BQuick On July 23: Top 10 Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Earnings: HUL, L&T, Zee
Hindustan Unilever Ltd.’s volumes grew at the slowest pace in seven quarters amid a slowdown in consumption in the economy.
- Net profit rose 15 percent year-on-year to Rs 1,755 crore.
- Revenue rose 6.6 percent to Rs 10,114 crore.
- The fall in volume growth is on account of base effect of the goods and services tax rate cuts.
'It’s not a train wreckage as it is still a pretty decent growth.'
Larsen & Toubro Ltd. expects revenue and order book growth to remain stable even as it missed estimates in the June quarter due to higher costs.
- Net profit rose 21 percent year-on-year to Rs 1,472 crore, missing the Rs 1,560-crore consensus estimate.
- Revenue rose 9.7 percent to Rs 29,636 crore.
- Margin expanded 100 basis points.
- L&T maintained its revenue growth guidance at 12-15 percent.
The government’s measures are likely to provide a fillip to investments.
Zee Entertainment Enterprises Ltd. reported a bigger-than-expected quarterly profit on the back of growth in domestic broadcast and digital businesses.
- Net profit jumped 62.5 percent year-on-year to Rs 530 crore.
- Operating profit rose 33.6 percent to Rs 727 crore.
- Margin expanded 560 basis points to 36.2 percent.
Zee beat estimates despite operational challenges from a TRAI order.
2. Relief For Over 42,000 Homebuyers
The Supreme Court today ordered the Enforcement Directorate to conduct a money-laundering probe against Amrapali, its managing director and other directors.
- In a relief to over 42,000 hassled home buyers, the Supreme Court also directed Noida and Greater Noida authorities to give completion certificates to flat buyers already residing in various projects of the Amrapali group.
- The apex court said the Amrapali group diverted homebuyers’ money and that the Noida and Greater Noida authorities colluded with the builder.
- Supreme Court also ordered the cancellation of Amrapali's Real Estate Regulatory Authority registration, and all of its land leases.
- The bench also directed state-owned NBCC India Ltd. to complete the unfinished housing projects in Noida and Greater Noida and handover these to homebuyers.
NBCC will get 8 percent commission for completing Amrapali’s projects.
3. More Time To File Income Tax Returns
The Central Board of Direct Taxes has extended the deadline to file income tax returns for assessment year 2019-20 by a month.
- The due date has now been moved to Aug. 31, 2019 from July 31, 2019 earlier.
- The extension has come after the tax department made a host of changes for the income tax return forms.
- The ITR forms this year have at least seven additional requirement that the taxpayer has to make.
- Experts had said the utility of the new information sought by the tax department cannot be disputed.
However, they warned that taxpayers will find it cumbersome to collate it accurately.
4. Reliance, Aramco Talks Hit A Wall
Mukesh Ambani’s Reliance Industries Ltd.’s talks to sell a minority stake in its refinery business to Saudi Arabian Oil Co. have stalled on differences over the deal’s structure, people with knowledge of the matter told Bloomberg News.
- Aramco is concerned about Reliance’s proposal to shift some debt of the wider group to its refinery business ahead of the transaction, said the people, who asked not to be named as the discussions are private.
- The Indian company is working on alternatives and negotiations could still resume and lead to a compromise in the coming months, the people said.
- A representative for Aramco declined to comment, while a representative for Reliance didn’t immediately respond to requests for comment.
Both sides have completed due diligence for the potential deal, the people said.
5. Top Stock Pickers’ Shopping List
India’s equity indices gained for the second straight quarter in the three months to June as Prime Minister Narendra Modi returned to power with an even bigger mandate and foreign investors pumped in money.
- The NSE’s benchmark Nifty 50 index rose nearly 1.5 percent in the April-June period, but the gains were mostly driven by a few heavyweights. Foreign investors remained net buyers for all the three months—a feat last achieved two years ago. They infused Rs 31,709 crore into equities during the period.
- Rakesh Jhunjhunwala added the most to his holding in Agro Tech Foods Ltd., taking his overall stake in the maker of Act-II Popcorn to 7.5 percent as of June.
