'For the next two years, we expect the bulk of earnings growth contribution from sectors like financials and energy, where the outlook remains positive, while the sectors which are linked to domestic consumption and are currently witnessing strains on margins have low salience for Nifty earnings.'
Titan was the top gainer in the Sensex pack, rising over 3 per cent, followed by M&M, Reliance Industries, Axis Bank, TCS, Maruti and Infosys. NSE Nifty surged 122.10 points to 15,885.15.
The companies' combined net profit declined by 10.1 per cent y-o-y during June '19 quarter against 26.2 per cent y-o-y growth a year ago.
Why does the world's fastest-growing major consumer of energy fail to attract investments in oil and gas? This is a question worth pondering after private sector conglomerate Reliance Industries Ltd (RIL) failed to close a $15-billion downstream asset deal with Saudi Arabia's national oil company, Aramco. It's understandable if multi-billion dollar investments in oil and gas projects or deals involving state companies that need to traverse a complex bureaucracy at state and federal levels and the corridors of ministries unravel. However, Mukesh Ambani-run RIL, India's most successful energy company, is not typically known to fumble on closing deals (Ambani closed deals worth around Rs 2 trillion early last year in telecom and retail with blue chip investors).
Billionaire Mukesh Ambani's Reliance Industries on Friday reported a 43 per cent jump in its September quarter net profit as its businesses from oil to retail fired on all cylinders, growing both sequentially and on a year-on-year basis. Net profit of Rs 13,680 crore, or Rs 20.88 per share, in July-September compared with Rs 9,567 crore, or Rs 14.84 a share, in the same period a year back, the company said in a statement. While better realisation and a sharp rise in crude oil prices benefited the old-economy business, retail saw footfalls at stores reach pre-Covid levels and per user earning from telecom business rose.
Indian Oil Corporation (IOC), the nation's largest oil firm, has renewed a deal to buy up to 2 million tonnes of crude oil in 2022 from Russia's Rosneft, the Russian oil producer said. IOC had in February 2020 signed a deal with Rosneft Oil Company to import up to 2 million tonnes of oil via the port of Novorossiysk. In 2021, the deal envisaged supply of up to 1.7 million tonnes of crude oil but IOC bought just on parcel or shipload as the cost of transporting the oil made it uneconomical, when compared to alternatives. For 2022, the deal is for the supply of up to 2 million tonnes of oil from the Black Sea port of Novorossiysk.
EV players suggest a reduction in the goods and services tax on batteries from 18 to 5 per cent as it would help push demand.
India must be prepared for a big, fat fuel import bill in FY23 - barring any further avatars of the Covid virus - as refiners crank up runs, or crude processing rates, to meet the growing demand for fuels, and crude prices soar. Capacity additions by an Indian state-run refiner will reinforce the need for foreign crude. Demand for all fuels is expected to increase by 3-8 per cent next fiscal from 2021-22, reaching pre-pandemic levels, according to analysts and industry experts.
This military visit came amid heightened tensions between China and United States, with issues pertaining to disagreements over Taiwan and the COVID-19 pandemic.
The much-talked-about sale of Ambuja Cement and ACC by Holcim Group will see the single-biggest outflow of foreign capital from the country if the two cement firms are acquired by Indian investors. The deal, valued at nearly $10.35 billion, will put in the shade Cairn Energy Plc's exit from India in 2010, when it sold Cairn India to Vedanta Group for $4.48 billion. According to various reports, big business groups such as AV Birla, JSW Group, and Adani Group are in the fray to acquire Holcim's assets in India.
US private equity firm I Squared Capital is dropping out of the race to buy India's second-largest state oil firm, Bharat Petroleum Corporation Ltd (BPCL) owing to a complex deal structure and lack of financial backers for the transaction, sources said. I Squared Capital through its Indian arm, Think Gas was among the three suitors that had evinced interest in buying the government's near 53 per cent shareholding in BPCL. "The company has made a decision not to participate in the financial bidding," a source with direct knowledge of the development said.
The government's programmes should be expected to generate some momentum, but the macro-economic numbers are not encouraging, observes T N Ninan.
However, a prolonged and intense second wave that curtails oxygen supply to industries for a longer-than-expected period will exacerbate downside risk in affected sectors
The levy of retrospective tax on the UK's Cairn Energy Plc is a tale of bizarre twists and turns that saw its attached shares being sold in May 2018 amid the passing of the baton from a full-time finance minister to interim one and the talks at the highest level to resolve the dispute, to claims that levy of back taxes was a result of an investigation into Panama Papers leak. The government late last month refunded about Rs 7,900 crore it had collected from selling residual shares of the British firm in its erstwhile India unit, seizing dividend and withholding tax refunds, to settle an eight-year-old dispute that had tarred the country's reputation as an investment destination. But, this did not come about easily. For seven years, the establishment vehemently justified in courts and outside seeking of Rs 10,247 crore in back taxes plus interest and penalty from a firm that gave India its biggest onshore oil discovery.
