Tag: pandemic

BSE IT Index trading at P/E multiple of 34.3x - nearly 29% higher than that of Sensex

BSE IT Index trading at P/E multiple of 34.3x - nearly 29% higher than that of Sensex
Wednesday, December 8, 2021
Tata Consultancy Services, Infosys, Wipro, and HCL Technologies, etc., India’s leading information technology (IT) services companies, are the flavor of the season on D-Street. The IT industry valuation premium over the broader market is now at its highest level in more than a decade as investors continue to accumulate the shares of top IT companies and go underweight on at-risk sectors, such as banking, oil and gas, metals, and even fast-moving consumer goods companies (FMCG). The BSE IT Index is currently trading at a trailing price-to-earnings (P/E) multiple of 34.3x — nearly 29 percent higher than the benchmark BSE Sensex P/E multiple of 26.6x. In contrast, till six months ago, the IT index was trading at a discount to the benchmark index. This is the first time in five years that the IT index valuations are higher than the benchmark indexes. Read more

Big Indian companies are steping up investments following the post pandemic

Big Indian companies are steping up investments following the post pandemic
Friday, October 22, 2021
With healthy cash reserves and aided by stronger balance sheets post-Covid, Indian companies are looking to step up their capital expenditure and investment plans. Industry captains and analysts say a mix of factors such as accommodative monetary policy and lower interest rates, reduced corporate tax rates and government incentives such as Production-Linked Incentive (PLI) scheme, global liquidity, and upward commodities cycle are fueling optimism among companies. "Corporates are sitting on cash as profitability has picked up in the post-pandemic period. They are looking to invest in order to capture available opportunities of increased government spending, divestment, consumer demand revival, and export market. PLI scheme and revival of real estate and housing will make a positive impact on the investment cycle. We believe sectors like IT pharma steel, sugar, cement, real estate, and infrastructure will take lead on investment" says an economic expert. Read more

The Indian economy is picking up leaving behind the shadow of the pandemic: RBI report

The Indian economy is picking up leaving behind the shadow of the pandemic: RBI report
Tuesday, October 19, 2021
The Indian economy is picking up leaving behind the shadow of the pandemic as consumer demand improves and supply constraints ease due to strong Kharif agricultural production and revival in manufacturing and services. Also, softer food prices are aligning headline inflation closer to the target of 5.3 percent for FY'22. "The green shoots of revival have spilled out of the high-frequency indicators and on to the headline metrics in a recovery that is progressively solidifying," the report said. RBI's Economic Activity Index (EIA) indicates that real GDP grew by 9.6 percent in July-September 2021

US futures fall over 1% due to growth worries amid Covid

US futures fall over 1% due to growth worries amid Covid
Monday, September 20, 2021
U.S. stock index futures fell 1% today (20th Sept.2021), as investors worried about rising COVID-19 cases and the pace of economic growth at the start of a week in which the Federal Reserve will decide on potentially tapering its massive pandemic-era stimulus. Futures tracking the blue-chip Dow index, which mainly comprises stocks reliant on a steady economic recovery, were down 1.5% by 04:31 a.m. ET. Wall Street's main indexes have been hurt this month by fears of potentially higher corporate tax rates denting earnings and have shrugged off signs inflation might have peaked. The benchmark S&P 500 is on track to snap a seven-month gaining streak. All eyes on Wednesday(22nd Sept.) will be on the Fed's policy meeting, where the central bank is expected to lay the groundwork for a tapering, although the consensus is for an actual announcement to be delayed until November or December meetings. Read more

RBI hints at normalising ultra-loose policy

RBI hints at normalising ultra-loose policy
Friday, August 6, 2021
The August review of the Reserve Bank of India’s bi-monthly monetary policy was interesting as: 1.) no unanimous voting on the policy stance 2.) more than expected revision in inflation forecast for FY22 and 3.) announcement of the variable rate reserve repo auction – an indication that the central bank has started the gradual withdrawal of the ultra-loose monetary policy that was in place since the onset of the Covid-19 pandemic. As expected, there was complete unanimity among all the six members of the monetary policy committee (MPC) to keep the interest rate unchanged at 4%. However, on maintaining the accommodative stance, five of the six members voted in favour. Professor Jayanth Verma disagreed. Read more