- Chennai-based Rajiv Khanna, who invests in the name of his wife Dolly Khanna, pared his holding in at least 10 companies.
Here are all the changes Jhunjhunwala, Khanna and Ashish Kacholia made.
6. Sensex’s Late Fall
Indian equities closed at their lowest in more than two months after swinging between gains and losses, with financial stocks the biggest drag amid ongoing concerns about the quality of credit at some lenders.
- The S&P BSE Sensex, which rose 186 points during the day, closed down nearly 50 points, or 0.13 percent, at 37,982.74.
- The NSE Nifty 50 swung from a gain of as much as 0.46 percent to close 0.13 percent lower.
- The broader market represented by the NSE Nifty 500 Index closed 0.15 percent lower.
- Seven out of 11 sectoral gauges compiled by NSE ended lower.
Follow the day’s trading action here.
U.S. stocks rose as investors assessed a batch of strong earnings and signs of progress in trade talks with China. Treasuries fell and the dollar rose.
- The S&P 500 climbed for a second day, though gains faltered as the index pushed back toward 3,000.
- The British pound stayed lower after Boris Johnson was officially named by the Conservative Party as Prime Minister Theresa May’s replacement.
- The dollar rose for a fourth day and Treasury yields were little changed.
- West Texas Intermediate was little changed at $56.07 a barrel.
Get your daily fix of global markets here.
Watch: Samir Arora Wants India To Tax FPIs Differently From The Super-Rich
7. RBI Reallocates Portfolios Of Deputy Governors
The Reserve Bank of India has reallocated portfolio's of deputy governors after the exit of Viral Acharya.
- The monetary policy department and the economic policy and research department have been added to BP Kanungo's portfolio.
- Financial market operations and financial market regulations department have been added to NS Vishwanath's responsibilities.
- The financial stability unit has now been assigned to MK Jain.
- Acharya’s stint at the central bank concludes today, a few months before his three-year term was set to end.
Acharya’s replacement is yet to be appointed.
8. Is DHFL’s Securitisation Pool Running Dry?
Dewan Housing Finance Corporation Ltd., which has been shut out of the debt markets since September, is running low on assets that it can securitise to generate liquidity. Such securitisation deals, where a pool of loans is bundled, rated and sold to investors, have been the only source of liquidity for DHFL since the collapse of Infrastructure Leasing and Financial Services Ltd. last year, which roiled the credit markets.
- Lenders to DHFL are unlikely to buy large amounts of the company’s loans through securitisation from here on, two bankers in the know told BloombergQuint on condition of anonymity.
- Investors have already cherry picked the best available retail assets to purchase, these bankers said, adding that the assets left on DHFL’s books may not be attractive to investors.
- Since September, the housing finance company has raised about Rs 40,000 crore through securitisation using pass-through certificates and ‘direct assignment’ deals.
The liquidity raised has been used to repay borrowings.
9. IMF Cuts India’s GDP Forecast
The International Monetary Fund has cut its India GDP growth forecast to 7 percent for 2019 and 7.2 percent for 2020, reflecting a weaker-than expected outlook for demand. The downward revision for both years reflects weaker-than expected outlook for domestic demand.
- IMF has also further reduced its global growth outlook, already the lowest since the financial crisis, and suggested that policy “missteps” on trade and Brexit could derail a projected rebound.
- The world economy will expand 3.2 percent this year and 3.5 percent next year, both down 0.1 percentage point from April projections.
According to IMF, the risks facing the global economy are...
10. Congress-JD(S) Government Loses Trust Vote
HD Kumaraswamy-led Congress-Janata Dal (Secular) coalition lost the trust vote in Karnataka Assembly on Tuesday.
- Speaker K R Ramesh Kumar announced that 99 MLAs had voted in favour of the motion and 105 against it.
- The Congress-JD(S) government had defied the two deadlines set by Governor Vajubhai Vala to Kumaraswamy to demonstrate his majority on Friday itself.
- A wave of resignations had set off the political turbulence in the state, pushing the 14-month old coalition government to the brink of collapse.
The vote ends the nearly three-week long political drama in the state.