The government on Monday budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including 2 PSU banks and one general insurance company, in the next fiscal year beginning April 1. The amount is lower than the record Rs 2.10 lakh crore which was budgeted to be raised from CPSE disinvestment in the current fiscal year. However, the COVID-19 pandemic impacted the government's CPSE stake sale programme, and the target has been lowered to Rs 32,000 crore in the Revised Estimates.
The impact for all electric two-wheelers, which are imported mostly from China, is that it will lead to price escalation that will be passed onto customers.
The operating margin of India Inc is likely to drop in the December quarter with a 100-120 bps year-on-year decline, as 27/40 sectors are set to see crimped margins despite higher revenue, according to a report. Surging commodity prices and price hikes may help companies report a healthy 16-17 per cent revenue growth to Rs 9.1 lakh crore during the quarter ending December, the Crisil report said on Tuesday. Software major TCS will open the earnings season Wednesday.
'2022 has not been -- and will not be -- the kind of 2021 bull market, which lifted all boats.'
Petrol and diesel prices were on Tuesday hiked by 80 paise a litre while domestic cooking gas prices were increased by Rs 50 per cylinder, ending an over four-and-half month election-related hiatus in rate revision, sources said. Petrol in Delhi will now cost Rs 96.21 per litre as against Rs 95.41 previously while diesel has gone up from Rs 86.67 per litre to Rs 87.47. Simultaneously, the price of a non-subsidised LPG cylinder has been increased to Rs 949.50 for each 14.2-kg bottle in the national capital.
If IOC is not allowed to run its own affairs, then we can see it close down in the next 10 to 15 years, warns Sudhir Bisht.
The Tata group is looking to make a foray into semiconductor (also known as chips) manufacturing and it has set up a business to seize the opportunity, Chairman N Chandrasekaran said on Monday. "At the Tata group, we have already pivoted into a number of new businesses like electronics manufacturing, 5G network equipment as well as semiconductors, in all probability," he said while speaking at the annual general meeting of the IMC Chamber of Commerce and Industry. Chandrasekaran said global supply chains, currently heavily dependent on China, would see a big change in a post-pandemic world with businesses shifting their reliance to other countries.
Media reports this week suggested that British energy drink firm Rich Energy was leading a consortium seeking to purchase the Silverstone-based team for 200 million pounds ($278.66 million).
Finance Minister Nirmala Sitharaman on Tuesday proposed enhancing the funding under the PLI scheme for domestic solar cells and module manufacturing to Rs 24,000 crore from the existing Rs 4,500 crore to make India an exporting nation. "For facilitating domestic manufacturing for the ambitious goal of 280GW of installed solar capacity by 2030, an additional allocation of Rs 19,500 crore for PLI scheme for manufacturing of high efficiency (solar) modules with priority of fully integrate manufacturing units for polysilicon to solar PV modules will be made," Sitharaman said in her Budget speech in the Lok Sabha. In April 2021, the Union Cabinet approved a Rs 4,500 crore production linked incentive (PLI) scheme to boost domestic manufacturing capacity of solar PV modules.
While Nifty 50 reflects changes in 40 years, it also shows what is missing: Low-cost manufacturers at one end, and deep-value players at the other. Also missing are technology players, observes T N Ninan.
The windfall tax on oil produced within India and fuel exported overseas will make up for more than three-fourths of the revenue that the government lost when it cut excise duty on petrol and diesel to cool soaring inflation, industry sources said. India on July 1 joined a select league of nations globally that have taxed windfall gains accruing to oil companies from soaring energy prices. The government slapped a Rs 6 per litre tax on the export of petrol and jet fuel (ATF) and Rs 13 a litre on the export of diesel effective July 1. Additionally, a Rs 23,250 per tonne tax was levied on crude oil produced domestically.
IT, FMCG and manufacturing sectors are less attractive to foreign portfolio investors
Capital markets regulator Sebi has kept the proposed Rs 4,500-crore initial share-sale of edible oil major Adani Wilmar Ltd (AWL) in "abeyance". However, the Securities and Exchange Board of India (Sebi) did not clarify further. The company had filed preliminary papers with Sebi on August 3, to raise funds through an initial public offering (IPO).
Two powerful US Senators have urged President Joe Biden not to impose provisions of the punitive Countering America's Adversaries Through Sanctions Act against India for buying the S-400 surface-to-air missile system from Russia.
In December 2019, the India arm of Deloitte Touche Tohmatsu surprised many with its ultra-competitive bid to become the transaction advisor for the country's largest strategic divestment in Bharat Petroleum Corporation (BPCL). The multinational major quoted just Rs 1; the second-highest bidder, SBI Caps, reportedly quoted Rs 15-17 crore. For Deloitte, the motivation was to bag a prestigious deal adding a national energy company to its portfolio. No doubt, it expected BPCL to go to a marquee buyer in quick time.