Service activities decline for 3rd straight month in July due to Lockdown

Service activities decline for 3rd straight month in July due to Lockdown
Wednesday, August 4, 2021
The biggest sector of India's economy, Services, continued to contract for the third month in a row in July due to restrictions imposed by state governments to arrest the spread of the Covid-19 pandemic according to a widely tracked IHS Markit purchasing managers' index (PMI) survey. Business activity, new orders, and employment declined in July, according to a commentary associated with the survey. The latest data also pointed to an intensification of inflationary pressures across the sector, it said. New work intakes also fell for the third month running in July, albeit at a softer pace than in June. In addition to challenging conditions domestically, firms observed a further deterioration in international demand for services. New business from abroad decreased at a sharp pace that was little changed from June. Read more

SBI Life Q1 results: Net profit sinks 43% YoY to Rs 223 cr

SBI Life Q1 results: Net profit sinks 43% YoY to Rs 223 cr
Monday, July 26, 2021
SBI Life Insurance Company today(26th July 2021) reported a 43 percent year-on-year decline in its net profit to Rs 223 crore for the quarter ended March. The company's sharp decline in bottom line was on account of additional reserves of Rs 440 crore created by the life insurers towards Covid-19 pandemic-related claims that may come up in the coming quarters. The life insurer said that there was a 1.28 times increase in the number of claims reported from the end of the previous financial year to the end of the June quarter, reflecting the devastating impact of the second wave of Covid-19 pandemic on the country. The company said that the total number of claims in the reported quarter was at 8,956, while claims net of reinsurance stood at around Rs 570 crore. Read more

Smallcap funds make for a good investment choice now

Smallcap funds make for a good investment choice now
Tuesday, July 20, 2021
Smallcap companies are those that have a market capitalisation of less than the 250th stock on the stock exchange. With economic data improving, the corporate profitability of smallcap companies can be expected to improve. Investors looking for decent returns and having a higher risk tolerance can look to invest in small caps. When it comes to mutual funds, schemes that invest at least 65% of their portfolio in smallcap stocks can be deemed as smallcap funds. There are over 4,500 smallcap companies listed on the stock exchange in India. Though they have the potential to give investors good returns, it is advisable to stay invested in them for the long term to mitigate the risks. Actively managed to smallcap funds can outperform other segments of the market, especially during phases of economic recovery or growth. Historically too, the smallcap funds have managed to outperform other segments. Read more

India's economic fundamentals strong, recovery underway: HDFC Chairman

India's economic fundamentals strong, recovery underway: HDFC Chairman
Tuesday, July 20, 2021
"Owing to the second wave, the Indian economy is likely to mirror a similar trend seen in FY21, where the first half of the financial year is weaker and the second half is significantly stronger,” according to HDFC Chairman Deepak Parekh. However, in terms of the overall macroeconomic environment, “the key challenge remains the unpredictability of the virus. The world is still susceptible to recurring waves of infections. Thus, economic recovery will remain uneven and patchy,” he said. There are a couple of factors working in favour of India. The foreign exchange reserves and foreign direct investment inflows are at a record high, agriculture growth is expected to remain strong with foodgrains estimated at over 305 million tonnes. RBI’s accommodative stance and government measures to alleviate covid-related stress would also help in the recovery, Parekh said.

June GST collection falls below Rs 1 trn-mark after 8 months

June GST collection falls below Rs 1 trn-mark after 8 months
Tuesday, July 6, 2021
GST collections for the month of June fell below Rs 1 trillion for the first time in months, according to the government data released today(7t6th July 2021). The gross GST revenue collected in the month of June is Rs 92,849 crore. The collection dropped below the Rs 1 trillion marks after posting above the mark for eight months in a row. GST collections moderated to an eight-month low of Rs 1.02 trillion in May. The revenues for the month of June 2021 are 2 percent higher than the GST revenues in the same month last year. The figures include GST collection from domestic transactions between June 5 to July 5 since taxpayers were given various relief measures in the form of waiver/reduction in interest on delayed return filing for 15 days for the return filing month June for the taxpayers with the aggregate turnover up to Rs 5 crore in the wake of covid pandemic second wave.

