Households may be feeling the pinch of higher inflation but corporate India is enjoying record high margins and profits. The combined quarterly net profit of listed companies scaled a new high in the April-June 2023 quarter owing to a sharp rise in operating and net profit. The expansion in margins more than compensated for the slowdown in revenue growth, which slipped into single digits in Q1FY24 after a gap of nine quarters.
Billionaire banker Uday Kotak founded bank as well as brokerage created and oversaw an offshore fund used by an unnamed investor to profit from a plunge in Adani shares that followed a damning Hindenburg report, the US short seller said on Tuesday. Hindenburg Research, which had in a January 2023 report alleged stock market manipulations and accounting fraud at the Adani group, said it has received a show cause notice from the Indian markets regulator Sebi over gains made from betting on the conglomerate's shares.
India can sustain 8 per cent annual GDP growth and the conducive macroeconomic configuration may become a launching pad for a step-up in the country's growth trajectory, said an article on the 'State of Economy' in the central bank's March Bulletin published on Tuesday. Over the period 2021-24, gross domestic product (GDP) growth has averaged above 8 per cent. The global economy is losing steam, with growth slowing in some of the most resilient economies and high frequency indicators, pointing to further levelling in the period ahead, said the article authored by a team led by RBI Deputy Governor Michael Debabrata Patra.
From its lows this month, the stock of Sona BLW Precision Forgings is up 10 per cent on better-than-expected results. The stock rose by 4 per cent in the trading session on Tuesday after Japan's Nikkei Group said the Indian automotive component major has topped its rankings in terms of competitive advantage. The rankings are based on sales, profit margin, capital expenditure, research and development, and market capitalisation.
The margins of tyre manufacturers could come under pressure given the rise in rubber prices and the moderating demand for tyres. In the past three quarters, the revenue growth for listed tyre companies has moderated from low to mid-single-digit on account of factors such as lower demand in replacement segments, weak export markets and the decline in the average selling prices to car makers (OEMs). Demand trends could remain muted in the near term, given the weak passenger vehicle replacement demand, assuming a typical replacement cycle of 3-5 years, and demand moderation in the OEM segment.
With high credit growth and healthy asset quality, listed commercial banks are expected to report steady growth in earnings during the fourth quarter ended March 2024 (Q4 FY24). Profits are expected to grow at 9.6 per cent year-on-year (Y-o-Y) and net interest income (NII) by 8.7 per cent in Q4 FY24, according to Bloomberg analysts' estimates. According to Motilal Oswal Securities, while bank credit growth has been robust, deposit growth has also gathered pace.
US's terrible political and economic leadership will ultimately cost the dollar its value. India must act early to avoid being dragged down, suggests R Jagannathan.
Kansai Nerolac Paints has seen its market capitalisation (mcap) erode by over 5 per cent since May 3 after posting a subpar performance in the fourth quarter of 2023-24. Weighed down by stiff competition, the company has shed Rs 1,172 crore over the past two weeks in mcap. India's largest paint maker in terms of mcap, expects double-digit growth in the industrial segment and aims to maintain margins, but its performance in decorative paints could suffer amid competition.
UPL, the country's largest agrochemical company, had a weak July-September quarter (Q2), reporting a sharp fall in revenues across geographies. Overall, the revenues were down 19 per cent on the back of lower agrochemical prices and inventory destocking. While the overall volumes were down 7 per cent, prices fell by 15 per cent. Volume decline in the European market was on the back of high channel inventory and product bans while in India the fall by 27 per cent was on account of muted demand for segments such as cotton and pulses.
The broader NSE Nifty fell 78.75 points, or 0.70 per cent, to close at 11,234.55.
'Now, the time has come to enlighten and educate our police machinery on the concept of freedom of speech and expression guaranteed by Article 19(1)(a) of the Constitution and the extent of reasonable restraint on their free speech and expression'
Irregular rainfall and a pick-up in commodity costs are expected to weigh on the demand and margins of fast-moving consumer goods (FMCG) companies. Most companies reported a sharp expansion in gross margins in the April-June quarter (first quarter, or Q1) of 2023-24 (FY24), given the lower prices of key raw materials and earlier price hikes. Furthermore, there were expectations that cost savings being passed on could reflect in volume growth going forward. However, these hopes could be dashed if demand recovery, especially in the rural segment, stalls, and gains on the raw material front start to recede.