After a long wait, the Shapoorji Pallonji Group has closed the sale process of its consumer durables business under the Eureka Forbes label by picking the American private equity fund Advent International's Rs 4,400-crore offer for a 72 per cent stake. The sale process, which began in November 2019, will help the over 156-year-old SP Group pair the debt pile and sharpen the focus on the flagship construction and engineering business under Afcons. The valuation of Rs 4,400 crore for a 72.56 per cent stake is is at an enterprise level and subject to closing adjustments and also includes an open offer for the remaining stake after the demerger and listing of Eureka Forbes, the SP group said in a statement on Sunday.
Engineering giant Larsen & Toubro (L&T) handed out a pay cheque of Rs 61.27 crore to its chief executive officer (CEO) and managing director (MD) SN Subrahmanyan in the last financial year (FY22), which is a near 115 per cent hike over FY21, as executive compensation at India Inc comes under sharp focus after two years of Covid-19. In fact, the total compensation of L&T's executive directors (including Subrahmanyan) in FY22 was 120 to 670 times the median remuneration of the company's employees, data from its FY22 annual report shows. This points to sharp hikes that the top management saw in their remuneration during the period, experts in human resources said. In FY21, L&T's executive compensation was 56 to 337 times the median remuneration of company employees.
The FPI holding in India's top 100 companies, which are part of the Nifty 100 index, declined to 24.23 per cent on average at the end of March this year, from a high of 27.5 per cent at the end of March 2021. This is the lowest FPI holdings in India's top listed companies in at least three years. A general sell-off by FPIs has weighed on stock prices and the benchmark S&P BSE Sensex is down 8.5 per cent, from its 52-week high made in October 2021. Most analysts expect FPI flows to remain weak in FY23 as well, given rising bond yields in the US and an expected earnings slowdown in India due to high inflation and commodity prices.
Only 80.6 per cent of the Rs 6-trillion allocation has been spent by February, data from the Controller General of Accounts shows.
Modi's unexpected announcement of achieving net zero by 2070 may have neatly deflected the pressures on India to sign up to an ambitious pledge but it does nothing to dispel the ecological emergency that threatens all life on the planet, , points out former forerign secretary Shyam Saran, the prime minister's special envoy and chief negotiator on climate change 2007-2010.
The Vedanta group on Wednesday confirmed putting in a preliminary expression of interest (EoI) for buying the government's stake in Bharat Petroleum Corp Ltd (BPCL).
CNG price in the national capital and adjoining cities on Tuesday was hiked by Rs 0.50 per kg, while an imminent increase in petrol and diesel price has been put on wait-and-watch mode for more clarity on global oil prices. CNG price in NCT of Delhi has been increased to Rs 57.51 per kg from Rs 56.51, according to the information posted on the website of Indraprastha Gas Ltd - the firm which retails CNG and piped cooking gas in the national capital. Following the firming up of international gas rates, IGL has been raising CNG rates by up to 50 paise (Rs 0.50) per kg periodically. Prices have gone up by about Rs 4 per kg this year alone.
The government on Thursday brought a bill in the Lok Sabha to withdraw all back tax demands on companies such as Cairn Energy and Vodafone and said it will refund the money collected to enforce such levies.
During a series of hectic talks between Cairn Energy and the Indian government over the $1.2-billion arbitration award in favour of the former last week, a slew of options was proposed by the two sides, including computation of capital gains and participation in the Vivad se Vishwas (VsV) dispute resolution scheme. The government is likely to go ahead and appeal against the arbitration award by a Permanent Court of Arbitration at The Hague before March 21, indicated finance ministry officials. Cairn Energy Plc on Sunday said it was hopeful that an acceptable solution to its tax dispute with the Indian government could be found to avoid prolonging and exacerbating the 'negative issue' for all parties.
Bankrupt Infrastructure Leasing & Financial Services (IL&FS) has sold the entire stake in the waste management arm IL&FS Environmental Infrastructure & Services (IEISL) and its subsidiaries to EverEnviro Resource Management (EverEnviro), an arm of the PE major Everstone Group, the companies said in separate statements. Though the value of the deal was not specifically disclosed, the crippled IL&FS -- which is under bankruptcy proceedings in NCLT -- said the sale will reduce its overall debt by Rs 1,200 crore, which is the combined debt of entities under the group's environment businesses. IL&FS Environmental Infrastructure & Services (IEISL) is one of the leading integrated waste management companies that is into municipal solid waste management apart from presence across various segments including construction and demolition, collection and transportation and waste to energy and currently manages over 8,400 tonnes per day solid municipal waste.
India's current account deficit is expected to deteriorate in the current fiscal on account of costlier imports and tepid merchandise exports, according to the Finance Ministry's monthly economic review. The review released on Thursday by the ministry also said that global headwinds would continue to pose a downside risk to growth as crude oil and edibles, which have driven inflation in India, remain major imported components in the consumption basket. For the present, it said, "their global prices have softened, as fears of recession have dampened prices somewhat. This would weaken inflationary pressures in India and rein in inflation."
