Category: Business

IndusInd Bank posts Q4 net profit at Rs 953.1 crore

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

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The IndusInd Bank posted a net profit of Rs 953.1 crore in Q4, close to the expectation of Rs 951.6 crore as per a CNBC-TV18 poll.

The gross NPA divergence, as per the bank up to March 2017 stood at Rs 1,055 crore.

The net NPA stands at Rs 745.7 crore versus the Rs 592.2 crore expectations. The gross NPA stands at Rs 1,705 crore versus the Rs 1,498.7 crore expectation, on a quarter-on-quarter basis.
The loan growth stands at 28.2% on a year-on-year basis.

The bank said that no accounts under divergence have been upgraded to standard.

The net profit (GU) stands at 27% with Rs 953.1 crore versus the Rs 751.6 crore year-on-year.

The bank announced a dividend of Rs 7.50 per share. For the financial year 2016-2017, the bank said that the divergence in the provisions in the mentioned term stood at Rs 349.1 crore, the net NPA divergence at Rs 1,001 crore and the gross NPA divergence at Rs 1,350 crore.

In the earnings, the bank claims that the provisions stood at Rs 335.5 crore versus the Rs 236.2 crore expectation on a quarter-on-quarter basis.
The net interest income, as per the results, stands at Rs 2,007.6 crore versus the poll of Rs 1,988.3 crore.

The net NPA expectation, according to the poll, stood at 0.46% on a quarter-on-quarter basis. The bank posted the gross NPA at 1.17%, on a quarter-on-quarter basis versus the 1.16% expectation.

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

Entities with sufficient funds, ability to run Air India can bid, says DIPAM Secretary

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

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Any entity having adequate finances and ability to run Air India can bid for 76 percent stake in the national carrier, DIPAM secretary Neeraj Gupta said today.

The government had last month floated a preliminary information memorandum inviting bidders to buy 76 percent stake in loss-making Air India along with transfer of management control.

An official in the finance ministry said there has been good response from entities in airline industry as well as corporates for buying stake in the debt-ridden national carrier.

“We are not looking for only an airline to take over Air India… Anybody who has (required) net worth and funds can bid for Air India,” Gupta said at an Assocham event here.

The secretary in the Department of Investment and Public Asset Management (DIPAM) said the government has kept financial capacity of the bidder as the main criteria for disinvestment of Air India. The bidder should also have the ability to run the national carrier.

As per the bid document, bidders would be required to have a minimum net worth of Rs 5,000 crore and should have posted profit after tax (PAT) in three of the previous five financial years from the Expression of Interest (EoI) deadline. The last date for submission of the bids is May 14.

The entity acquiring the domestic carrier will have to retain the ‘Air India’ brand for AI’s business operations for a minimum specified number of years on terms to be detailed at request for proposal (RFP) stage.

The bids can be put in by a single player or as part of a consortium. The consortium can be along with a bank, venture capitalist, financial institution or fund.

The official said the government will come out with responses based on the queries received from interested bidders.

He said there should be no concerns about retrenchment as the government will follow best industry practices.

The government would retain 24 per cent stake in the national carrier, and the bidder who buys Air India would have to stay invested in the airline for at least three years.

As per the bid document, the transaction would involve Air India, its low cost arm Air India Express and Air India SATS Airport Services Pvt Ltd, which is a joint venture between the national carrier and Singapore-based SATS.

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

Nestle confirms outlook as volume growth picks up

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

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Food group Nestle confirmed its full-year guidance after organic sales growth accelerated to 2.8% in the first quarter of 2018, helped by improving volumes.

Nestle is among packaged food companies taking action after seeing sales slow as many consumers prefer fresh foods, reacting by cutting costs, divesting underperforming businesses and increasing efforts to innovate with new products.

The maker of KitKat chocolate bars and Maggi soups confirmed on Thursday its target to grow organic sales by 2-4% this year and improve its trading operating margin. It also said it was on track to return to mid-single-digit organic sales growth by 2020.

It also confirmed it expected restructuring costs of around 700 million Swiss francs ($723 million) this year.

Quarterly organic growth of 2.8%, which strips out currency swings and portfolio changes, was ahead of the average estimate of 2.5% in a Reuters poll and up from 1.9% in the final quarter of 2017.

