BQuick On July 31: Top 10 Stories In Under 10 Minutes
Top news, must-read stories and columns—all served up in less than 10 minutes.
This is a roundup of the day’s top stories in brief.
1. SBI Chairman Says This Is The 'Best Time' To Lend
The head of the largest lender in the country thinks the current macroeconomic situation is probably the best time to rev up lending as the risks associated are lower.
“In a situation like this, prudence is something you have to exercise, but for lending, this is the best time,” State Bank of India Chairman Rajnish Kumar told Bloomberg Quint in an interview.
If you give a loan to someone at this time, most likely it will not go wrong.Rajnish Kumar, Chairman, SBI
Kumar said he’s a contrarian as far as lending is concerned and would rather stay cautious if everyone else in the market was lending aggressively.
SBI’s outstanding advances rose 6.58% year-on-year to Rs 23.85 lakh crore as on June 30.
2. SBI’s Profit Surge, Sun Pharma’s Taro Troubles, Tata Motors' Rs 8,400-Crore Loss
State Bank of India’s quarterly profit surged, owing to a fall in provisions and an exceptional gain.
Net profit of India's largest lender rose 81% year-on-year to Rs 4,189 crore.
This includes an exceptional gain worth Rs 1,540 crore due to sale of investments in SBI Life Insurance Co.
Net interest income also rose 16% to Rs 26,641 crore.
SBI said that as of June the bank has been “asymptomatic” of bad loans problems.
Sun Pharmaceutical Industries Ltd. reported a net loss for the quarter ended June as it provided for the resolution of multi-year investigations against its U.S. subsidiary— Taro Pharmaceutical Industries Ltd.
India’s largest drugmaker reported a net loss of Rs 1,665.6 crore.
The company provided a sum of Rs 3,176 crore to settle Taro’s multi-year investigations by the Department of Justice in the U.S.
Overall exceptional items for the quarter stood at Rs 3,633.3 crore.
Get all the highlights from Sun Pharma’s Q1 results.
Tata Motors Ltd. reported yet another quarterly loss as the Covid-19 pandemic caused a slump in sales in India and overseas.
Net loss stood at Rs 8,438 crore in the quarter ended June.
Revenue fell 48% year-on-year to Rs 31,983 crore.
Still, the company hopes for a revival.
Related Coverage
Indian Oil Corp. returns to profit in Q1 due to costlier fuel.
UPL Ltd.'s profit nearly doubles on low base, India business improvement.
Laurus Labs Ltd.’s profit rises by over 10 times.
3. India’s Fiscal Stress And Core Sector Contraction
India’s fiscal deficit reached Rs 6.62 lakh crore, or 83.2% of the budgeted estimate in the quarter ended June as the government’s revenue remained stressed amid the disruptions caused by the coronavirus pandemic.
Revenue receipts were 7.4% of the target set for the current financial year against 14.5% achieved in the same period last year.
Total expenditure was Rs 8.16 lakh crore, which was 26.8% of the full-year target compared with 25.9% spent last year.
The government’s net tax revenue in the April-June period was Rs 2.69 lakh crore against Rs 4 lakh crore collected a year ago.
The government’s revenue could still trail the budgeted target by over Rs 6 lakh crore.
India’s core sectors continued to contract in June, but at a slower pace than in the previous month.
The index of eight core sector industries fell 15% year-on-year in June, according to data by the Office of Economic Advisor on Friday.
The index fell 22% in May as per the revised estimates compared to the initial estimate of a 23.4% contraction.
On a cumulative basis, the index contracted 24.6% in the April-June period.
All industries excluding fertilisers saw a contraction in June.
4. Nifty’s Six-Week Streak Ends; Dollar's Worst Month In A Decade
Indian markets' six-week gaining streak came to an end with benchmark indices declining in four out of the five sessions this week.
S&P BSE Sensex ended 0.34% lower at 37,606
NSE Nifty 50 declined 0.14% to end at 11,087.
Both Sensex and the Nifty declined for the third straight day.
Among the sectoral indices - the Nifty Pharma outperformed for the third straight day, ending 3.6% higher.
