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Reduced margins, high interest rates to hit India Inc’s revenue
Exports jump 46 pc to $29.2 billion in June
HDFC Q1 net up 22 pc at Rs 844 cr
Hike credit flow to housing sector, FM tells banks
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Re ends at 10-week high
SBI plans to raise $5 bn from overseas
SC order fallout
Sahara-SEBI Dispute
NTPC to get Rs 10,000-cr loan from SBI
Spectrum Row
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Reduced margins, high interest rates to hit India Inc’s revenue
According to estimates by brokerage firm Prabhudas Lilladher, revenue growth is slowing and margins are dropping. It says revenue growth of Nifty companies has been around the 20-25 per cent mark for several quarters and the same is likely to continue in the current earnings as well with revenue growth of about 25.2 per cent. Profit growth has been on a declining trend due to declining margins and higher interest and depreciation costs. In the overall dismal landscape, very few sectors are expected to deliver a strong showing. According to the report, consumer staples will continue to do well led by decent rural demand and relatively better pricing power. Technology is also expected to report good numbers due to continuing volume growth in the US and marginally improved pricing power. Oil and gas numbers are likely to be good essentially led by higher crude realisation. Banks (particularly PSUs led by SBI) will report weak performance on account of lower margins and higher provisions. Poor numbers are also likely from construction companies due to weak order flow and execution and higher interest costs. Real estate financials continue to be hit by poor volumes and higher input costs. Power utilities too are facing problems of low plant load factor (PLF) (due to coal availability) and low realisations on merchant tariffs. Given the extraordinary poor investment climate and weakening consumer demand, the brokerage says financial results from corporate India will remain lacklustre for some more quarters. CRISIL Research expects corporate profitability to remain under pressure during April-June 2011 (first quarter of 2011-12) due to rising input costs, moderation in volume growth and increased competition. Based on an analysis of the aggregate financial performance of select companies (excluding oil refining and marketing companies) across 23 industries, it expects revenues to grow by a robust 23 per cent, but operating profit margins are forecast to decline. Motilal Oswal says that the BSE Sensex closed first half of the year at 18,800 levels, down 8 per cent over December 2010. A late rally towards June-end helped Indian markets to recoup part of the losses made over the last few months. India has been among the most under-performing markets during this period, led by heightened concerns on inflation and slowing industrial activity. During this period, FY12 earnings estimates have been cut by 5 per cent. It estimates that the June quarter will mark another tough quarter for earnings. While aggregate earnings seem healthy, the growth is not widespread. Most sectors are likely to report a drop in EBITDA and PAT margins.
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Exports jump 46 pc to $29.2 billion in June
New Delhi, July 8 Imports, too, grew at a high rate of 42.4 per cent to $36.9 billion, leaving a trade deficit of $7.7 billion for the month. "$29.2 billion figure is a very, very high number for exports. Virtually all sectors grew well," Commerce Secretary Rahul Khullar told reporters here. During April-June, 2011-12, exports grew by 45.7 per cent to $79 billion and imports shot up by 36.2 per cent to $110.6 billion, Khullar said. During the first quarter of the current fiscal, the trade deficit stood at $31.6 billion. The exporting sectors that registered strong growth during the quarter include engineering, petroleum products, gems and jewellery, readymade garments and electronics. — PTI
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HDFC Q1 net up 22 pc at Rs 844 cr
New Delhi, July 8 The bank's total income rose to Rs 3,821.60 crore during Q1 2011-12, from Rs 2,801.95 crore in the corresponding period last fiscal. As at June 30, 2011, the total assets of HDFC stood at Rs 1,41,589 crore, an increase of 22 per cent over the same period of previous fiscal. The loan disbursement during the quarter grew by 20 per cent while the bank's loan book increased to Rs 1,24,168 crore, from Rs 1,01,625 crore at the end of June 30, 2010. — PTI
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Hike credit flow to housing sector, FM tells banks
New Delhi, July 8 The FM asked banks and financial institutions to contain the downward trend of asset quality by devising strategies for containing and rolling back NPAs. He was addressing a review meeting of the CEOs of public sector banks here today. Mukherjee said credit growth of 22.4 per cent was recorded by public sector banks in 2010-11 but it has seen a moderation in the last quarter. Net profits of PSBs have gone up from Rs 39,000 crore to Rs 45,000 crore. Mukherjee said the performance of banks under the subsidy scheme for housing loans was not up to the desired level and asked the banks to increase credit disbursement to the housing sector. On the agriculture Sector, the FM noted that against a target of flow of Rs 3.75 lakh crore, the achievement has been over Rs 4.46 lakh crore. While the overall target has been exceeded, the Finance Minister expressed concern that many banks have failed to meet this obligation. The Finance Minister advised the CEOs to undertake a comprehensive capital planning exercise, particularly in view of the Basel-III capital adequacy benchmarks, which banks are gearing up to adopt. He stated that considering that the investment needs of the infrastructure sector are increasing, banks need to sustain and improve the flow of credit to the sector. Banks should gain more headroom for lending to infrastructure projects by availing takeout finance from IIFC, he said.