Financial wealth in India jumps 11% to $3.4 trillion in pandemic year

Financial wealth in India jumps 11% to $3.4 trillion in pandemic year
Tuesday, June 15, 2021
Financial wealth is the total wealth excluding real assets and liabilities held by adult individuals. Financial wealth in India grew 11 percent to USD 3.4 trillion in 2020 despite the coronavirus pandemic, according to a global consultancy estimation published today(15th June 2021). The 11 percent growth in financial wealth was at par with the compounded annual growth rate for the five years to 2020, the report said. It can be noted that after a sharp correction in the early days of the pandemic, there has been a continuing rally in stocks since April last year, which has led to concerns being expressed across quarters. Concerns are also being expressed about a greater disparity in incomes and the pandemic widening the divide. The report noted that the next few years will also see a faster expansion in financial wealth, but the rate of expansion will slow down marginally to 10 percent per annum to take the number to USD 5.5 trillion by 2025. Read more

Indian banks proved the doomsday predictions wrong in a pandemic year

Indian banks proved the doomsday predictions wrong in a pandemic year
Monday, June 14, 2021
When the Covid-19 pandemic broke out in March last year and a nationwide lockdown was imposed to restrict its spread, there were concerns all around over its impact on the banking sector. Bad loans were stabilising after a relentless rise for several years and there was a ray of hope for the banking sector after a long time with non-performing assets have crossed the hump. Then the Covid-19 pandemic broke out crippling economic activity due to the lockdown and fears of asset quality problems resurfaced. The Reserve Bank of India (RBI) too, raised a red flag about the possible ballooning of bad loans. Stress tests by RBI projected gross non-performing assets of the Indian banks to shoot up to 13.5% by September 2021 as compared to 7.5% in September 2020 – under a baseline scenario. The situation was predicted to worsen under a severe stress scenario. Read more

TCS stock up 3000% since its IPO -Chandrasekaran

TCS stock up 3000% since its IPO -Chandrasekaran
Friday, June 11, 2021
Tata Consultancy Services (TCS) has navigated the pandemic very well, and has earned tremendous goodwill from customers, which enhanced the firm’s standing in the market, N Chandrasekaran, chairman, said in his virtual address of the 26th Annual General Meeting on Thursday. He said, if an investor had invested in TCS IPO investor’s wealth would have increased by 3000% in 17 years. One share of TCS at a price of Rs 850 during the IPO in 2004 would be worth Rs 28000 today, giving shareholders a 3000% return on their investment. On the performance of the company, he said barring the first quarter of the fiscal year, the company delivered a sharp recovery. For FY21, TCS has returned Rs 33,873 crore in dividends and buyback to shareholders, resulting in a payout of 95 per cent of free cash flow.Chandrasekaran also recounted the contribution of FC Kohli, who led TCS during the initial 27 years, navigating multiple technology waves investing continuously in people and in research Read more

Investment activity hits historic low in FY21 due to pandemic

Investment activity hits historic low in FY21 due to pandemic
Tuesday, June 1, 2021
In the fourth quarter of the financial year, 2020-21 (Q4FY21) investment activity revived to a seven-quarter high and demand recovered to a five-quarter high but this may not sustain because of the impact of the second wave of Covid-19 on rural demand and corporate spending, feel economists. The better-than-expected economic growth in Q4 was largely led by a spike in government spending and double-digit growth in investment activity, owing to a low base. However, for the whole of FY21, growth in investment and consumption touched a historic low as the country grappled with the impact of the nationwide lockdown in Q1. Read more

