BQuick On July 21: Top 10 Stories In Under 10 Minutes

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

1. Zoom, Tinder, Under Radar For ‘Netflix Tax’ In India

India has identified several overseas firms including Zoom, Tinder, Skype, and Tumblr that are allegedly not paying indirect tax, according to a senior government official, as the nation continues to plug gaps that cause loss of revenue.

• Such companies are required to register as Online Information Database Access and Retrieval service providers and pay integrated goods and services tax at 18%, according to the law.
• The companies that don’t have a physical presence in the county can appoint a representative to register on their behalf.
• If the companies don't comply, the official said, the tax department can ask the Information Technology Ministry to ban these apps or websites. To be sure, the government hasn't issued any notices yet.

Find out how the ‘Netflix Tax’ works.

2. Brands That Helped HUL And Britannia Weather The Covid Storm

Hindustan Unilever Ltd.’s quarterly profit rose despite disruptions from the Covid-19 outbreak as the company benefited from higher sales of food items and the acquisition of GlaxoSmithKline Consumer Healthcare Ltd.

• Revenue rose 4.4% over last year to Rs 10,560 crore—higher than the estimated 9,880 crore.
• However, the growth was aided by HUL's takeover of GSK-CH and its best-selling Horlicks brand.
• Without Horlicks, the revenue would’ve declined 7% during the quarter, Chief Financial Officer Srinivas Phatak said in the post-earnings press conference.

Read more to see how HUL managed costs in a virus-stricken quarter.

A national lockdown imposed to curb the Covid-19 outbreak forced millions of people to stay indoors and increasingly consume packaged food. That aided Britannia Industries Ltd.’s financials.

• Its star-performing brands during the lockdown, according to Varun Berry, the biscuit maker’s managing director, were Marie Gold, Milk Bikis, Nutri Choice and Good Day.
• Demand for dairy products and bakery products like rusk and bread, he said, remained high in the last 3-4 months.

And this trend is expected to sustain. Read more.

3. How Axis Bank And Bajaj Finance Fared In Q1

Axis Bank Ltd.'s profit fell in the first quarter as the private lender’s provisions rose.

• Net profit declined 19% year-on-year to Rs 1,112 crore in the quarter ended June, according to its filing.
• It reported a net loss of Rs 1,388 crore in the previous quarter ended March.
• The private sector lender made provisions worth Rs 4,416 crore compared with Rs 3,815 crore a year ago.

Fresh slippages halved from a year ago.

Bajaj Finance Ltd.'s profit fell in the quarter ended June as the non-bank lender accelerated provisions to combat the disruptions stemming from the Covid-19 pandemic.

• Net profit declined 19% year-on-year to Rs 962 crore.
• Net interest income rose 12% over the year-ago period to Rs 4,152 crore.

The NBFC may consider “accelerated provisions” for Covid-19.

4. Windfall For Majesco Shareholders

Majesco signed a pact to sell its U.S. subsidiary to private equity firm Thoma Bravo, ramping up payouts to shareholders.

• The Nasdaq-listed arm of the information technology company will be sold at $13.1 apiece, a premium of 71% to its closing price on July 17, according to the corporate announcement on exchanges.
• The deal values the company at $594 million.
• Majesco India holds 74% in its U.S. arm, and will get $421 million, or about Rs 3,150 crore, from this deal.

Here’s the premium that shareholders are likely to get in India due to the deal.

5. India’s Growing Tribe Of Women Borrowers

For long, India has wanted to bring more women into the formal financial sector. From self-help groups and microfinance lending targeted towards women to a failed-attempt to open a women’s only bank in the Bharatiya Mahila Bank.

• While some of these policies worked and others didn’t, the share of women in India’s borrower base has steadily been on the rise.
• Apart from rural areas, where lending to women is now a proven strategy, urban areas are also seeing more women borrowing individually and collectively with family members.
• Data from the Reserve Bank of India shows that the number of credit accounts held by women rose to 35.38% of all individual accounts as of March 2020, up from 30.16% in March 2019, according to the basic statistical returns by the RBI.

A combination of factors may have led to this increase.

6. What Helped Auto Demand In June

Retail sales of cars and two-wheelers improved in June, the first full month of economic activity after an extended nationwide lockdown, aided by a recovery in rural demand.

• Vehicle registrations, a measure of auto sales at dealerships, rose to 984,395 units in June from 202,697 units in May, according to data released by the Federation of Automobile Dealers Associations.
• On a year-on-year basis, however, retail sales fell 42% in the reported month. All segments, barring tractors, witnessed a decline.

The rural market, led by a robust crop output and timely arrival of monsoon, has witnessed a recovery in demand.

7. L&T Top Brass Takes Pay Cuts

Amid Covid-19 pandemic, key officials of engineering and construction conglomerate Larsen & Toubro Ltd. have taken voluntary pay cut of up to 53%, including a 24.19% salary cut by its group Chairman AM Naik, according to the company's annual report.

• Naik drew a total remuneration of Rs 6.18 crore for 2019-20 as against Rs 8.15 crore in 2018-19, according to the annual report of the infrastructure giant.
• L&T Chief Executive Officer and Managing Director SN Subrahmanyan took home Rs 27.17 crore for 2019-20, showing a pay cut of 43.91%.

Read more to see what L&T Chairman Naik said in his annual message to shareholders.

8. Covid-19: India Cases Top 11.5 Lakh; Delhi Survey Shows 24% Have Had The Virus

India’s Covid-19 tally crossed the 11.5-lakh mark, as the highly contagious virus spreads rapidly in the world’s second-most populous nation.

• The country added over 37,000 fresh cases in the last 24 hours to take the total tally to 11,55,191, according to the Health Ministry’s update as of 8 a.m.
• Of these, over 7.2 lakh have recovered, while active cases crossed 4 lakh.

Track news and developments around the Covid-19 outbreak in India here.

Nearly a quarter of the residents in India’s capital New Delhi have had the coronavirus, according to a sero-prevalence study conducted by the country’s disease control organization.

• With a population of more than 11 million, New Delhi has so far reported 123,747 confirmed cases and 3,663 deaths.
• The study conducted by the National Center for Disease Control found that 23.48% of the 21,387 blood samples tested showed the prevalence of IgG antibodies.

The tests help in the identification of the presence of antibodies in the general population.

10. Modern Monetary Theory: To Do Or Not To Do?

In the midst of a global recession, matched by localised economic contractions across a number of economies, the once-fringe theory of Modern Monetary Policy is becoming more mainstream.

• Public debt is soaring and the idea that governments can print money indefinitely, constrained only by inflation, is seductive for administrations.
• MMT, however, can only work for a handful countries. Rabobank, in a July 20 report, said its analysis suggests that only eight economies have conditions that can allow them to consider MMT as a policy option.
• “MMT is a medicine that will likely hurt more patients than it cures. Very few economies can hope to take it on a sustainable basis,” Rabobank’s Michael Every, Hugo Erken and Erik-Jan van Harn wrote in the report.

See which countries can attempt MMT, and why India should stay away from it.