Polarisation in the performance of Indian banks will persist as many large public sector banks are still saddled with weak assets, high credit costs, and poor earnings, S&P Global Ratings said on Thursday. It said State Bank of India and leading private sector banks have largely addressed their asset quality challenges, and their profitability is improving more sharply than the banking system. In its Global Banking Outlook-2023 report, S&P said economic recovery is driving credit costs to cyclical low levels and stronger balance sheets and higher demand should boost bank loan growth, but deposit growth will lag.
Data show manufacturing still down, unlike banking
The Indian aviation market's recovery has been significantly impacted by caps on fare and capacity that has been placed by the government since May last year, said Willie Walsh, the director general of global airlines body IATA, on Tuesday. When India resumed the scheduled domestic flights on May 25 last year after a two-month break in view of COVID-19 lockdown, it had allowed the carriers to operate not more than 33 per cent of their pre-Covid domestic services. This capacity cap has been gradually increased and it now stands at 65 per cent.
The Q1FY24 earnings season has started on a dismal note for corporate India. The early-bird companies' revenue growth has been at a 10-quarter low, while the combined earnings of non-BFSI (banking, financial services, and insurance) companies seem to have hit the ceiling. The numbers suggest corporate India is entirely dependent on BFSI companies and the IT services sector to drive growth in revenue and profit while other sectors are showing signs of stagnation.
Within three trading sessions in May, foreign portfolio investors (FPIs) have pumped in Rs 9,461 crore into Indian equities. This follows net inflows worth Rs 7,936 crore in March, and Rs 11,631 crore in April. The trend, analysts said, could continue going ahead as the US Federal Reserve may soon halt its interest rate hike cycle, which will strengthen foreign fund inflows into emerging markets, including India.
After bumbling for years since 2014, the Modi government seems to believe that massive government expenditure will lead us to prosperity supported by 'seat-of-the-pants' decision-making, observes Debashis Basu.
Loan against gold as a product is catching on fast. Let's keep the momentum going, but aim for sustainable growth. A few bad apples should not ruin the brunch, argues Tamal Bandyopadhyay.
This would be bigger than group co Adani Power's existing capacity.
The Uttar Pradesh Police on Sunday detained three persons for questioning a day after a woman factory worker was raped and found murdered in Sector 63 area of Noida.
A 21-year-old woman employee, who was missing since Friday night from work, was found murdered near her house in Noida, with police suspecting that she might have been raped.
British Council announces young arts entrepreneur contest. Applications must be in by July 26, 2008, for a chance to win Rs 6.5 lakhs!
Benefiting from higher credit off-take and loan repricing, listed commercial banks are expected to post 43.9 per cent year-on-year (YoY) growth in their net profit in the quarter ended June 30 (Q1FY24), analysts have said. Controlled credit costs due to a healthy asset quality profile and a steady treasury book will also support a strong bottom line for the lenders in the first quarter. However, net profit may shrink sequentially, according to analysts' estimates for 13 banks sourced from Bloomberg data.
India's economy grew 6.1 per cent in the fourth quarter of 2022-23, pushing up the annual growth rate to 7.2 per cent, official data showed on Wednesday.
India appears poised to sustain its growth in a more durable way than before with the economy carrying the momentum from FY23 into the current fiscal year, the Annual Economic Review for 2022-23 released by the finance ministry on Thursday said. However, the report cautioned that escalation of geopolitical stress, enhanced volatility in global financial systems, sharp price correction in global stock markets, a high magnitude of El-Nino impact, and modest trade activity and FDI inflows, are factors that could constrain the pace of growth. "Should these developments deepen and dampen growth in the subsequent quarters, the external sector may challenge India's growth outlook for FY24," the finance ministry said.
Equity investors should thank cash-rich biggies such as TCS, ITC, HUL, Nestl, and Bajaj Auto for this.
Business confidence remained positive in August and was driven by upbeat forecasts of sales, an expected improvement in demand and promotional activities
In its bid to attract the growing number of air travellers in the country, Indian Airlines on Tuesday announced the launch of its 'Bumper Super Saver' scheme providing 16 flight coupons to anywhere on the domestic sector for Rs 65,000.
