amid intense competition from Chinese suppliers.
Lead indicators suggest that domestic current account deficit (CAD) is likely to reduce in 2023, while macro-economic stability has received a boost from inflation being brought back to the official tolerance band, according to the Reserve Bank of India's (RBI's) January 2023 Bulletin. "With the merchandise trade deficit reaching an all-time high of $83.5 billion in a quarter, and a rise in net outgo from the income account, the current account deficit increased to 4.4 per cent of GDP in Q2FY23," the State of the Economy article in the bulletin said. "It is noteworthy, however, that the CAD for Q1 was revised down from 2.8 per cent to 2.2 per cent on account of downward adjustment in Customs data.
The members of the Reserve Bank of India's (RBI's) Monetary Policy Committee (MPC) voiced different views on the interest rate and stance, with two of them indicating they may not vote for further rate increases even if Governor Shaktikanta Das and Deputy Governor Michael Patra maintain bringing down inflation as their primary objective, the minutes of the December review of the monetary policy showed. The other two members remained neutral. The MPC increased the policy repo rate by 35 basis points (bps) - which was lower than the previous three hikes of 50 bps. The repo rate has been hiked by 225 bps to 6.25 per cent since May this year.
Domestic investors are tightening their grip on the ownership of listed companies. The gap between the shareholding of domestic institutional investors (DIIs) and foreign portfolio investors (FPIs) narrowed to 13.11 percentage points at the end of the September 2023 quarter. At the peak, the gap was nearly 50 percentage points in March 2015, according to an analysis by Prime Database, a leading provider of data on the capital market.
'It is observed that some of our branches are already losing good balances in their savings deposits as well as fixed deposits, which are maturing, to the other banks.'
Indian government bonds, particularly those of shorter maturity, strengthened sharply on Monday, as the collapse of the California-based Silicon Valley Bank (SVB) prompted investors to rush to the safety of American debt, leading to a decline in US bond yields.
Corporate margins and profits in India remain vulnerable to changes in crude oil prices in the international market. Historical quarterly data from listed companies (excluding banks, finance and insurance, oil and gas, and power sectors) indicate an adverse correlation between corporate margins and crude oil prices.
The recent run on the US-based Silicon Valley Bank (SVB) and the subsequent seizure of its assets by the regulators may have sparked a global wave of risk aversion, particularly for start-ups. However, the Indian banking sector is unlikely to be a victim of any contagion effects, said analysts. he bank, which played a big role in financing start-ups and technology players, faced stress after incurring huge losses on its holdings of US bonds, following the most-aggressive monetary tightening cycle by the Federal Reserve in around four decades.
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances