Author: Ajay Vaishnav

Chemicals: Is the worst over?

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

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Seen as long-term wealth creators by investors, the chemicals sector hasn’t performed up to the mark in the last two years, with few upgrades from FII brokerages.

That may change soon, as analysts and brokerages who took a cautious stance earlier are now turning bullish on the prospects of chemical stocks.

The recent moves from the two prominent global financial institutions—UBS and Morgan Stanley—indicate what appears to be a shift in the mood towards this sector.

Chemical Stocks: Long-term wealth creators

In a recent analysis, UBS highlighted the tendency of investors to overlook the strong niche positions and growth opportunities that many chemical companies possess.

Despite the lingering effects of the pandemic, there are signs of a modest volume recovery, offering a ray of optimism for investors, it added.

The global brokerage has initiated a ‘buy’ rating on PI Industries and Navin Fluorine, recognising their potential for future growth.

Chemical stocks: The valuation picture

Deepak Nitrite has also caught the attention of investors following a double upgrade from Morgan Stanley.

The investment bank has set an ambitious price target of ₹2,985, implying a potential upside of 20% from current levels.

Not just that, Morgan Stanley projects that Deepak Nitrite has the potential to double its earnings by 2028, underscoring its long-term wealth-creation prospects.

Despite the positive outlook, management commentaries after the fourth quarter results remain mixed.

While there are indications of a recovery gaining traction in the second half of FY25, challenges also persist, particularly on the realisations front, which continues to face pressure.

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IRFC Q4 net profit grows 34% to ₹1,717 crore; board approves ₹50,000 crore fund raising plan

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

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Indian Railway Finance Corporation (IRFC) Ltd reported on Monday a 34% rise in its profit to ₹1,717.3 crore for the March 2024 quarter on account of higher income.

It had clocked a profit of ₹1,285.2 crore during the fourth quarter of the last fiscal, the state-owned company said in a regulatory filing.

The company’s total income rose to ₹6,477.9 crore in the January-March quarter from ₹6,230.2 crore in FY23.

During the period under review, its expenses stood at ₹4,760.6 crore as against ₹4,945 crore a year ago.

Besides, the board of the company also approved a final dividend of 70 paise per share for FY2023–24.

The board of directors also approved the raising of resources for the financial year 2024–25 up to ₹50,000 crore from both domestic and international markets.

It will be raised “through a prudent mix of tax-free bonds, taxable bonds on a private placement or public issue basis,” including capital gain bonds, government-guaranteed bonds, and government-serviced bonds.

The primary objective of the IRFC, under the Ministry of Railways, is to meet the predominant portion of extra-budgetary resources (EBR) requirement of the Indian Railways through market borrowings at the most competitive rates and terms.

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‘Responsible for War Crimes’: ICC Prosecutor seeks arrest warrant for Israel PM and Hamas chief

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

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It’s confirmed. The chief prosecutor of the International Criminal Court is seeking arrest warrants against Israeli PM and Hamas Chief. Karim Khan, the chief prosecutor believes Israel’s PM, his Defence minister Yoav Gallant and three Hamas leaders—Yehia Sinwar, Mohammed Deif and Ismail Haniyeh—are responsible for war crimes and crimes against humanity in the Gaza Strip and Israel.

What has the ICC Chief Prosecutor said about Hamas?

‘There are reasonable grounds to believe that Sinwar, Deif and Haniyeh are criminally responsible for the killing of hundreds of Israeli civilians. These individuals planned and instigated the commission of crimes on October 7, 2023. Hostages taken from Israel have been kept in inhumane conditions, and that some have been subject to sexual violence, including rape while being held in captivity’, says Karim Khan.

What has the ICC Chief Prosecutor said about Israel

‘Benjamin Netanyahu, the Prime Minister of Israel, and Yoav Gallant, the Minister of Defence bear criminal responsibility for the following war crimes and crimes against humanity committed in the Gaza strip. Israel, like all States, has a right to take action to defend its population. That right, however, does not absolve Israel or any State of its obligation to comply with international humanitarian law’, says Karim Khan, Chief Prosecutor, ICC

He further adds, ‘The means Israel chose to achieve them in Gaza—namely, intentionally causing death, starvation, great suffering, and serious injury to body or health of the civilian population—are criminal.

What happens next?

