Markets regulator Sebi will put in place a framework for the Application Supported by Blocked Amount (ASBA) facility for investors in secondary market trading, similar to the existing system for IPO investors. Sebi's board approved the proposal during its meeting here on Wednesday. Through the proposed facility, which would be optional for investors as well as stock brokers, Sebi aims to bring in "efficiency in the secondary market ecosystem by allowing usage of same blocked amount towards margin and settlement obligations.
After lagging behind other segments in the automotive (auto) space over the past few years, two-wheelers are expected to reverse their volume underperformance. After witnessing a 36.3 per cent volume decline over the 2018-19 (FY19) through 2021-22 (FY22) periods, the sector staged a recovery in 2022-23 (FY23), with volumes rising 17 per cent. While volumes are still a quarter lower than the FY19 peak of 21 million units, a double-digit growth trajectory is expected to prolong.
IT major Accenture's second straight cut in its revenue growth forecast for FY23 suggests there is more pain ahead for the Indian IT sector, say analysts. Accenture has lowered the top end of its FY23 growth guidance in constant currency (CC) to 9 per cent from 10 per cent earlier. The firm, which follows a September-August fiscal cycle, expects a 2-6 per cent CC growth in Q4 of FY23 (June-August 2023) versus the 6-10 per cent prior guidance.
The board of Nazara Technologies, a listed online gaming company, has approved the issue of shares worth Rs 100 crore to firms managed by Zerodha founders Nikhil and Nithin Kamath, the company said in a regulatory filing on Monday. The company is proposing to issue 1,400,560 equity shares at a face value of Rs 4 each, for Rs 714 per equity share. This will amount to Rs 99,99,99,840 and will be proportionately allotted to M/s Kamath Associates and M/s NKSquared.
At Rs 919 crore, InterGlobe Aviation, the parent firm of low-cost airline IndiGo, posted its best-ever fourth quarterly net profit in the January-to-March quarter (Q4) of financial year 2022-23 (FY23). The bottom-line, however, was lower than the Street's expectations where estimates ranged from Rs 1,160 crore to Rs 2,180 crore. On the bourses, shares of IndiGo have added just 30 paise (0.01 per cent) since the announcement of the Q4-FY23 results on May 18.
Meaningful market share would go to those who have the distribution strength to push their products, such as banks.
Auto industry volumes have grown by 2.5 per cent overall, led by domestic sales of three-wheelers, two-wheelers and passenger vehicles (PVs) in the first quarter of this financial year. Analysts predict an 18 per cent growth in revenues for automotive original equipment manufacturers (OEMs) and profit growth of 69 per cent year-on-year (YoY). However, on a sequential basis, a decline in revenues as well as earnings before interest, taxes, depreciation, and amortisation (Ebitda) margins is expected.
In a recent note, the global brokerage firm said India now commands a weight of 19 per cent in the above-mentioned portfolio as compared to 18.2 per cent in September 2023. India, it said, is a large liquid market and remains a counter-weight to North Asia if a slowdown in the West occurs and China's recovery disappoints.
'The stockbroker should have a good balance sheet to support its scale of operations. It should also have proper risk management in terms of margins so that it doesn't go bankrupt during extreme market movements.' 'The broker must have a track record of navigating several market cycles in an ethical and transparent manner.'
Bank of Baroda Q4 results: Key brokerages have raised their target prices on Bank of Baroda after the state-owned lender posted better-than-expected March quarter (Q4FY23) results. Analysts now see up to 29 per cent upside in the stock from a one-year perspective as they believe BoB is well-placed among the large public banks with nearly all key business metrics moving closer to the top-tier banks. Valuations, too, remain attractive despite steady strong quarterly performances.
India's GDP growth will slow down to 5.5 per cent in FY24 from the 6.9 per cent expected in the current fiscal 2022-23, a Swiss brokerage said on Wednesday. The slowdown was attributed to slowing global growth and tightening of monetary policies in the report by economists at UBS India. It said India will be among the "lesser affected economies" in the world, but made it clear that the world's fifth largest economy is not immune from global headwinds.
2023 could be another volatile year for Indian equity markets, according to BofA. In a report, the brokerage pointed out that the Nifty50, at present, is trading at 20.7x against its long-term average of 18.8x one-year forward earnings of current Nifty constituents. Plus, India is trading at a 98 per cent premium to its emerging market (EM) peers against its long-term average of 45 per cent.
The newest entrant to the Rs 46-trillion mutual fund (MF) space - Zerodha - plans to focus strictly on the low-cost passive segment and offer its products solely through the commission-free digital route, as it aims to replicate its broking success in the MF space. "We will offer an array of exchange-traded funds (ETFs) and index funds that would help investors take varied exposures and build portfolios based on their financial needs and risk tolerance. "Zerodha Fund House (FH) products will be exclusively distributed online and available as direct plans to engage directly with individual investors and consumers, taking advantage of the pronounced shift from physical to digital interactions," said Vishal Jain, chief executive officer, Zerodha FH.
