Author: Mitali Mohite

Godrej Properties shares hit a new record high: Here’s a chat with the CEO

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

Listen to the Article (6 Minutes)

Shares of Godrej Properties hit a fresh record high on May 6 after the Mumbai-based real estate company beat its annual guidance on booking value and posted record sales for the seventh consecutive year.

At 11:45 am, the share was up nearly 10% at an all-time high of ₹2,816.35 apiece.

In a post-earnings conversation with CNBC-TV18, Pirojsha Godrej, the Executive Chairman of Godrej Properties said he expects a 20% year-on-year growth in bookings to ₹27,000 crore in financial year 2025 backed by strong demand, and a solid project lineup.

This is the verbatim transcript of the interview:

Q: Tell us more about the fourth quarter of FY24 and how do you see growth going ahead.

A: When we look at FY25, a few things give us confidence about being able to meet the ₹27,000 crore booking value guidance we provided, which is about a 20% year-on-year (YoY) growth. Firstly, of course, the market itself is providing us with a lot of support, we are seeing consistently across several new launches, very robust demand levels. Last quarter, for example, we had two of our best-ever launches one Gurugram called Godrej Zenith where we sold over ₹3,000 crore of inventory in just three days, and another called Godrej Reserve in Mumbai, where we sold about ₹2,700 crore worth of inventory in March. So, we are seeing very robust responses to projects by credible developers, and we feel that the kind of business development we did, over the last three or four years has left us well-positioned to have a launch pipeline in FY25 that can support this kind of growth.

The second thing I would add is that in FY24, we have seen a couple of our regions really perform outstandingly well, in the Nation Capital Region (NCR), for example, we had sales growth of 180% and we were able to cross ₹10,000 crore in bookings. In Mumbai, we saw an over 100% growth to ₹6,500 crore. But a couple of our other key markets like Bengaluru and Pune actually had only kind of moderate growth levels. And when we look at our portfolio this year, we feel very confident that all four of our existing major regions will be seeing strong growth and that creates a couple of additional geographies through which we can grow rapidly. Another thing I would like to point out is that in Q4, we entered the Hyderabad market for the first time through the addition of two projects there with a potential booking value of about ₹5,000 crore. So, we have several new geographies that we think can show substantial growth over last year, and even the ones that did perform very well last year, like NCR and Mumbai, given the plans this year, do have the opportunity to grow. So, a combination of all of those things leaves us quite confident that we can meet this relatively large booking value number of ₹27,000 crore.

Q: Your sales have gone up three times – that is just in the last three years, of course, we are talking about the big real estate cycle boom that we saw, do you think growth rates will stabilise now from hereon and the three times number that I spoke about will take a longer time for you to reach?

A: Yes, three times in three years on this larger base might be challenging, but I would not put it totally out of the realm of possibility. I think the sector is booming. We do have a strong project portfolio. I would also like to take this opportunity to say the new CEO for Godrej Properties, Gaurav Pandey is doing an absolutely fantastic job in identifying the way that Godrej Properties must go about leading the sector in terms of growth rates. So, with all of those in place, I do think the an opportunity for rapid growth ahead as well. But of course, execution on this higher base will be much tougher. And we have to be aware that the cycle may change, at least in some markets. So, we have to be ready for all possibilities. And certainly, sustaining the kind of growth rate we have seen in the recent past on this higher base will be challenging. But overall, we have guided that through the cycles, we would expect kind of 20% growth rates, and certainly we would like to see at least that over these next few years, even on this higher base.

Also Read | Godrej Properties Q4 Results: Realtor expects bookings worth ₹27,000 crore in FY25

Q: We were speaking to other real estate players as well. And they indicated that maybe prices will stabilise from hereon because there has been a massive increase already. Do you think that is a possibility, or we will continue to see a minimum amount of price growth every year?

A: I think it’s probably going to be a little different from market to market because what we have seen to date is quite different across markets. So, if I take say NCR and Bengaluru, those two markets have seen the most pricing growth over the last one or two years as compared to somewhere like Maharashtra where Mumbai and Pune have not seen the same kind of pricing growth. So, it would not surprise me if you saw more moderate growth in NCR and Bengaluru for a while and you saw Maharashtra catching up a little bit.

Q: Talk about cash flows and debt. I wanted to understand when you think the company will be able to see a situation where operating cash flows are exceeding the business development expenses. And if it does, what does it do to your debt it has reduced now, what kind of levels are you comfortable with when it comes to debt?