As the next step, the chief prosecutor will request the warrants from a panel of three judges, who take on average two months to consider the evidence and determine if the arrest warrants are to be issued.

It is important to note that Israel is not a member of the court, and even if the arrest warrants are issued, Netanyahu and his Defence Minister do not face any immediate risk of prosecution.

However, experts believe the arrest warrants could make it difficult for officials to travel abroad.

Earlier, the ICC issued an arrest warrant against Russian President Vladimir Putin over the Ukraine war.

Israel’s reaction

Benny Gantz, a member of Israel’s War Cabinet with Netanyahu has hit out at the ICC prosecutor’s announcement, saying, ‘the prosecutor’s position to apply for arrest warrants is in itself a crime of historic proportion to be remembered for generations.’

What is the ICC?

The International Criminal Court, or ICC, was established in 2002 as the permanent court of last resort to prosecute individuals responsible for the world’s most heinous atrocities—war crimes, crimes against humanity, genocide and the crime of aggression. It is based in The Hague, Netherlands.

It is separate from the International Court of Justice, which considers cases between states and is currently investigating whether Israel has committed acts of genocide in Gaza.

Many countries, including Israel, the United States, Russia and China do not accept the court’s jurisdiction over war crimes, genocide and other crimes.

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Israeli war cabinet member reacts to ICC seeking arrest warrants for Netanyahu and Gallant

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

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Benny Gantz, a member of Israel’s War Cabinet, has slammed the decision of the International Criminal Court’s (ICC) Chief Prosecutor Karim Khan’s bid to seek arrest warrants against Prime Minister Benjamin Netanyahu and Defense Minister Yoav Gallant.

Calling Khan’s decision a “crime of historic proportion,” Gantz said, “The prosecutor’s position to apply for arrest warrants is in itself a crime of historic proportion to be remembered for generations.”

Khan is also seeking warrants against three Hamas leaders — Yahya Sinwar, Mohammed Deif and Ismail Haniyeh.

“The State of Israel is waging one of the just wars fought in modern history following a reprehensible massacre perpetrated by terrorist Hamas on the 7th of October,” Gantz said in a statement.

Meanwhile, Hamas has also denounced the request by the ICC for arrest warrants of three of its leaders over the October 7 attacks into southern Israel.

Hamas said it “strongly condemns the attempts of the ICC Prosecutor to equate victims with aggressors by issuing arrest warrants against a number of Palestinian resistance leaders without legal basis,” a CNN report quoted from a Hamas statement on Monday.

Earlier, the ICC’s Chief Prosecutor announced that he would seek arrest warrants for Israeli Prime Minister Benjamin Netanyahu and Hamas leader Yahya Sinwar, along with other senior Israeli and Palestinian figures who have played crucial roles in the ongoing war in Gaza.

Prosecutor Karim A.A. Khan stated in a release that he is “filing applications for warrants of arrest before Pre-Trial Chamber I of the International Criminal Court in the Situation in the State of Palestine.”

Israeli Defense Minister Yoav Gallant is also facing the prospect of arrest, as pressure mounts on Israel both domestically and globally to halt its military offensive in Gaza and negotiate a cease-fire and hostage release deal with Hamas.

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Delhi records highest-ever May peak power demand amid severe heatwave

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

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Amid a severe heatwave and red alert, Delhi registered its highest-ever peak power demand in May this year at 7572 MW on Monday, May 20, at 3.33 pm, breaking the previous record of 7438 MW set in May 2023.

It is also the third consecutive day that Delhi’s peak power demand has surpassed the 7000 MW mark.

The peak power demand in May 2023 was recorded at 6916 MW, while in May 2022, it stood at 7070 MW.

Delhi’s all-time high peak power demand of 7695 MW was registered on June 29, 2022.

Officials from the two power distribution companies — BSES Rajdhani Power Ltd (BRPL) and BSES Yamuna Power Ltd (BYPL) — told agencies that despite the soaring demand, both entities successfully met the peak power demand in their respective service areas.

Delhi is reeling under a severe heatwave, with the Indian Meteorological Department (IMD) expecting Monday’s temperature to settle around 45 degrees Celsius, a day after Najafgarh in southwest Delhi reached a sweltering 47.8 degrees Celsius—the highest in the country so far this season.

On Monday, Delhiites woke up to a warm morning, with the minimum temperature settling at 29.2 degrees Celsius, three notches above the season’s average, according to the IMD.

