Category: Business

Rather unexpectedly when the economic conditions looked challenging and visibility was low, India Inc has surprised with the Nifty companies delivering their highest-ever quarterly profits in September 2020 in the last 45 quarters.

“While this quarter’s superior earnings performance is well acknowledged, just highlighting this exhibit of last 45 quarters of absolute PAT. Both Nifty and MOSL Universe delivered their highest ever quarterly profits in Sep’20. (Guess very few, if any, would have imagined this in April’20),” said Gautam Duggad, Head of Research, Motilal Oswal Financial Services.

No wonder that stock markets are rallying to lifetime highs as companies are posting record profits and stock prices are keeping pace with the improving profitability, at least among the big companies. As the Covid pandemic rages, there was uncertainty about corporate performance which has clearly been belied.

In an earlier report, Motilal Oswal Institutional Equities had said that the September quarter (2QFY21) corporate earnings season was a blockbuster one, with big beats and upgrades across sectors.

According to a report by Motilal Oswal Institutional Equities, wiith an upgrade (more than 5 per cent) to downgrade ratio (less than 5 per cent) of 4:1, this has by far been the best earnings season in many years.

“Sixty-three per cent of the companies in our coverage universe beat 2QFY21 estimates, while 18% reported below estimate results. This has resulted in the first material earnings upgrade for Nifty EPS estimates in many years”, the report said. More importantly, corporate commentaries across the sector suggest continued demand recovery in 3QFY21, underpinned by a healthy start to the festive season.

While sales growth was in-line, better-than-expected demand recovery, continued cost control measures, and lower-than-expected provisioning costs for the BFSI segment drove a spectacular profit beat. Cement, private banks, banks, PSU banks, healthcare, oil and gas, technology, and utilities reported year on year profit growth, while auto, capital goods, consumer, NBFC, and retail reported YoY declines. The telecom sector posted a loss.

The report said QFY21 corporate earnings were a broad-based beat, leading to significant upgrades in earnings estimates. Better-than-expected demand recovery and continued cost control initiatives were the key highlights of the quarter.

BFSI earnings were particularly strong, with commentaries from large private sector banks indicating the stress on asset quality may not be as bad as initially feared. Although, banks continue to increase provisions for COVID-related stress. Economic recovery continued, with high-frequency data for October coming in fairly strong (GST collections, Manufacturing PMI, rail freight, power demand, and IIP).

Early trends from the festive season suggest continued demand recovery. However, after the 68 per cent rebound from March lows, Nifty valuations are no longer cheap, the report said.

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Digital payments major Visa on Monday announced a collaboration with ICICI Bank on its ‘Visa in a Box’ programme for fintech acceleration.

Through this collaboration, fintechs can access APIs and the developer sandbox of Visa and ICICI Bank, to rapidly build, test and deploy consumer payment applications, Visa said in a statement.

ICICI Bank is the first bank to partner with Visa for its ‘Visa in a Box’ programme in India.

“As part of the alliance, ICICI Bank and Visa have come together to help fintechs launch their prepaid card issuing programme in India. The bank offers its financial technology, in-depth market expertise and payment solutions to accelerate innovation within the thriving fintech community,” it said.

Under the partnership, ICICI Bank has launched co-branded prepaid cards with three fintechs — one each in business banking, business expense management and neo bank.

The statement said that the partnership between Visa and ICICI Bank will further accelerate fintech enablement for innovations across digital issuance, lending and prepaid use cases.

T.R. Ramachandran, Group Country Manager, India and South Asia, Visa said: “As India becomes one of the epicenters for payment innovation, it is incumbent upon established players to create a collaborative ecosystem for fintechs to help contribute to India’s journey of digital payment adoption. We are delighted to partner with our longstanding partner, ICICI Bank, towards this objective.”

He said that through this partnership with ICICI, Visa looks forward to combine its platform assets and expertise, to deliver a robust kickstart for Indian fintechs.

Sudipta Roy, Head of Unsecured Assets, ICICI Bank said: “We believe that this partnership presents us with an opportunity to get innovative solutions for our customers and partners, thereby catering to the growing demand for digital solutions in the country. We look forward to witnessing some pioneering and ground-breaking innovations and solutions through this programme, which have the potential to benefit a larger audience.”

Visa and ICICI Bank will also jointly develop programmes aimed at accelerating growth and innovation in their respective businesses, the statement said. ICICI Bank will also have access to Visa’s growing network of fintech partners — part of the Visa Everywhere Initiative (VEI) — and provide guidance to get them to market in the most efficient way possible.

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Mukesh Ambani, Chairman, Reliance Industries Limited (RIL) said on Saturday that the passionate and dynamic leadership of Prime Minister Narendra Modi has made the world sit up and take notice of the emergence of a New India.

Addressing the convocation ceremony of Pandit Deendayal Petroleum University (PDPU) virtually, Ambani who is also President, PDPU said, “His confidence and conviction have inspired and galvanised the entire nation. I am sure that the bold reforms introduced under his leadership will pave the way for India’s swift recovery and rapid economic progress in the years to come.”

“His passionate and dynamic leadership has made the world sit up and take notice of the emergence of a New India,” Ambani added at the convocation.