Volume growth picked up to 2.6%, from 1.2% in the final quarter of 2017, but prices rose by only 0.2%, Nestle said in a statement. Price pressures were illustrated by a price row with European retailers.

There were also broadly positive reports from other consumer goods companies.

French yogurt maker Danone on Wednesday reported a 4.9% rise in first-quarter underlying sales, helped by strong demand for baby formula products in China

Anglo-Dutch Unilever reported first-quarter sales that met expectations, helped by volume gains, and maintained its full-year outlook.

SIGNS OF IMPROVEMENT

For Nestle, growth in the Americas accelerated to 1.2% and Asia (AOA), at 4.7%, was also better than the previous quarter, while Europe, the Middle East and North Africa (EMENA) slowed to 2.2%, hit by declining prices, Nestle said.

Kepler Cheuvreux analyst Jon Cox said sales figures were better than feared, highlighting the improvement in the US.

“However, we are now in the execution phase of efforts to accelerate sales,” he said. “While there is an improvement, it is clearly going to take time to accelerate sales for a group the size of Nestle.”

Vontobel’s Jean-Philippe Bertschy said deflationary pressures in Brazil and Europe had led to the weak pricing, but the slightly better-than-expected figures should help market sentiment.

Shares in the group, which have lost around 10% of their value this year, were indicated to open 1.1% higher, according to pre-market indications by bank Julius Baer.

They are trading at around 20 times forward earnings, at a premium to Danone at just under 18 times and in line with Unilever.

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

Walmart likely to retain Flipkart’s top management post deal

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

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Top Flipkart officials will likely be allowed to retain their posts by Walmart if the proposed deal between the firms materialize, a report by Live Mint said.

Walmart, which is looking to buy out 55% stake in Flipkart will retain the management team of Flipkart including CEO Kalyan Krishnamurthy if the deal goes through, the report said.

The US-based retail giant could also take up a share greater than 55% the report said, quoting people familiar with the matter.

The retention of top officials will not be just limited to Flipkart, the report added. It is very likely that the American retail giant may look to retain the top executives serving at the helm of Myntra,  Jabong and PhonePe that are owned by Flipkart.

Under the proposed plans, compensation for some key executives will be paid out over several years to ensure they stay with the company after the deal, the report said.

It would be important for Walmart to retain top executive in Flipkart as it is reported that the retail giant have bigger targets to achieve using the Flipkart deal. The company which is facing stiff competition across the globe from rival Amazon reportedly sees Flipkart as a tool to challenge the e-commerce giant.

Besides gaining higher influence in the Indian market, it is expected that Walmart will use the expertise of Flipkart and its leadership to come out with a global business model that aims for a direct approach towards customer.

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

All SBI ATMs will dispense Rs 200 notes by April-end, says Rajnish Kumar

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

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The cash situation in certain pockets has improved, said Rajnish Kumar, SBI chairman. “Average availability of cash in ATMs has gone up from 74% to 82%,” he said.

Kumar said that the bank will complete recalibrating ATMs with Rs 200 notes by the end of this month.

He further said that lesser deposits were recorded in Telangana which shows that cash wasn’t returning to the system. However, he added that overall, the currency levels at macro was higher than pre-demonetisation.

Earlier, talking about the sudden cash shortage situation in the country, Kumar had said that the Reserve Bank had supplied sufficient cash over the last year.

He, however, had no answer as to why cash withdrawals had seen a sudden spike from January to about Rs 18.29 lakh crore.

After receiving a number of complaints regarding cash crunch in ATMs in several states, the Union Finance Ministry had called a meeting of the RBI, banks and state government officials to discuss the issue.

The rate of cash withdrawal was far more than the cash deposits in banks in Andhra Pradesh, Bihar, Karnataka, Maharashtra, Rajasthan, Uttar Pradesh, Madhya Pradesh, and Telangana.

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

One-day default clause: Experts say there will be resistance at first but system will adjust to it

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

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The Reserve Bank of India (RBI) intends to stay with the February 12 circular, which means more non-performing assets (NPAs) need to be recognised and new could be created because even a one-day default (overdue) payments could require the banks to start a resolution process.

