BQuick On August 7: Top 10 Stories In Under 10 Minutes

This is a roundup of the day’s top stories in brief.

1. DMK Supremo M Karunanidhi Passes Away At 94

The former Chief Minister of Tamil Nadu M Karunanidhi passed away at the Kauvery Hospital in Chennai.

• The Dravida Munnetra Kazhagam supremo had been hospitalised since July 26 for a urinary tract infection.
• Tamil Nadu will observe one-day holiday and week-long mourning.
• Security has been beefed up across Tamil Nadu following Karunanidhi’s demise.
• Prime Minister Narendra Modi and Congress President Rahul Gandhi took to Twitter to express their condolences.
• The DMK has submitted a request to the Tamil Nadu government for Karunanidhi to be buried near the Anna memorial at Chennai’s Marina Beach.

Read more on the former DMK Chief’s demise

2. A Year Of Windfall That Wasn’t For Tata Sons

A year of bonanza for Tata Sons Ltd., India’s largest conglomerate, ended like any other. That’s because most of what it received as dividend from group companies, and from a buyback and stake sale in Tata Consultancy Services Ltd. was wiped out by an impairment charge on its telecom arm Tata Teleservices Ltd.

• In financial year 2018, Tata Sons reported a revenue of Rs 8,156 crore, according to ratings agency Crisil. Nearly Rs 6,700 crore of it came as dividend from TCS, BloombergQuint calculations showed.
• The company also received extraordinary gains from two transactions--nearly Rs 10,278 crore by participating in the Rs 16,000-crore TCS buyback and stake sale worth Rs 8,150 crore in TCS.
• In all, it got more than Rs 28,102 crore during the year.
• But the company also took an impairment of nearly Rs 24,267 crore on investments in Tata Teleservices, according an Aug. 1 report of rating agency ICRA.

Read more on the abrupt end of Tata Sons’ bonanza year

3. Nifty Inches Higher; U.S. Stocks Rise On Economy Optimism

• Indian equity benchmarks ended flat as gains in metal stocks were offset by losses in state-owned banking shares.
• The S&P BSE Sensex Index fell 26 points or 0.07 percent to 37,665.80.
• NSE Nifty 50 Index inched marginally higher to an all-time closing high of 11,389.
• Six out of 11 sector gauges compiled by the National Stock Exchange ended higher led by the NSE Nifty Metal Index's 1.2 percent gain.
• On the other hand, the NSE Nifty PSU Bank index was the top loser, down 2.14 percent.

Follow the day’s trading action here

U.S. stocks rose within striking distance of records amid optimism economic growth can continue apace even as the world’s two largest economies square off in a trade skirmish.

• The S&P 500 Index hit the highest level since Jan. 29.
• The Cboe Volatility Index dipped below 11 for the first time since May.
• The MSCI All-Country World Index increased 0.4 percent to the highest in more than 20 weeks.
• The dollar slid the most in two weeks.

Get your daily fix of global markets here

4. Earnings Update: M&M, PNB

Mahindra & Mahindra Ltd.’s profit rose in line with estimates in the quarter ended June on the back of strong operational performance.

• Net profit rose 67 percent from a year ago to Rs 1,257 crore.
• Revenue of the maker of XUV 500 sports utility vehicle rose 23 percent to Rs 13,358 crore.
• Earnings before interest, tax, depreciation and amortisation rose 47 percent to Rs 2,110 crore
• Operating margin expanded 140 basis points to 15.8 percent.

Here’s how M&M fared in the April-June period

Punjab National Bank reported a lower-than-expected net loss in the first quarter.

• The lender reported a net loss of Rs 940 crore compared with a Rs 343-crore profit a year ago.
• Net interest income, or the core income of the lender, rose 22 percent to Rs 4,691.8 crore.
• Asset quality improved marginally with gross non-performing asset ratio contracting to 18.26 percent from 18.38 percent in March.

