Emerging markets such as India have always run higher inflation rates than developed economies such as the US and countries of Western Europe. But for the first time in the past 30 years, the US reported a higher consumer price inflation (CPI) rate than India in five consecutive months. The US reported a CPI rate of 7.5 per cent in January 2022 against 6.01 per cent in India and analysts expect the trend to continue for at least a few months more
It has Rs 20,500 crore of standard stressed pool outstanding as of June 2018. Thus, the entire stressed book (net NPAs and standard stressed pool) is nearly two times its net worth.
Stocks of public sector companies, especially the oil refining and marketing companies (OMCs) - Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL) and Indian Oil Corporation Limited (IOC) - logged gains on Tuesday in a weak market. While the Nifty lost nearly 1 per cent in trade on Tuesday, the Nifty CPSE index - a gauge of performance of central public sector enterprises on the National Stock Exchange (NSE) - gained over 3 per cent in intra-day trade. The rally in PSU stocks comes on the back of the BPCL chairman, Arun Kumar Singh suggesting in the company's annual general meeting (AGM) on Monday that the government intends to complete the divestment process in the OMC by March 2022.
Market cap of government companies has remained unchanged in the past 8 years.
However, experts caution that investors should not expect the big returns they got from the sector between March and September 2020.
Out of 11 companies that got listed in 2019, nine have outrun the market by gaining more than 10 per cent against their respective issue price.
Valued at $71.2 billion, the bank's market capitalisation is more than that of global banks like Barclays, JP Morgan Chase and Credit Suisse.
The latest circular from BSE that sought to cap the price movement of select scrips, especially the mid-, small-cap segments, traded on the exchange is not without a reason. A quick calendar year-to-date price check on the stocks from the categories put under 'Add-on Price Band Framework' by the BSE reveals a total of 210 stocks have seen their market price more than double. Among individual stocks, SC Agrotech, Adinath Textiles, Waaree Renewable Technologies, Steel Strips Infrastructure, Unistar Multimedia, Texel Industries, Raja Bahadur International and Hindustan Everest Tools from the BSE's X and XT group have rallied over 500 per cent during this period. Topping the charts is Gita Renewable Energy, which has zoomed 3,964 per cent to Rs 272.35 now from Rs 6.7 as on December 31, 2020.
Despite near-term headwinds of rising input costs and the possibility of lower demand for products as Covid dented rural & urban India, and impacts both production & consumption, analysts remain bullish on stocks of fast moving consumer goods (FMCG) companies and expect the index to relatively outperform its peers in the second half of fiscal 2021-22 (FY22). In the past one year, prices of key commodities such as groundnut oil, mustard oil, Vanaspati, soya oil, sunflower oil and palm oil have shot up in the range of 20 per cent to 60 per cent, data show. The FMCG sector macros in this backdrop, according to analysts, have further deteriorated because of weakness in consumer demand and likely margin pressure due to elevated crude oil, palm oil and global food prices.
Together, the top 10 business groups reported a pre-tax loss of Rs 19,342 crore during the January-March 2020 quarter, as against a profit before tax of around Rs 48,500 crore in the year-ago period and Rs 39,600 crore during the December quarter. While Vedanta was the worst hit. others included Aditya Birla, Bharti, Adani, Mahindra, and Tata.
The Indian rupee is down nearly 2 per cent against the US dollar since the beginning of January 2019. Experts attribute the Indian rupee's relatively poor performance to a sharper-than-expected fall in economic growth in India.
The combined interest payment for India's top listed companies, excluding financial and oil and gas firms, was up 15.2 per cent year-on-year during the six months ended March 2019, outpacing the change in net sales and operating profit.
The relentless rally in small- and mid-cap stocks continues as large-caps show signs of fatigue. In July, the Nifty Smallcap 100 rose 8.1 per cent, extending its year-to-date (YTD) gains to 48.5 per cent, while the Nifty Midcap 100 added 3.1 per cent, taking its YTD rise to 33.5 per cent. On the other hand, the Nifty50 remained unchanged for the month, with YTD gains of 12.7 per cent.
For large start-ups the US market is considered to be a preferred destination, as Indian investors were seen as hesitant to pay the kind of valuation private equity investors or the US markets pay. However, Zomato's listing has quashed these notions.
