Demand strong; operating at 90% levels, says Maruti Suzuki’s Shashank Srivastava

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

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Maruti Suzuki has been witnessing strong demand, with bookings and enquiries looking good, said Shashank Srivastava, ED-Marketing & Sales of Maruti Suzuki on Monday. The automaker has been operating at 90 percent production level, he said and added that it is hard to say when it would get back to 100 percent output levels.

Srivastava said, “The demand has been pretty strong, if you look at the demand parameters in terms of the bookings or the inquiries, they have been very strong.”

He added, ” In October, we did about 60 percent of our production, in November about 83 percent and December almost 90 percent. So while the situation seems to be improving on that front, there still seems to be normalcy which we would really like and at what point of time we will get 100 percent of the production, the normalised production is still a question mark because the situation on the supply chain is quite dynamic.”

The automaker has pending deliveries of 2.30 lakh units.

Srivastava said, “The pending bookings being at 2.3 lakhs and the retail, very good at 1.64 lakh in December seemed to indicate that on the demand side, there seems to have been a good strength.”

On the issue of semiconductors, he said some improvement has been witnessed over the past few weeks, but a timeline for complete normalisation of the issue remains unclear.

Over the last year, prices of raw materials used in automobiles have risen. As a result, Maruti Suzuki has taken a price hike this month. However, the price hikes taken till now has not been sufficient to cover the rise in raw material prices, Srivastava pointed out.

He said demand in the rural market has been strong, thanks to normal monsoon this year. A normal monsoon helps put money in the hands of the rural folk, who then spend on consumer durables such as two-wheelers.

Maruti Suzuki has a 62 percent share of the overall passenger car market in India. However, it’s share in the SUV segment is low. The automaker is planning to ramp up the mid-SUV segment, which is a problem area for it. Srivastava said there’s been no slide in footfalls in showrooms except in Mumbai.

Maruti Suzuki plans to introduce electric vehicles (EVs) in 2025. The auto industry in India will witness the roll-out of many versions in the hybrid space in the next three years, said Srivastava.

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Closing Bell: Sensex close to 60,000, Nifty breaches 17,600; Coal India, ICICI Bank lead

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

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The Indian equity benchmark indices closed 1.5 percent higher in the first trading session of 2021 with Nifty breaching the 17,600 mark during the session.

The 30-scrip Sensex closed at 59,183, as it rose 930 points and the Nifty50 index surged 270 points to end at 17,625. The broader markets supported the rally as both mid-caps and small-caps rallied a percent higher. The market breadth favours the advances, with three stocks rising for every one stock that slipped.

Among sectoral gauges, a strong rally was seen in financial and metal indices, while Nifty pharma and healthcare indices ended in the red. Nifty Bank, Private Bank and Financial Services closed over 2.5 percent higher. A sharp uptick in ICICI and HDFC Bank lead Nifty Bank to close over 200-day moving averages. Nifty Metal, PSU Bank closed over 2 percent higher. Nifty Consumer Durables, IT, Auto, and Oil & Gas indexes rose over 1 percent.

Among the 50 stocks on Nifty, 44 ended in the green with Coal India, Eicher Motors, Bajaj Finance, Tata Steel, and ICICI Bank leading the gains, as each scrip rose over 3 to 6 percent. Leading the losses were Cipla, Dr Reddy, Mahindra & Mahindra, Divi’s Lab, and Tech Mahindra.

Nalco surges 2 percent after the management said third-quarter results will beat the second-quarter performance. An 11 percent rise in M&HCV sales for December lifted Ashok Leyland above the 200-day moving average. RBL Bank closed over 5 percent higher today after witnessing a sharp decline last week.

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Risks in merged banks more than in unmerged ones: RBI report

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

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Although systemic risks in the Indian banking sector have significantly reduced from the elevated levels seen during the first wave of the COVID-19 pandemic, the risks generated by merged state-owned banks was higher than of their unmerged counterparts, the Financial Stability Report released by the Reserve Bank of India showed.

The RBI analysed the daily stock returns of 32 bank stocks for each calendar year since 2011 to assess the systemic risk levels in the sector, The Economic Times reported.

The Centre had announced the merger of 10 public sector banks into four entities in 2019 to achieve higher operational efficiency gains and reduce lending costs.

