However, rural demand continued to remain a concern for FMCG companies during the quarter.
The Nifty IT Index, the gauge for the performance of information technology (IT) stocks, was the worst performer on the stock exchanges on July 29, a day after Infosys posted lower-than-expected earnings growth for the June quarter and sharply cut its revenue growth guidance for 2023-24 (FY24). The IT index was down 4.1 per cent, its biggest one-day fall in three months. The decline was led by Infosys, with its shares plunging nearly 8 per cent, followed by HCLTech (-3.2 per cent), Wipro (-3.0 per cent), and TCS (-2.7 per cent).
Oil and gas sectot may not put up good numbers in Q4.
India's gross domestic product (GDP) growth slowed to 4.1 per cent in January-March 2022 period, while for the full year 2021-22 the growth stood at 8.7 per cent, according to the government data released on Tuesday. GDP at constant (2011-12) prices in Q4 2021-22 is estimated at Rs 40.78 lakh crore, as against Rs 39.18 lakh crore in Q4 2020-21, showing a growth of 4.1 per cent, as per the National Statistical Office (NSO) data. India's GDP growth has slowed for the third straight quarter.
Domestic-focused agricultural chemical (agrochem) companies could face near-term headwinds, given the worries on the El Nio effect on monsoons, higher inventory, and pressure on margins. Some of these were reflected in the October-December quarter (third quarter, or Q3) results of companies and may impact them in the current quarter (fourth quarter, or Q4) as well. Nuvama Research pointed out that the sector witnessed mixed performance during the quarter as global agrochem and domestic fertiliser companies maintained growth momentum, while adverse agronomical conditions and excess channel inventory weighed on domestic market volume offtake.
The Union government is projected to share about 32 per cent of central taxes with states during the financial year 2024-25 against the 15th Finance Commission's recommendation of 41 per cent. The Revised Estimates (RE) for FY24, too, show a similar share of states in the central taxes at 32 per cent. In absolute terms, however, there has been an increase in the amount devolved to states compared to the Budget Estimates (BE) for FY24 at Rs 11 trillion.
From the Sensex basket, Tata Motors, State Bank of India, Tata Steel, Power Grid, NTPC, Bajaj Finserv, Bajaj Finance and Asian Paints were the major laggards.
The country's largest lender SBI on Friday reported a 41 per cent surge in standalone net profit at Rs 9,114 crore for the fourth quarter ended March 2022, helped by decline in bad loans. State Bank of India (SBI) had registered a profit of Rs 6,451 crore during January-March period of 2020-21, the lender said in a regulatory filing. Total income of the bank during the March quarter increased marginally to Rs 82,613 crore, from Rs 81,327 crore in the same period of the previous fiscal.
Amid cooling raw material prices, the crude-oil linked companies, which includes paint and tyre firms, have been on a roll over the past one year. Shares of related companies have gained up to 84 per cent, as against a 14 per cent rise in the S&P BSE Sensex. Analysts, however, believe stretched valuations in both these sectors could trigger a de-rating.
Sources close to the development told Business Standard the company was exploring different ways to save on its employee costs and had laid off a few employees on "performance" grounds. "We will see a similar development for the next few months. "The company is fine-tuning its hiring policies and implement rigourous measures to look into employee performance," a source said.
Do not, however, enter expecting quick returns.
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.
Over the past year, the National Stock Exchange Nifty FMCG Index, which tracks the market capitalisation of the top 15 companies in the fast-moving consumer goods (FMCG) sector, has surged by 17.3 per cent. In contrast, the Nifty50, a broader market index, has witnessed an 8.8 per cent increase during the same period. The FMCG stocks have also been rally leaders in the current calendar year.
A likely turnaround in profitability margins in the March quarter (Q4FY23) will not be enough to lift the outlook for paint stocks due to volatile crude oil prices and rising competition in the sector, analysts say. Hence, they advise investors to avoid the sector over the short-to-medium term despite the heavy correction in the stocks since last year. Shares of Asian Paints, Berger Paints, Indigo Paints, Nerolac and Pidilite have shed 6-32 per cent over the last 6 months versus a 3 per cent rise in the benchmark Sensex.
