Indian IT services sector's revenue growth will slow down to 3 per cent in the current fiscal from 9.2 per cent in the previous financial year, a domestic ratings company said on Tuesday. Icra Ratings said the profitability will also take a beating in this financial year and the operating profit margin will narrow by up to 1 percentage point to 20-21 per cent. The topline growth will come down to 3-5 per cent in FY24 from the 9.2 per cent posted in FY23, the agency said, attributing the slowdown to softening demand.
Highly-rated finance firms and housing finance companies are expected to benefit from the absence of Housing Development Finance Corp (HDFC) from the bond market once it merges with the HDFC Bank in early FY24. Post merger, the bond market is expected to become less crowded, which will ease fund raising conditions for other players in the field. It may perhaps also compress the spread for debt instruments floated by housing finance companies (HFCs) over 10-year government bonds, subject to demand and supply conditions.
Though Indian banks don't have large exposure to subprime mortgages, analysts are worried at the rise in their restructured loan portfolios and deterioration in credit quality.
Though most experts remain bullish on the banking space, they suggest investors buy only those banks whose NPAs are at a manageable level of 3% to 4% and there is credit growth or earnings visibility.
For non-banks, the IL&FS crisis was nothing short of India's Lehman moment, which has for a foreseeable future reset the sector on multiple grounds.
After raising interest rate by a cumulative 250 basis points in 11 months, the Reserve Bank of India (RBI) on Thursday unexpectedly kept benchmark rate unchanged as global banking woes added uncertainty to the economic outlook. Five out of six members of MPC voted to remain focused on the withdrawal of accommodation to ensure inflation aligns with target while focusing on growth, RBI Governor Shaktikanta Das said on Thursday. The Monetary Policy Committee of the central bank decided to take a pause after a rate hike seen in previous six consecutive policies.
Asset quality stress has ballooned recently, as growth slowed and interest rates continued to rise.
Public sector banks are increasingly looking at promoter funding as a business opportunity when others are shying away from it.
The stress in the banking sector, which mirrors the stress in the corporate sector, has to be dealt with in order to revive credit growth.
Shares of most European banks are down significantly.
Latest figures for HDFC Bank aren't available.
A rate change seems round the corner, no matter where the new base level is fixed.
With March 2016 being the final quarter when banks will have to disclose their stressed assets, the markets are assuming the worst is yet to come
So, what does 2016 have in store for the Indian markets? Will they be able to take a giant leap forward in the leap year, and what are the key risks?
Chief Economic Advisor V Anantha Nageswaran on Thursday expressed hope that the economy will maintain the trend growth rate of 6.5 per cent and above for the rest of the years in the current decade. The economy will close the current fiscal logging in a growth of 6.5-7 per cent, he said, citing the projections of private sector analysts, Reserve Bank of India (RBI) and international agencies like OECD and the IMF. "This appears to be reasonable at this point in time although we will get the data on the fiscal second quarter in a few days, which will give more clarity on these numbers.
2022 is shaping up as the year brimming with job opportunities for people who possess relevant skillsets. Therefore, it is crucial for fresh graduates and young professionals to enroll in relevant certification courses to add more feathers to their introductory portfolio
After a turnaround in performance by Indian equity markets since July that has seen the S&P BSE Sensex and the Nifty50 wipe out the year-to-date losses, analysts suggest investors start nibbling into stocks that are focused on the domestic economy. While they say intermittent corrections, led by policies of global central banks and other economic data, cannot be ruled out, analysts expect India's relative outperformance among global equity markets to continue as it looks better placed with a healthy economic recovery, and remains one of the fastest growing major economies. In this backdrop, Neeraj Chadawar, head of quantitative equity strategy at Axis Securities, believes that amid global slowdown, aggressive tightening by the central banks, and preference for domestic interests first (by the local government), export-oriented themes are likely to be muted or will deliver conservative returns in the near-term.
Budget 2015 has blessed the banking sector.
Expect heightened volatility and stress to hit the markets. Caution may be the need of the hour, alerts Akash Prakash.