The S&P BSE Realty Index has emerged as one of the top-performing sectors, yielding a remarkable 45 per cent return over the past six months. The three leading players, listed by market capitalisation, have substantially enriched investor wealth by 43-70 per cent during this period. If the second quarter (Q2) of 2023-24 (FY24) updates from Macrotech Developers (Lodha) and Sobha, along with industry data for the quarter, serve as any indication, the trend of strong bookings for larger players is expected to continue.
Indian economy is poised to do better on the back of reforms undertaken by the government and is expected to clock a 6.5-7 per cent growth in the remaining part of the decade, Chief Economic Advisor (CEA) V Anantha Nageswaran said on Tuesday. Addressing reporters here after the tabling of the Economic Survey in Parliament by Finance Minister Nirmala Sitharaman, Nageswaran said that by and large, inflation is likely to be "well behaved" in FY2023-24 barring headwinds. "My optimism is that in the coming decade, rest of the decade, the potential GDP growth, without taking into account export potential, because global economy is still rife with uncertainty, the growth rate would be around 6.5 to 7 per cent, rather than between 6 per cent and 6.5 per cent," he said.
India's economy grew by 6.3 per cent in the second quarter of the current fiscal, official data released on Wednesday showed.
Increase in tax exemption limit by Rs 50000 is positive for the FMCG sector, as it will leave more discretionary income in the hands of consumers.
Indian growth in the rest of this fiscal year and next will be propelled by robust domestic consumption as consumer confidence improves, and by investment, including large increases in government capital expenditure, according to the Asian Development Outlook September 2023. "As slowing exports could foment headwinds for the economy, and erratic rainfall patterns are likely to undermine agricultural output, the growth forecast for FY2023 is revised down marginally to 6.3 per cent," ADB said.
Ahead of the Budget, the government has achieved almost half the divestment target of Rs 65,000 crore. FY23 divestment receipts are unlikely to be anywhere close to the budgeted target.
The RBI interest rate decision, industrial production data for June and the ongoing quarterly earnings from corporates would largely drive the stock markets this week, analysts said. Other major factors such as global market trends, the movement of oil prices and the trading activity of foreign investors would also influence trading, they added. "The market will have an eye on the RBI Monetary Policy Committee (MPC) meeting, which will be announced on August 10, 2023. We are heading towards the last batch of Q2 earnings of key companies such as Adani Ports, Coal India, Hero MotoCorp, Hindalco and ONGC, among others, which will lead to stock-specific movement," said Pravesh Gour, senior technical analyst, Swastika Investmart Ltd.
The country's per capita income is likely to grow by close to 70 per cent to $4,000 by fiscal 2030 from $2,450 in fiscal 2023, helping it become a middle-income economy with $6-trillion GDP, more than half of which will be coming in from household consumption, says a research report. Per capita income/GDP has risen from $460 in fiscal 2001 to $1,413 in fiscal 2011 and further to $2,150 in fiscal 2021. The biggest growth driver will be external trade which may nearly double to $2.1 trillion by 2030 from $1.2 trillion in fiscal 2023 when the GDP printed in at $3.5 trillion, Standard Chartered Bank said in a weekend report which assumes a 10 per cent nominal GDP growth annually from now on.
The early bird results for the January-March quarter of 2022-23 (Q4FY23) show a pick-up in earnings growth, despite a slowdown in revenue growth, thanks to a decline in input costs and lower provisioning for bad loans by banks. The combined net profit of 66 companies that have, so far, declared their quarterly results was up 15.2 per cent year-on-year (YoY) in Q4FY23, an improvement from 4.3 per cent YoY growth in Q3. Net sales growth of these companies, however, slowed down to 11.5 per cent YoY in January-March 2023, the slowest rate in eight quarters.
'It will send a very strong signal that it is now our time to grow.'
Macroeconomic data announcements, global trends and trading activity of foreign investors would guide momentum in the equity market this week, analysts said. Markets ended a five-week losing streak and gained nearly a per cent last week, helped by a sharp rebound on Friday. Last week, the BSE benchmark jumped 500.65 points or 0.77 per cent and the Nifty gained 169.5 points or 0.87 per cent.
It is 10 years since Bandhan Financial Services became the first microfinance institution (MFI) to receive the universal bank licence. A year later, in 2015, it started operations. Bandhan's entry into banking was seen as a vote of confidence by the Reserve Bank of India (RBI) for the country's microfinance sector. Subsequently, the RBI awarded small finance bank licences to nine MFIs.
