Month: April 2022

IDFC First Bank reports net profit of Rs 342.7 crore on lower provisions, misses estimates

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

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Private lender IDFC First Bank on Saturday reported a 168 percent year-on-year (YoY) jump in net profit at Rs 342.7 crore for the fourth quarter ended March 31, 2022, driven by strong growth in core operating income and lower provisioning.

In the corresponding quarter last year, the company posted a net profit of Rs 127.8 crore. CNBC-TV18 Polls had predicted a profit of Rs 388 crore for the quarter under review.

The net profit for FY22 de-grew by 68 percent YoY basis to Rs 145 crore as compared to Rs 452 crore in FY21, due to higher provisioning in Q1-FY22 to manage the COVID-19 second wave impact on its assets.

Also Read: Wipro Q4 results: Revenue meets estimates, attrition rises

Net interest income (NII) grew by 36 percent YoY to Rs 2,669 crore in Q4 FY22, up from Rs 1,960 crore in Q4 FY21. The NII for FY22 grew by 32 percent YoY to Rs 9,706 crore, up from Rs 7,380 crore in FY21.

Net interest margin (NIM) of the bank (quarterly annualized) improved to 6.27 percent for Q4-FY22 from 5.17 percent in Q4-FY21. NIM for FY22 stood improved to 5.96 percent as compared to 5.03 percent in FY21.

The capital adequacy of the bank was strong at 16.74 percent with a CET-1 Ratio of 14.88 percent as of March 31, 2022, against the regulatory requirement for the Capital Adequacy Ratio of 11.5 percent with a Tier-I Ratio of 9.5 percent. The Capital Adequacy Ratio improved from 13.77 percent with CET-1 Ratio at 13.27 percent as of March 31, 2021.

Also Read: HUL Q4 results: Net profit rises 8.6% YoY to Rs 2,327 crore, turnover crosses Rs 50,000 crore; beats estimates

Fee and other income increased strongly by 40 percent YoY to Rs 841 crore in Q4 FY22 from Rs 600 crore in Q4 FY21. The increase was 13 percent on a sequential basis. During FY22, the fee and other income grew by 66 percent YoY to Rs 2,691 crore from Rs 1,622 crore in FY21.

Core operating income (NII + fee and other income excluding trading gains) increased by 37 percent YoY to Rs 3,510 crore in Q4-FY22 from Rs 2,561 crore in Q4-FY21 aided by strong NII and fee income growth.

During FY22, the core operating income grew by 38 percent YoY to Rs 12,397 crore from Rs 9,002 crore for FY21. Fee income growth was contributed primarily by the fees related to loan sourcing, higher transaction led fees, distribution and wealth management fees etc. Retail fees constitute 84 percent of the overall fees for the quarter.

Also Read: Yes Bank back in black with Rs 367 crore net profit in Q4, beats estimates

Operating expense grew 24 percent YoY at Rs 2,674 crore for Q4-FY22 as compared to Rs 2,156 crore for Q4-FY21 on account of increased business. For FY22, the operating expenses are up by 36 percent at Rs 9,644 crore as compared to Rs 7,093 crore in FY21.

Core operating profit (excluding trading gains) grew by 106 percent YoY basis to Rs 836 crore for the quarter Q4-FY22 from Rs 405 crore in Q4-FY21. During FY22, the core operating profit grew by 44 YoY basis to Rs 2,753 crore from Rs 1,909 crore in FY21.

Provisions were lower by 36 percent and 6 percent on a YoY and QoQ basis respectively at Rs 369 crore in Q4-FY22 as compared to Rs 580 crore in Q4-FY21 and Rs 392 crore in Q3 FY22. The bank has not utilised the Covid provision during the quarter and carries Covid provisions of Rs 165 crore as of March 31, 2022.

Also Read: HFCL Q4 net profit falls 21% to Rs 68 crore

The bank is broadly on track to meet the asset quality and credit cost guidance. Based on the improved portfolio performance indicators, the bank is confident to achieve its credit cost guidance for FY23 at 1.5 percent on funded assets.

