Capital expenditure by 54 large central public sector enterprises and five departmental arms, having a capex minimum target of Rs 100 crore, rose 93 per cent year-on-year (YoY) in the April-May period to Rs 1.39 trillion. The National Highways Authority of India (NHAI) and the Railways have started this financial year's capex cycle on a stronger note. In the first two months of FY24, the 54 CPSEs, along with the departmental arms, achieved 19 per cent of their combined budget target of Rs 7.33 trillion, Business Standard has learnt.
The recent price correction in broader markets has hit cement companies hard. So far in the current month, smallcap firms like Visaka Industries, Andhra Cements NCL Industries, Sahyadri Industries, and KCP have lost 19.7 per cent, 14.3 per cent, 13.8 per cent, 13.5 per cent, and 11.5 per cent, respectively. On the contrary, largecap companies, while registering losses for the month, have seen a softer blow.
India's gross tax revenue, comprising both direct and indirect taxes between April and July, reported a growth rate of merely 2.8 per cent to Rs 8.9 trillion compared to the same period a year ago, as shown by government data on Thursday. This growth was dampened by direct tax figures, offsetting the healthy growth in goods and services tax collections and Customs duties. While net tax revenue contracted by 12.6 per cent to Rs 5.8 trillion up to July, accounting for 25 per cent of the Rs 23.3 trillion full-year target, this could be attributed to the increased tax devolution to states during the period.
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.
At an aggregate level, the late ace investor's portfolio that was valued at Rs 32,445 crore as on March 31, 2023 is now worth Rs 35,979 crore.
Given the uncertain macroeconomic conditions, most brokerages have turned slightly cautious on the pace of growth in State Bank of India's (SBI's) earnings going ahead. While they don't see any significant risk arising for now, its sheer balance sheet size and systematic importance has nudged them to cut earnings estimates for fiscal year 2023-24 (FY24) and 2024-25 (FY25) up to 5 per cent. India's largest state-owned bank, on Thursday, reported standalone net profit of Rs 16,694.51 crore for Q4FY23.
Indian IT services sector's revenue growth will slow down to 3 per cent in the current fiscal from 9.2 per cent in the previous financial year, a domestic ratings company said on Tuesday. Icra Ratings said the profitability will also take a beating in this financial year and the operating profit margin will narrow by up to 1 percentage point to 20-21 per cent. The topline growth will come down to 3-5 per cent in FY24 from the 9.2 per cent posted in FY23, the agency said, attributing the slowdown to softening demand.
Mutual funds (MFs) are lining up distinguished new fund offerings (NFOs) for the next financial year to win over investors after a lukewarm response to product launches in the 2022-23 financial year (FY23). NFOs drew a lukewarm response in FY23 as launches were mostly in the passive debt space, which has a comparatively lower popularity among retail investors. The limited launches in equity space also failed to rake in huge sums due to subdued investor sentiments in a volatile market.
Notwithstanding the windfall tax placing a cap on profits, oil and gas producers like Oil India (OIL) and Oil and Natural Gas Corporation (ONGC) have done well in the October-December quarter (third quarter, or Q3) of 2022-23 (FY23). ONGC faces the drag of poor results from its subsidiary Hindustan Petroleum Corporation, and in comparative terms, OIL is better off. Standalone net sales in Q3FY23 stood at Rs 5,900 crore - up 57 per cent year-on-year (YoY), up 2 per cent quarter-on-quarter (QoQ).
Corporate India is starting to step up its capital expenditure plans amid government incentives and signs of rising demand, company executives and analysts have indicated. This coincides with the Reserve Bank of India (RBI) recently citing a double-digit growth in private capital expenditure. Healthy balance sheets of banks and corporates, along with increasing capacity utilisation and improving business sentiment, are contributing to a favourable environment for sustained growth in private sector investments, the RBI said in its policy last week.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
Smaller players manufacturing electric two-wheelers (E2Ws) are unlikely to raise prices of their models initially in 2024 in order to ensure volumes do not drop. The prices of E2Ws range from Rs 90,000 to Rs 1 lakh, the players being Lohia Auto, Godawari Electric, Emobi, etc. As India's E2W sector gears up to go past one million in 2024, manufacturers are likely to maintain price stability, underpinned by strategic independence from subsidies under Faster Adoption and Manufacturing of Electric (and Hybrid) Vehicles II (FAME II), localisation efforts, sustainability initiatives, and a focus on affordability.