In August, the Reserve Bank of India Governor Shaktikanta Das held a meeting with chief executive officers/ managing directors (CEOs/ MDs) of large non-banking financial corporations (NBFCs). The discussions included diversifying borrowing sources for NBFCs and housing finance companies (HFCs) to contain increasing reliance on bank borrowing, risks associated with high credit growth in retail segment in unsecured loans, prioritising IT upgrades and cyber-security, improving provisioning, monitoring of stressed exposures and slippages, ensuring robust liquidity and asset-liability management, ensuring transparency in pricing, creating robust grievance redress mechanisms.
Ahead of the 2023-24 Union Budget, the thinking at the top level of the central government is clear: Gross domestic product (GDP) growth of 6-6.5 per cent is a comfortable enough target for FY24 and the focus should be on fiscal consolidation to ensure that the sovereign cost of borrowing does not become prohibitively expensive in a high-interest rate environment, according to people in the know. Those aware of deliberations between the Prime Minister's Office (PMO) and the Ministry of Finance said while the Budget would look to strike a balance between infrastructure investment and welfare schemes, it is unlikely to be populist, though it will be the last full-year Budget before the 2024 Lok Sabha election. Incidentally, 6-6.5 per cent GDP growth is what the upcoming 2022-23 Economic Survey is expected to project for FY24.
With the merger between HDFC Bank and HDFC Ltd complete, analysts said the next key monitorable for the Street would be successful resolution of merger-related hiccups, including employee-related churn and roll out of complete banking services across branches. At the bourses, they expect the stock to perform in-line with the benchmark indices in the near-term. "There's usually an initial period of consolidation after a merger as the entities work towards integration.
Housing finance major HDFC and state-run Punjab National Bank on Tuesday announced up to 25 basis points increase in their lending interest rates, making their new and old loans expensive for consumers. The revised rates would be effective from March 1. Mortgage lender HDFC has increased its retail prime lending rate by 25 basis points to a minimum of 9.20 per cent.
The Indian economy is estimated to grow at 7 per cent in the 2022-23 fiscal, down from 8.7 per cent a year ago, mainly due poor performance of mining and manufacturing sectors. As per the first advance estimates of national income released by the National Statistical Office (NSO) on Friday, the manufacturing sector output is estimated to decelerate to 1.6 per cent in the current fiscal from 9.9 per cent in 2021-22. Similarly, mining sector growth is estimated at 2.4 per cent in the current fiscal as against 11.5 per cent in 2021-22.
Union Minister of Road Transport and Highways Nitin Gadkari on Tuesday unveiled the prototype of the world's first Bharat Stage (BS)-VI-compliant electrified flex-fuel car, developed by Toyota Kirloskar Motor. The car, which runs on 100 per cent ethanol (E100), is based on the Toyota Innova HyCross. It can cover 40 per cent of its distance on ethanol and the remaining 60 per cent on electric, with the petrol engine shut off.
Rajasthan is all set to vote on Saturday to elect members of a new assembly with the Bharatiya Janata Party aiming to unseat the ruling Congress, which is fighting hard to change the trend of alternate governments in the state.
The duty hike on cigarettes by 16 per cent announced in the Union Budget 2023-24 would have a nominal impact of around 7-12 paise per stick across cigarette categories, according to experts. This upward revision in National Calamity Contingent Duty (NCCD) would have negligible impact on smokers and the companies could easily absorb the shock as it may not also have any resultant impact on margins, they said. Finance Minister Nirmala Sitharama in the Union Budget for 2023-24 on Wednesday proposed to revise and increase the duty on cigarettes to about 16 per cent.
The Survey lists some of the challenges that might impede India's progress.
The number of ultra-high net worth individuals (UHNWIs) in India is expected to rise 58.4 per cent in the next five years from 12,069 in 2022 to 19,119 in 2027, a report by property consultancy Knight Frank said on Wednesday. In its "The Wealth Report 2023", Knight Frank said that the number of Indian UHNWIs, with a net worth of $30 million or above, fell 7.5 per cent in 2022 due to economic slowdown, rate hikes, appreciation of the US dollar and geopolitical uncertainties. Globally, the number of UHNWIs fell 3.8 per cent in 2022 compared to 2021.