Markets will digest dent on June quarter earnings as one-time hit: Analysts

Markets will digest dent on June quarter earnings as one-time hit: Analysts
Friday, May 14, 2021
The present Covid-19 pandemic situation across key economic hubs will dent corporate earnings in the June 2021 quarter (Q1FY22), but the markets will take this in their stride and digest them as a one-time hit look forward to growth as the economy normalises after this wave, believe analysts. They expect the second wave in India to peak by June. Economic normalisation, is likely by August – September 2021 according to them. Economic pain, most analysts believe, will be restricted to the second quarter of this fiscal (Q2FY22) as the stringency of the lockdown measures is relatively low as compared to the first wave in 2020. Yet, leading brokerages and rating agencies, including Moody’s, Nomura, Crisil, QuantEco Research, and CARE Ratings, have cut India’s GDP growth estimates for FY22. Read more

SBI Life stock to outperform peers over the next one-two years:Analysts

SBI Life stock to outperform peers over the next one-two years:Analysts
Monday, May 10, 2021
As the second wave of the Covid-19 pandemic gripped India, it resulted in an increased demand for insurance products. The institutional players on the Street saw it as an opportunity and lapped up shares of the largest private player - SBI Life Insurance Company. Moreover, an impressive March quarter show made them even more gung-ho on the prospects of the firm. The stock has rewarded handsomely with a rise of 11 percent from March-end, outperforming the benchmark Sensex which has gained 3 percent in the same period, show data available on ACE Equity. The growth prospects for the industry remain robust, underscored by the latest data. In April, the insurance industry posted Annual Premium Equivalent (APE) growth - a measure of new business sales growth in the insurance industry growth - of 70 percent YoY, coming off a low base with private insurers growing 80 percent and LIC at 57 percent. Read more

Why isn’t India’s stock market falling more?

Why isn’t India’s stock market falling more?
Thursday, May 6, 2021
What are the reasons for India’s stock market not falling much in spite of the most pervasive second wave of Covid-19 pandemic considering the risky asset class in a country struggling with its most horrific calamity. New daily Covid-19 infections have remained above 300,000 for two weeks now, the worst caseload the world has seen. The death rate is 3,700-plus. Fear of the virus is pervasive. Even the rich and the powerful are finding it hard to arrange a hospital bed or track down an oxygen cylinder. But in all this, the benchmark Nifty 50 Index is down ever so slightly, clocking a less than 5% decline since mid-February. At 32 times earnings, almost double the valuations in China, the Indian market is super-expensive. The logic for those prices runs like this: Unlike last year, there’s no national lockdown. And there may not be one if the peak of the surge is just a week or two away, as some epidemiological models indicate. Read more

India's coronavirus crisis may derail the world economy

India's coronavirus crisis may derail the world economy
Saturday, May 1, 2021
The second wave of the COVID-19 pandemic has struck India with a devastating impact. With over 300,000 new cases and 3,000 deaths across the country each day at present, the total number of deaths has just passed the 200,000 mark – that’s about one in 16 of all COVID deaths across the world. There is now a humanitarian crisis of significant proportions. India is a country of 1.4 billion people and makes up a sixth of the world’s population. Hence it is also most likely going to affect the world economy. India is itself the fifth largest economy in the world. With relatively high growth rates (of between 4% and 8%) and its large size, it has a significant impact on the world economy. Read more

PVR plans to release films in theatres as virus eases

PVR plans to release films in theatres as virus eases
Tuesday, January 19, 2021
PVR Ltd. is now planning to release their movies in cinema halls rather than on streaming sites like those run by Netflix Inc. and Amazon.com Inc., now that the pandemic is easing in India. The country’s biggest cinema operator, which runs about 835 screens across 71 cities, is currently operating most theaters at half capacity due to Covid-related restrictions. However, it sees benefits in the “age-old strategy” of movies first coming to the big screen before being monetized on other platforms. A number of Indian films starring top actors such as Amitabh Bachchan, Akshay Kumar, and Vidya Balan opted for streaming platform release in 2020 as theaters were shuttered by shelter-at-home rules. PVR’s shares, which snapped eight years of gains to fall about 30% in 2020, have risen almost 14% this year. The stock has 20 buy calls, six holds, and four sales among analysts tracked by Bloomberg.