A: I am happy to share we actually saw exactly that situation in the fourth quarter. So, we had a very strong quarter for business development. We added two new projects, as I mentioned in Hyderabad, with a potential booking value of about ₹5,000 crore, we added an exciting new project in the Noida market that has about ₹3,000 crore of booking value and another project in Bengaluru that we had in our system, but we sort of inactive for 10 years, and that has been revived, and that has another potential ₹5,000 crore booking value. So, despite that kind of very strong business development during the quarter, we saw net debt reduce by ₹700 crore due to very strong operating cash flows. We had collections of about ₹4,700 crore in Q4, which is the highest-ever quarter for the company. So, we have already demonstrated in a small way over a short period of a quarter that that is possible, we are very confident that operating cash flows will grow rapidly. You mentioned the growth rate in bookings. But our operating cash flow growth rate over the last four years has been even faster. We have been compounding at about 50% a year to over ₹4,000 crore of operating cash flows in FY24. FY25 looks to be another very strong year for operating cash flows, and we do think that will give us the opportunity to considerably invest in business development. The one thing that we hesitate to talk about too much is whether net debt over the short periods will increase or reduce because our business development numbers are never kind of set in stone, we have that directionally what we would like to do and how we are viewing markets. But then how much actual business development happens as a function of the kind of opportunities we are seeing in the market and how many of them we are able to successfully close.

Q: There has been a development so in terms of you being, the Godrej Properties company being, the development manager for the group’s large Vikhroli land, what do you think it would mean for Godrej Properties in terms of future aspects? What would it mean in terms of addition to your own books?

A: It is not a development because we have been the development manager for the Vikhroli land for over 10 years now. But it’s very important that that was clarified that that relationship will continue exactly as is. It’s a very important and valuable project for Godrej Properties. The Vikhroli land bank owned by Godrej & Boyce is one of the most attractive land parcels anywhere in the country. So, for Godrej Properties to continue to be associated in its capacity as development manager creates a huge opportunity for the company. It’s a project I am personally very passionate about because, in addition to the financial opportunity it provides, I think it’s a wonderful opportunity to really look at urban development at scale, looking at how we can think about sustainable development and look at how we can hopefully have a positive impact at the city level for Mumbai. So really looking forward to continuing to be associated with the Vikhroli development. And very happy to note that we launched our first project under that agreement after several years in the March quarter and saw a good response to that. So hopefully now with greater clarity, we can see a pickup in the pace of activity in development in Vikhroli.

The market capitalisation of Godrej Properties is around ₹76,187.53 crore. Its shares have gained close to 104 % in the past year.

For the entire interview, watch the accompanying video

Catch all the latest updates from the stock market here

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

KEI Industries expects 16% FY25 revenue growth led by strong demand and expanded capacity

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

Listen to the Article (6 Minutes)

KEI Industries, a manufacturer of power cables and electrical wires, aims for 15-16% growth in its revenue during April-March 2024-25 due to strong demand and capacity additions.

The Delhi-based company targets an earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin of 11% for FY25.

The company’s Chairman and Managing Director, Anil Gupta believes the sharp spike in price of inputs such as copper will not affect demand much, and a pass-through clause with customers for any cost increases means the impact on margins will also be limited.

“The ongoing projects will not stop just because some commodity prices have gone up. And those contracts have limited time period for execution. Otherwise, there are penalties attributed to them. The pauses are always temporary in new order booking,” he noted.

The company has seen healthy order booking in April as well despite the rise in commodity prices, he pointed out.

KEI’s Silvassa facility is now operational, and the one in Bhiwadi will start by June 2024. The first part of the Sanand facility will be operational by April or May 2025.

Also Read | KEI Industries: Rising metals prices passed on, could temporarily affect demand

Gupta expects exports also to grow substantially. In the last financial year, the company grew exports by 58%, and this year (FY25), it can grow by 50% given that they have a healthy order book as well as enquiry flow.

The company currently has order book of about ₹3,500 crore.

“In our type of business order booking numbers will never be too big because our engineering, procurement, and construction (EPC) business is small. For the cable business, we are taking the orders and maximum within 3-4 months we are executing it. In retail business, orders are coming, and they are executed maximum within 15 days, and they are never reflected in the order book. So, order book largely relates to Business-to-business (B2B) orders and EPC orders,” he added.

