India's corporate sector is likely to report a slowdown in revenue growth and earnings for the July-September 2023 period (Q2FY24), according to earnings estimates by brokerages, after the country's top listed companies posted higher than expected profits for the first quarter. The combined net profit of Nifty50 companies, based on brokerage estimates, is expected to have grown by 19.6 per cent year-on-year (Y-o-Y) to Rs 1.75 trillion in Q2FY24 - a sharp deceleration from 37.6 per cent Y-o-Y growth in the combined earnings of index companies in the April-June 2023 period. According to estimates, the combined earnings in the second quarter would be down 8.8 per cent on a quarter-on-quarter (Q-o-Q) basis and the lowest in the past three quarters.
Citing economic slowdown and political roadblocks to policy-making, rating agency S&P on Monday warned India could become the first BRIC nation to lose investment-grade rating.
The outlook cut is based on a weak premise since the economy is expected to rebound this fiscal but a wake-up call was needed.
Global ratings agency Standard & Poor's on Thursday pegged India's FY'14 GDP growth at 6.4 per cent, one of the most optimistic estimates among analysts, and said it may upwardly revise outlook on the sovereign rating if the government continues to focus on policy initiatives.
The announcement by Standard & Poor's (S&P) on Wednesday to cut its outlook for India from stable to negative should cause no surprise, even though it comes barely five days after a similar exercise by Moody's, which had retained its outlook on India as stable.
In a report on the rupee's depreciation, S&P said, "Revenue for companies that export and operate overseas would rise, because they would get more rupees for the goods and services they sell."
Indian pharmaceutical firms foresee minimal disruptions in trade with Israel despite escalating regional tensions. Rising crude prices and export shipping insurance premiums have raised concerns, but the pharmaceutical sector remains optimistic. Pharmaceutical exports from India to Israel in FY 2020-21 amounted to $32.5 million, which represents only a minor segment of India's overall pharma exports.
Lack of fuel security is a major constraint to the growth of the generation capacity, and the slow pace of tariff reforms is hindering infrastructure investment at the state-level.
'It will drive a lot of surrounding business, that is where we see some good projects coming in.'
While retaining India's sovereign rating at 'BBB-' with a negative outlook, S&P said there is at least a one-in-three likelihood of a downgrade within the next 12 months.
'We see mid-and small-caps as a real pot of gold.' 'From a 10-15 years perspective, mid-and small-cap are likely to outperform the larger index, as they have done in the past.'
Confidence in the company as government is the biggest shareholder.
In a string of bold initiatives, the government, accused of a 'policy paralysis', first announced a steep 12 per cent, or Rs 5 per litre, increase in the regulated diesel prices on Thursday and a cap on subsided cooking gas usage.
'A cutback in hiring and compensation growth by IT companies will have a significant impact on consumer demand, especially in the urban sector of the economy.'
'Just the amount of work which is there just to become more and more successful in banking. For this to happen you need to have leaders who understand technology.'
There is an Indian at the helm of affairs surrounding the historic downgrade of the United States' creditworthiness, as ratings agency S&P's unprecedented move was taken under the leadership of Deven Sharma.
Retaining India's sovereign rating at the lowest investment grade, global agency S&P on Tuesday warned that a downgrade is likely for the country if its political climate worsens and pace of fiscal reforms slows down.
For Lori Beer, chief information officer, JPMorgan Chase & Co, largest banker in the US, India is a big part of the organisation's global technology footprint and is core to its products and services. This is evident from the fact that in less than two months since JPMorgan & Chase chief executive officer Jamie Dimon visited India, Beer has come here to see the recently opened centres in Mumbai and Bengaluru. "What is different for me this year are our new centres and to be able to come and see the vibrancy, and connectedness is great.
NPA percentage in loans may touch 10% by March 2013, up from 5% in March 2011.
The cash pile within smallcap mutual fund (MF) schemes has grown over the past few months amid a relentless rally in stocks in this space. While fund managers usually don't make cash calls, incessant inflows and valuation discomfort have forced their hand. At the end of January, the top 10 schemes had over Rs 12,160 crore in cash, compared to Rs 8,700 crore in August 2023.
