The headline for corporate profit growth has been very encouraging in the July-September quarter (Q2) of 2023-24 (FY24), with the combined net profit of listed companies up by 38 per cent year-on-year. However, the earnings distribution has been very lopsided, with most of the growth coming from public-sector oil-marketing companies (OMCs), banks, non-bank lenders, automobile (auto) companies, and cement producers. By comparison, companies from information technology services, fast-moving consumer goods (FMCG), retail, and consumer durables were disappointed, experiencing a sharp slowdown in net sales growth and a relatively muted increase in reported net profit.
Tata Power saw a big sell-off, with the stock falling almost 8 per cent after declaring disappointing results for the October-December quarter (Q3) of 2023-24 (FY24) on Friday evening. The company reported net consolidated revenue of Rs 14,650 crore, up 4.4 per cent year-on-year (Y-o-Y), and earnings before interest, tax, depreciation, and amortisation (Ebitda) of Rs 2,607 crore, up 2 per cent Y-o-Y, in the quarter, led by higher sales across Odisha distribution companies (discoms) and capacity addition in renewables. This was well below consensus estimates.
Base metals major Hindalco's overseas subsidiary, Novelis, has submitted a draft registration with the US Securities and Exchange Commission (SEC) for the proposed public offering of promoters' shares. Novelis' sole shareholder, AV Minerals (Netherlands) NV, is a 100 per cent subsidiary of Hindalco. Novelis would not receive any proceeds from the sale. Assuming SEC clearance could go through in about 6 months.
Bankers said the outlook of M&As in India in 2024, especially in the second half after the Lok Sabha election, seems relatively better.
As many as 267 of 453 companies from the BSE500 index are trading above their consensus price targets, according to the data compiled by Bloomberg. Not all companies in the BSE500 index are tracked by analysts.
Medical tourism is likely to be the next major foreign exchange earner for India as an increasing number of patients, unwilling to accept long queues in Europe or high costs in the US, are travelling to the country to undergo surgery, according to a
Core retail segments like motor and health continue to report strong growth of 19-20 per cent with competitive intensity still visible in the motor OD (owner driven) segment. Commercial lines reported muted growth. Group health remains a key driver. Among the listed companies, ICICI Lombard continues to trail in the motor section while Star Health has lost its Y-o-Y retail market share although its better on a sequential basis.
Even when large businesses said they were flying blind in mid-2020, the markets rallied and an incredible business boom followed. This is not to say that the markets will continue to rally and there is nothing to worry about, observes Debashis Basu.
In the October-December quarter (Q3) of FY24, Hindalco reported flat consolidated revenue year-on-year (Y-o-Y) at Rs 52,800 crore. Copper revenue rose due to higher shipments and better Average Selling Price (ASP). Revenue from the aluminium vertical and Novelis declined 3 per cent and 6 per cent Y-o-Y, respectively.
Amid increasing volatility and recession fears looming over global markets that has led to the decline in wealth of a number of billionaires, Gautam Adani was the only one to buck the trend. The billionaire added $43.3 billion in net worth between Diwali 2021 (November 4) and this year's Diwali (October 24) according to Bloomberg data. He added more wealth than the gross domestic product (GDP)of more than a dozen Indian states.
HDFC Asset Management Company (HDFC AMC) reported a healthy profit after tax (PAT) of Rs 430 crore for the July-September quarter (Q2) of financial year 2023-24 (FY24). It rose 20.2 per cent year-on-year (Y-o-Y) and decreased 8.4 per cent quarter-on-quarter (Q-o-Q). This was driven by good equity returns, leading to a sequential improvement in revenue yields.
In the coming months, globally as well as in India, rice might remain a hot potato.
UltraTech Cement's third quarter of financial year 2023-24 (Q3FY24) performance saw a combination of 6 per cent year-on-year (Y-o-Y) volume growth and 8 per cent revenue growth coupled with better realisations per tonne. The earnings before interest, taxes, depreciation, and amortisation (Ebitda) stood at Rs 3,250 crore and Ebitda per tonne was Rs 1,191. Profit after tax (PAT) was reported at Rs 1,780 crore. Other income dipped and interest costs rose.
