Author: Abhishek Jha

Rising yen to hurt margins of Maruti Suzuki

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s top carmaker Maruti Suzuki, which is already buffeted by plunging sales, faces fresh trouble due to high foreign exchange rates, particularly with the yen.

The depreciation of the rupee against the Japanese yen may further erode the margins of the company, a unit of Japanese automaker Suzuki Motor Corp. Yen-denominated costs account for roughly 10 percent of Maruti’s revenue.

Appreciation in the yen typically impacts subsidiaries of Japanese companies across the globe. In Maruti’s case, the currency impact is in the form of higher cost of raw material sourced from the parent company as well as increased royalty outgo.

In the past 10 days, the rupee has weakened by 8 percent against the yen. The rupee is now quoting at 0.68 against an average of 0.63 in the first quarter of FY20.

Shares of Maruti Suzuki have slumped more than 20 percent since the beginning of 2019 as Indian automakers grapple with rising commodity prices and foreign exchange rates, amid weak monthly sales and declining demand.

Maruti, on its part, has been lowering its yen exposure. It aims to bring down the exposure to the Japanese currency to zero in the next couple of years. The company has also been paying the royalty to its Japanese parent in rupees to mitigate the impact of the yen’s volatility.

The company’s exposure to yen-denominated costs was roughly 18 percent a few years ago. If the yen holds at current levels, it will ultimately hurt Maruti’s margins and profitability going ahead.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why Retail stands out as a verticle for Reliance

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Reliance Industries Limited (RIL) hosted its 42^nd annual general meeting on Monday. The announcements were primarily focused on Jio but company chairman Mukesh Ambani did sound bullish about the conglomerate’s retail verticle.

Mukesh Ambani said that Reliance Retail, if listed, would be in the ‘top-10 companies’ of India. He also added that Reliance Retail is larger than all the retailers put together. A closer look at the company’s numbers show why so.

In terms of share price growth, RIL surged 45.37 percent in 2 years, 125.50 percent in 3 years and 132.68 percent in last 10 years. The outstanding growth is primarily a reflection of robust performance from its retail and petrochemical segments and fresh entry into the telecom segment. Continued growth in the major segments like retail, telecom and petrochemicals will lead to higher value creation for investors.

Reliance’s refining division contributes 51.15 percent to sales followed by Petrochemicals division that contributes 22.34 percent to sales and Retail segment that contributes 16.95 percent to sales, as of March 19 quarter.

Established in 2006, Reliance Retail stands at the 3rd position in terms of contribution to sales, it remains the best segment performer amongst all six RIL business divisions. Reliance Retail manages 11 brands under its broader umbrella and operates about 10,644 retail stores in over 6,700 cities covering 23 million sq ft area and 516 petro retail outlets, as on June 30, 2019. In Q1FY20 alone, it opened 265 stores.

While comparing RIL’s segmental business revenues, it was seen that Reliance Retail maintained a stronger revenue growth as compared to others. In the June quarter this fiscal, Reliance Retail saw a jump of 47.5 percent in its revenues to Rs 38,196 crore as against Rs 25,890 crore made during the corresponding quarter last year.

While, oil & gas slipped in terms of revenue, digital services (Jio) saw a jump of 54.5 percent in revenue growth during quarter ended June 30, 2019.

The business has achieved a revenue CAGR of 55 percent and EBITDA CAGR of 76 percent over the last five years. Reliance Retail has formed several long-term strategic partnerships which adds significant value to its offerings across all consumption baskets.

Recently, the company has signed international brands like American jewellery brand Tiffany and Co. Apart from that, Reliance Brands also sells luxury labels like Ermenegildo Zegna, Brooks Brothers and Bally in India.

According to Reliance Retail’s website, it has a portfolio of more than 40 international brands which are mostly on the luxury end. Given the addition of ever-increasing international brands, Reliance Retail will further see a surge of increased profits added to its company’s books next quarter.

Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Reliance Jio: 3 years, 340 million subscribers and Mukesh Ambani’s roadmap

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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It’s been a remarkable journey for Reliance Jio since its launch three years back. Jio is now India’s largest telecom company in terms of revenue and profit. Subscriber base has hit 340 million and the company believes that 500 million is well within its grasp. The roadmap ahead is promising too with Chairman Mukesh Ambani talking about getting in financial and strategic investors in a few quarters now and a listing in the next five years.

At the Reliance Industries annual general meeting (AGM) on Monday, Mukesh Ambani announced the commercial launch of its fiber to the home (FTTH) JioFiber effective 5th September.  Currently penetration of broadband in India is low at 8-10 percent with BSNL being the biggest player followed by Airtel broadband. Impact of Jio’s broadband offerings will go beyond impacting the existing players as it can go a long way in expanding India’s broadband market itself.

RIL has announced it will price JioFiber at a base price of Rs 700 per month going up to Rs 10,000 per month depending on the speed. The speed will range between 100 mbps to 1 gbps. Analysts say that the base pricing of Jio broadband services is in line with peers but the sweetener is in form of faster speeds, more data offering and the many content tie ups.  Also the JioFiber customers who opt for annual plans which is called Jio Forever, will get an HD OR 4K LED television and a 4K set top box free. The set top box offers ultra-high definition entertainment, virtual reality content, multi-party video conferencing, voice-enabled virtual assistants, interactive gaming, home security etc. However, remember a Tata Sky or Airtel Dish will not be compatible with a Jio set top box and one will need to use cable services given by Den or Hathway which are owned by RIL.

There are also other interesting takeaways. Jio will soon offer unlimited ISD calling service from Jio landlines to the US and Canada at fixed monthly plan of Rs 500 per month.  Reliance Jio will also launch its IoT platform from January 1, 2020 and aims to connect 1 billion households on the particular platform.  The company also spoke about high quality video conferencing and innovative technologies like augmented and virtual reality facilities.

Jio has also announced a marque partnership with Microsoft where it will set up a network of large world-class data centres across India. The global tech giant will bring its Azure cloud platform to the table. In a boost to budding start-ups, the company has announced free connectivity and cloud infrastructure at Rs 1,500 per month for a bundle of connectivity, productivity and automation tools to a micro and small business.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

RIL aims to be zero-net debt company in 18 months

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Reliance Industries Chairman Mukesh Ambani in his 42^nd Annual General Meeting (AGM) announced that the business giant will become a zero-debt company by the end of FY21.  RIL ended last year with net debt of Rs 154,478 crore.

He announced that a four pronged strategy will help the company achieve its goal. “We have a very clear roadmap to becoming a zero-net debt company in next 18 months,” he said.

Saudi Aramco & BP deal completion

Saudi Aramco will buy a 20 percent stake in RIL’s oil to chemical business. The oil giant will supply 500,00 barrels of crude oil a day to RIL’s Jamnagar refinery. Along with this RIL has joined hands with BP for a new fuel retail joint venture in which RIL will hold 51 percent.

Unlocking value from telecom assets

Mukesh Ambani announced at the AGM that Rs 3.5 lakh crore was already invested in network assets and thus the major infrastructure investments for the telecom business were over. He also laid hope on the IoT platform which will be commercially available from January 2020 to garner a revenue of Rs 20,000 crore annually.

Listing & value unlocking for Jio & Reliance Retail

The RIL chairman also announced that both Jio and Reliance Retail would be listed within the next five years and this would help raise money form the market and reduce its debt exposure.

Unlocking value from real estate other financial investment

Mukesh Ambani also said that Reliance Industries would consider raising money from other assets such as real estate and other financial investments to achive its aim of going debt free by FY21.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

FM meets capital market participants: key takeaways

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Finance Minister Nirmala Sitharaman’s meeting with market participants on Friday seemed to hit the right notes with respect to building confidence. The minister was said to be very patient and receptive to most suggestions and ideas discussed by the group. Reducing taxes was one of the biggest talking points and the FM heard out the market men’s rationale behind the request. Mutual fund bosses & broking company heads pitched for a reduction and even outright removal of the Long Term Capital Gains Tax. Some of them argued that the Securities Transaction Tax (STT) was brought in as the country didn’t have a long term capital gains tax and thus having both taxes today is detrimental to investors’ interest.

