The Reserve Bank of India's (RBI's) draft guidelines on gold loans, if implemented in their current form, are expected to impact non-banking financial companies (NBFCs) and mid-tier banks in the near term, more significantly than larger banks, according to analysts.
In conversation with Shubhashish and Arijit Barman, Rakesh Arora, managing director and head of research, Macquarie Capital Securities (India) Pvt Ltd and among the most authoritative metal analysts in India, says companies should start taking environmental laws more seriously.
Kotak Mahindra Bank's net interest margin is likely to swell after the Reserve Bank of India (RBI) lifted its restrictions on the private lender that barred it from issuing fresh credit cards and onboarding new customers through digital mode, brokerages said on Thursday. The bank's net interest margin (NIM) has seen a decline of over 35 basis points (bps) since the restrictions were imposed by the regulator in April 2024.
Reliance Industries Ltd, India's most valuable company, is back on a growth path after six months of challenges as it posted better than expected earnings in the December quarter, brokerages said.
Private banks' net profit grew 26.3 per cent year-on-year (Y-o-Y) to Rs 48,982 crore in the first quarter ended June 2024 (Q1FY25) owing to healthy growth in credit and other income. The gross non-performing assets (GNPAs) increased with the end of dispensation granted during the pandemic, according to the data compiled by BS Research Bureau for listed 18 private banks.
The December meeting of the Reserve Bank of India's (RBI's) six-member Monetary Policy Committee (MPC) will start on Wednesday even as there is no clarity on whether Governor Shaktikanta Das, the chair of the panel, will continue in office after his term ends next week. The outcome of the meeting will be announced on Friday by Das at 10 in the morning.
Although UltraTech Cement's results for the December quarter of the current financial year (Q3FY25) were not an improvement compared to Q3FY24, the company managed to surpass Street expectations. The company's profit attributable to the owners of the parent dropped 17.4 per cent year-on-year (Y-o-Y) to Rs 1,469.5 crore in Q3FY25 as against Rs 1,777 crore in Q3FY24.
Analysts, however, said the timing of the infusion was good.
Foreign brokerages said if SBI decide to buy stake in the bank, they should buy it at Rs 1 per share as the net worth is hugely impaired.
The country's most valuable lender HDFC Bank can perhaps no longer claim to be a favourite of foreign portfolio investors (FPIs). Two data indicators, both somewhat interconnected, point to this - the diminishing premium of HDFC Bank's American depositary receipts (ADRs) compared to local shares, and the ample investment opportunities available to FPIs in the domestic market. The ADR premium has shrunk to below 5 per cent, down from over 30 per cent in March 2021, and even lower than recent levels.
Select companies in infra, capital goods, private banks, auto, oil & gas, and mining could be considered by investors.
Axis Bank, HCL Technologies, Maruti Suzuki, NBCC and Union Bank are their top five stock picks.
Major global indices like CAC 40, DAX Shanghai Composite, Hang Seng, Nikkei, Straits Times, Sensex, Nifty have lost 1% - 10% in a week
Banks such as IndusInd Bank, Federal Bank, DCB Bank and Axis Bank which have renewed their focus on secured loans may be, hence, walking on a tightrope.
Analysts said FIIs had created long positions worth Rs 9,700 crore (Rs 97 billion) in index futures till recently.
Given the developments, analysts do not foresee a quick recovery.
Higher growth justifies current run-up, say experts.
Apart from navigating the bank through the Covid crisis, Jagdishan may also have to deal with the latest development on the auto loan lending practice scam. He will be expected to deliver consistent profit growth of 20 per cent-plus quarter after quarter, irrespective of the operating environment.
For the June quarter, sales for DLF were down 25 per cent at Rs 1,725 crore (Rs 17.25 billion) over the same quarter a year earlier.
The Reserve Bank of India's (RBI's) move to ban Mastercard from issuing new cards for not complying with the local data storage guidelines may hit five private banks, a non-bank lender, and a major card-issuing company. The impact is expected to be felt for a few months as these players transition to other card networks. According to Nomura Research, RBL Bank, YES Bank, and Bajaj Finserv are the ones most impacted by the ban as all their credit card schemes are allied to Mastercard. Among others, IndusInd Bank, Axis Bank and ICICI Bank have 35-40 per cent of their credit card schemes tied to Mastercard, the report said.
Experts suggest domestic factors rather than the Greece crisis would determine the course of the Indian equities.
FIIs have offloaded stocks worth Rs 13,110 crore
HDFC and HDFC Bank's merger - touted as India's biggest-ever corporate merger - pumped up shares of the two entities on the bourses. Shares of Housing Finance Development Corporation (HDFC) skyrocketed 9 per cent while those of HDFC Bank zoomed 10 per cent. In comparison, the benchmark S&P BSESensex and the Nifty50 indices settled 2.2 per cent higher on Monday.
Analysts expect banks with a strong deposit franchise to benefit from SBI's rate cut as they too are likely to follow the leader.
Striking another major deal in less than four months, Adani Power on Mondayentered into a binding agreement with Gautam Thapar-led Avantha Group to buy out its 600 MW Korba West unit for more than Rs 4,200 crore.
Sebi also plans to examine if any comments made by company officials or the bankers could have misled investors.
While rate cuts may increase churn between banks, these may not boost credit offtake meaningfully.
The Tata Group had acquired its UK steel operations as part of a 6.7 billion pounds acquisition from Anglo-Dutch steelmaker Corus in 2009.
Axis Bank's acquisition of Citibank's consumer finance business for Rs 12,325 crore - the second biggest deal in the Indian banking sector - is seen as a good deal at a good price. The acquisition enables Axis Bank to close the gap with competition in some key segments such as credit cards. At the same time, there are some key issues that are crucial for the deal's success, apart from the fact that it will take some time for Axis to reap the full harvest of its investment.
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Shedding its gains from Monday, NIkkei has declined around 0.7% while Hang Seng and Shanghai Composite were trading marginally lower.
Another year of strong performance by these export-oriented sectors likely as US economy revives and rupee is expected to be under pressure.
Bankers pay a small price for their misdeeds, no matter how large the cost to their banks or to the economy at large, says TT Ram Mohan.
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Of the 11 licence holders, only eight remain in the fray as concerns about profitability and rising competition are making them think twice before jumping in.
The real benefits can be seen when prices stabilise, preferably at levels acceptable to both consumers and producers.
With commodity markets remaining soft and uncertain, it is likely the money will flow into equity markets with strong upsides, such as India.
The sentiment around Indian equities remains positive and unchanged.
Reliance Industries and ONGC were down 4-6% each contributing the most to the Sensex losses
India Inc has few leaders who are likely to grab headlines in 2015.
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