CASA Deposits posted growth of 11% YoY to reach Rs 51,170 crore as of March 31, 2022, as compared to Rs 45,896 crore as of March 31, 2021. Current Account Deposits now contribute to 18.29 percent of total CASA as compared to 11.80 percent as of March 31, 2021.

CASA Ratio was at 48.44 percent as of March 31, 2022, as compared to 51.75 percent as of March 31, 2021. The average CASA Ratio for FY22 improved to 49.88 percent as compared to 41.50 percent for FY21.

Also Read: SBI Card Q4 net profits zoom three-fold to Rs 581 crore

Customer Deposits increased by 13 percent to Rs 93,214 crore as of March 31, 2022, as compared to Rs 82,725 crore as of March 31, 2021. As of March 31, 2022, the bank has 641 branches and 719 ATMs (including recyclers) across the country.

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

These states are taking critical measures to stave off electricity crisis

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

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India is currently going through a power crisis due to dwindling coal supply. It is likely to get worse as power demand is going north amid intensifying heatwave across the country. The rising temperatures are burdening the thermal power plants that are already struggling with low coal stocks. Due to heat wave, depleted capacity, and technical snags, several states are facing power crisis pushing them to take extreme measures to meet the demand and regulate the shortfall.

Here is a list of states where the power crisis is getting intense by the day

Delhi: According to Delhi Power Minister Satyender Jain, coal shortages are seen in several power plants located in the NCR region. For the first time, Delhi’s peak power demand reached 6000 megawatt (MW) due to an unabated heatwave. The Delhi Government said that the power crisis amid coal shortage could lead to power cuts in important establishments in the capital such as Metro trains and hospitals. Jain has written to the Centre requesting adequate coal availability in the power plants that supply electricity to Delhi.

Uttar Pradesh: The state has a 3000 MW deficit as the demand is of around 23,000 MW and the supply is just 20,000 MW. This has led to load shedding in rural areas and smaller towns of the state. Currently, electricity is being supplied in rural areas on an average of 15 hours 7 minutes against the scheduled 18 hours. UP Power Minister AK Sharma said that electricity is being procured from other states such as Sikkim, Himachal Pradesh and Madhya Pradesh to ensure scheduled supply of electricity.

Maharashtra: The shortage has been less severe over the past week compared to earlier in the month. The peak demand had gone over 25000 MW. Maharashtra has large outstanding dues to coal companies and the Centre is blaming it for non-payment. The state has been implementing load shedding since early part of April because of a deficit and additional steps are being taken to compensate for the power shortage. Vidarbha, Marathwada, and Khandesh and many parts of rural Nashik, Ahmednagar, and parts of Marathwada including Aurangabad faced power cuts earlier in April.

Punjab: Electricity demand in the state has shot up by 40 percent, according to state’s power minister Harbhajan Singh, reported Livemint.  Farmers protested against the irregular power supply by blocking traffic in Punjab’s Hoshiarpur. Several areas especially rural areas in the state are experiencing 10 to 13-hours power cuts.

Jharkhand: The state usually has an energy demand of 1,800-2,100 MW during peak hours but it has now surged to 2,500-2,600 MW. Jharkhand Chief Minister Hemant Soren admitted that the state has not been able to meet the energy demand and said that additional funds have been made available to procure electricity from the market.

Rajasthan: Power demand in the state has shot up to about 2,800 lakh units daily from 2,131 lakh units last year. Due to a backlog in supply, several areas in the state are facing power cuts of up to 3-7 hours. Rajasthan Power Minister Bhanwar Singh Bhati said the state is capable of catering to only 70 percent of the power demand leaving a 30 percent deficit of about 3000 MW. He mentioned the shortage of coal as the reason and said the Centre is not providing sufficient coal to Rajasthan. To combat the situation Rajasthan Government has appealed to the industry/factory owners to cut down electricity usage by 50 percent.