India’s endless bank salvage pain

India’s endless bank salvage pain
Wednesday, January 13, 2021
India's state-dominated lending system’s aggregate balance sheet had a gaping hole even before Covid-19. Now things could turn uglier. The regulator’s latest stress test projects nonperforming assets to jump to 13.5% of loans and advances by September in its baseline scenario, and 14.8% in the worst-case situation, almost doubling from 7.5% a year earlier. After many tough years, making India’s broken banks whole is still very much like pulling teeth. The twists and turns in the $12 billion bankruptcy of a housing finance company show how challenging it may be for the country to nurse its post-pandemic financial system to health.

Bajaj Finance Q2 profit declines 36% YoY to Rs 965 crore

Bajaj Finance Q2 profit declines 36% YoY to Rs 965 crore
Wednesday, October 21, 2020
Shares of Bajaj Finance was down 0.89 per cent at Rs 3,233 on Wednesday after the Company posted huge 35.94 per cent year-on-year (YoY) drop in net profit at Rs 964.88 crore for the quarter ended September 30 as the lender almost tripled provisions for bad loans as the coronavirus pandemic impacted demand for credit and borrowers’ ability to repay. Analysts in an ET NOW had projected the figure at Rs 1,037 crore. The Company had reported Rs 1,506 crore in the same period last year. Loan losses and provisions for the second quarter ended September 30, 2020, was ₹1,700 crore as against ₹594 crores in Q2 FY20. Consolidated assets under management rose to ₹137,090 crores as compared to ₹135,533 crores in the year-ago period.Net interest income of the NBFC increased 4 per cent YoY to Rs 4,165 crore which was better than the CNBC-TV18 poll estimates of Rs 3,711.7 crore. Total operating expenses for Q2 FY21 was down by 16% to ₹1,160 crores from ₹1,384 crores. Read more

Relief on NPAs extended after govt tells interest issue being looked into

Relief on NPAs extended after govt tells interest issue being looked into
Thursday, September 10, 2020
Today(10th Sept.2020)The Supreme Court of India extended its interim order that no account is to be declared NPA till further orders after the Centre said an expert panel has been set up to look into the issue of interest being charged by banks on instalments deferred during the moratorium period due to the COVID-19 pandemic. The top court was hearing a batch of pleas which have raised the issue of interest being charged on instalments which were deferred during the moratorium period due to the COVID-19 pandemic. The top court granted two weeks to the Centre and Reserve Bank of India (RBI) to file the affidavit and place before it the decisions taken in this regard. Read more

Big countries such as India are at a disadvantage in dealing with pandemics

Big countries such as India are at a disadvantage in dealing with pandemics
Friday, July 31, 2020
India is now the epicenter of the global coronavirus pandemic. It ranks just behind the U.S. and Brazil in confirmed cases and is growing faster than either. The total rose 20% in just the last week, despite the fact that India is testing less than most of its peers. It’s looking increasingly likely that India will wind up being the country with the most cases in the world. It is a reflection of the fact that big, diverse countries are at a disadvantage in dealing with pandemics. Smaller nations such as New Zealand or Thailand can manage the flow of cases by shutting down their international borders. But internal borders are as porous in India as they are in the U.S. Read more

Maruti Suzuki posts Rs 249 crore loss for Q1

Maruti Suzuki posts Rs 249 crore loss for Q1
Wednesday, July 29, 2020
Maruti Suzuki on Wednesday reported a consolidated loss of Rs 249.4 crore for the June quarter of FY21 (Q1FY21) as compared to a profit of Rs 1,376.8 crore reported in the corresponding quarter last year due to operating loss and lower revenue following a steep decline in sales volumes during the lockdown. It was the first time since its listing in 2003 that the auto major reported a quarterly loss. Analysts had projected a net loss of Rs 340 crore for the company. Revenue from operations declined sharply by 79.2 per cent to Rs 4,106.5 crore compared to the year-ago period. The company sold a total of 76,599 vehicles during the quarter, sharply lower from 4,02,594 in the same quarter a year ago. Sales in the domestic market stood at 67,027 units, while exports were at 9,572 units. The stock was down at Rs 6,172.35, down 1.83 per cent on the BSE. Read more