The Indian equity market valuation has been moving in tandem with the US 10-year treasury yield. While the benchmark US bond yield has witnessed a nearly 70 basis point decline since the end of October this year, dropping from 4.93 per cent to 4.23 per cent on Friday, the Sensex earnings yield has slipped by nearly 45 basis points - from 4.5 per cent to 4.05 per cent. Previously, Indian equities' earnings yields rose in sync with the US bond yields.
With inflation down, the government's twin deficits are largely under control.
Following a more than 15 per cent surge in the National Stock Exchange (NSE) Nifty 50 from this year's lows, the spread between the 10-year government security (G-sec) and the Nifty earnings has approached the danger zone of 2 percentage points (ppt). At present, the G-sec yield is roughly 7.09 per cent, while the Nifty earnings are 5.12 per cent. As a result, the spread works out to 1.98 ppt, ever so slightly below the danger mark of 2 ppt.
The 2022-23 (FY23) January-March quarter performance of the country's largest listed paint companies was better than Street expectations. Asian Paints, Berger Paints, and Kansai Nerolac Paints (Kansai Nerolac) registered double-digit revenue growth, compared with the year-ago quarter, reinforced by strong volume/value growth. Falling raw material prices also helped the paint majors hoist their gross margins.
Titan Company on November 21, became the second Tata group firm to join Rs 3 trillion market capitalisation (market cap) club after its shares hit a new high of Rs 3,400, up nearly 2 per cent on the BSE in Tuesday's intra-day trade. At 12:28 PM; with a market cap of Rs 301,847 crore (Rs 3.02 trillion) Titan stood at number 16th position in overall market cap ranking on the BSE listed companies, the exchange data shows. Titan overtook paint company Asian Paints, which has a market cap of Rs 300,579 crore, data shows.
Growing concerns over slower-than-expected margin recovery, amid weak deposit growth have caught HDFC Bank's investors off guard. HDFC Bank's stock on Wednesday plunged nearly 9 per cent to hit an intraday low of Rs 1,527 on the BSE after reporting weaker-than-expected earnings in the third quarter (October - December) of the current financial year (Q3FY24). The shares of India's biggest private lender closed at Rs 1,536.9, down 8.46 per cent.
Brokerages believe that the Bharatiya Janata Party's (BJP's) stronger-than-expected showing in state elections reduces political risks for the domestic markets going into 2024. However, after the short-term excitement, the focus will soon shift to earnings, global liquidity conditions, and the interest rate trajectory. "BJP's win in the three state elections is much better than what exit polls suggested and reinforces the consensus expectations of a Modi win in the 2024 national elections with a greater likelihood of 300+ seats for the BJP.
The S&P BSE Auto Index has been one of the biggest outperformers among sectoral indices over the past year with returns of 26 per cent. By comparison, the benchmarks - the National Stock Exchange Nifty50 and the S&P BSE Sensex - managed about 6-8 per cent during this period. Improving demand, falling raw material costs, and rising product realisations, led by the premiumisation of portfolios, have led to a revision of growth estimates and upgrades by domestic brokerages.
Airline stocks have been soaring following a steep decline in crude oil prices and sustained passenger traffic. Analysts have particularly turned bullish on the stocks of InterGlobe Aviation and SpiceJet. On December 20, shares of InterGlobe Aviation (IndiGo) hit a record high of Rs 3,009 on the BSE, having surged 43.24 per cent year-to-date (YTD).
The Reserve Bank of India's (RBI's) latest order on unsecured loans is set to hit the banking sector's growth in the near-term, cautioned analysts, as they see banks slowing down on aggressive retail lending. Besides, cost of funds for non-banking finance companies (NBFC) is expected to inch up as banks will pass on higher capital charge to NBFCs. "We believe the fallout of the RBI action will be mainly on growth, given the rising dependence on unsecured retail loans and lending to NBFCs for growth.
Capital goods companies in their Q2FY24 results are expected to report another steady quarter of earnings growth as order inflows and execution remain healthy, according to analysts. An upward revision in order inflow targets and a margin improvement due to lower raw material costs are also anticipated. "We expect the execution of all capital goods companies and most EPC (engineering, procurement, and construction) companies to remain healthy Y-o-Y (year-on-year), led by strong order book accretion in the past 5-6 quarters," wrote analysts at Kotak Securities in a note, estimating revenue growth of 32 per cent for India's largest company in the capital goods space -- Larsen & Toubro.
It is 10 years since Bandhan Financial Services became the first microfinance institution (MFI) to receive the universal bank licence. A year later, in 2015, it started operations. Bandhan's entry into banking was seen as a vote of confidence by the Reserve Bank of India (RBI) for the country's microfinance sector. Subsequently, the RBI awarded small finance bank licences to nine MFIs.
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.
Amid cooling raw material prices, the crude-oil linked companies, which includes paint and tyre firms, have been on a roll over the past one year. Shares of related companies have gained up to 84 per cent, as against a 14 per cent rise in the S&P BSE Sensex. Analysts, however, believe stretched valuations in both these sectors could trigger a de-rating.