Haryana: Haryana is facing severe power shortage and even urban areas like Gurugram are facing power cuts of up to 6 hours. Heatwave and infrastructure projects have been cited as the reason behind the rise in demand and a shortfall in supply. As per a TOI report, Haryana Power Minister Ranjit Singh Chautala has said that the current daily demand is about 8,100 MW and the shortfall was over 300 MW.  He said uninterrupted power will be available to consumers within next few days as the gap will be covered by Saturday.

ALSO READ: Centre & states play blame game over power crisis
as intense heat broils the country

Odisha: Odisha, which is known to be a power surplus, state has been facing a shortage of around 400 MW daily. It has an average need of 4,150 MW and peak demand of 4,450 MW. According to the state officials, the shortfall is temporary, and the situation will improve within a week by the end of April.

Bihar: The state is facing a power deficit of 200-300 MW per day because of the sudden increase in demand, heatwaves and an early arrival of peak summer. The generation of hydropower has also suffered.  The state’s daily demand of electricity is close to 6,000 MW. Sanjeev Hans, Secretary of Energy Department, Bihar said, the government, is purchasing about 600 MW of electricity almost every day at higher rates to meet the demand, as per a TOI report.

ALSO READ: Explained: Coal stocks down, India is staring at possible power crisis in hot summer

Andhra Pradesh: The state is facing a demand of 210 million units per day and currently there is a shortfall of about 50 million units of power per day. To combat the crisis, the discoms in the state are implementing a two-day ‘power holiday’ for industries per week. Andhra Pradesh is the first state to implement a power holiday after Gujarat.

Kerala: The state is also witnessing long power cuts. The production of electricity in the state has reduced by 400MW due to the coal crisis. The Kerala State Electricity Board has decided to impose power cuts to regulate the shortfall.

ALSO READ: India reels under longest April heat wave in last 10 years

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

DoT exempts handsets, smart watches from mandatory testing regime; addresses regulatory overlap

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

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The telecom department has exempted certain products including mobile user equipment, mobile handsets, and smart watches from the ambit of its mandatory testing ‘MTCTE regime, removing a regulatory overlap that existed, an official release said on Saturday.

The exemptions on these widely-used products will reduce the compliance burden and will enable the industry to roll out their products faster, it said adding that the move will also reduce import delays.

“DoT (Telecom Department) in consultation with MEITY examined the issue and has now decided to exempt the following products from the ambit of MTCTE regime: Mobile User Equipment / Mobile handset (Mobile phone), server, smart watch, smart camera, PoS Machine (Point of Sale Devices),” the release said.

Also Read: Telecom subscribers’ base down to 116.6 crore in February, shows TRAI data

Ministry of Electronics and Information Technology (MEITY) carries out Compulsory Registration of specified goods — such as laptops, wireless keyboards, PoS machines and other electronic equipment — under the Electronics and Information Technology (Requirement for Compulsory Registration) Order, 2012.

Department of Telecom (DoT) has specified ‘Mandatory Testing and Certification of Telecommunication Equipment (MTCTE)’ under Indian Telegraph (Amendment) Rules, 2017 for equipment capable of being used for telecommunications. Amid increasing convergence of technology, regulatory overlap was noted regarding certain products such as smart watch, smart camera amongst others.

Representations were also received from industries and associations regarding the overlapping jurisdiction of DoT and MEITY. “It was highlighted that such overlap is a deterrent for the timely launch of new products. It also increases the compliance cost for the industry,” the release noted.

Also Read: States doling out needless subsidies are on brink of fiscal collapse, warns report

The removal of regulatory overlap in mandatory testing for these products is a “regulatory reform” that will improve the ease of doing business for electronics manufacturing companies and contribute towards making India a $1 trillion digital economy. “The gazette notification in this regard will be issued in due course,” it said.

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

India’s visual effects industry zooms towards becoming a global hub

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

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The COVID-19 pandemic put a stop to film and television production for almost two years and the visual effects or VFX industry as a result too took a big hit. The pain was felt not just in Hollywood and UK, which lead the VFX game, but in India as well where VFX is fast becoming a staple in gaming, cinema, and television.

Today, the sector is on a rebound and the current Rs 12,000 crore business, as per I&B Ministry estimates, is expected to clock 30 percent growth over the next two years according to a report by BCG.