Following the announcement, Andhra Bank and Corporation Bank were merged with the Union Bank of India, Allahabad Bank was merged with Indian Bank, Syndicate Bank was merged with Canara Bank and United Bank of India and Oriental Bank of Commerce were merged with Punjab National Bank.

The merger came into effect from April 2020. Prior to this, Dena Bank and Vijaya Bank were merged with the Bank of Baroda in April 2019 and associate banks of State Bank of India (SBI) were merged with the anchor entity.

Meanwhile, the finance ministry recently informed Parliament that profitability of public sector banks had improved post the mergers, BusinessLine reported.

In reply to a question in the Rajya Sabha, Pankaj Chaudhary, Union Minister of State for Finance, said Bank of Baroda posted a profit of Rs 828.96 crore in FY2020-21 against a loss of Rs 8,339.27 crore in FY2018-19 following the amalgamation of Vijaya Bank and Dena Bank with the major bank.

Similarly, Punjab National Bank posted a profit of Rs 2,021.62 crore in FY2020-21 from a loss of Rs 8,310.93 crore in FY2019-20.

Meanwhile, the RBI’s Financial Stability Report said that even in a severe stress scenario, the capital levels of Indian banks would remain above the prescribed minimum level of 9 percent, the ET report said.

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Delhi High Court extends time for Facebook, WhatsApp to respond to CCI notices in privacy policy matter

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

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The Delhi High Court Monday extended the time for filing replies by Facebook and WhatsApp to two notices issued to them by the Competition Commission of India (CCI) which has ordered a probe into the instant messaging app’s new privacy policy. WhatsApp and Facebook have challenged the CCI’s June 4 and 8, 2021, notices respectively, asking them to furnish certain information for the purpose of inquiry conducted by it.

A bench of Chief Justice D N Patel and Justice Jyoti Singh noted that the Data Protection bill is yet to be finalised and, therefore, adjourned the proceedings to March 30. The court was hearing the appeals of Facebook and WhatsApp challenging its single-judge order dismissing their pleas against the probe ordered by the CCI into WhatsApp’s new privacy policy.

Till then the time to file replies to the June 4 and June 8, last year, notices issued by CCI to the appellants (Facebook and WhatsApp) is extended, the bench said. The court had earlier granted time to the social media platforms to file replies to notices and thereafter, the time was further extended.

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Senior advocate Harish Salve, representing WhatsApp, submitted that the Data Protection bill was tabled in the Parliament and the court had earlier granted time to file replies to the notices till October 11, 2021, but it could not be extended thereafter as the matter was not taken up. Additional Solicitor General Aman Lekhi, appearing for CCI, contended that Data Protection bill is irrelevant to this controversy and that the case does not deal with privacy’ but with the provisions of Competition Act relating to abuse of dominant position and inquiry into certain agreements and dominant position of an enterprise.

Meanwhile, the counsel for Facebook India submitted that he has filed an application seeking to be impleaded as a party to the case. However, the court asked him to file a fresh petition. The case relates to the appeals of Facebook and WhatsApp against a single judge order dismissing their pleas against the probe CCI ordered into the instant messaging app’s new privacy policy.

The division bench of the high court had on May 6, 2021, issued notices on the appeals and asked the Centre to respond to it. The single judge on April 22 last year, had said though it would have been “prudent” for the CCI to await the outcome of petitions in the Supreme Court and the Delhi High Court against WhatsApp’s new privacy policy, not doing so would not make the regulator’s order “perverse” or “wanting of jurisdiction”.

The court had said it saw no merit in the petitions of Facebook and WhatsApp to interdict the investigation directed by the CCI. The CCI had contended before the single judge that it was not examining the alleged violation of individuals’ privacy which was being looked into by the Supreme Court.

It had argued before the court that the new privacy policy of WhatsApp would lead to excessive data collection and “stalking” of consumers for targeted advertising to bring in more users and is therefore an alleged abuse of dominant position. WhatsApp and Facebook had challenged the CCI’s March 24, 2021, order directing a probe into the new privacy policy.

In January last year, the CCI on its own decided to look into WhatsApp’s new privacy policy on the basis of news reports regarding the same.

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

Avenue Supermarts Q3FY22; here’s what to watch in results

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

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Avenue Supermarts’ DMart, a supermarket chain, has given a quarterly update and Rs 9,065 crore is the highest quarterly number that the company has posted in terms of revenue and for perspective its 22 percent growth year on year (YoY) and a quarter on quarter (QoQ) growth of almost 16.5 percent.