The other key talk point was ease of investment and here the FM is believed to have taken a very favourable view of the requests. Market participants are pushing for doing away with the need of having multiple KYC or know your client requirements. As of now capital market institutions can’t use the KYC done by banks and are required to do their own background checks. They argue that this increases the cost of compliance and should be done away with.

ALSO READ: Relief measures likely in 7-10 days

More investment by the Employees’ Provident Fund Organisation (EPFO) was another pitch taken up during the Friday meeting. Mutual fund & stock market players asked the government to consider more participation by the EPFO in active funds. At present, the EPFO has the mandate to invest up to 15 per cent of its corpus in equities. It has been investing closer to 5 per cent of its Assets under management (AUM) in the capital market as of now and most of that is via index funds or ETFs.

If North Block does move on this point and gets the EPFO to commit more money to actively managed funds then it could provide an ample flow of long term money to the market. This liquidity booster could be a game changer with respect to domestic flows and help counter the gush of foreign portfolio investment (FPI) outflows in times of turmoil. However investing retirement savings in equity markets has always been a contentious political issue and thus a quick move on this front may not be possible immediately.

ALSO READ: Government mulls steps to boost auto, housing demand

Other demands in Friday’s meeting were regarding the fixed income market. Participants stressed on the need to have a formal NBFC debt resolution mechanism in place – something that is being experimented with for the first time in the form of DHFL. There was also the request for more avenues of NBFC refinancing.

Finally market participants also urged the Finance Minister to curb any regulatory over-reach. The pitch was – don’t clamp down on financial market innovation just because of some failures and market volatility.  Market participants feel India’s capital market still has a long way to go when it comes to offering a full range of market instruments and financial products which can deepen the corporate bond market and also help market players hedge better and mitigate risk.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Relief measures likely in 7-10 days

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Finance Minister Nirmala Sitharaman is on a sectoral consultation drive to help the economy shift gears. She met industry as well financial market representatives today.

CNBC-TV18 has learnt that after all the consultations with respective stakeholders are over, the government is likely to come out with a mega package of announcements, especially for sectors like MSMEs, auto and financial markets.

READ ALSO: Government mulls steps to boost auto, housing demand

Sources in the know have indicated that the relief announcement may come in as early as next week. It is quite likely that the FM will take centre stage through a press conference and share the details of the package.

With the Reserve Bank of India cutting lending rates by 35 bps recently, sources have also told CNBC-TV18 that public sector banks (PSBs) have been sensitised to pass on the cut to consumers.

When asked specifically on the issue of GST cut for the auto sector, sources have indicated that relief measures except tax cuts might also be on the anvil.

Nirmala Sitharaman has till now met bank representatives, industry captains and market investors. She is scheduled to meet the realty and home buyers on Sunday.

Markets have been perturbed with the exodus of foreign portfolio investors (FPIs) and CNBC-TV18 has also learnt that that the Government may examine amendments to the finance act assuage the aggrieved.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Finance Minister Nirmala Sitharaman takes note of industry’s issues

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Finance Minister Nirmala Sitharaman is on a sectoral consultation drive to help the economy on the growth path. On Firday morning she held talks with the CII National Conference where many industry captains gave their inputs on how to boost the struggling economy.

After the meet CNBC-TV18 reporters caught up with the likes of Uday Kotak, Adi Godrej, TV Narendran, Sumant Sinha, Ajih Gulabchand and more.

Speaking to reporters, Uday Kotak, MD of Kotak Mahindra Bank said that the session with the Finance Minister was an interactive one and that Sitharaman assured CII that she would consider the various suggestions made by CII. He added that the private sector would support investments in the state of Jammu and Kashmir.

A recurring concern was the dwindling inflows from foreign portfolio investors (FPIs) after the Budget announcement to increase income tax surcharge on them. Kotak assured that the Finance Minister would give a fair and patient hearing to FPIs in the context of the capital market and the economy when she met them later in the day.