Bajaj Auto Q1 net profit plunges 53 per cent YoY to Rs 528

Bajaj Auto Q1 net profit plunges 53 per cent YoY to Rs 528
Wednesday, July 22, 2020
The Pune based two-wheeler major Bajaj Auto on Wednesday reported a standalone net profit of Rs 528 crore for the April-June quarter of FY21 (Q1FY21), down 53 per cent, from a profit of Rs 1,125.67 crore in the year-ago period, dented by lower volumes but the operating performance was ahead of analysts estimates. Sequentially, the profit tumbled 60 per cent from Rs 1,310.29 crore posted in the March quarter of FY20. Revenue from operations fell 60.3 per cent year-on-year to Rs 3,079.24 crore in the quarter ended June 2020, hit by lower sales volumes. Bajaj Auto said it sold 4,43,103 units during the first quarter against 12,47,174 units in the year-ago period. On a consolidated basis, the net profit was Rs 395.5 crore, down from Rs 1,012.16 crore clocked in Q1FY20. The company’s EBITDA (earnings before interest, tax, depreciation and amortisation) came to Rs 441 crore in the June quarter, while margin came in at 14.3 per cent. Read more

Gold breached $1,800 barrier for the first time since 2011

Gold breached $1,800 barrier for the first time since 2011
Wednesday, July 8, 2020
Gold briefly breached $1,800 an ounce today(8th July 2020) for the first time since 2011 as mounting fears over the fast global spread of the coronavirus sent investors scurrying for safe havens. Spot gold had risen 0.3 percent to $1,799.22 per ounce by 0854 GMT, after hitting its highest since November 2011, at $1,800.18, earlier in the session. US gold futures rose 0.2 percent to $1,812.90 per ounce. European shares opened lower as soaring COVID-19 cases dented hopes of a swift economic recovery. Read more

India Unlock 1.0 begins: Hotels, malls, places of worship to open from June 8

India Unlock 1.0 begins: Hotels, malls, places of worship to open from June 8
Sunday, May 31, 2020
The Centre on 30th May eased the lockdown curbs significantly while announcing ‘’unlock 1’’ with an “economic focus”. With this, the Centre has outlined a plan to reopen nearly all activities outside of containment zones starting Monday,1st June. Places of worship, hotels, restaurants and malls can resume business by June 8, it has said. Coinciding with this, some states have extended the lockdown for 15 to 30 days. For areas in containment zones, the Centre has extended the lockdown till June 30. It’s up to the local authorities to demarcate containment and buffer zones. With lockdown 4.0 ending today (31st May), the Centre has issued detailed guidelines for phased reopening of all prohibited activities. Amid state governments imposing restrictions on inter-state travel, the Centre has suggested that there will be unrestricted inter-state and intra-state movement of people and goods. Read more

COVID-19 pandemic effect:RIL announces pay cuts in its oil & gas division

COVID-19 pandemic effect:RIL announces pay cuts in its oil & gas division
Thursday, April 30, 2020
India’s most-valued company Reliance Industries(RIL) announced pay cuts for employees in its oil and gas division, an internal memo showed. “The COVID-19 pandemic has posed unprecedented challenges for India and the world. All societies, industries, and businesses are impacted and Reliance is no exception,” the memo read. The memo said Chairman Mukesh Ambani has agreed to forgo his entire compensation, while the board of directors, executive directors, EC members, and senior leaders will forgo 30-50 percent of their compensation. Employees in its hydrocarbons division with compensation of less than Rs 15 lakh per annum will not face any pay cut, while those above that will have a 10 percent reduction in their fixed pay. Also, the annual cash bonus and performance-linked incentives that are paid in the first quarter will be deferred. It was not immediately clear if the pay cuts are limited to the oil & gas division.

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