Bidding pipeline is strong in the wire and cable business, and in the EPC business the company does not bid for business over ₹500 crore, which is already in place.

In the domestic as well as export market, the bidding to EPC market as well as utilities is quite strong.

KEI posted a 22% jump in profit to ₹169 crore in the January-March period.

Also Read | KEI Industries Q4 Results: Profit, revenue show healthy growth with share price in the green

The company’s market capitalisation is around ₹36,236.45 crore. Its shares have gained close to 118 % in the past year.

For the entire interview, watch the accompanying video

Catch all the latest updates from the stock market here

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

Foreign investors to stay wary of Indian market until election: Richard Harris

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

Listen to the Article (6 Minutes)

Richard Harris, Chief Executive at Port Shelter Investment Management says the Indian equity market has been doing well, but the next big trigger could come post-elections when foreign institutional investor (FII) flows return.

“I think that it does look as if it’s gonna be a Modi 3.0. I think anything else would be an upset to the market. Governments that have been in power for two cycles usually don’t change too much in the third cycle, unless they’re under stress. And at the moment, the government really isn’t under stress,” he noted.

Despite the near certainty about the election outcome, foreign investors, he says, are always cautious ahead of big events. They want to see what the land is going to be like afterwards. “I think it will be business as usual within India, and foreigners would probably think the same post-election,” Harris said.

Discussing the US Federal Reserve’s latest rate actions, Harris said the market now expects the Fed to look forward, not backwards, to anticipate inflation and a slowdown in growth.

However, interest rates are not what the market is most concerned about anymore.

“At the moment, the narrative is growth; we’re looking at growth in earnings, we’re looking at the consumer being strong, we’re looking at employment figures being pretty good, which is the employment figures coming out today, which everybody’s going to be looking at. And while people are focusing on growth, I think markets will continue to trend as they are,” he noted.

Also Read | BJP’s Hindi heartland dominance faces test in phase 3 polls

He believes the Fed don’t want to lower interest rates unless necessary because the market is already doing quite well. Also, keeping rates as they are, gives them the option to lower them later if needed.

Also Read | ING reaffirms its forecast for the first Fed rate cut in September

For the entire interview, watch the accompanying video

Catch all the latest updates from the stock market here

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

Fino Payments Bank sees decline in debit card use, UPI transactions soar

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

Listen to the Article (6 Minutes)

Mumbai-based Fino Payments Bank said that while the use of debit cards is going down, transactions through the Unified Payments Interface (UPI) surged over the past year.

In an interview with CNBC-TV18, Rishi Gupta, Managing Director & CEO of Fino Payments Bank, provided insights into the customer profile, revenue growth projections, and the shifting trend toward UPI and other digital transactions.

UPI, he said, has become a major spending platform for customers.

“Our UPI transaction volume has grown by 175% on a year-on-year (YoY) basis; debit card, in particular, has grown by 5%, but the ecosystem is moving from debit cards to UPI now and UPI volumes are substantially going up in the entire ecosystem,” added Gupta.

The payments bank expects the growth seen in March to continue into April, and has a guidance of over 20% for the financial year 2024-2025.

Also Read | Fino Payments Bank seeks Small Finance Bank license from RBI

Gupta said that besides the traditional businesses of CASA (low-cost deposit accounts) and cash management services (CMS), which have grown over 30% in recent years, they anticipate a notable enhancement in the digital business.

He said the share of digital segment in total revenue is expected to improve to 12-15% from 9% now.

“Looking at the three big engines running, CASA, digital and CMS, we expect that the growth should be above 20% in FY24-25,” said Gupta.

Also Read | NPCI International partners with Bank of Namibia to develop UPI-like payment system in Namibia

On April 30, the company reported a 14% increase in net profit to ₹25 crore for the January-March period. The average deposits rose by 49% to ₹1,352 crore in FY24.

The market capitalisation of Fino Payments Bank is around ₹2,433.60 crore. Its shares have gained close to 33% in the past year.

For the entire interview, watch the accompanying video

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

Five Star Business Finance forecasts 30% loan growth for FY25

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

Listen to the Article (6 Minutes)

Chennai-based Five-Star Business Finance, based in Chennai expects its loan book to grow 30% in the current financial year (FY25).

Total disbursements for January-March period grew 20% to ₹1,336 crore from ₹1,110 crore last year.