Follow the day’s trading action here.
6. Why Agri-Input Firms Are Bullish
Companies making agricultural inputs including fertilisers, herbicides and agro-chemicals expect growth seen in the quarter-ended June to sustain and get better, aided by strong rural demand, capacity expansion and product innovations.
Shares of Dhanuka Agritech Ltd., Rallis India Ltd. and Coromandel International Ltd. have jumped between 15% and 80% in the three months through June.
That was driven by financial performance that overcame disruptions caused by the Covid-19 outbreak as agri industry was categorised among essential services.
Rural India is expected to emerge as a bright spot amid projections of a normal monsoon and bumper harvest.
Related Coverage
Rural demand could turn around after October, says Ramesh Iyer.
Signs of microfinance stress emerging in three Indian states.
7. Indians Are Buying Bigger Bottles Of Booze
Edibles weren’t the only items Indians purchased in larger packs as they hunkered down at home during the Covid-19 lockdown. They’re also buying bigger bottles of liquor.
With bars and pubs shut, and weddings and other social gatherings cancelled or postponed, consumption of alcohol has moved in-home, Anand Kripalu, chief executive officer at United Spirits Ltd., India’s largest spirits maker, told analysts in a conference call. And, he said, there’s a shift to larger stock-keeping units.
The switch to larger packs in edibles was also reported by cigarettes-to-consumer goods maker ITC Ltd., which said people are buying bigger SKUs to reduce frequency of purchases as the pandemic spreads across the country.
Regional lockdowns in July are expected to affect supply chains and alcohol sales through retail outlets.
8. One Auto Segment That's Still Seeing Demand
Auto wholesales declined in July as supply-chain constraints persisted and fresh lockdowns were imposed amid mounting cases of the coronavirus, according to four brokerages, extending a lengthy slowdown in the sector.
Factory-gate shipments of passenger cars, two-wheelers and commercial vehicles are likely to tumble in the range of 3-71% year-on-year in July, according to data compiled from the reports of four brokerages—Nomura, Emkay Global, Motilal Oswal and Dolat Capital.
All segments, barring tractors, witnessed a decline in sales over the year ago.
Tractor demand, analysts said, remained strong on account of early Kharif sowing, easy vehicle finance availability and higher yield.
Wholesales for most automakers, however, surged over the preceding month.
9. Former HP India Employee Alleges Whistleblower Retaliation
Aggrieved by alleged ‘illegal and wrongful termination’, a former employee of Hewlett-Packard India Sales Pvt. has approached the Delhi High Court against the company.
The complaint has also been filed against the parent entity HP Inc. and 11 other individuals presently in senior management positions in the
U.S., Malaysia, Singapore and India. The Delhi High Court has asked all the parties to file their responses within four weeks.
Manoj Kumar Grover has alleged ‘systematic persecution, harassment and victimisation’ by the company and senior management after he complained against certain unethical actions.
Read more to see the allegations made by Grover.
10. India's Covid-19 Tally Shoots Past 16 Lakh
Confirmed Covid-19 cases in the country crossed the 16-lakh-mark just days after the central government announced further relaxations to open up the economy.
India added 55,078 fresh cases in 24 hours, taking the total tally to 16.3 lakh, according to the Health Ministry’s 8 a.m. update.
The last one lakh cases were added in two days.
Over 10.5 lakh of these, however, have recovered. Nearly 36,000 have died.
This is the second straight day that India has reported over 50,000 fresh cases.
While new cases continued to pour in, recoveries also spiked today with over 37,000 patients discharged in the last 24 hours.
Track news and developments around the Covid-19 outbreak in India here.
Globally, cases crossed 1.7 crore leaving over 6.68 lakh dead.
U.S. recorded another surge in deaths with California, Florida and Arizona reporting high incidence of fatalities.
France warned that its pace of infections is accelerating with the rate of infection doubling in three weeks.
The WHO said that countries were unprepared for the pandemic because of a deep underinvestment in public health infrastructure.
The absence of universal health coverage or affordable health care also aggravated the situation, it said.
Follow the global spread of the virus here.