Adi Godrej, Chairman of the Godrej Group, voiced difficulties faced by various industries like the auto sector and advocated a need for a temporary reduction in GST.  He added that FPI rollback will give some reassurance to the Indian markets which was badly needed.

TV Narendran, CEO and MD of Tata Steel, said that the Finance Minister had told CII that she would travel across various parts of the country to listen to what local industries next week

Rakesh Mittal, MD at Bharti Enterprises, feels that the government needs pump up public expenditure in infra sector and that liquidity crunch issues, especially for MSMEs, is being worked upon.

Sumant Sinha, Chairman and MD of ReNew Power said that discussions with FM were very reassuring and that she promised to address issues pointed out by them as quickly as possible.

Abhimanyu Munjal, joint MD and CEO of Hero Fincorp said that another demand was easing refinance norms for housing finance companies from National Housing Bank.

Ajit Gulabchand,  Chairman and MD of Hindustan Construction Company raised the point of paying on time to keep the cash flow running smoothly. He reasoned that since the government is involved in many things, it is not paying on time and thus putting industry into a difficulty.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Government mulls steps to boost auto, housing demand

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The slowdown in the auto and the housing industry has the government worried.  The fiscal space for a stimulus is limited but CNBC-TV18 learns that the Centre is planning to undertake some specific measures to lend a helping hand to these two sectors.

The immediate focus of the government is now on the huge inventory pile-up in the housing and automobile sector. CNBC-TV18 learns that the government is looking at short term measures to stimulate demand without impacting revenue. The tight liquidity situation has impacted the consumers dependent on credit especially real estate, automobile, MSMEs.

For the automobile sector government may look at reducing GST rate from 28% to 18% for a period of 3-6 months, but it has to be backed by the states’ representatives part of the GST council. It is thought that reduction of GST rate, the attractive festival offers, lower interest rate offers from the bank along with the transmission of recent monetary policy cut of 35 bps by banks will help reduce the pending inventory.

The government believes, the housing sector is a bigger worry as the unsold inventory pile is getting bigger with time. Total unsold inventory for tier 1 cities stands at 6.65 lakh which is worth over Rs 5.53 lakh crore. Mumbai region alone has an unsold inventory pile of over 2.22 lakh worth Rs 2.52 lakh crore and NCR region has 1.81 lakh unsold inventory worth Rs 1.13 lakh crore. Sources indicate immediate focus will be to stimulate demand and bring in measures for consumers to flush the long-pending inventory.

Finance Minister Nirmala Sitharaman had announced benefits for second-home buyers in the budget this July and  guidelines on the same are being worked upon by the urban and housing development ministry.

CNBC-TV18 has also learnt that all issues of economic slowdown especially housing, automobile, NBFCs, and banks are being discussed by the Prime Minister’s Office and the line ministry directly.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

YES BANK: Top management reshuffle on the cards

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Yes Bank, in a regulatory filing on Thursday evening, said that it is in the process of appointing certain new key managerial personnel, including the Chief Financial Officer (CFO), Chief Compliance Officer (CCO), and Chief Operating Officer (COO). Currently, these top positions in the bank are occupied by the former MD & CEO Rana Kapoor’s most trusted aides, including members who have been with the bank since its inception.

Kumar Padmanabhan, who was appointed the Chief Operating Officer of the Bank in 2015, was part of the core team that helped set-up the bank in June 2004, and was instrumental in setting up & implementing the process & systems for the Bank across all business.

Raj Ahuja, who is currently the Chief Financial Officer of the bank, took over this critical role in the bank  from Rana Kapoor’s right-hand man, Rajat Monga in April last year, and was reporting directly to the then-MD & CEO.

Rakesh Mehran is the current Chief Compliance Officer of Yes Bank. Mehra is also one of the bank’s old-times who has been associated with YES BANK since 2007.

The bank did not assign any reason for the top management rejig in the regulatory filing. However, given that some of these key managerial positions were assigned by the ousted MD & CEO, Rana Kapoor, the move could be seen as an effort by the new CEO, Ravneet Gill to remedy some of the lapses in corporate governance, credit disbursal policies noted the Reserve Bank of India last year, when it brought an end to the founding CEO Rana Kapoor’s tenure.