It’s not just home-grown filmmakers and television production houses that are making a beeline for Indian visual effects designers. They’re a big name in Hollywood with over 100 VFX artists from India receiving due credit in Paramount’s latest instalment, ‘Sonic Hedgehog 2’. This was not their first rodeo, as many of them had worked on the movie’s first instalment in 2020.

“There is a lot of talent and creativity already available in India, we are taking a lead now. From four years back to now, not only has the volume of work coming down to India increased but even the complexity levels of the sequences we are delivering have increased,” said Payal Vijay Selvam, Head – Creative Operations, MPC VFX.

Also Read | Hold your beer. The war is making your drink and chakhna costlier

Even then, the Indian industry is just scratching the surface. A report by Boston Consulting Group says that India’s VFX and animation industry has less than 10 percent share of the global market but has the potential to scale up to 25 percent by this decade.

Speaking to CNBC-TV18, Biren Ghose, Country Head, Technicolor Creative Studios said, “We are seeing 103 percent growth just in the last year, in 2021. Of course, in the pandemic last year live-action shoots did suffer but over the next two years, in the report that just got published in March 2022, we are seeing that this will be a one trillion rupee industry.”

The growth is visible not just in big-ticket projects, but in the number of people choosing it as a career path. “The age group if you see, the whole VFX industry, the average age will be around 20-25, we are really passionate and in a very unique state, which is not there in other countries,” Arnab Sanyal, Head – Compositing, MPC VFX told CNBC-TV18.

In the last two years alone, the Indian visual effects industry has created 60,000 jobs and with studios like MPC in Bengaluru going on a hiring spree, another 1,20,000 jobs could be created in the coming years.

The challenge is getting the right talent. Highlighting the issue, Sargurunathan Sivalingam, Supervisor – Assets, MPC VFX said, “We need to increase the number of artists, we are getting many VFX movies into the industry but we are struggling to get the right skill set, the number of artists is very less.”

With the government establishing a dedicated task force for the VFX segment in India, estimates show that the industry is on track to double its growth and reach a valuation of Rs 18,000 crore in the next two years.

Demand is certainly not an issue but a lack of skilled talent could pose a challenge. However, there is no dearth of dreamers in this industry. If the government and the industry come together to ensure up-skilling and better infrastructure, the sky is the limit.

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

Jeff Bezos becomes world’s third richest after losing $20 billion in Amazon stock plunge

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

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Jeff Bezos lost $20 billion of his wealth on Friday bringing him down to the third spot in the Forbes list of world’s richest people. The drop came after Amazon’s stock tanked following a downbeat earnings report. The company’s stocks fell by 14 percent as it reported a massive loss of $3.84billion in the last quarter. As of Saturday, Jeff Bezos’ net worth was valued at $150.1 billion down from $170.5 billion on Thursday.

Bezos is now behind No. 2 Bernard Arnault, the French luxury tycoon whose net worth is estimated at $157.7 billion by Forbes.

The top spot is occupied by Tesla CEO Elon Musk, who has a net worth of $246 billion and has just acquired Twitter for $44 billion.

Bloomberg Billionaires Index reported similar numbers. The index showed that the world’s 500 richest people lost a total of more than $54 billion on Friday amid the broader market drop.

Most of Bezos’ fortune consists of Amazon stock as he owns an 11.1 percent stake in the company. Therefore, with a drop in Amazon’s stock price, Bezos’ fortune took a hit on paper. However, he may be able to recover if Amazon’s stock price rises again before he sells his shares.

ALSO READ: Amazon results and outlook fall short as warehouse, fuel costs soar

His wealth has taken a massive blow since it hit a peak of $210 billion last year, making him the world’s richest person at the time as per New York Post report.

MacKenzie Scott, Bezos’ college sweetheart and former wife, who took 25 percent of his Amazon stock in a divorce settlement, also witnessed a $6 billion cut in her wealth dropping to $36.8 billion, according to Forbes.

