Benefitting from the economic rebound, banks are expected to report a healthy bottom-line and asset quality profile in the quarter ended March 2023 (Q4FY23). The net profit of listed commercial banks is projected to grow by an average 43.6 per cent year-on-year (YoY) in Q4FY23 amid better net interest margins (NIMs) and declining credit costs. This is based on a combined assessment of analyst estimates for 17 banks on Bloomberg database.
The argument that India is going towards a 'Hindu rate of growth' is "ill-conceived, biased and pre-mature" when weighed against the respective data on savings and investments, said SBI Research in its Ecowrap report. The term Hindu rate of growth was coined by economist Raj Krishna in 1978, which denoted the economic growth of about 3.5-4.0 per cent in terms of GDP during 1947-1980. "India's quarterly sequential Y-o-Y GDP growth has been in a declining trend in FY23.
The IT services giant is also slated to hold a board meeting on April 13 and 14, to approve of and take on record the consolidated financial results of the company for the quarter and year ended March 31, 2021. Indian IT majors will be announcing their fourth quarter (Q4) and 2020-21 results starting April 12. At the end of the Q3 FY21 Infosys had cash and investment of $4.5 billion.
A spate of recent orders under the Indigenously Designed Developed and Manufactured (IDDM) category have led to investor focus on defence stocks. Actually, the defence index has been an outperformer for a long while with public sector undertakings (PSUs) like Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Bharat Dynamics (BDL), Garden Reach Shipbuilders Engineers (GRSE), Cochin Shipyard and Goa Shipyard being beneficiaries of the policy.
After withdrawing record funds in 2021-22, foreign portfolio investors (FPIs) continued their sell-off in the last fiscal too and pulled out Rs 37,631 crore from Indian equities amid aggressive rate hikes by central banks globally. The outflow trend is likely to reverse in the current financial year since India has the best growth potential in the financial year 2023-24 (FY24), VK Vijayakumar, chief investment strategist at Geojit Financial Services, said. Market analysts believe that FPI flows in the current financial year would be decided by a host of factors, such as the US Federal Reserve's policy stance, oil prices movement and development in the geopolitical situation.
Fitch Ratings has cut India's economic growth forecast to 8.7 per cent for the current fiscal but raised GDP growth projection for FY23 to 10 per cent, saying the second COVID-19 wave delayed rather than derail the economic recovery. In its APAC Sovereign Credit Overview, Fitch Ratings said India's 'BBB-/Negative' sovereign rating "balances a still-strong medium-term growth outlook and external resilience from solid foreign- reserve buffers, against high public debt, a weak financial sector and some lagging structural factors". The 'Negative' outlook, it said, reflects uncertainty over the debt trajectory following the sharp deterioration in India's public finances due to the pandemic shock.
State-owned oil firms such as ONGC and IOC will invest over Rs 1.11 lakh crore in the next fiscal year starting April as they supplement the government's massive spending programme to spur economic growth. Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), GAIL (India) Ltd, Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL) and Oil India Ltd (OIL) will together make a 7.4 per cent higher capital expenditure in the 2022-23 fiscal (FY23). The capex spending of Rs 1.11 lakh crore in 2022-23 compares with a revised estimate of Rs 1.04 lakh crore for the current fiscal year that ends in March, according to Union budget documents.
Health premiums have picked up again after a slight moderation in growth, taking the non-life insurance industry's growth to 22 per cent in November, and to almost 17 per cent so far this financial year. Health premiums grew by 22.54 per cent in the April-November period, driven largely by group health plans, which have seen good growth due to rationalisation of discounts in premiums caused by adverse claim ratios in prior periods, medical inflation, and enhanced coverage. Health premiums grew by 29 per cent in the same period last year.
RBL Bank's interim chief executive officer (CEO) and managing director (MD) Rajeev Ahuja on Sunday tried to allay concerns around the health of the bank. He said events during the weekend are not linked to RBL's asset quality. The bank said Vishwavir Ahuja, its managing director (MD) and chief executive officer (CEO), had on Saturday proceeded on leave with immediate effect on medical grounds.
'India has always been a bottom-up stock-picking market, and as growth recovers with higher liquidity, mid and small-caps always tend to outperform.'
'While we note the very strong cyclical recovery in the economy, we believe there is still uncertainty over medium-term prospects.'
Zomato has lost over 9 per cent thus far in calendar year 2023 (CY23) and has underperformed the S&P BSE Sensex that has slipped nearly 5.3 per cent during this period. Despite this underperformance, analysts at HSBC think that the stock can hit Rs 87 going ahead - up over 64 per cent from the current levels. The food delivery industry, wrote Yogesh Aggarwal and Abhishek Pathak of HSBC in a recent note, has slowed considerably in the last few months.