Top performers were PowerGrid, ONGC, Ultratech Cement, Asian Paint, Kotak Bank and Titan. Nifty settled with a gain of 232.40 points at 14,761.55.
Showing the effect of the slowdown in global economic activity, the equity foreign direct investment (FDI) into India declined sharply to $13.9 billion in April-July 2023 from $22.04 billion a year ago. The net FDI, inflows minus outflows, declined from $17.28 billion in April-July 2022 to $5.70 billion in April-July 2023 on account of moderating gross FDI and a rise in repatriation. Gross FDI into India moderated to $22.0 billion during April-July 2023 from $29.6 billion a year ago, according to Reserve Bank of India data.
A cocktail of heatwave and upcoming cricketing events is expected to usher in the peak season for the country's largest beer maker, United Breweries. The beer maker, which has gained share in some key markets, will be a major beneficiary as April to July is an important period contributing to 40-45 per cent of its annual beer volumes. Going ahead, the T20 Cricket World Cup in June and the ongoing IPL will have a positive impact on volumes and should be able to offset the negative impact of elections on sales, experts believe.
Domestic rating agency Icra on Monday revised its FY24 GDP growth forecast to 6.5 per cent from 6.2 per cent earlier. However, the revised forecast is still much lower than the Reserve Bank of India's (RBI's) 7 per cent real Gross Domestic Product (GDP) growth estimate for the ongoing fiscal. Earlier this month, the RBI had revised upwards its GDP estimate to 7 per cent from 6.5 per cent, calling the revised number a "conservative" one.
India's tactical and operational response demonstrated its ability to prosecute tri-service operations, even without a formal tri-service doctrine or the higher command structure needed to coordinate it, points out Ajai Shukla.
If Hindenburg or its partner do not join the investigation, then Sebi may pass an ex-parte order against it, which may be enforced as a foreign award in US courts.
Stocks of alcoholic beverage makers have corrected over the last few trading sessions on worries that taxes, competition and costs will hurt sales and profitability. The recent trigger for the decline is Karnataka, which accounts for 15 per cent of overall liquor consumption, increasing duties. The state increased by 20 per cent the additional excise duty on Indian-made foreign liquor (IMFL) on all slabs.
While Bajaj Finance, Asian Paints, Tata Steel, NTPC and SBI were among the other gainers, ONGC, Axis Bank, Tech Mahindra, Infosys and ICICI Bank were among the laggards. NSE Nifty advanced 82.75 points or 0.73 per cent to settle at 11,470.25.
Yes Bank on Saturday reported over two-fold jump in standalone net profit at Rs 452 crore for March quarter 2023-24, primarily due to benefits on the provision front. In the year-ago quarter, the bank logged a profit of Rs 202.43 crore. The private sector lender benefitted from write-back on income tax and interest on income tax returns, but the profits were limited by its inability to comply with the mandatory priority sector lending (PSL) requirements, its management said.
Siemens delivered a strong margin performance and also reported high other income to beat consensus in the January-March quarter (Q2) of FY24 (the company's year-end is September 30). In addition, it has opted to demerge the energy vertical with a 1:1 award of shares in the newly demerged entity which will be listed by the end of this year (CY25).
Yes Bank was the top loser in the Sensex pack, shedding 2.50 per cent, followed by HUL that fell 2.37 per cent, M&M 2.12 per cent, SBI 2.03 per cent, Tata Motors 2.03 per cent and Vedanta 1.97 per cent.
Following alterations in the tax structure, mutual fund (MF) schemes that invest in overseas securities have experienced a sharp decline in inflows. In the first five months of 2023-24 (FY24), international MF schemes have received an average monthly gross inflow of only Rs 270 crore, compared to Rs 490 crore during the same period in the previous year. This decline persists despite nearly all fund houses opening subscriptions for such schemes, with higher redemptions creating headroom for fresh investments.