Lakshmipathy Deenadayalan, Chairman and Managing Director of the non-bank finance company (NBFC) said, “I don’t see any kind of weakness, both in loan growth as well as from collections perspective. The outlook is very strong; especially post COVID we have been giving growth of above 30% and the same growth will continue,” he added.

Deendalayan expects the net interest margins (NIMs) to come down to a steady state of around 15-16% in 2-3 years. The NIM was at 17.19% in the latest quarter versus 18.47% last year.

He pointed out that the NBFC focuses on lending to specific niche segments where traditional financial services are not readily available to customers.

Also Read | Five Star Business Finance forecasts 31-32% asset base growth in FY25

The lender has raised the Capital to Risk (Weighted) Assets Ratio (CRAR for certain users in light of the Reserve Bank of India’s (RBI’s) recent circulars.

CRAR is a measure used by banks to ensure they have enough capital to cover their risks

On loans given out for personal needs, the lender has raised the CRAR to 125% from 100%.

Also Read | RBI issues revised guidance note on operational risk management, extends it to NBFCs

In the January-March quarter, the lender’s profit after tax (PAT) increased by 40% to ₹236 crore.

The market capitalisation of Five Star Business Finance is around ₹21,651.48 crore. Its shares have gained close to 42% in the past year.

For the entire interview, watch the accompanying video

Catch all the latest updates from the stock market here

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

Eveready targets high single-digit revenue growth in FY25

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

Listen to the Article (6 Minutes)

Kolkata-based Eveready Industries India is targeting a high single-digit revenue growth in the current financial year (April-March 2024-25).

The company hopes to grow its battery business revenue by 5%, flashlight by 10-12%, and lightings by 20% during the year.

The earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin guidance has been retained at 10% to 12% versus 10.8% clocked in FY24.

Suvamoy Saha, Managing Director of Eveready Industries India said the aim is to double the revenue in 3-4 years by focusing on existing brands and distribution networks. and diversifying into new product categories.

Also Read | Eveready looks to double revenues within 4 years with minimal investments

While the company is open to considering acquisitions to expand business, Saha said action will begin only once the current businesses are consolidated.

Eveready posted a profit of ₹8 crore in January-March quarter versus a loss of ₹14.39 crore last year.

Also Read | Eveready Industries Q4 net profit at ₹8 crore amid sluggish rural demand

The market capitalisation of Eveready Industries India is around ₹2,513.16 crore. Its shares have gained close to 14.75% in the past year.

For the entire interview, watch the accompanying video

Catch all the latest updates from the stock market here

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

Bajaj Auto aims to outpace industry growth with focus on higher-end segments

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

Listen to the Article (6 Minutes)

Bajaj Auto will maintain its lead in the domestic two-wheeler market, growing at least two to three times the industry average, particularly in the higher-end segments, according to Rakesh Sharma, the Executive Director of the company.

“The performance (in March and April together) is driven by the top half of the industry, which is growing at a slightly faster rate than the bottom half. And we are continuing to lead in the top half by a fair margin,” he said.

While sales typically slow down in May and June, Sharma says, “I think we will continue to outpace the industry, particularly in the top up by about two to three times. So I would say in the domestic business, we should again see a similar performance as in April in May.”

Bajaj Auto’s total sales in April grew 17% year-on-year (YoY) to 3.88 lakh units. Domestic sales were up 17% YoY at 2.49 lakh units, while exports grew 18% YoY at 1.39 lakh units.

The company wants to increase its market share in the higher-end market segment by introducing improved products and setting competitive prices.

“We are a tad below the leader, but I must point out that when we started the last financial year (FY24), we were 10 percentage points away from leadership in the top half. We are now 1% point away and of course; we will be thrust to ensure that we get to the number one spot in the top half,” added Sharma.

Also Read | Bajaj Auto strong Q4 show gets the company three target price hikes — Should you buy?

Bajaj Auto is all set to announce a new lineup of products starting tomorrow when it launches its biggest Pulsar.

Sharma expects the new launch to not only bring in volumes in the top segment but to boost the Pulsar brand in general.

Among export markets, Nigeria, which is significant for Bajaj with a large market share, is currently the only one that remains a concern.

“Nigeria is still struggling with finding an equilibrium on the currency side, which is having a dampening affecting on retail sales there,” Sharma noted.

Also Read | Bajaj Auto expects to grow faster than the industry as it nears entering Europe

On April 18, Bajaj Auto reported a 35% jump in its net profit over last year at ₹1,936 crore for the January-March period.

