BQuick On Oct. 10: Top 10 Stories In Under 10 Minutes

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

1. TCS Rewards Shareholders; IndusInd Meets Estimates

Tata Consultancy Services Ltd.’s quarterly profit fell and margin narrowed to its lowest in nine quarters despite rupee depreciation and lower visa costs. But it chose to reward shareholders with a Rs 45 per share dividend payout.

• Net profit fell 1.1 percent sequentially to Rs 8,042 crore.
• Revenue rose 2.1 percent quarter-on-quarter to Rs 38,977 crore.
• Operating margin narrowed 20 basis points to 24 percent, the lowest in nine quarters.

Bigger deals and slower conversion also mean that things may not get better in the remaining half of the fiscal. Read more here.

IndusInd Bank Ltd.’s net profit met analyst estimates in the quarter ended September even as provisions rose for the lender, which is fresh off its merger with Bharat Financial Inclusion Ltd.

• Net profit stood at Rs 1,383 crore, in-line with the Rs 1,417-crore analyst estimate.
• The merged entity’s asset quality remained steady.
• Gross bad loan ratio expanded to 2.19 percent from 2.15 percent in the June quarter.
• Net bad loan ratio contracted to 1.12 percent from 1.23 percent.

Provisions rose sharply to“take care of future requirements”.

2. Shivinder Singh Arrested While Police Looks For Malvinder

The Delhi Police arrested former Fortis Healthcare Ltd. promoter Shivinder Singh and three others in an alleged fraud case, officials said.

• Kavi Arora, Sunil Godhwani and Anil Saxena were also arrested by the Economic Offence Wing of Delhi Police for allegedly diverting public money and investing in other companies, they said.
• A complaint was filed by Religare Finvest Ltd. alleging that loans were taken by Singh while managing that firm but the money was invested in other companies.

Shivinder's brother Malvinder Singh is absconding and a lookout circular has been issued against him.

3. Indian Markets, U.S. Stocks Drop

Indian equity benchmarks resumed declines after rallying yesterday, led by the fall in private lenders—HDFC Bank Ltd., ICICI Bank Ltd. and IndusInd Bank.

• The S&P BSE Sensex fell 0.78 percent or 297.5 points to close at 37,880.40.
• The NSE Nifty 50 declined 0.7 percent to end at 11,234.55.
• The broader markets represented by the NSE Nifty 500 Index fell 0.71 percent.
• The market breadth was tilted in favour of sellers.
• All 11 sectoral gauges compiled by NSE ended lower.

Follow the day’s trading action here.

Stock traders were on tenterhooks monitoring the latest trade developments as a long-anticipated meeting between America and China got underway, and after contrasting reports on the talks spurred volatility in Asian markets. Treasury yields inched higher.

• The major U.S. equity gauges drifted while the Stoxx Europe 600 Index dipped slightly as investors grappled with a slew of headlines including news that the gathering in Washington might be cut short.
• The S&P 500 Index was little changed as of 9:31 a.m. New York time.
• West Texas Intermediate crude gained 1.2 percent to $53.21 a barrel.

Get your daily fix of global markets here.

4. A ‘Partly Long Lasting’ Slowdown

Moody’s Investors Service sees India’s growth slowdown as one that’s driven by multiple and partly “long-lasting” factors, it said in a review of the Indian economy today.

• The rating agency sees the Indian economy growing at 5.8 percent in 2019-20, with growth expected to pick-up to 6.6 percent in the following year and to 7 percent over the medium term.
• There are few prospects of a rapid bounce-back in the Indian economy, Marie Diron, managing director—sovereign risk at Moody’s, told BloombergQuint.
• “Compared with only two years ago, the probability of sustained real GDP growth at or above 8 percent has significantly diminished,” Moody’s said in its note.
• The factors behind the slowdown, according to Moody’s, are multiple and mainly domestic.

Watch the full interview with Moody’s Marie Diron where she explains why weaker growth threatens India’s fiscal roadmap.

5. Reliance Jio’s U-Turn

Reliance Jio Infocomm Ltd. will now start charging customers for voice calls to recover interconnection usage charges, going back on its promise to keep voice calls free on its network.