Earlier on Sunday, in the national capital, Pitampura recorded 47 degrees Celsius and Mungeshpur 47.7 degrees, at least seven notches above the usual temperature for these areas at this time of the year.

Not just in Delhi, the IMD has reported a severe heat wave in parts of Haryana, Chandigarh, Uttar Pradesh, Bihar, Gujarat and Madhya Pradesh.

It issued a red warning for Delhi, Chandigarh, Haryana, Punjab and Rajasthan, stressing the need for “extreme care for vulnerable people.” An orange alert was issued for Uttar Pradesh, Bihar and Gujarat, emphasising “high health concern” for vulnerable people, including infants, the elderly, and those with chronic diseases.

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On Rajasthan’s weather in the next few days, Radheshyam Sharma, Director of Meteorological Center, Jaipur, told news agency ANI, “There will be no significant change in temperature in the next 48 hours i.e. the heat wave will continue. But if we look from May 22, the maximum temperature may increase by another 2 degrees Celsius in the next 23 days. That means in the areas where the temperature is currently recording 46 and 47 degrees there is a strong possibility that on May 22 and 23, the maximum temperature may be recorded from 46 to 48 degrees Celsius. This means the severe heatwave situation will last from May 22 to May 25-26.”

With inputs from agencies

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Dr Lal Pathlabs’ Arvind Lal: If you can have an incentive policy for semiconductors why not healthcare

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

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Dr Lal Pathlabs Executive Chairman Arvind Lal believes India’s healthcare policy needs incentives from the government akin to strategies employed in other sectors, especially on the semiconductor front.

In an exclusive interaction with CNBC-TV18 on Monday, May 20, Lal said: “They need to incentivise private people. Give them a special status, like they have to semiconductors. Why not recognise healthcare as a good industry, in which the government can help us in many ways.”

On the lessons learned from the pandemic, Lal said it compelled the firm to radically re-evaluate operational strategies and develop innovative approaches that made them a frontline player in COVID-19 testing.

“We were one of the first labs to be asked by the ICMR (Indian Council of Medical Research) to start testing. And in less than two years, we expanded that to 20 labs in India, where we were doing the RT-PCR, and in the year 1921, we did nearly 35 lakh RT-PCR tests.”

On constraints to the advancement of the healthcare sector, Lal underscored the need for capital and a comprehensive public-private-partnership (PPP) model where the private sector’s expertise and vast reach complement the government’s efforts.

“The government has never used the private arm, which is the biggest in private practice; nearly 70% of patients in India are seen by private people. We can share our experiences with the government.”

On expanding Dr Lal’s presence in southern markets, Dr Om Manchanda, Managing Director of the firm, emphasised a dual strategy of organic and inorganic routes.

While his first preference remains organic growth to build a robust presence and deeper foothold, Manchanda doesn’t discount the inorganic route for expansion.

When questioned about specific acquisition targets, he maintained that evaluations are ongoing. “We continue to evaluate all the time and right now there’s nothing I can share,” Manchanda said.

Dr Lal PathLabs reported a 53% year-on-year (YoY) rise in consolidated net profit at ₹81 crore in the third quarter that ended December 31, 2023, compared to ₹52.8 crore in the corresponding quarter of last year.

The healthcare company’s revenue jumped 10% to ₹5,389 crore in Q3FY24, compared to ₹4,894 crore in Q3FY23.

Shares of Dr Lal Pathlabs had settled at ₹2,535.65 a piece, down about half a percent in trade on Friday.

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

‘Banks are studying it’: DFS Secretary on RBI’s project financing draft guidelines

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

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The Reserve Bank of India’s (RBI) draft guidelines on project financing are under review, and the Department of Financial Services (DFS) may send comments on it, said DFS Secretary Vivek Joshi on Friday, May 17.

Joshi was responding to queries at the ongoing CII Annual Business Summit 2024 in New Delhi.

“All banks are studying this, and they will provide their comments. If they request, we will also send our comments to the RBI,” he said.

The senior government official emphasised that the Department of Financial Services (DFS) is closely examining the draft. “We are studying it. Depending on the conclusions we reach, we will decide if we need to provide comments.”

The official also said feedback from banks is actively being gathered, and the Indian Banks’ Association (IBA) is also reviewing the draft. “Banks are still examining it. They are concerned that they may need to make additional provisions, which is causing some worry,” Joshi noted.