Infy, L&T key movers while auto stocks dropped
Standard & Poor's on Wednesday lowered the stand-alone credit profile of two government-owned lenders- the State Bank of India and Union Bank of India citing concerns over their asset quality and high credit cost.
India's economic condition is just a notch above that of Greece. The next phase could be of a "sovereign default" similar to Greece, said Arun Jaitley, Leader of Opposition in Rajya Sabha.
A retired Indian colonel working with the United Nations was killed in Gaza when the vehicle he was travelling in came under attack in strife-torn Rafah, the 'first international' casualty for the world body since the start of the Israel-Hamas conflict.
Airfares in the country are set to rise, with IndiGo on Thursday introducing a fuel charge of up to Rs 1,000 based on a flight's distance, in response to the significant rise in aviation turbine fuel (ATF) prices in the last three months. The Indian aviation sector experiences its peak travel season between October and December. The inclusion of a fuel charge component in airfares is anticipated to have a sizable impact on IndiGo's passengers, according to experts.
RBI had rescheduled the starting date for its implementation.
Ratings agency Standard & Poor's on Monday cautioned that it could lower the sovereign ratings of countries like India, Japan and Malaysia, which 'are still to come out of the economic meltdown of 2008'.
HUL and Genpact aim to enable these businesses to eventually get absorbed into the supply chains of large consumer companies, including that of HUL. In 2021, the maker of Sunsilk shampoos committed to spending Rs 2,000 crore annually with diverse businesses by 2025, Ansu Archana, procurement director, beauty & wellbeing, HUL, told Business Standard. Archana added that the program aligns with Unilever's wide-ranging set of commitments and actions to help build a more equitable and inclusive society.
Keen to prevent a downgrade of India's sovereign rating by Standard & Poor's (S&P), which could trigger an exodus of foreign investors, Prime Minister Manmohan Singh has told the Congress party there is no option but to raise diesel prices by at least Rs 5 a litre after the Presidential election. The current diesel subsidy is Rs 9.13 per litre sold.
Standard & Poor's has placed the sovereign ratings of 15 euro zone nations, including AAA-rated Germany and France, under 'CreditWatch'.
The decision by the Reserve Bank of India to introduce a unified regulatory framework on connected lending for all the regulated entities (RE) is expected to reduce the influence of business conglomerates in the Indian lending space, said bankers and experts. "Connected lending pertains to lending to related parties within the same business group. "While the RBI might appear more agreeable to allowing business conglomerates to own banking licenses, it deems it crucial to bolster regulations that would prevent conglomerate-owned banks from gaming the system," said Shivaji Thapliyal, head of research and lead analyst, YES Securities.
There is a "one in three" chance of a downgrade of the country's sovereign rating to junk status in the next two years.
'AI is not a new thing for us. We started our AI journey in 2015.'
"High inflation could derail India's stable macroeconomic and interest rate environment", Standard & Poor's said in a statement.
'While every year presents new challenges, it also provides opportunities for better growth and performance.'
IndusInd Bank, Suzlon, and Paytm will remain under focus, as the stocks are pegged to get added to the MSCI global standard index. These stocks, along with six others, are seen attracting cumulative inflows of nearly $2 billion from passive funds tracking MSCI indices. Persistent Systems, APL Apollo, Polycab, Macrotech Developers, Tata Motors DVR, and Tata Communication are the other six stocks that will be added to the MSCI index, shows an analysis done by Nuvama Alternative & Quantitative Research.
S&P warned about spending on subsidies and heavy government debt.
State-owned Oil and Natural Gas Corporation (ONGC) has cancelled the bids received for its Daman upside gas development project off the western coast due to high price quotes, sources said. The project is crucial to ONGC's strategy of ramping up gas production from its shallow-water fields off India's west coast. Once completed, the project would lead to nearly doubling of current gas production of 4-5 million standard cubic metres per day.
Volatility in exchange rates are also expected to increase.