Investors shunned shares of Bajaj Finance on Friday, a day after the non-banking financial company (NBFC) reported a sharp contraction in its net interest margin (NIM) for the March quarter of the financial year 2023-24 (Q4FY24). The losses accounted for a fifth of the benchmark S&P BSE Sensex's 609-point loss. Most brokerages have tamed their earnings expectations for the next couple of quarters, after the management said it expected the pressure on NIMs to continue in the near term.
India's largest PSU bank, State Bank of India, delivered excellent results, once the impact of a big jump in employee expenses was adjusted for. The net interest income (NII) beat the Street due to a better net interest margin (NIM) and good loan growth. The credit growth at 5.2 per cent quarter-on-quarter (Q-o-Q) (15 per cent year on year) was excellent for a large bank.
Bharti Airtel has quietly narrowed its adjusted gross revenue (AGR) market share gap with Reliance Jio, the country's largest player in the game, in the last three years. Despite Jio's aggressive entry into 4G and now into 5G, Airtel's gap with Jio, which was 6.4 percentage points in Q1 of FY21 and went up to 7.2 percentage points in Q1 of FY22, has fallen to only 4.4 percentage points in Q1 of FY24. Currently, Reliance Jio's AGR market share is 41.6 per cent while Airtel's is at 37.2 per cent.
Fast moving consumer goods (FMCG) companies are expected to see muted topline growth, with uneven spread of the monsoon impacting demand. Rural demand recovery, too, remains elusive in the July-September quarter. Brokerages expect volumes to remain steady in the quarter on a sequential basis.
Elections are not won or lost by expounding on such macro-economic matters. For the aam admi, what matters in manifestos are promises that will improve their quality of life, notes Vinayak Chatterjee.
'Your decisions should not be driven by your view on the market, but by your objectives, risk appetite, and time horizon.'
The Union government's finances witnessed significant improvement in August after a stressful first four months of the current fiscal year. India's gross tax revenue, comprising both direct and indirect taxes, for the first five months of 2023-24 surged 16.5 per cent year-on-year (Y-o-Y) to Rs 11.8 trillion. During the April-July period, gross tax revenue increased by a mere 2.8 per cent compared to the Budget Estimate of 12.1 per cent growth for FY24.
As the fight for deposits intensifies, the cost of money will rise and the margin will be under further pressure, points out Tamal Bandyopadhyay.
Retail companies are expected to witness a tepid strong same-store sales growth (SSSG) expansion in the third quarter (October - December) of the current financial year (Q3FY24) on the back of subdued sales in the festival season. The third quarter of the financial year typically witnesses higher sales since it coincides with the festival season. This time around, weak customer sentiment has dragged down SSSG.
Stock markets will be largely driven by global trends and macroeconomic data announcements in a holiday-shortened week which may see volatility amid monthly derivatives expiry, say analysts. Equity markets will remain closed on Monday for Gurunanak Jayanti. Trading activity of foreign investors and the movement of the rupee against the dollar will also be tracked by investors.
Liverpool reclaimed top spot in the Premier League with a 3-1 win over Burnley at Anfield on Saturday, but they were made to battle hard by a brave visiting side.
The banking regulator was uncomfortable with the runaway pace at which consumer credit was growing.
Profits of India's top listed companies have been growing at a faster pace than those of their American peers, but when it comes to revenue growth, the order has reversed recently. The combined net profit of the S&P 500 companies was up 14.1 per cent year-on-year (Y-o-Y) during the trailing 12 months (TTM) ended December 2023, as against 17.4 per cent profit growth logged by the BSE 500 companies in the same period. This is the second consecutive year of faster profit growth for the BSE 500 companies.
IMAGES from the Premier League matches played on Saturday.
Mahindra & Mahindra (M&M) reported very strong results for the January-March quarter of the last financial year (Q4FY24), beating consensus comfortably. The margins of the automobile business improved 170 basis points (bps) year-on-year (Y-o-Y) to 8.8 per cent, while FES (Farm Equipment Sector) margins improved to 15.8 per cent (up 60 bps Y-o-Y), despite a decline in volumes due to cost optimisation and lower raw material costs.
With the reality of coalition politics staring the BJP in its face, this was inevitable, points out Ramesh Menon.