A strong business update for the April-June quarter of the 2023-24 financial year Q1FY24 has led to a big jump of over 7 per cent in the share price of Bajaj Finance on Tuesday (July 4). The non-banking financial company's (NBFC's) new loan book grew 34 per cent with 9.9 million new loans booked in Q1FY24 from 7.2 million loans booked in Q1FY23. The company's total customer franchise rose to 72.98 million (as on June 30, 2023), compared to 60.30 million year-on-year (YoY) with the highest-ever quarterly increase of 3.84 million in Q1FY24. Assets under management (AUM) grew by 32 per cent to about Rs. 270,050 crore in Q1FY24 from Rs. 204,018 crore in Q1FY23.
The stock of Divis Laboratories is up 10 per cent over the last couple of trading sessions on expectations that the worst is behind and the company could see a sequential growth in the March quarter of the 2022-23 financial year (Q4FY23). The stock witnessed the highest downgrades among Nifty50 index stocks with earnings cuts over a third after the Q3FY23 results. The company had posted a 32 per cent drop in revenues over the year ago quarter in Q3FY23 and 8 per cent sequentially, which was sharply lower than Street expectations.
Total income for the quarter ended March 31, 2019, stood at Rs 31,204.5 crore, up by 22.1 per cent from Rs 25,549.7 crore for the quarter ended on March 31, 2018,
For over a decade, HDFC Bank consistently outperformed industry growth rates in both deposits and advances, maintaining impeccable asset quality. Amid a landscape where other banks struggled with soaring non-performing assets (NPAs), HDFC Bank thrived, eventually surpassing ICICI Bank to become the largest private sector lender in India. Its net interest margin (NIM) remained stable in the range of 4.1-4.4 per cent.
The country's largest carmaker Maruti Suzuki India (MSI) on Tuesday reported 6.14 per cent decline in consolidated net profit at Rs 1,241.1 crore for the fourth quarter ended March 31, 2021. The auto major had posted a net profit of Rs 1,322.3 crore in January-March quarter of 2019-20, MSI said in a regulatory filing. However, revenue from sale of products stood at Rs 22,959.8 crore as compared with Rs 17,187.3 crore earlier, up 33.58 per cent.
Hospitals to recover from sluggish Q3; diagnostics' growth rate at pre-Covid levels.
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.
A quick look at the Q1FY23 performance of top-tier IT services players shows that they are still far away from getting a grip on managing attrition. Talent retention has eroded not only their margins but also any gains they may have made from rupee depreciation. Despite robust growth numbers and strong deal pipelines, margins for all the players -- TCS, Infosys, HCL Technologies and Wipro -- have continued to shrink at a pace that has had the street surprised.
Layoffs, corporate restructuring, governance and most importantly profitability: The 14 Indian startups that plan IPOs this year are pulling out all the stops to ensure successful market debuts.
Nasdaq-listed information technology (IT) services firm Cognizant will incur the cost of $400 million over two years as it sets to restructure its operations amid sluggish growth rates. Its NextGen Program aims at simplifying the operating model, optimising corporate functions, and consolidating and realigning office space to reflect a post-pandemic hybrid work environment. As part of this structural shift, Cognizant will eliminate 80,000 seats, or 11 million square feet of real estate in large cities in India.
Domestic ratings agency Icra on Monday forecast a 2 per cent GDP growth in the fourth quarter of 2020-21, and a 7.3 per cent contraction for the full fiscal year. From a GVA or gross value added perspective, the agency pegs Q4 growth at 3 per cent and the full year contraction at 6.3 per cent. According to the agency, the 2 per cent projected GDP growth will help the economy avoid a double-dip recession as indicated by the National Statistical Office (NSO) for Q4. Icra's projection is better than the 8 per cent contraction forecast by the NSO as it sees Q4 growth at only 1.1 per cent.
India's largest two-wheeler maker by volume - Hero MotoCorp (Hero) - posted a better-than-expected operating performance in the January-March (fourth quarter, or Q4) quarter of 2022-23 (FY23). Riding on higher average selling prices which were up 5 per cent year-on-year (YoY) and volume growth of 7 per cent, the company registered a 12 per cent growth in revenue to Rs 8,306 crore. The company sold 127,000 units in the quarter, largely driven by domestic sales which were up 11.6 per cent, while exports saw a sharp fall of 57 per cent over the year-ago quarter.