The number of centrally sponsored schemes have increased to 35 in FY22 from 30 in FY21 and central sector schemes have increased to 704 from 685 in the previous year, reports Dilasha Seth.
The country's largest listed footwear brand by market capitalisation, Metro Brands, posted better than expected December quarter results for the 2022-23 financial year (FY23), riding on store expansion and strong same store sales (SSS) growth. Profitability too remained robust, even as net profit growth was marginally lower. The company, which retails across the Metro, Mochi, Walkway, Crocs and Fitflop formats, posted a 24 per cent growth in revenues over Q3FY22.
The country's gross domestic product (GDP) is likely to grow at 5.8 per cent in the third quarter of fiscal 2022, according to an SBI's research report- Ecowrap. The country's economy expanded by 8.4 per cent in the second quarter of 2021-22, to cross pre-pandemic levels. However, the GDP growth in July-September period was slower than the 20.1 per cent expansion in the previous quarter.
Investors are pushing back more often against companies' resolutions on what is paid out to top executives. In the first four months of financial year 2022-23 (FY23), there have already been five such rejections, according to shareholder voting data from tracker Adrian, a platform maintained by the proxy advisory firm Institutional Investor Advisory Services India (IiAS). Two of these have been at multiplex chain PVR and direct-to-home company Dish TV India.
Tata Motors on Monday launched the country's first CNG truck in the medium and heavy commercial (M&HCV) vehicle segment in the 28- and 19-tonne nodes. Most truck makers, including Tata Motors, currently offer CNG only in the small and light commercial vehicle segments. The company also launched a fleet of seven trucks in the intermediary and light commercial vehicle (I&LCV) segment, meant for varied applications.
Japanese tech investor SoftBank may end up investing around $1 billion in India in 2022, nearly a third of what it did last year, according to people closely tracking its plans. Last year, SoftBank undertook investments of $3.2 billion in 12 deals. In the first five months of CY22, the giant investor has invested $400-500 million in five deals.
Consumption of gold is the highest among middle-income households - those with annual income between Rs 2 lakh and Rs 10 lakh - who account for an average of 56 per cent of gold sales over the last five years, according to a nationwide survey conducted by India Gold Policy Centre (IGPC) at the Indian Institute of Management, Ahmedabad (IIM-A). "Per capita consumption is highest among the rich, but total volume still rests with the middle-income group. "With increasing income, there is an increasing propensity to consume gold, although the share of gold in the portfolio does not increase with the same proportion of income," the survey report says.
The share of listed public sector undertakings (PSUs) in the overall market capitalisation has hit a three-year high of 11.4 per cent. This comes on the back of the sharp outperformance of the PSU pack over the past two years. In 2021 and 2022, the BSE PSU index gained 41 per cent and 23 per cent, respectively. Market participants said a combination of factors like value buying and bullishness, particularly in public sector banks (PSBs), were the reason for the improved prospects.
Fitch Ratings on Monday cautioned that the Indian government has little fiscal headroom at its disposal to respond to possible shocks to growth given the country's lowest investment grade credit rating with a negative outlook. "India's public debt/GDP ratio, at about 87 per cent in FY21, is well above the median of around 60% for 'BBB' rated sovereigns. "We revised the Outlook on India's rating to Negative, from Stable, in June 2020, partly owing to our assumptions about the impact of the pandemic on public finance metrics. "The government has little fiscal headroom at its current rating level to respond to possible shocks to growth," it said in a report.
Cooler weather meant that demand for milk products and value-added items like buttermilk and ice-cream did not show the usual rise.
Global private equity investor Advent International on Monday said it is acquiring a significant stake in Suven Pharmaceuticals from its promoters, the Jasti family. The PE major said this will be followed with an open offer to acquire 26 per cent more in the listed contract development and manufacturing organisation from public shareholders, and also merge the company with investee company Cohance Lifesciences, as per an official statement. Media reports on a Monday morning pegged the acquisition at Rs 6,300 crore, and that Advent had pipped rival Blackstone for the acquisition.
The stock of the retail chain Avenue Supermarts (Dmart) was the biggest loser in the BSE 100 Index shedding 4.35 per cent on Thursday and added to these losses on Monday by falling an additional 1.3 per cent. The Street was reacting to lower than expected operational performance by the company in the March quarter. The country's largest listed retailer by market capitalisation reported a 20 per cent year-on-year (y-o-y) growth in its top line to Rs 10,337 crore.
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.
The 62 per cent increase in natural gas prices by the Indian government will boost the profitability of upstream companies in the country and support their investment spending, Fitch Ratings said on Tuesday. The price for gas from fields that were assigned by the state to oil companies, mainly Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL), increased to $2.90 per million British thermal units (mmBtu) for October 2021-March 2022, from $1.79 per mmBtu in the previous six months. "Higher gas prices will increase the input cost for key end-consumer sectors, to the extent the price hike is passed on," Fitch said.