One of the key factors contributing to the decline in the value of the rupee against the US dollar is the tightening yield spread between the 10-year India government bond and the US government bond. The yield on 10-year Indian government bonds is now only 295 basis points higher than that of US 10-year treasury bonds, the lowest since January 2007. Lower spread means lower incentive for foreign investors to invest in rupee assets, which adversely affects foreign capital inflows into the country and weighs on the rupee-dollar exchange rate.
Acceleration in demand, together with marginal price hikes of about 2-3 per cent by cement companies in the October-December quarter (third quarter, or Q3) of 2022-23, may not be enough to cushion the impact of high input costs on the bottom line, reveal Bloomberg consensus estimates for the quarter. Year-on-year (YoY) net sales growth in Q3 will come in at nearly 7 per cent, shows Bloomberg data, while bottom-line growth will show a sharp decline of 25 per cent from a year ago. The earnings before interest, tax, depreciation, and amortisation (Ebitda) will likely decline by nearly 5 per cent versus a year ago, shows data.
India's first-ever listed new-age company, Zomato, has seen a meteoric rise in its stock price in calendar year 2023 (CY23), rising 70.75 per cent during this period as compared to 9.5 per cent rise in the S&P BSE Sensex. From being the second worst hit new-age stock in CY22, crashing 57 per cent on the National Stock Exchange (NSE), the stock hit the Rs 100-mark for the first time since January 2022 in late August. The stellar run in the stock - only after PB Fintech and One97 Communications-owned Paytm, analysts say, may be coming to an end, at least for now.
'You can put 25 per cent right now; put another 25 per cent when Nifty corrects another 500 points.' 'At 13,500 put another 25 per cent and at 13,000 one can get fully deployed.'
Within three trading sessions in May, foreign portfolio investors (FPIs) have pumped in Rs 9,461 crore into Indian equities. This follows net inflows worth Rs 7,936 crore in March, and Rs 11,631 crore in April. The trend, analysts said, could continue going ahead as the US Federal Reserve may soon halt its interest rate hike cycle, which will strengthen foreign fund inflows into emerging markets, including India.
The automobile sector has started seeing volume growth, the crucial economy segment included. Maruti Suzuki India (MSIL) could be a big beneficiary as the country's largest passenger vehicle (PV) maker has seen several favourable developments including volume recovery. Demand for its new sports utility vehicles (SUVs) appears to be good, and the company has 4 lakh outstanding orders by April 2023, (up from 3.6 lakhs in January 2023). Siam (Society of Indian Automobile Manufacturers) estimates that passenger vehicle demand would grow by 5-7 per cent in the 2023-24 financial year (FY24) and MSIL is likely to beat the market growth.
India will need $223 billion of investment to meet its goal of wind and solar capacity installations by 2030, according to a new report by research company BloombergNEF (BNEF). The government has set a target of increasing non-fossil power capacity to 500 GW by 2030. It wants non-fossil fuel power sources to provide half of its electricity supply by 2030. "To achieve this target, India needs to massively scale up funding for renewables," the report said, adding that $223 billion is required over the next eight years just to meet the solar and wind capacity targets.
Debt management is going to be a worry for the Vedanta group until FY25 at least. However, the restructuring of business divisions in Vedanta India could lead to an unlocking of values. The group structure is fairly complex. Anil Agarwal-led Vedanta Resources (VRL), which is London-listed, has a lot of debt on the balance sheet. It will have to repay $1 billion in secured bonds by January 2024 and at least another $300 million in calendar 2024.
Private life insurers are expected to deliver decent growth in the first quarter of the 2023-24 financial year (Q1FY24) on the back of stronger group business performance and easing supply-side constraints on individual protection. Life Insurance Corporation (LIC), though, is likely to see a decline. Healthy 12 per cent year-on-year (YoY) retail annual premium equivalent (APE) growth for private players, coupled with 11 per cent year-on-year (YoY) decline in LIC, will pull retail APE growth to a mere 3 per cent YoY in June 2023.
Eicher Motors is a leader in the premium motorcycle segment, where it holds market share of over 85 per cent under the Royal Enfield (RE) brand. The company's joint venture VE Commercial Vehicles (VECV) with Volvo, where it holds 54.5 per cent stake, gives it a strong footing in commercial vehicles (CVs). The company had good results in FY23 and it has a strong balance sheet and good operating margins.