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Re ends at 10-week high
Mumbai, July 8 At the Interbank Foreign Exchange (Forex) market, the local unit opened at the day's high of 44.30/32. It ended the day at 44.3250/3350.
— PTI
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SBI plans to raise $5 bn from overseas
New Delhi, July 8 Pratip Chaudhuri told reporters the bank, which along with its associates controls about a quarter of all Indian bank loans and deposits, aimed to raise the funds through medium-term notes, possibly in the second and third fiscal quarter. "Right now we have a total objective of $5 billion but we would like to time the market," he said. "First there has to be visibility of credit growth. If there is demand for assets we will go and raise the money." Chaudhuri, who took up his role earlier this year, had told Reuters in May he expected surging interest rates to crimp loan growth this year to 17-19 per cent, from a January target of 20-22 per cent. He had said at that time the bank would raise $3 billion to $4 billion in offshore debt in FY12. The bank had posted an unexpected plunge in its net profit for the fourth-quarter of the last fiscal year, slammed by higher provisions, operating costs and taxes. The bank has guided for net interest margins of 3.5 per cent for the current fiscal year that ends next March, and Chaudhuri said the bank was "on track" to achieve it. The bank would launch its planned rights share issue in the second or third quarter of this fiscal year, he said. He said the bank had no plans to raise funds via Tier II bonds. — Reuters |
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SC order fallout
New Delhi, July 8 The authority also said it will return the land to the affected farmers as per the apex court ruling and will strictly follow the new land acquisition policy of Uttar Pradesh in acquiring land for future projects. "After this court order, we will acquire all future land keeping in mind the market price and hence will have to pay higher land prices. Automatically, sale prices will increase and hence end consumers will be impacted severely," GNIDA chief Rama Raman said. The authority will follow the court orders in "letter and spirit" and will return the land to farmers, he added. "Initially, we will return the land as per the orders. We will see later how we can proceed in this respect after going through the detail judgement," Raman said. He, however, did not specify what GNIDA will do to compensate the developers, but said it will acquire land at regular intervals "as and when necessary". On Wednesday, the Supreme Court had upheld a verdict of the Allahabad High Court that quashed acquisition of 176 hectares of land from farmers in Greater Noida saying the authorities were "sub-serving" private builders in the name of public interest. Raman, however, said real estate development in the area is unlikely to get affected due to the judgement. — PTI
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Sahara-SEBI Dispute
New Delhi, July 8 "We do not want Union of India (government) to come at this stage. Let them (SEBI) come and clarify. We have our own query on it," said the bench headed by the Chief Justice S H Kapadia. During today's proceedings, senior advocate Fali S Nariman, appearing for the Sahara group, said that Sahara was not a listed company and only the government has jurisdiction over it and not market regulator SEBI. "We (Sahara) are not a listed company and the government (Ministry of Corporate Affairs) has jurisdiction over us. If there is any listed company, then SEBI has jurisdiction," he said, asking the bench to issue a notice to the government seeking a clarification of its stance. Narimnan said despite the matter was pending in the court, SEBI issued fresh show-cause notice to the group and passed the order. On it, the bench said," We have asked the SEBI to explain it. We wanted to know that from where you got this (concept of) OFCD." The Supreme Court further said that it had asked SEBI as "We wanted investors to be protected." — PTI
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NTPC to get Rs 10,000-cr loan from SBI
New Delhi, July 8 The loan amount would be the largest extended by SBI to any Indian or foreign corporate. NTPC said the loan would be utilised for financing capital expenditure of its ongoing and new projects. "The rupee term loan has a door-to-door maturity of 12 years with a drawdown period of four years," NTPC said. The pact for the loan was signed by NTPC CMD Arup Roy Choudhury and SBI Chairman Pratip Chaudhuri yesterday. "This is the single largest loan extended by State Bank of India to any corporate entity in India and abroad.
— PTI |
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Spectrum Row
New Delhi, July 8 Highly placed sources in the ministry said it has not investigated the shareholding pattern of Loop Telecom and had merely relied on the report of Registrar of Companies in communicating its stand. About the charge that the ministry has changed its stand from 2009, when it stated that Essar had 9.99 per cent stake in Loop to 2.15 per cent now, the sources said that it was a clerical error. In both the reports (of 2009 and 2011) Essar's stake in Loop was within permissible limit of less than 10 per cent, they said. The clarification comes in wake of the CBI claims that Essar Group had over 10 per cent stake, the permissible limit for obtaining 2G licence, in Loop Telecom at the time of award of the 2G spectrum licence. It was alleged that Essar used Loop as a front company to corner spectrum in violation of the guidelines. The MCA said that although there was difference in the two figures presented in the reports, the fact stands that Essar's holding was within permissible limits. — PTI
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New Delhi, July 8