• Jio will charge 6 paise per minute for voice calls made to other phone networks. Users, however, will be compensated with free data of similar value.
• By introducing these charges, Reliance Jio is trying to pass on the gross IUC cost to consumers which may boost its Ebitda and margins, said Rajiv Sharma, telecom analyst and head of Institutional Research - Equities at SBICAP Securities.
• But such a move has also has a butterfly effect on other telecom players.

Here’s what it means for the rest of the industry.

6. The Price Of Falling Aluminium Prices

Aluminium prices fell to their lowest in three years as the U.S.-China trade war fears escalated and demand from the automobile sector—one of the metal’s biggest consumers—remained subdued.

• That’s expected to hurt Indian producers whose financials are sensitive to prices of the metal.
• Prices of base metals—a class of non-precious metals used widely in industry like aluminium, tin and zinc—have declined between 5 percent and 15 percent so far this year, according to Bloomberg. But that may be only part of the problem.
• The aluminium industry, which is currently facing a deficit, may swing to a surplus in the near future, led by slowing demand and increased supply, depressing prices further, Russia’s United Co. Rusal, the world’s second-largest producer of the metal, said in its commentary while announcing earnings for the quarter ended September.

The prices slump comes amid slowing growth in major global economies.

7. RBI’s ‘No’ To Indiabulls Fans Contagion Risks

The contagion risk from India’s year-old shadow banking crisis has suddenly turned much graver. What investors don’t know yet is whether the new problem is a $4 billion headache, a $16 billion migraine, or a life-threatening tumor, writes Andy Mukherjee.

• A marriage with a deposit-taking institution would have given much-needed relief to a shadow bank like Indiabulls, which has to support $16 billion in mortgages, advances against property, commercial real estate and other such hard-to-liquidate, long-term assets with loans from banks and the money market.
• That’s become increasingly difficult and expensive since the unexpected collapse in September last year of IL&FS Group, an infrastructure operator and financier.
• Meanwhile, the more immediate contagion risk comes from the $4 billion that the Indiabulls Group, which includes the housing finance company, owes the Indian banking system.

RBI sent three key messages by rejecting the merger. Here’s what they were.

8. Why Indians Aren’t Buying Gold Ahead Of Diwali

India’s festival of lights is bringing little cheer to jewellers in the world’s second-biggest gold consumer.

• With less than a month to go before the Hindu festival of Diwali, a period when gold purchases typically peak, jewellers are lining up promotions to get buyers through the door as a rally in prices coincides with a collapse in consumer demand for everything from cookies to cars.
• Gold has soared in 2019, hitting a six-year high in dollar terms, as investors fret about the impact of the trade war, central banks cut rates and exchange-traded fund holdings surge.
• In India, where prices hit a record in September, the rally comes as the country’s growth slows, unemployment rises and a crisis of confidence engulfs the banking system.
• Its imports fell for a third month in September to the lowest in more than three years as jewellers cut purchases.

Jewellers will try to instigate demand but people are unlikely to buy, at least before December.

9. Who Is This ‘Car Buyer In Retreat’ That’s Caused The Auto Slowdown?

• 66 percent of all cars are owned by the richest 20 percent of households.
• Have they stopped buying?
• Or have sales slumped in the remaining 80 percent of the market?

Noted management consultant Rama Bijapurkar identifies what's missing in the debate on the auto slump.

10. India’s No. 1 DTH Operator

As India’s pay television market shrunk amid a churn, Tata Sky Ltd. became India’s largest direct-to-home services provider by subscribers.

• Tata Sky added 3 million average active subscribers in the three months ended June, according to data released by the Telecom Regulatory Authority of India. That gives it 32 percent market share, dethroning Dish TV India Ltd.
• All DTH operators saw an increase in active subscribers—average of paying users on day 7, 14, 21 and 28 of a month—with such users rising 3.17 million to 54.26 million as of June industrywide.
• That comes as the new TV tariff rules giving subscribers the freedom to pay for channels they choose and better digital tracking of users have changed preferences.

Here’s what India’s DTH landscape looks like now.