As the review continues, the DFS secretary assured that any necessary feedback will be provided accordingly.

The RBI has proposed tighter rules to govern lending to projects under implementation.

Under these draft regulations, lenders must allocate 5% of the total loan amount as general provisions for existing and new loans. The public has been given time until June 15 to respond to the proposals.

Non-banking financial companies, along with executives from the SBI, PNB and PFC, met with top officials in India’s Finance Ministry, according to a CNBC-TV18 report.

Their grouse: The latest guidelines from the Reserve Bank of India (RBI), which raise the cost of loans for infrastructure projects, will eat into the profit.

The executives, in a meeting with financial services Secretary Vivek Joshi, sought the government’s intervention.

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

Supreme Court reserves verdict in Arvind Kejriwal plea challenging arrest and remand

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

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On Friday, May 17, the Supreme Court reserved its verdict on Delhi Chief Minister Arvind Kejriwal’s petition challenging his arrest by the Enforcement Directorate (ED) in the Delhi Excise Policy case.

A Bench of Justices Sanjiv Khanna and Dipankar Datta reviewed the written record of the case and instructed the ED to submit a chart detailing what new evidence had emerged after the arrest of former Delhi Deputy CM Manish Sisodia to justify the agency’s decision to arrest Kejriwal.

“Arguments heard. Judgment reserved,” the Court stated.

The Court clarified that Kejriwal would be at liberty to apply for bail in the meantime.

Kejriwal was arrested by the ED on March 21 in a case alleging that a criminal conspiracy was hatched by Aam Aadmi Party (AAP) leaders, including Kejriwal, Sisodia, and others, to create loopholes in the Delhi Excise Policy of 2021-22 to favor certain liquor sellers.

The Court recently granted interim bail to Kejriwal until June 1 to allow him to campaign for the ongoing Lok Sabha elections.

The Delhi High Court had earlier rejected Kejriwal’s plea against his arrest, leading to the present appeal before the Supreme Court.

Senior Advocate Abhishek Manu Singhvi, representing Kejriwal, argued that when Kejriwal was arrested, the material currently being cited to defend the decision was not available.

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

India needs new capital market reforms, says Chief Economic Advisor

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

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India’s Chief Economic Advisor (CEA) V. Anantha Nageswaran said on Friday, May 16, that the country needs further capital market reforms to push growth, and market regulators have an unenviable task ahead.

“We are at a point where capital market reforms 2.0 are needed. Markets should be able to finance the equity needs of banks and otherwise too,” Nageswaran said while addressing the industry at the CII Annual Business Summit. He added that some portion of the financing will continue from external sources.

The CEA also said the country needs to have a ballpark estimate of investments for a holistic and comprehensive picture, while also adding that these will be met through a combination of debt and equity.

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Speaking earlier at the event, veteran banker Uday Kotak also said capital markets will be an enormous engine to finance India’s growth. He added that India is fast becoming a nation of investors rather than a nation of savers.

“For somebody like me who started his career 35–40 years ago, when it was essentially a saver-borrower market and not an investor-issuer market, we used to see an export of Indian capital markets,” Kotak said.

Kotak further pointed out that India’s mutual fund industry is now reaching global size. The continued sustainability of capital markets is most important without sacrificing stability, he added.

India’s equity market, which accounted for less than a third of the Chinese market about a year ago, has narrowed its gap with those listed on bourses in Mainland China.

India is currently the fifth-largest stock market in the world and commands a market capitalisation of $4.35 trillion (as of January 2024), which is 50.3% of the Chinese market.

India has seen a series of capital market reforms aimed at improving the efficiency, transparency, and global integration of its financial markets.

Here’s a list of broad key reforms undertaken post-1991:

• The establishment of the SEBI in 1992 as a separate statutory authority for capital market regulation.
• Introduction of electronic trading platforms like the National Stock Exchange (NSE) for improved market efficiency.
• Pledge-repledge system that ensures securities given for margin remain in client accounts.
• Upfront margin requirements for all trades to avoid over-leverage.
• Peak margin system to control excessive leverage in the market.
• Segregation of client funds and securities to protect investors’ interests.
• Integration with commodity markets that brought commodity markets under SEBI’s fold.
• T+1 settlement for quicker settlement of trades.
• Cybersecurity framework to protect market integrity.
• Transparent IPO pricing to ensure fair market practices.

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