India's top IT companies have shown a hiatus between their performance on the bourses in the pandemic period and earnings growth. The combined market cap of the top five IT companies - Tata Consultancy Services, Infosys, Wipro, HCL Technologies, and Tech Mahindra - is up 87 per cent since the end of March 2020. In comparison, the benchmark BSE Sensex is up 68 per cent during the period. So the industry beat the broader market by a big margin in the last one year.
Companies in the small-cap universe are having a dream run - the Nifty Smallcap 100 index has shot up more than 25 per cent on a year-to-date basis, even as the benchmark Nifty is up 7 per cent. This is the best start for the index since 2017 when the Nifty Smallcap 100 index surged 32.3 per cent between January 1 and May 10. However, in terms of outperformance to the Nifty, this year's performance is the best in more than a decade. A combination of sectoral tailwinds and lack of institutional selling pressure has helped small companies escape from the correction triggered by the second wave of Covid-19.
sharper-than-expected economic recovery back home, analysts say, can fuel a further rally in domestic cyclicals, industrials, and financials as global central banks continue with their easy money policy.
Analysts attribute this withdrawal trend to the nervousness ahead of US presidential elections and the fact that the markets raced ahead even as the economic recovery remained fragile back home.
BSE-listed companies' market capitalisation reached Rs 197.7 trillion on January 21, against India's nominal GDP of Rs 190 trillion during 12 months ended December 2020.
There will be pressure on the fiscal situation, especially at a time when the monsoon can also disappoint. More populist expenditure is on cards if the mandate is a hung Parliament or a coalition government.
The divestment process, however, will not be an easy affair as there are multiple stakeholders, including the employee unions, whose concerns will have to be addressed.
Analysts attribute this fall to the recent moderation in energy (mainly crude oil) and commodity prices, lowering of input costs for companies in sectors such as FMCG, consumer durables, and automobiles, reports Krishna Kant.
Analysts expect firms to shift focus to online platforms to boost sales in these Covid-19-impacted times.
Auto companies are now grappling with a slowdown in sales, triggered by pent up demand due to the COVID-led lockdown easing a bit and supply-side issues for raw material.
Analysts, however, suggest investors remain selective on realty stocks and buy only where there is revenue visibility and a credible promoter backing.
Further outperformance hinges on pickup in industrial activity, buying by local investors.
Since UK referendum outcome to exit European Union last Friday, 32 companies have hit record highs.
BJP loss could trigger a correction
Analysts attribute the surge to a host of factors, particularly the interest shown by the retail investors in these two market segments.
India Inc's cash pile was up 13.8 per cent last fiscal year, thanks to a combination of higher profits in sectors such as IT and fund raising by top companies such a Reliance Industries, Bharti Airtel and Tata Motors, among others.
Experts point to the higher contribution of rural from the north for the growth reported by the region, a point endorsed by companies who've been pushing their presence aggressively there.
The Karnataka election is being seen as the semi-final to the 2019 general elections and appears to be heading towards a close fight
What worked for the markets was favourable global investor sentiment and encouraging flows into the emerging markets following stimulus measures taken by central banks.
A weak economy coupled with rising Covid-19 cases and inflation that is above RBI's comfort zone, geopolitical developments, and upcoming India Inc's second quarter results for FY21 could impact sentiment, analysts say.
Most analysts as well as company executives say the rally in commodity prices is ill-timed coming just when firms were recovering from disruptions such as demonetisation & introduction of GST
There is positive correlation between crude oil prices and Indian equities and investors can expect more upside after the recent rally in Brent crude price.
After Maharashtra, analysts expect more states like Karnataka and Haryana to slash stamp duty rates. However, analysts, do caution that it's still a long road to recovery for the realty sector.
Their share in overall market capitalisation of BSE stocks has risen to a four-year high
The combined profit before tax of 748 companies, which have declared their results for Q1FY21, is down 46 per cent YoY. Their net sales went down by a quarter as the Covid-19 lockdown led to a sharp fall in economic activity.
While sales momentum from rural areas may last another three to six months, sales growth in urban areas could stage a comeback by next year's June quarter as people learn to live with the coronavirus and economic activity gradually improves in the cities.