Also Read | Bajaj Auto Q4 results: Net profit jumps 35% to ₹1,936 crore; auto major declares dividend of ₹80 per share

Bajaj Auto’s market capitalisation is around ₹2,53,773.00 crore. Over the past year, its shares have risen by nearly 101%.

Automakers like Maruti Suzuki, Mahindra and Mahindra, Tata Motors, Bajaj Auto, and Hero Motocorp, along with others, share their sales numbers every month on the first day of the month.

For the entire interview, watch the accompanying video

Catch all the latest updates from the stock market here

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

ING reaffirms its forecast for the first Fed rate cut in September

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

Listen to the Article (6 Minutes)

ING maintains its forecast that the US Federal Reserve will hold off on any changes to its monetary policy in the near term, with the earliest possible rate cut expected in September.

“We still think 75 basis points is on the table. We’re a little bit more aggressive than the market, but not not hugely so,” said James Knightley, Chief International Economist at ING, in interview on CNBC-TV18.

“We need the data and it’s not just one or two months of data to be justifying record. We need to see three or four months. So that would mean, September is the earliest opportunity for a rate cut…but that rate hikes scenario does appear to have taken off the table,” he said.

Knightley pointed to robust recent economic data as a contributing factor to the stability in policy outlook.

Price increases over the last quarter were double the normal rate, and the strong job market added over 800,000 jobs in the first three months alone, coupled with sustained consumer spending, all supporting the case for a cautious approach to rate adjustments, he noted.

Also Read | The latest signal from US Fed is soothing for the markets

It is important to wait for at least three consecutive months where core inflation increases by 0.2%. Instead, it has consistently been higher at 0.4% for the past three months.

The unemployment rate stands at 3.8%, but it needs to rise above 4%, potentially reaching around 4.2% by September, for the Fed to consider making a move at the Federal Open Market Committee (FOMC) meeting in September.

“What is more important for US inflation and keeping inflation sustained is what happens to wage pressures because in a service sector economy, the biggest cost input is the cost of labour and if the jobs market is weakening, wage pressures are becoming more subdued there is perhaps less risk of inflation staying high for a prolonged period into next year,” he noted.

Also Read | US Federal Reserve holds steady on interest rates, signals potential future cuts

For the entire interview, watch the accompanying video

Catch all the latest updates from the stock market here

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

Maruti Suzuki likely to begin mass production of EVs for India in FY26: RC Bhargava

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

Listen to the Article (6 Minutes)

Maruti Suzuki India will likely begin mass production of electric vehicles (EVs) for the Indian market only in FY26 (April-March 2025-26), said RC Bhargava, Chairman of the country’s largest passenger car maker.

In an exclusive interview with CNBC-TV18, Bhargava said the company’s best-ever sales performance is being driven largely by the sport utility vehicle (SUV) segment as “it will be a while before the entry-level segment revives”.

He does not foresee the need to raise product prices this year given the cost-cut initiatives are working in their favour. However, Bhargava feels it is “futile to try and predict margins in such uncertain times.”

Below are the excerpts of the conversation:

Q: Could you just run us through the performance across segments? Where have you seen the maximum strength, where have you seen pick up and what do you expect for FY25?

A: In the last two years what has been happening is that the SUV segment has been the fastest growing segment. The bulk of our growth has also come from that segment, whether in numbers, topline or profits.

The entry-level segment has not revived, in fact, it has gone down a bit. I think it will take maybe a couple of years more before we see any movement there.

Q: As we start a new financial year, what is your expectation for the SUV segment? Is it expected to remain as strong as it has been last year?

A: The trend will continue this year at least with the SUV segment leading the entire sales of cars in India. I don’t think there is any reason to think that there will be a change in consumer thinking or behaviour regarding what they want in this segment.

As I said the entry-level segment, the small car segment buyers are still not coming back to the car market. Amongst those who buy cars in the more expensive brackets, the sedans fundamentally are losing ground to the SUVs and I don’t see this trend changing.

Q: Could you tell us what Maruti’s plans, and ambitions are on EV side in FY25?

A: FY24-FY25 we are not going to have very much in the way of electric cars at all. The plan is to start production towards the end of this financial year and mass production follows a little bit after the start of production. Also, I believe the commitment is that the bulk of the first lot of production will be exported to Europe. So, the domestic market will get electric cars in numbers from Maruti only after April 2025.