Here’s a look at the continued fallout of the Nirav Modi fraud

5. Why Torrent Pharma Is Outperforming Its Larger Indian Peers

Shares of Torrent Pharma Ltd. have risen the most among large domestic peers so far this year as its domestic business aided earnings when Indian drugmakers face pricing pressure in the U.S., the largest market for many of them.

• The stock has gained over 33 percent since the start of the financial year in April, compared with a 10.6 percent rise in the S&P BSE Healthcare Index.
• The recent rally was aided by its June-quarter earnings, as its revenue jumped 37 percent year-on-year. Its operating profit grew 60 percent.
• The November acquisition of Unichem Laboratories Ltd. also contributed to Torrent Pharma’s domestic business. And the company expects its international segment to improve.

Here’s what’s working in Torrent Pharma’s favour

6. Ola Takes Its Fight With Uber To U.K.

In its second big overseas push, Ola received licences to operate in South Wales and Greater Manchester today. While the operations in South Wales will be launched within the next month, it plans nationwide expansion by the end of 2018.

• Ola will be competing with its biggest rival Uber that has had a troubled run in some of the British cities after its licences were revoked.
• Brighton had said in March that it would not renew Uber’s licence as the taxi firm is not, ‘fit and proper’ to use.
• The two companies are already head-to-head in India and Australia.
• However, the aggressive expansion might hit Ola’s balance sheet.

Read more on Ola’s expansion plans in the U.K.

7. Here’s How India Plans To Tackle The Mallyas Of The Future

The government is mulling amendments to the Passport Act to prevent economic offenders who pose a “financial risk to the country” from fleeing, according to a senior government official.

• A committee headed by Financial Services Secretary Rajiv Kumar was formed to tighten laws to prevent loan defaulters from fleeing the country.
• The committee has suggested amending the Act to ensure that whenever there is financial risk to the banking sector, defaulters get asked to participate in the resolution of that loan, the official said.
• The amendment will lay out “well-defined criteria based on reasonable classification of financial risk,” added the official quoted above.
• The amendments will prevent an offender from leaving the country by issuing a look-out notice. It will also authorize banks to inform enforcement agencies about such offenders once they meet the criteria.

Read more on India’s plans to nab fugitive defaulters

8. Rs 11,000-Crore Bailout Package For Air India?

The Civil Aviation Ministry is in discussions with the Finance Ministry for a Rs 11,000-crore bailout package for the ailing Air India, sources told PTI.

• The discussions come against the backdrop of a failed effort to privatise the loss-making airline, which continues to grapple with financial woes.
• The bailout package would be utilised to reduce high-cost working capital loans, the PTI report added.
• The airline is staying afloat on a bailout package extended by the previous United Progressive Alliance regime in 2012.
• As a reflection of the financial crunch at the airline, staff salaries have been delayed for five consecutive months.

Here's more on the Air India bailout plan that’s in the works.

9. Changes To Anti-Graft Law Not In The Right Direction: Kaushik Basu

Former chief economic adviser, Kaushik Basu said that recent amendments to the Prevention Of Corruption Act are not in the “right mode.”

• These amendments include increasing the punishment for bribe givers to up to seven years and providing a seven-day window for reporting crime, following the passage of which the bribe giver will not be charged.

Read Kaushik Basu’s take on the amendments to the anti-graft Act, the rupee and more

10. From Health To Education: The Cost Of Services Is Rising Faster Than Goods In India

A rise in so-called ‘core inflation’ in India has led to the assumption that the demand-supply gap in India is closing. But what if the inflationary pressures are emerging more from the increased cost of services than the increased cost of goods?

• A services CPI index constructed by BloombergQuint consisting of health, education, personal care, recreation and amusement services shows that these components have seen a higher level of inflation than the overall index over the last four months.
• Soumya Kanti Ghosh, chief economist at State Bank of India pointed out that services inflation has been rising since December, while goods inflation has only started to pick-up from about March.
• While the higher Goods and Services Tax could be one reason, increase in incomes could also be leading to higher demand for services, say economists.

Here’s why services inflation is on an upswing