IMF has raised India’s 2024-25 GDP growth forecast by 20 bps to 6.5%. IMF has pegged the growth for FY24 at 6.7%. For FY26, IMF has raised its India forecast by 20 bps to 6.5%. IMF has also marginally upped the global growth estimate by 10 bps and US growth estimate by 50 bps on the back of what it calls “rather surprising resilience.” For FY24, the Indian government has pegged growth at 7.3%, so IMF is still being conservative about India. RBI had recently revised growth forecast for FY24 by 50 bps from 6.5% to 7.0%.
Larsen and Toubro (L&T) Q3FY24 net profits were up15% at Rs2,947 crore. Analysts had pegged net profits in the quarter at Rs3,304 crore. L&T results are generally seen as a bellwether for the capital goods sector in India and also an indicator of the direction of GDP growth. L&T has greatly benefited from government aggression on capex. There are concerns that the construction enthusiasm will abate around elections as projects are likely to be put off. General elections are expected around May 2024, just 4 months away.
Bharti Airtel added 3.98 million 4G/5G users in November; its best monthly accretion in 27 months, as per TRAI data. However, the only area of concern is that Bharti Airtel added just about 520,000 4G/5G users, its lowest in 18 months. However, Bharti Airtel did lose active subscriber base in November, although the 4.33 lakh dip in active subscribers is much lower than the 12 lakh dip in October. Jio continues to lead on subscriber accretions; adding 34.5 lakh subscribers in November. Vodafone added 9.6 lakh subscribers.
Tata Consultancy Services (TCS) has signed a 15 year deal with Aviva Insurance of UK to transform its UK life business and improve customer experience. The size of the deal was not disclosed, although it is said to be a mega deal for TCS. Aviva and TCS have been partners for over 20 years. Under the new deal, TCS will implement TCS BaNCS to transform Aviva’s end-to-end policy administration and servicing to cover more than 5.5 million policies. For Aviva, it will be managed by Diligenta, the UK based subsidiary of TCS.
Aadhar Housing Finance, owned by global private equity giant (Blackstone), is targeting an IPO to the tune of Rs5,400 crore. The IPO will be made at an indicative valuation of $3 billion. Blackstone acquired Aadhar Housing Finance for nearly $300 million in 2019; betting on the frenetic growth of affordable home finance in India. It was earlier planning a $1 billion IPO in 2022, but had to be shelved due to market volatility. The company will be filing its DRHP with SBI in the next couple of weeks, with additional changes to the IPO.
As banking liquidity continues to remain tight (liquidity deficit of Rs3.50 trillion), the bond markets are now expecting Open Market Operations (OMO) purchases from RBI to infuse liquidity into the system. The deficit is due to the government refraining from spending to keep the fiscal deficit at under 5.9% for FY24, apart from the GST and advance tax outflows. A section of the market also expects CRR cuts, though that does look unlikely due to its implications for funding costs. RBI policy is slated for February 08, 2024.
The NCLT accepted a petition by Zee Entertainment shareholders seeking the intervention of NCLT to force Sony to honour the merger commitment. Last week, Sony had called off the proposed $10 billion merger with Zee Entertainment. Sony has been asked to file a response within 3 weeks. Tribunal did not agree to the argument of the counsel that the NCLT approval was conditional. The next date of the hearing has been set for March 12, 2024. The merger deal was supposed to happen latest by December 21, 2023. Reddy Labs posted 11% growth in net profit at Rs1,379 crore for Q3FY24. The growth was driven by higher market share in existing products in North America and growth in Europe. For the quarter, net revenues grew 6.57% to Rs7,215 crore. The sales growth was on the back of new products performance and base business market share gain in the US and Europe. Its North America revenues grew 9%, Europe revenues grew 15%, while India revenues grew 5% yoy. It is also funding its oncology subsidiary up to Rs650 crore.