Also Read | Maruti Suzuki will have to offer more discounts, says analyst after Q4 results miss estimates

Q: Commodity prices have moved higher recently, and forecasts show that across the board, commodities will remain pretty strong. Is the market strong enough to take price increases as and when it is required? What’s your sense? Can you improve on these margins? The Street in the fourth quarter was expecting a margin of about 13.5%. Will the direction of travel be in that 13% plus kind of range?

A: It is still not very clear what is going to happen to commodity prices. Some items are going up, but some items are not going up, they are still coming down. What the net result will be, I think you will have to wait a bit longer to see the impact of the Iran-Israel situation, and what happens to China.

If electric car sales continue to fall the world over, the total car market will come down globally. This will mean less demand for various materials and that could also have an impact on material prices. If the Yen continues to weaken against the dollar, it always helps us in terms of material costs. Other factors which are important are that as a company, we have to continue our efforts to reduce costs everywhere.

Also Read | Maruti Suzuki declares dividend of Rs 125 per share, the highest-ever in its history

Catch all the latest updates from the stock market here

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

UCO Bank targets 12-14% credit growth in FY25, margin of around 3%

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

Listen to the Article (6 Minutes)

UCO Bank is targeting credit growth of around 12-14% and net interest margin (NIM) of 2.9-3.0% for the the current financial year (FY25).

The bank had a good January-March performance with a jump in margin and improvement in asset quality.

Ashwani Kumar, MD & CEO of UCO Bank expects gross non-performing assets (GNPA) at around 2.75% and net NPA of 0.9% in FY25.

Kumar said while the bank is well capitalised, the board has approved a ₹400 crore fundraising to help bring down the government stake in the bank.

“Since our government holding is 95%, to bring it down to 75% we have taken Board approval and after the approval of the AGM, we will go to the market at an opportune time, and in multiple tranches, not at one go,” he said.

Below is the verbatim transcript of the interview:

Q: What are your targets for FY25 when it comes to loan growth when it comes to names, and at the same time when it comes to your asset quality?

A: The target for the current year’s credit growth will be around 12-14%; last year also did a growth of around 16%. So, 12-14% growth target will be there. Net interest margin (NIM), we have given a guidance of 2.90-3% and we will continue with that guidance for this year. We achieved an NIM of 3.12%. Now the NIM will continue to be around 2.9-3%. So far as asset quality is concerned, we have already improved our asset quality to 3.48 from 4.78 last year, and we will try to make it to 2.75 in this year, and net NPA, our endeavour will be to bring it further down from 0.89%.

Q: Two-part question on the asset quality. Slippages ₹476 crore is marginally lower as compared to ₹483 crore last quarter. What is your outlook on slippage going ahead?

A: If you look at our slippages in the year 2022-23, it was around 1.70% over slippage ratio, and this current year our slippage ratio is around 1.10% and our endeavour will be to bring it further down maybe somewhere around 1% slippage ratio in this year and we are targeting upgradation of around 25% of the account which slipped last year.

Q: Slippages, you expect this figure to probably continue. Are you guiding for maybe ₹470-450 odd crore in the next couple of quarters. Will it rise, will it reduce. What is the quarterly run rate?

A: It will be in the same range because the book is also growing, annual percentage will come down and slippages will be in the same range expectedly though we don’t have any large chunky accounts where we expect some slippage, but there are certain agriculture accounts, MSME accounts which are slipping and then getting upgraded also. So, slippages will be in this range.

Q: I wanted your thoughts on your credit deposit ratio. That has increased. What is the number that you would be comfortable with going forward?

A. If you look at our CD ratio, it was around 64% in the last financial year and now it is around 71%. Our endeavor will be to reach 75% CD ratio during this year.

Q: For the fundraise, you have an approval for about ₹400 crores and multiple modes are open to be explored. Could you give us a sense of the time at which you are looking to raise funds? What could be the amount? And what will you be looking at; a QIP or an FPO? 

A. If you look at our CRAR (capital to risk-weighted asset ratio), it is around 17%. As far as the growth part is concerned, the bank does not need further capital raise. But since our government holding is 95%, to bring it down to 75% we have taken Board approval and after the approval of the AGM, then we will go to the market at the opportune time in multiple tranches, not at one go.

For the entire interview, watch the accompanying video

Catch all the latest updates from the stock market here

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