The stock of Colgate-Palmolive (India) surged after the company delivered a better than expected operating performance for the March quarter of the 2022-23 financial year (Q4FY23) recently. The stock, however, has given up most of these gains over the last one week as the Street awaits recovery in the core toothpaste segment and sustained recovery in market share. The country's largest listed oral care company posted a gross margin expansion of 100 basis points (bps) on a sequential basis to 66.9 per cent, led by pricing and efficient sourcing.
Income of the bank during March quarter of the last financial year rose to Rs 76,027.51 crore from Rs 75,670.5 crore in the same period of 2018-19.
Investors are increasingly turning optimistic about shares of new-age companies. From broad-based 'sell' calls, analysts are giving thumbs up to Zomato, Paytm, and FSN e-Commerce Ventures-owned Nykaa as these companies have shifted focus to sustainable profits. The shares of Zomato hit a fresh 52-week high of Rs 126 apiece on the BSE on November 7, having rallied 15.4 per cent in one week.
The first-quarter performance of top IT services players, as well as mid-cap firms, has been subdued, reflecting macro uncertainties. The numbers of the top four firms show several misses, hinting at difficult times ahead. One mismatch is the total contract value (TCV) signed by the firms and the revenue growth registered.
Tata Motors surpassed Maruti Suzuki (India) (MSIL) to become the most-valuable automobile company, in terms of market capitalisation (mcap), after a gap of seven years. With this, the company's stock hit a new high on the BSE on Tuesday (January 30). The combined mcap of Tata Motors (Rs 285.51 crore) and Tata Motors DVR (Rs 29,119 crore) stood at Rs 3.146 trillion.
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.
The Reserve Bank India's (RBI's) decision to ban the onboarding of new accounts on the "bob World" mobile digital platform led to a selloff in the Bank of Baroda (BoB) stock. The stock of the public sector bank dropped by around 3 per cent. The central bank cited "material supervisory concerns"; news reports claimed mobile numbers were randomly linked to accounts to purportedly inflate registrations on bob World.
'While lower steel prices may impact a part of the quarter, this will be offset by softer raw material prices.'
A weaker-than-expected sales performance, concerns about higher competitive intensity in the current year, and earning cuts by some brokerages have weighed on the stock of the country's largest paint maker, Asian Paints. While the Q3 volume show was slightly below expectations, the company's operational and bottom line beat estimates, benefiting from the falling raw material costs. The stock ended the day with a decline of over 2 per cent at Rs 3,175 apiece.
State-backed Life Insurance Corporation of India (LIC) recorded strong growth in the value of new business (VNB) margin in the third quarter of financial year 2023-24 (Q3FY24) while major listed private life insurers reported a weak performance. VNB refers to the profit that an insurer is likely to garner from new business, which comes from policies sold in a particular period. VNB margin is the profit margin of the insurer.
The country's largest private sector lender HDFC Bank on Saturday reported a 23 per cent jump in standalone net profit to Rs 10,055.20 crore for the March quarter, led by growth in loan demand across categories and lower provisioning as bad loans were trimmed. The bank's net profit during the corresponding period of the previous fiscal stood at Rs 8,186.51 crore. "After providing Rs 2,989.5 crore for taxation, the bank earned a net profit of Rs 10,055.20 crore, an increase of 22.8 per cent over the quarter ended March 31, 2021," HDFC Bank said in a regulatory filing.
Since its results for the first quarter of the 2023-24 financial year (Q1FY24) earlier this month, the stock of auto component major Bharat Forge is up nearly 15 per cent and hit its all-time high in the process. The recent gains have extended the returns over the last three months to over 34 per cent. After a strong Q1 performance which beat expectations, brokerages had revised their earnings estimates upwards to factor in the improved outlook.
HDFC Bank Q4 review: HDFC Bank's January-March quarter (Q4) results, for financial year 2022-23 (FY23), brought no cheer to investors as elevated costs, and merger-related uncertainties continue to dent the sentiment. Moreover, analysts fear that merger-related costs may put pressure on margins and cost to income ratio in the near-term, while the return on equity could moderate owing to low leverage of the parent. Analysts, therefore, opine that the stock's re-rating may be some time away. "While the risk of a de-rating on a standalone basis appears to be quite low given that the business performance is holding up well, we believe a re-rating in the stock would happen as and when more clarity emerges on the smooth transition (merger)," said a report by Sharekhan.