The market capitalisation of China, the world's second-largest economy, has topped $10 trillion for the first time.
After a technology upgrade, the Multi Commodity Exchange of India (MCX) appears poised for an improvement in volumes. The premier commodity and forex exchange reported a loss of Rs 19.1 crore in the July-September quarter (second quarter, or Q2) of 2023-24 (FY24). This was attributed to higher software charges payable under an extended service agreement with 63 moons technologies and a one-off cost towards core guaranteed funds (CGF).
China is the world's second-largest - both in terms of GDP and m-cap. At $10 trillion, its m-cap is second only to the US at $38 trillion.
Currently, TCS is India's second most valuable firm after Reliance Industries, which has a market cap of nearly Rs 12.9 trillion.
Info Edge (India) reported a good fourth quarter for the 2022-23 financial year (Q4FY23) given depressed conditions in the Key IT segment. The billing growth of 13.7 per cent year-on-year (YoY) in recruitment was well ahead of market expectations. There was solid growth in realisations (up 5.5 per cent) as well as unique customers (up 7.7 per cent).
The upcoming general elections will be the focus and the economy and market performance will pivot around that event. The general consensus is that the India stock market should be up around 10 per cent by the end of the year.
As volatility continues to plague the emerging markets, India has been the worst performer after Vietnam this year. The US credit crisis and fears of a recession in the world's largest economy is compelling the foreign funds to dump stocks.
US election results may not reverse Indian markets' bearish trend, says Devangshu Datta
Ambani's wealth jumped $3.59 billion in the past 24 hours, while Adani added $2.96 billion to his net worth.
UBS stepping in to save Credit Suisse with a $3.2-billion acquisition has provided the beleaguered Swiss bank's India employees a glimmer of hope. The surprise deal - engineered by the Swiss government - has triggered optimism of fewer job losses at Credit Suisse's India unit and better synergies at key verticals, such as wealth management and investment banking. "UBS is a much stronger hand. Coming within its fold will give Credit Suisse's wealth management and investment banking divisions a good home.
Taxing the rich will fetch nothing; only votes, argues Debashis Basu.
The impending merger between Housing Development Finance Corporation (HDFC) with HDFC Bank may create challenges for large-cap fund managers, most of whom are already grappling to match the returns generated by their benchmarks. The combined weight following the merger in the benchmark Sensex and Nifty 50 indices is likely to be much higher than permissible limits for active mutual fund (MF) schemes. This could have a bearing on the performance of large-cap funds if HDFC Bank shares outperform the markets, as the schemes will be forced to remain underweight on the stock to adhere to the single-stock cap.
Half the stocks in the Nifty 100 index have seen a reduction in their target price by analysts this year due to fears of lacklustre earnings growth and uncertain economic environment. Adani Green Energy, FSN E-Commerce (Nykaa), Adani Ports & SEZ and Indus Towers are among the companies that have seen the maximum cut in TPs during the first three months of calendar 2023, shows Bloomberg data. On the other hand, Canara Bank, JSW Steel and Bank of Baroda have seen the highest increase in TPs.
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.
SoftBank-backed hospitality major OYO is planning to reduce the number of shares it aims to sell through public listing because of reduced capital requirements and technology headwinds. This comes at a time when valuations of start-ups, including that of OYO, have taken a hit. "OYO earlier filed papers for its IPO (initial public offering) based on its funding requirements at the time.
The BSE Midcap ended up 0.5% while the Smallcap index ended nearly 1% higher
Sun Pharmaceutical Industries (Sun Pharma) reported a turnaround in the January-March quarter of the 2022-23 financial year (Q4FY23), declaring a profit after tax (PAT) of Rs 1,984 crore versus a loss of Rs 2,277 crore in Q4FY22. However, that loss in FY22 was due to several exceptional one-time items -- with Rs 3,723.15 crore allocated to settlement of lawsuits in the US and other Exceptional Items adding up to Rs 3,935.75 crore. Adjusted for exceptional items, PAT in Q4FY22 amounts to Rs 2,155 crore, which is a year-on-year (YoY) growth of about 36 per cent.
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