To discuss how this would play out for the banking sector, CNBC-TV18 spoke to PS Jayakumar, MD & CEO, Bank of Baroda and G Padmanabhan, Non-Executive Chairman, Bank of India.

Jayakumar said working with the thought that the February 12 circular is given, we should not fuss about it.

“It is a principle to identify the customer early and try to work a resolution early,” he said, adding that 80-85% of customers having dues over one-day but below 30 days, correct themselves.

Padmanabhan said the one-day default clause looks onerous but any change being brought about in the way things are done would create some kind of disruption. ”Any change faces resistance in the beginning but then system will get used to it,” he said.

“Once an account is recognised as an NPA and getting it back to the standard category is a huge problem,” said Padmanabhan. There is a new process that has been put in place.

“However, to recognise a stress on day one and make sure to do the resolution in 180-day, initially there could be some adjustment issues but the system will get used it, said Padmanabhan.

According to Padmanabhan, the most important point raised by the RBI Deputy Governor NS Vishwanathan in his speech yesterday at Pune was that, “For the same project, if there is raising a money from the capital market and then raising money from the banks, why should they have different set of rules.”

“It is accepted that the capital market and the credit market today work differently but what is sought to be done is to synchronize the two. And I don’t think you can fault that basic objective,” said Padmanabhan.

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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

Expect TCS Q4 revenue to rise 2.3%, says Edelweiss

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

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In big earnings today- a CNBC-TV 18 poll pegs the dollar revenue growth at 2.6 percent for Tata Consultancy Services (TCS). The management commentary on banks, financial services & insurance (BFSI) will be key.

We are predicting 2.3 and it is very much doable, said Sandip Agarwal of Edelweiss in an interview.

“I would expect some improving commentary on BFSI but I would like them to retain the positive commentary on retail and other segments,” he added.

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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

Open for non-airlines to takeover Air India, says Neeraj Gupta

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

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Neeraj Gupta, secretary, Department of Investment and Public Asset Management said the government was not looking for only one airline to take over Air India.

“Airlines can be part of consortium but financial health is important,” said Gupta.

Stressing on the criteria for divestment process, Gupta said that the only condition was a sound net worth and added that PEs and Venture Capital could also participate in the divestment process.

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He further said that the government was currently studying the responses received with respect to Air India divestment. “We have received more responses from non airline players,” he said.

However, he refused to give further details as to which big corporates had come forward for the same.

The Air India divestment process or privatisation has witnessed a lot of twists and turns with a number of airlines expressing interest but eventually denying it.

The state-owned airline has been piling up crores of debt in the past decade. With a debt of around Rs 52,000 crore, the government finally gave its ‘in-principle’ nod to divest a substantial share of the airline on June 28 last year.

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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 to probe hoarding of Rs 2,000 notes and recent spike in cash withdrawals

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

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The government has launched an investigation into the suspected hoarding of Rs 2,000 notes and recent spike in cash withdrawals, reported Business Standard.

The decision comes on the wake of cash crunch experienced in several parts of India, particularly in the states of Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh and Bihar.  The high rate of cash withdrawal from the ATMs across the country had given rise to mass panic.

“The Department of Revenue will establish the reason for possible hoarding of Rs 2,000 notes. There has also been a sudden increase in cash withdrawals, especially in the last 15 days, which will also be looked into,” a senior Finance Ministry official was quoted saying in the report.

According to the official data, there were cash withdrawals worth Rs 294.7 billion from the ATMs and branches as against deposits of Rs 236.5 billion on 16^th April, added the report.

The report also stated that in their briefing to the Prime Minister’s Office (PMO), the Union Finance Ministry informed that around 40% of ATMs in the country were not functioning as of 16th April. And in view of the crisis, the ministry, according to the report held meetings with top bank officials and directed them to fill up the ATMs.

“By Thursday (April 19), around 80% of the ATMs will be functioning across the country, banks have been told to ensure that. The recalibration exercise to support the new design of notes will be ramped up, though not all ATMs require recalibration,” another official was quoted in the report.

In addition, the report said that a committee that included the Economic Affairs Secretary, Financial Services Secretary and RBI Deputy Governor was formed and has been tasked with planning and coordinating the printing and supply of currency.

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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