Shares of Infosys hit a five-month low of Rs 1,419.60, down 1 per cent on the BSE in Tuesday's intra-day trade. The stock was quoting at its lowest level since October 10, 2022. In past two days, the stock of information technology (IT) bellwether was down 4 per cent after the company on Saturday informed to the stock exchanges that Mohit Joshi, president of the company has resigned effective March 11, 2023. Mohit Joshi will be on leave thereafter and his last date for the company would be June 9, 2023, Infosys said in an exchange filing.
Since its results, the stock of bottling and beverage distribution company Varun Beverages (VBL) is up 7 per cent on the back of a strong 2022-23 January-March quarter performance, robust outlook, and revision in profit estimates. Given the sharp uptick, it is now part of the trillion-rupee club, with its market capitalisation at Rs 1.01 trillion. The stock is one of the best performers in the consumer space as well as the S&P BSE 200, of which it is a constituent.
The Reserve Bank is expected to go for another rate hike of 0.40 per cent at the scheduled review of the monetary policy next week, a foreign brokerage said on Friday. The central bank's rate setting panel will follow it up with a 0.35 per cent hike in rates at the next review in August, or make it into a 0.50 per cent hike next week and a 0.25 per cent increase in August, to make the total quantum of rate hikes at 0.75 per cent, the report by Bofa Securities said. On May 4, the Reserve Bank of India (RBI) hiked rates by 0.40 per cent, and Governor Shaktikanta Das has already called a rate hike at the forthcoming review as a "no brainer" given the pressure to maintain its core mandate of inflation in the targeted band of under 6 per cent.
The Securities and Exchange Board of India (Sebi) plans to roll out a new regulatory framework for registrar and transfer agents (RTAs) - the market intermediaries responsible for the record-keeping of bondholders and shareholders after a company offers securities to the public. The markets regulator, sources said, is considering a multifold increase in net-worth requirement, a move that may dissuade companies from having in-house RTAs for record-keeping. At present, the minimum net worth required for RTAs is Rs 50 lakh and Rs 25 lakh in categories I and II, respectively.
The general elections in April/May 2024 are expected to add volatility to the Indian markets, keeping investors on their toes.
The stock of India's largest agrochemical player - UPL (formerly United Phosphorus) - fell 2.8 per cent in trade. It was among the top losers in the BSE 100 on Tuesday. Weak 2022-23 (FY23) January-March quarter (fourth quarter, or Q4) performance and muted near-term outlook led to the decline. The company reported lacklustre growth in revenue of 4 per cent on the back of a price reduction of 3 per cent and volume growth of 1 per cent.
Boom, bust or a bit of both: as the jury bides time before ruling on the US 'recession', the economy's vital signs at a perplexing time of high-interest rates, still-punishing inflation, and surprisingly strong economic gains are a study of a growing debate over whether the world's largest economy is barrelling into a new downturn. With the US Federal Reserve's (Fed's) inflation fighters attempting the risky pursuit of 'pillow-soft landings' and its economy sending out mixed signals, if there is indeed a recession, it could spell trouble for domestic equities and corporate earnings growth.
Economic growth, which we are taking for granted, slows for a completely different set of local or global factors and the Modi premium vanishes, observes Debashis Basu.
The sharp jump in shares of Kalyan Jewellers (Kalyan) has surprised many on the Street; however, analysts believe more steam could be left in the stock as the Thrissur-based gold retailer pivots to a new asset-light network expansion model. Kalyan's stock has surged 62 per cent in the past month, even as the S&P BSE SmallCap Index has gained just 5 per cent. In its latest business update, the company said its consolidated sales grew more than consensus expectations at 31 per cent year-on-year, led by strong domestic sales regardless of the volatility in gold prices.
Except for Westlife Foodworld (Westlife), a weak 2022-23 (FY23) January-March (fourth quarter, or Q4) quarter performance and a muted near-term outlook led to a downward revision of earnings estimates for quick-service restaurant (QSR) players. Brokerages have slashed estimates by as much as 10 per cent for 2023-24 (FY24) and 2024-25 (FY25). The downward revisions have weighed on the performance of listed players, who have underperformed the market with low single-digit returns over the past month.
Since its October high last year, the stock of innerwear major Page Industries has been on a downtrend, shedding a little over 30 per cent of its market value. Higher competitive intensity, muted volumes, pressure on margins, and rich valuations have led to downgrades for the stock. The October-December quarter (third quarter, or Q3) performance was lower than the Street's expectations - both on volumes/sales and margins.
The Reserve Bank of India's latest order prohibiting Bajaj Finance from sanctioning and disbursing loans under its 'eCOM' and 'Insta EMI Card' products may not have serious implications on the non-banking finance company's profitability, provided the ban is lifted within six to eight weeks, analysts said. "In a surprise move, the RBI has asked Bajaj Finance to stop sanction and disbursal under two of its digital lending products. "While the move is negative, the speed of correction will be key to reinstate products," global brokerage Jefferies said in a report.
Only the top 5 per cent profit makers account for 75 per cent of profits.