Besides the board-level exits last year, Senior Vice President Jaideep Iyer, and Senior Group President Pralay Mondal also left Yes Bank last year to join RBL Bank and Axis Bank respectively.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Sachin vs Kohli: “Greatest of all time” debate is meaningless

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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It is human to compare. Make listicles. Your top-five charts. More often than not, fandom plays a major factor in this. Thus, the world of sports, music, cinema etc… will always have unresolved debates about who is the greatest. Roger Federer or Rafael Nadal? Michael Schumacher or Mika Hakkinen? Cristiano Ronaldo or Lionel Messi? And the latest in cricket — Virat Kohli or Sachin Tendulkar?

There are different ways of judging greatness.

1. Statistics
2. Flourish & the “wow” factor
3. Grittiness/match winning performances
4. Competition faced
5. Impact on the sport

Statistics

Stats show that Virat Kohli is easily the greatest one-day international (ODI) batsman ever. And this has perturbed the Sachin Tendulkar camp. In all other Sachin versus Brian Lara versus Ricky Ponting etc… debates the Bhagwaan camp could fall back on stats.

Now, they can’t. Kohli hit the 10,000 run mark recently and did it in just 205 innings. That a staggering 54 innings lesser than the Little Master. Moreover, after 205 innings, Sachin averaged 42 whereas Kohli almost touches 60. Also, Kohli has already hit 37 centuries while Sachin was on 21. There is one stat, however, which marginally pips Sachin ahead and that is percentage of team runs. 17 versus 16… slightly unbelievable, right?

Flourish And The Wow Factor

This is subjective. Some find Lara more attractive than Sachin and some argue the other way. Kohli does possess a couple of “wow” shots in his arsenal. The wristy, almost slap like shot he uses to hit the midwicket boundary with ease being one of them. Sachin on the other hand, was a delight to watch. He had the gift to take your breath away time and again. That straight drive, that punch through the covers and that wristy flick were just sublime.

Grittiness/Match Winning Performances

Again subjective. It is well established that Kohli thrives under pressure. His chasing abilities are already legendary. Sachin is slightly misunderstood in this regard. Out of his 49 ODI centuries, 33 were in winning causes. That’s 70 percent.

Competition Faced

This is the ODI ranking of bowlers when Sachin was at his peak and the number one batsman in 1999.

1. Shaun Pollock, 2. Glenn McGrath, 3. Shane Warne, 4. Curtly Ambrose, 5. Allan Donald.

The top-10 included Saqlain and Muralitharan too. Today, Jasprit Bumrah, Rashid Khan, Kuldeep Yadav, Trent Boult and Josh Hazelwood are at the top.
It is not Kohli’s fault that the bowling standard has dipped slightly. The sports has changed. Runs mean commercial gains. Consider this for a moment. Why aren’t we talking about Viv Richards as the greatest? No safety, bad equipment, green-top wickets, deadly adversaries, that guy dominated in an era when the general mindset was survival.

Impact On The Sport

Some greats change the game for the next generation. Jonty Rhodes is the first example. The art of fielding changed when he flew from Point to almost Gully to dismiss a bewildered Brian Lara.

Sachin has had that impact on ODI batting, Warne revived spin bowling, Waqar Younus and Wasim Akram practically taught the world the art of reverse swing and AB De Villiers and Chris Gayle have done that for T20 batting. Kohli is yet to find a footing here but I suspect the guy will be remembered as the professional of professionals.

Former England captain Mike Atherton wrote about Kohli’s drive for excellence. Apparently, Kolhi compares his body fat percentage with Novak Djokovic, the 14-time grand slam winner who has only 7.5 percent body fat. His peers can only follow his footsteps.

So, stop obsessing about who is the greatest. Enjoy and celebrate what you are seeing as this will end sooner than you know. Sachin Ramesh Tendulkar does not grace the 22-yards anymore.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow