BQuick On Oct. 26: Top 10 News Stories In Under 10 Minutes
This is a roundup of the day’s top stories in brief.
1. Earnings: ICICI Bank, ITC, Dr. Reddy’s, UPL
ICICI Bank Ltd. returned to profitability in the July-September quarter due to lower provisioning for bad loans and higher interest income.
- The private lender reported a Rs 909-crore profit, about 56 percent lower than in the same quarter last year. It had reported its first loss at least since 2001 in the June quarter.
- Net interest income, or the core income of the bank, rose 12.4 percent to Rs 6,418 crore.
- Gross non performing loans as a ratio to the total advances fell 35 basis points sequentially to 9.3 percent.
- Net NPA ratio also fell to 4.05 percent from the previous quarter’s 4.67 percent.
- Net interest margin stood at 3.33 percent compared with 3.24 percent last quarter.
ITC Ltd.’s net profit rose for the eleventh straight quarter, matching analyst estimates.
- The cigarettes-to-luxury hotels conglomerate’s net profit rose 12 percent year-on-year to Rs 2,955 crore.
- Revenue rose 7 percent to Rs 11,068 crore.
- Ebitda rose 12 percent to Rs 4,205 crore.
- Operating margin expanded 150 basis points to 36.5 percent.
Dr. Reddy’s Laboratories Ltd.’s profit rose for the second straight quarter, beating estimates.
- Net profit increased 76.84 percent year-on-year to Rs 504 crore.
- Net sales rose 7.2 percent to Rs 3,797 crore.
- Revenue from pharmaceutical services and active ingredients rose 7 percent to Rs 600 crore, while revenue from emerging markets and global generics rose 36 percent and 7 percent respectively to Rs 750 crore and Rs 3,050 crore.
UPL Ltd.’s profit missed estimates in the second quarter as the chemical maker incurred a one-time loss.
- Net profit rose 13.9 percent year-on-year to Rs 270 crore.
- Revenue rose 13 percent to Rs 4,257 crore, higher than the Rs 4,140-crore estimate.
- Ebitda rose 16.7 percent to Rs 839 crore.
- Ebitda margin stood at 19.7 percent, expanding 60 basis points.
2. Nifty’s Last Man Standing
It’s been a year of contrast for Wipro Ltd.
- Shares of India’s third-largest software services provider lagged when its peers’ stocks surged and benchmark NSE Nifty 50 Index rose to hit an all-time high on Aug. 28.
- Since then, information technology stocks have fallen and Nifty erased all gains to trade nearly 14 percent lower.
- But Wipro rose nearly 8 percent during the period, the only Nifty stock to do so.
3. Time To Look At Mid Caps
It’s time to consider selective beaten-down mid-cap stocks as they are trading at a discount to the large caps first time in three years, according to Citi India.
- While valuations are unlikely to have bottomed yet, according to Citi, a year of decline in mid caps was every time followed by positive returns in the last decade and a half.
- “Besides, all the three election years during the period have been good for mid caps,” it said in a report.
- Among its top picks are cement maker Dalmia Bharat Ltd., agri chemicals company UPL Ltd. and healthcare chain Apollo Hospitals Enterprise Ltd.
4. Stocks Fall From India To U.S.
India's NSE Nifty 50 Index fell for the second day in a row, to its lowest level in over seven months, dragged by weakness in IT firms, and banking blue-chips.
- The S&P BSE Sensex fell 1.01 percent or 341 points to 33,349.
- The NSE dropped 0.94 percent or 95 points to 10,030.
- Fifteen of 19 sector gauges compiled by BSE ended lower led by the S&P BSE IT Index's 2 percent drop.
- On the other hand, the S&P BSE Energy Index was top gainer, up 0.6 percent.
- For the week, Sensex fell 2.82 percent and the Nifty declined 2.65 percent.
U.S. stocks extended their slide, with the Nasdaq Composite Index on pace for its fourth consecutive weekly decline, as disappointing reports from technology bellwethers continue to weigh on sentiment.
- Amazon.com and Alphabet led shares lower after the FAANG leaders released earning late Thursday, just minutes after helping to push the Nasdaq up the most on a closing basis since March.
- In Europe, the Stoxx Europe 600 Index continued its retreat, heading for the biggest monthly drop in three years.
- Treasuries gained and the dollar climbed to a 17-month high.