Sectorally, telecom, realty, auto and banks were among the top losers, shedding as much as 2.22 per cent.
Unless RBI temporarily relaxes the norms on recognising of bad loans, the pressure on this front could rise in the December quarter.
YES Bank, Bank of Baroda, SBI, IndusInd Bank, and RBL Bank are amongst the banks, Jefferies says, are most prune to "high risk" emanating from ADAG, Cox & Kings, CG Power, DHFL and Essar Shipping.
The banking sector, which had seen good set of numbers in the third quarter, is likely to report subdued earnings in the fourth quarter of 2008-09 due to slowdown in credit growth and pressure on interest margins, analysts say.
The current slowdown has lasted for over 18 months and is the longest incident of sluggishness since 2006.
Vedanta Limited (Vedanta) helping its parent and group holding company Vedanta Resources to deleverage its balance sheet has started to strain its balance sheet. Vedanta's gross debt (consolidated) was up 24.3 per cent year-on-year (YoY) in FY23 and reached a six-year high of Rs 66,628 crore by the end of March. Similarly, its net debt went up 20.3 per cent YoY to Rs 45,706 crore at the end of FY23, up from Rs 38,228 crore a year ago; it was the highest since FY20.
Liquidity in the banking system has slipped into a deficit for the first time in three weeks, prompting banks to borrow the largest quantum of funds from the Reserve Bank of India (RBI) in around a month and a half. The key catalyst for the sudden tightening in liquidity was due to outflows on account of advance tax payments, which occur towards the end of a quarter. Analysts also cited other factors such as a currency leakage and possible interventions by the RBI in the foreign exchange market, which contributed to the tighter liquidity conditions.
The management, however, is a bit wary about near-term performance.
ICICI Bank has the largest proportion of SDR loans as a percentage of its total, followed by state-run United Bank of India and Canara Bank.
Broking firm Jefferies says Indian financial system is now flooded with the kind of liquidity witnessed in 2005-07 and 2009-10
Yoga guru Ramdev's company to invest Rs 5,000 crore in four units in the next 500 days to boost production.
Lower gold imports and higher overall exports to help narrow the gap.
Moody's on Thursday said the new 'inflation targeting' mechanism is a "credit positive" move.
The combined market capitalisation of the 21 listed PSU banks declined by about Rs 76,000 crore to Rs 425,800 crore during the month.
As regards India, FIIs have pumped in over Rs 34,400 crore in the Indian stocks in calendar year 2021.
The bull run in the Indian equity markets is intact, said analysts at Morgan Stanley in a recent note. They expect the S&P BSE Sensex to hit 80,000 levels by December 2023 in their bull-case scenario, to which they have assigned a 30 per cent probability. From the current level, this translates into an upside of nearly 29 per cent.
Enjoying the backing of the regulator, Gill has identified the core problems, ring-fenced the banks from "influencers" and is in the process of building a new team. Now, he needs to play a Vikram Pandit for YES Bank, says Tamal Bandyopadhyay.
The demand for gold is expected to take a hit if the price of the yellow metal - which has been hovering around Rs 60,000, a level never seen before - remains elevated. Due to a sharp increase in price in a very short time and the flow of smuggled gold continuing, gold price in Mumbai is quoted at around Rs 59,000 per 10 gram. Typically, overall demand in the January-March and July-September quarters is moderate-to-dull, which is the case in the ongoing period.
The earnings of India Inc hit a record high in the 2022-23 (FY23) January-March quarter (fourth quarter, or Q4), compared with their poor showing in the previous two quarters of the financial year. The rise in earnings, however, is exclusively led by banking, financial services, and insurance (BFSI) companies. A better-than-expected showing by banks and non-bank lenders in Q4FY23 more than compensated for the earnings contraction in the non-BFSI space.
The startling report comes at a time when many analysts are concerned over almost all the key indicators heading south or even contracting, forcing the government to offer massive tax giveaways.
The Reserve Bank of India (RBI) raised the minimum capital requirement for so-called shadow banks and tightened rules on deposits and bad loans to avoid any potential risk to the economy from these rapidly growing finance firms by regulating them like traditional banks.
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