The stock of the country's largest listed oral care company -- Colgate-Palmolive (India) Ltd is up 18 per cent over the past month. The gains were led by better than expected June quarter (Q1) performance of the 2023-24 financial year (FY24) and growth revival expectations of the oral care category. The company's volume growth is pegged at 5-8 per cent in Q1FY24. This is the second consecutive quarter of volume growth.
Higher discounts on crude oil offered by the United Arab Emirates (UAE) to wean India away from Russian crude may soon see Indian refiners ramping up purchases from the Gulf nation, officials at multiple refiners said. They also pointed to the recent agreement on trade settlement in national currencies signed between India and the UAE as a reason for this. "While discussions are underway, the UAE has offered discounts on crude, which will be more than that of the current level of Russian discounts.
India's aviation industry could return to profitability in 2023-24 for the first time since the pandemic. The industry may pare aggregated net loss by 75-80 per cent year-on-year (YoY) to between Rs 3,500 crore and Rs 4,500 crore in 2022-23 (FY23), compared with Rs 17,500 crore of net losses in 2021-22 (FY22). A combination of recovery in passenger volumes and easing cost pressures due to stable fuel and foreign exchange (forex) costs could spark a turnaround. CRISIL says domestic and international passenger traffic recovered to 90 per cent and 98 per cent, respectively, of pre-pandemic traffic (2019-20, or FY20), in April-December 2022, compared with April-December 2019.
Zee Entertainment Enterprises Ltd (ZEEL) is seeking rapprochement with Sony Group as it makes a last-ditch effort to resurrect a $10 billion merger, according to industry sources. After the Japanese multinational firm pulled the plug on its $10 billion merger deal in January, the Indian company reached out again to Sony to reconsider the termination and offered for talks this month, a source said. On the other hand, Sony is understood to be evaluating the proposal from Zee.
10 high dividend paying stocks across sectors that are expected to maintain or even increase their pay-outs in FY23 thanks to faster earnings growth in the last four quarters.
Something is cooking in online food delivery. After 15 years of grappling with the demands of the business - read cash burn - Gurugram-based Zomato reported its first profit in the first quarter of 2023-24 (FY24). Not satiated, it reported a profit in the following quarter as well: Of Rs 36 crore in the second quarter compared to Rs 2 crore in the first. A year ago, in the second quarter of FY23, it had reported a loss of Rs 251 crore.
Outward remittances under the Reserve Bank of India's (RBI) liberalised remittance scheme (LRS) rose in May 2023 to $2.88 billion as compared to $2.33 billion in April, mainly due to an uptick in travel spend. People in India spent close to $1.5 billion on international travel in May, against $1.10 billion in April.
Chief Economic Advisor (CEA) V Anantha Nageswaran on Thursday said describing India's recovery as 'K-shaped' was wrong as both rural and urban economies were recovering, albeit at different paces. Speaking to reporters at the Finance Ministry, Nageswaran said the gross domestic product (GDP) growth print for the recent October-December quarter (Q3FY23) will likely be revised upwards. "The notion of using the letter 'K' to denote urban and rural is somewhat wrong because it is almost as if one is growing and one is contracting. "I would say one segment's slope is more positive, and the other one slope is less positive but it is positive," Nageswaran said.
Notwithstanding the fact that the country's pharmaceutical (pharma) pricing regulator has allowed a 12 per cent price increase for medicines listed under the National List of Essential Medicines (NLEM) in 2023, analysts and industry insiders predict that the overall domestic pharma industry will only witness a price hike of 5-6 per cent. This is attributed to higher competitive intensity in the market. Krishnakumar V, executive director and chief operating officer (CEO) of Eris Lifesciences, a domestic-focused pharma company, noted that the NLEM segment experienced growth suppression of around 150 basis points due to price reductions during the January to July period this year.
Of the top four companies, which collectively hold more than half of India's market share, two have pitted Shah Rukh Khan and Sunny Deol against each other.
Hybrids have helped Maruti acquire leadership in SUVs, a segment that was never its forte. Toyota has also risen with the hybrid tide to clock its highest-ever annual sales in 2023.
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.
Sales growth of entry-level cars or hatchbacks like WagonR and Alto have seen a decline during the past few years due to changing consumer preference. Maruti Suzuki chairman R C Bhargava had on October 28 said that he does not expect hatchback unit sales to grow in the fourth quarter (Q4FY23) or in the next fiscal year.
'In staples, we have still managed in rural areas.'