- West Texas Intermediate crude fell 1.1 percent to $66.62 a barrel.
5. Essar Steel Lenders Approve ArcelorMittal’s Plan
The committee of creditors of Essar Steel Ltd. has accepted the joint offer made by ArcelorMittal and Japan’s Nippon Steel even as promoters, the Ruias, made a last-ditch effort to retain the steelmaker.
- The resolution plan includes an upfront payment of Rs 42,000 crore to the lenders and a Rs 8,000-crore capital injection in Essar Steel to support operational improvement, ArcelorMittal said in a media release on Friday.
- Essar Steel is among the first 12 non-performing assets that the Reserve Bank of India had directed banks to take to insolvency resolution in June 2017.
- The Ruia family-promoted company owes Rs 49,394 crore to its financial creditors and about Rs 5,000 crore to operational creditors.
6. CBI Crisis: SC Gives Two-Week Deadline
The Supreme Court agreed to hear a petition by Central Bureau of Investigation’s Director Alok Verma, challenging the central government’s decision to send him on leave.
- The apex court also directed the Central Vigilance Commission to complete an enquiry into the allegations and counter-allegations raised by Verma and his deputy Special Director Rakesh Asthana within two weeks.
- Retired Supreme Court judge AK Patnaik will supervise the CVC’s probe, ruled a three-judge Supreme Court bench headed by Chief Justice Ranjan Gogoi.
- The court also barred the newly appointed interim CBI Chief Nageswara Rao from taking any policy decisions. All decisions taken by the interim director should be submitted to the court by Nov. 1.
- Earlier in the day, Congress chief Rahul Gandhi also led a protest march to the CBI headquarters after which he was detained by the police.
7. Indirect Tax Evasion Detection Spikes
Indirect tax evasion detected in the first five months of the financial year more than doubled over the year-ago period, according to official documents reviewed by BloombergQuint, as the taxman resumed scrutiny after going slow during transition to the goods and services tax.
- In the previous financial year, the focus was more on preparation and stability of the new indirect tax regime, said a senior official on the condition of anonymity.
- The Directorate General of Goods and Services Tax Intelligence detected indirect tax evasion worth Rs 18,656 crore in April-August 2018 compared with Rs 7,031 crore in the year-ago period.
8. India’s Rickshaw Revolution
An electric-vehicle revolution is gaining ground in India, and it has nothing to do with cars.
- The South Asian nation is home to about 1.5 million battery-powered, three-wheeled rickshaws – a fleet bigger than the total number of electric passenger cars sold in China since 2011.
- But while the world’s largest auto market dangled significant subsidies to encourage purchases of battery-powered cars, India’s e-movement hardly got a hand from the state.
- Rather, drivers of the ubiquitous three-wheelers weaving through crowded, smoggy streets discovered that e-rickshaws are quieter, faster, cleaner and cheaper to maintain than a traditional auto rickshaw.
9. Modicare’s Biggest Hurdle
The world’s largest healthcare program in India is running up against a challenge: many of its 50 crore beneficiaries don’t have a clue about it, as they didn’t have to enroll for it.
- Prime Minister Narendra Modi’s solution is to tackle the problem at its roots.
- He is writing letters to 10 crore families educating them about the benefits of the program, which automatically registered 40 percent of India’s population that make up the bottom of the population as per the socio-economic caste census data, said Vinod K. Paul, a member of NITI Aayog, the government’s policy think tank.
- “It’s a big step toward access of services, it will change the health system by making costs rational,” said Paul, who’s the architect of the program.
10. Inside Samsung’s Challenge To Apple
Samsung Electronics Co. is overhauling its line-up of premium phones for next year, preparing to launch its first 5G-capable smartphone, a cheaper flagship model and a foldable-screen device to challenge Apple Inc. and stay ahead of Chinese rivals, people familiar with the matter said.
- The South Korea-based company is in talks with Verizon Communications Inc. to launch its Galaxy S10 in the U.S. with a fifth-generation wireless chipset, said the people, asking not to be identified because products are still under development.
- The goal is to secure support from the biggest U.S. carrier to popularize the technology, which is designed to transfer data dozens of times faster than the fourth-generation networks in use now.
- Samsung has embedded a fingerprint sensor under the display of its S10, overcoming years-long challenges of mass-producing such a device, the people said.