Bajaj Finance's quarterly business update, coupled with around 24 per cent fall over the past six months, has turned risk-reward favourable for investors, observe analysts. They see up to 39 per cent upside in the stock, from a one-year perspective. Global brokerage CLSA, for instance, has upgraded the stock from 'underperform' to 'outperform' with an increased one-year target price of Rs 6,600 (vs Rs 6,000 earlier) as it believes the risk-reward has turned favourable for the counter, and there is scope for expansion if growth remains robust.
The gross tax revenues have touched 65 per cent of the Budget estimates at Rs 17.81 lakh crore during the first eight months of the current fiscal till November, propelled by corporate and personal income tax mop-up, according to the Economic Survey 2022-23 presented in Parliament on Tuesday. The survey, authored by Chief Economic Advisor V Anantha Nageswaran, said the 'substantial reforms' in India's taxation ecosystem post-2014 and policy reforms have removed the distortionary incentives from the economy. Reforms like GST, reduction in corporate taxes, exemption of sovereign wealth funds and pension funds from taxes, and removing Dividend Distribution tax have reduced the tax burden on individuals and businesses.
Analysts have turned cautious on Cipla, as the recently issued form 483 by the US FDA with eight observations to its Pithampur (Indore) plant is expected to delay the launch of the company's key generic - Advair - in the US. The Indore plant contributes around 5 per cent of Cipla's revenues, as per analysts' estimates. While the respiratory product, which is used to treat asthma, had cleared the pre-approval inspection of the regulator at the Indore unit; the final approval could be unlikely until the company clears the recent US FDA observations, analysts say.
Vodafone Idea (Vi) lost 12.4 million subscribers in the first quarter of FY22, the most since the fourth quarter of FY20, as the second wave of Covid hurt its operational and financial performance. Vi had managed to trim subscriber losses in the third and fourth quarters of FY21. However, it lost 12.4 million subscribers and its customer base shrunk to 255.4 million in the first quarter of FY22. Sequential fall in 4G users was modest, indicating that most of the loss was in the low-margin 2G segment.
Fitch expected economic activity to contract by 5 per cent in FY21 due to the strict lockdown measures imposed since March 25, before rebounding by 9.5 per cent in FY22.
The March quarter (Q4) of the ongoing financial year (FY23) may see cement companies report better financial numbers as input costs ease, pricing action resumes, and cement demand remains firm. While companies have been cautiously optimistic about their outlook, analysts and sector experts remain bullish. In its latest report on the cement sector, brokerage IDBI Capital said that it expected earnings before interest, tax, depreciation, and amortisation (Ebitda) per tonne for cement companies to improve by Rs 200-300 sequentially in Q4.
With a new chief executive officer (CEO) at the helm, the country's largest two-wheeler maker Hero MotoCorp is now looking to cut flab and move towards a leaner organisation. It has launched a voluntary retirement scheme (VRS) for its staff as it aims to make the organisation 'agile and future-ready'. Recently, the company's erstwhile chief financial officer (CFO) Niranjan Gupta was elevated as CEO.
Distribution yields could rise, but risk of Covid, higher interest rates remain.
A small Ahmedabad-based chartered accountancy firm, whose appointment was questioned by a US short seller in its scathing report against the conglomerate run by billionaire Gautam Adani, has resigned due to "pre-occupation", Adani Total Gas Ltd said. Hindenburg Research in its January 24 report that levelled allegations of fraud, stock manipulation and money laundering against the Adani group, had also raised the issue of the size and capability of the firms auditing the conglomerate. Adani group has repeatedly denied all allegations.
Target prices around Rs 400 suggest a significant upside.
Strong Q3 brings Infosys comfort amid macro risks.
Kinetic Engineering (KEL), the makers of the iconic Luna two-wheelers in the seventies, will soon start producing components for an electric version of the moped. Pune-based Kinetic said in September that Luna would make a comeback in an electric avatar. The electric Luna, or E-Luna, will be launched by KEL's sister company Kinetic Green Energy and Power Solutions.
One thing is for sure: It smacks of the regulator's lack of confidence in the bank's board, points out Tamal Bandyopadhyay.
The economy faces more downside risks now as economic disruptions arising from the second wave are likely to stabilise only from July, warned the Swiss brokerage USB Securities. Last month, the brokerage had cut its GDP forecast by 150 bps to 10 per cent for FY22, which though is much higher than the consensus projections by others with some pegging it at as low as 8 per cent. Though adverse impacts on sequential growth is less severe than in the June 2020 quarter when it plunged by 23.9 per cent, as lockdowns are more targeted and localised and households and businesses have adjusted to the new normal now, still, it is increasingly possible that normalcy returns only by July as against our baseline assumption of June.