With sentiment for the automotive (auto) sector turning positive, stocks of two-wheeler auto majors have been hitting their 52-week highs. Hero MotoCorp, Bajaj Auto, TVS Motor Company, and Eicher Motors recently reached their yearly highs on strong sales in the festival season and the expectation of faster growth rates ahead. Since the start of this month, listed two-wheeler majors have delivered returns in the 12-17 per cent range, compared to the 7 per cent gains for the S&P BSE Auto Index and 3 per cent for the benchmark S&P BSE Sensex.
Maruti Suzuki India (MSIL) has ambitious plans to increase capacity. It is also seeking shareholders' approval for a complex swap transaction, which would acquire Suzuki Motor Gujarat (SMG), a subsidiary of Suzuki Motor Corporation (SMC) through a preferential offer. SMC already holds 56.37 per cent of MSIL's equity.
The FMCG sector is generally considered to be a safe haven during difficult times as people never stop buying soap and toothpaste. However, weak rural and semi-urban demand has been a factor since the lockdowns of 2020-21 while rising inflation has also impacted margins. While the FMCG majors have survived on the basis of price hikes and good management practices, they have seen growth slowdowns and experienced margins being squeezed as raw materials and transport costs rose. The FMCG sector witnessed positive volume growth in the fourth quarter of the 2022-23 financial year (Q4FY23) after five consecutive quarters of decline, and the rebound in demand was led by urban markets.
India's private and state government-owned ports (non-major ports) continued to grow faster than those owned by the Centre (major ports) through the first three quarters of 2023-24 (FY24), cargo handling data shows. At 604 million metric tonnes (mmt), cargo at major ports grew by 5 per cent between April and December, while non-major ports' cargo traffic growth was 11 per cent at 531 mmt. During December 2023, central government-owned ports in India handled cargo volumes of 69.9 mmt, a tepid year-on-year (Y-o-Y) growth of 0.7 per cent.
Strong Q3 brings Infosys comfort amid macro risks.
The Securities and Exchange Board of India (Sebi) has proposed that at least 10 per cent of corporate bond market trades by foreign portfolio investors (FPIs) should be done on the request for quote (RFQ) platform. At present, most trades in the corporate bond market are over-the-counter (OTC), creating a lot of opacity. The markets regulator has been nudging debt market participants such as mutual funds (MFs), alternative investment funds (AIFs) and brokers to use the RFQ platform to boost secondary market liquidity and transparency.
As temperatures soar across the country, amid searing heat wave, analysts see power demand hitting fresh record highs this year. The time, therefore, may be opportune to add related stocks on dips as higher demand boosts earnings visibility, they said. On April 18, India's electricity demand touched a new high of 216 gigawatts.
Outward remittances in February under the Reserve Bank of India's (RBI's) liberalised remittance scheme (LRS) fell 23 per cent over January, latest data released by the central bank, in its monthly bulletin, revealed. In February, Indians remitted $2.1 billion under the RBI's liberalised scheme. On a year-on-year (YoY) basis - aided by international travel - LRS jumped 15.24 per cent. Further, in April 2022-February 2023, outward remittances under LRS stood at $24.18 billion, an all-time high.
Bolstered by an impressive performance in the global specialty business and outstanding results in the Indian market, Sun Pharmaceutical Industries, the largest pharmaceutical (pharma) company in the country, showcased a strong performance in the July-September quarter (second quarter, or Q2) of 2023-24 (FY24).
'IT companies do not have a large presence there either in terms of market and team. So, the impact of the war will be minimal. But West Asia is an emerging economy.'
Indian sweet, snack, and restaurant chain group Bikanervala, with revenues of over Rs 3,000 crore, is working towards an initial public offering (IPO) for its food company in the next three years. Before that, it could also bring in private equity (PE) investors. The low-profile Aggarwal family-owned group company, Bikanervala Foods (which also sells under the brand name Bikano), operates in the snack business.
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.
Titan posted better than expected revenue growth in the March quarter of the financial year 2022-23 (Q4FY23), powered by strong demand trends in the jewellery and watch segment. Standalone jewellery sales for the firm were up 24 per cent year-on-year (YoY) on a slightly lower base and aided by like-to-like growth of 19 per cent. The company highlighted that new buyer growth was at 15 per cent while average ticket size was up 8 per cent.
Sanjiv Puri, chairman and managing director of ITC, is looking to expand the conglomerate's play outside India by taking "strategic positions" in markets close to home in the non-cigarette fast-moving consumer goods (FMCG) and hospitality businesses. In a recent conversation with Business Standard, Puri revealed that ITC is setting sights beyond India's borders. "We already export to 100-odd countries. We want to scale that up and take some strategic positions in markets close to us," he said.
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