“All of us know that PDPU itself is a product of Prime Minister Narendrabhai’s ‘Atma Nirbhar’ vision. It is a vision he cherished even when he was the Chief Minister of Gujarat… … to make India self-reliant in the areas of Energy, Energy Education, Research and Innovation”, Ambani said.

“By the middle of this century, the world will use twice as much energy as we use today. In the next two decades, India’s own per-capita energy needs will be more than twice as much as today. Therefore, India is required to simultaneously pursue two goals: To become an economic superpower. To become a green and clean energy superpower,” Ambani said.

Ambani added, “To achieve these twin goals, we need disruptive solutions in renewables, low carbon and carbon recycle technologies. We need breakthroughs in new energy sources such as green and blue hydrogen. We also need great innovations in energy storage, saving and utilization.”

Addressing Gujarat Chief Minister Vijay Rupani, Ambani said, “Gujarat is a trailblazer state. It has always shown the pioneer spirit. Today the entire world acknowledges that New Gujarat has paved the path for New India. The visionary leadership of Shri Narendra Modiji that Gujarat received is now available to the nation. I must compliment you and your team for making Vibrant Gujarat even more vibrant under the guidance of Shri Modiji and Shri Amit Shahji,” Ambani added.

Ambani while addressing the students said, “The future is very bright for India, for you, and for all Indians. This, our ancient nation, has faced many adversities in the past. And has emerged stronger each time. This is because resilience is in the very DNA of Indian people, Indian culture. In the post-COVID era, I clearly foresee explosive and exponential growth in the Indian economy. Within a couple of decades, India will be among the Top 3 economies in the world. Growth will create unprecedented opportunities and possibilities for young and talented people like you,” he added.

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Shares of Bharti Infratel surged over 7 per cent on Friday after the company completed its long-awaited merger with Indus Towers.

Around 10.25 a.m., Bharti Infratel’s shares on the BSE were trading at Rs 198.70, higher by Rs 13.10 or 7.06 per cent from its previous close.

The much-delayed merger of the two companies was completed on Thursday.

Post the completion of the transaction, Vodafone Idea Ltd (VIL) has received cash
consideration of Rs. 3,760.1 crore for its 11.15 per cent shareholding in Indus.

“The said transaction had been executed and completed on November 19, 2020 (“VIL closing”),” the filing said.

Further, the Board of Bharti Infratel has allotted 757,821 ,804 equity shares of Rs 10 each to the Vodafone group and 87,506,900 equity shares of Rs 10 each to PS Asia Holding Investments (Mauritius) Limited (Providence) aggregating to 28.12 per cent and 3.25 per cent respectively in the post-issue share capital of the company.

“Accordingly, the paid-up equity share capital of the company stands increased to Rs 26,949,369,500 divided into 2,694,936,950 Equity Shares of Rs 10 each fully paid-up,” it said.

The board has appointed Bimal Dayal as the CEO of the company eith immediate effect and Manish Dawar will be the CFO with effect from December 1, 2020.

Shares of Vodafone Idea also jumped 4 per cent post the merger. Post the completion of the transaction. Vodafone Idea’s shares on the BSE were trading at Rs 9.64, higher by 3.99 per cent from its previous close.

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Shares of budget airline SpiceJet rose over 13 per cent on Thursday after the Federal Aviation Administration (FAA) of the US cleared Boeing’s 737 Max aircraft to resume flying, nearly two years after it was banned post two fatal crashes.

The stock price surged 13.6 per cent on the BSE to hit an intra-day high of Rs 75.40 per share.

Around 11 a.m., its shares were trading at Rs 74.35, higher by Rs 8 or 12.06 per cent from its previous close.

SpiceJet is the only India airline with the aircraft, apart from the now-grounded Jet Airways, and has 13 Boeing 737 Max in its fleet.

The company it its July-September earnings had said that despite its inability to undertake revenue operations, the company continues to incur various costs with respect to these aircrafts.

On Wednesday, FAA said in a statement: “The design and certification of this aircraft included an unprecedented level of collaborative and independent reviews by aviation authorities around the world,” the FAA said in a statement.

The American regulator said that globally, regulators have indicated that Boeing’s design changes, together with the changes to crew procedures and training enhancements, will give them the confidence to validate the aircraft as safe to fly in their respective countries and regions.

In a statement, Boeing said the move will allow the airlines that are under the FAA’s jurisdiction, including those in the US, to take the steps necessary to resume service and begin making deliveries.

“We will never forget the lives lost in the two tragic accidents that led to the decision to suspend operations,” David Calhoun, Chief Executive Officer of The Boeing Company, said in a statement.

“These events and the lessons we have learnt have reshaped our company and further focused our attention on our core values of safety, quality and integrity,” it added.

The statement noted that throughout the past 20 months, Boeing had worked closely with the airlines, providing them with detailed recommendations regarding long-term storage and ensuring that their inputs were part of the effort to safely return the airplanes to service.

“The FAA’s directive is an important milestone. We will continue to work with regulators around the world and our customers to return the airplane back into service worldwide,” said Stan Deal, President and CEO of Boeing Commercial Airplanes.

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