As per a Dailymail UK report, Bezos has lost about $40 billion from his net worth since the beginning of this year.

ALSO READ: CCI launches antitrust raids on Amazon sellers Cloudtail, Appario

Amazon stunned Wall Street on Thursday as it reported a loss of $3.84 billion, or $7.56 per share, for the first three months 2022. It was in stark contrast to its last year’s first quarter report that reflected a profit of $8.1 billion, or $15.79 per share.

Amazon is contending with higher labour costs following massive hiring made during the pandemic. Also, a surge in inflation may hold back sales for the e-commerce giant this year.

ALSO READ:  When Jeff Bezos spoke about space dream 20 years ago, people laughed

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

PIL has turned into personal interest litigation, says Chief Justice NV Ramana

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

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Chief Justice NV Ramana expressed concern over frivolous litigations in courts and said the concept of PIL has now turned into personal interest litigation and is at times being misused to stall projects or put pressure on public authorities.

Speaking at a joint conference of chief ministers and chief justices of high courts, Ramana said abiding by law and the Constitution is the key to good governance. Prime Minister Narendra Modi inaugurated the conference.

“The rising number of frivolous litigations is an area of concern. For example, the well-meaning concept of public interest litigation is at times turning into personal interest litigation.”

“No doubt, PIL has served a lot of public interest. However, it is sometimes being misused to stall projects or pressurise public authorities.  These days, PIL has become a tool for those who want to settle political scores or corporate rivalry. Realising the potential for misuse, courts are now highly cautious in entertaining the same,” Ramana said.

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

ED seizes Rs 5,551 crore assets from Xiaomi Technology India under FEMA

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

Listen to the Article (6 Minutes)

The Enforcement Directorate (ED) on Saturday seized Rs 5,551.27 crore of Xiaomi Technology India Private under the provisions of the Foreign Exchange Management Act, 1999 in connection with the illegal outward remittances made by the company.

According to ED, the amount of Rs 5,551.27 crore was lying in the bank accounts of the company. Xiaomi India is a wholly-owned subsidiary of the China-based Xiaomi Group.

In February this year, the ED initiated an investigation in connection with the illegal remittances made by the company.  “The company started its operations in India in the year 2014 and started remitting the money from the year 2015. The company has remitted foreign currency equivalent to Rs 5,551.27 crore to three foreign-based entities which include one Xiaomi Group entity in the guise of royalty,” the agency said.

Also Read: Yes Bank-DHFL case: Rana Kapoor, Wadhawans laundered money worth Rs 5,050 crore, says ED

“Such huge amounts in the name of Royalties were remitted on the instructions of their Chinese parent group entities. The amount remitted to other two US-based unrelated entities were also for the ultimate benefit of the Xiaomi group entities,” it said.

“The Xiaomi India is a trader and distributor of mobile phones in India under the brand name MI. Xiaomi India procures the completely manufactured mobile sets and other products from the manufacturers in India. Xiaomi India has not availed any service from the three foreign-based entities to whom such amounts have been transferred,” the agency added.

Further, it said, “Under the cover of various unrelated documentary façade created amongst the group entities, the company remitted this amount in the guise of Royalty abroad which constitute violation of Section 4 of the FEMA. The Company also provided misleading information to the banks while remitting the money abroad.”

Also Read: Explained: Why ED attached Amway assets worth over Rs 750 crore?

Earlier, the ED had summoned Manu Kumar Jain, the global vice president of Xiaomi for questioning in a probe linked to the contravention of the foreign exchange law. Allegations related to the violation of forex laws in the Indian arm of the Chinese company over the last few years are being investigated.

Jain, the former India head of Xiaomi, has been asked to furnish some financial documents linked to the company by appearing in person on Wednesday or sending it through an authorised representative.

Proceedings under the FEMA are civil in nature and the final penalty, post-adjudication, can be at least three times the amount contravened under the law.

Also Read: NSE co-location scam: ED raids brokers’ offices in Delhi, Gurugram

Xiaomi and few other Chinese mobile manufacturing companies were raided by the Income Tax Department in December last year on charges of tax evasion.

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