Pre-pandemic as well, it’s a growth of 34 percent from Q3FY20 and that’s not all, the companies also opened 17 new stores in the quarter, which is on the higher side as far as their quarterly store opening is concerned and definitely the highest in the Q3 ever since the company listed too.

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However, the stock has corrected about 20 percent from its record high as well and valuations wise, it’s never been cheap and at 115 times FY23 price to earnings, it still continues to be expensive, but nevertheless, if it continues to post record numbers and continue to do well, maybe those valuations will hold on.

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Multiplex cinema stocks react to Omicron curbs; Inox Leisure corrects over 2%, PVR rebounds

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

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Multiplex cinema stocks ebbed on Monday as sentiment turned bearish amid Delhi and Haryana imposing curbs to contain fast spreading omicron variant of COVID-19. The uncertainty took a toll on the stock prices of PVR and Inox Leisure as other states also mull more restrictions just months after reopening of theatres.

The Inox Leisure share price opened in the red on Monday and slipped to day’s low of Rs 344.85 apiece, down 2.4 percent from its previous close on the Bombay Stock Exchange (BSE). The shares of PVR Ltd too started the day on a negative note and declined 3.2 percent to the day’s low of Rs 1,255.90 per share.

Karan Taurani of Elara Securities last week told CNBC-TV18 that if Maharashtra were to announce a complete shutdown, the potential downside would remain at 15 percent and that is where the cinema stocks could bottom out.

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“Maharashtra is 25-30 percent circuit contribution in terms of box office, if it is to announce night curfew then producers would panic and delay the releases, which would be good for the stocks to correct 10 percent from here on,” he said on December 29.

The cinema stocks, however, haven’t bottomed out yet. The shares of both Inox Leisure and PVR began to recover from initial losses in afternoon deals. While Inox Leisure stock rallied almost 1 percent to its day’s high of Rs 356.75 per share on the BSE, the shares of PVR traded more than 3 percent higher, at the time of writing, from the previous close.

However, in the past one month, PVR Ltd shares have witnessed profit-booking and slipped over 7 percent, whereas Inox went down a little less than a percent against the benchmark index BSE Sensex’s rise of 2.65 percent during the period.

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According to Dr. VK Vijaykumar, Chief Investment Strategist at Geojit Financial Services, the Delhi government’s decision to shut down theatres and multiplexes will certainly hit the revenues of these businesses.

“The hit to the revenues of multiplexes is reflected in the reaction of stock prices. Both PVR and Inox Leisure are around 30 percent off their November highs,” he told CNBCTV18.com.

He, however, suggested that the view that the Omicron variant is less virulent, though fast-spreading, is gaining ground. And this may be an indication of the imminent end of the pandemic, he said, adding that if such happens to be the case, the closure of theatres and multiplexes may be short-lived and stock prices will bounce back.

“Multiplex stocks were seeing signs of recovery after 18 months of the gap as vaccination picked-up pace, COVID-19 cases declined and the economy reopened,” Ajit Mishra, VP – Research, Religare Broking said.

The brokerage is of the view that the new restrictions due to Omicron strain will soon be lifted, considering the new variant is less impactful.

“Though it would dent the revenue for the multiplexes in the near term, the long-term growth prospects are still promising. Besides, we expect further consolidation in the industry that would help the big players to strengthen their positioning. Investors may consider accumulating multiple stocks on dips with the long-term view,” Mishra told CNBCTV18.com.

Meanwhile, Elara Securities’ Taurani believes consolidation will happen in single-screen because they are struggling the most in terms of the lock-unlock phase. “Definitely, PVR and INOX would be eying smaller multiplex chains but some steady business has to happen for 3-6 months for mergers and acquisitions to happen,” he said.

So far, apart from Delhi, cinema halls have been ordered shut in the Gurugram, Faridabad, Ambala, Panchkula, and Sonipat districts of neighbouring Haryana until January 12. Cinema owners and even filmmaker Karan Johar’s pleas to reopen theatres with partial restrictions have gone unheard until now. In fact, Twitter users slammed the director-producer for being ‘inconsiderate.’

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

Telecom equipment makers reach Rs 6,200-crore production in first year of PLI; here are the details

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3 Mins Read

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