Net direct tax collection for FY24 (net of refunds) actually exceeded the revised estimates (RE). While the corporate tax receipts lagged, it was more than made up by personal income tax receipts. Against the RE of Rs19.45 trillion, the actual net direct tax collections for FY24 came in at Rs19.58 trillion. The personal income taxes include STT also. The stagnant corporate tax collections have been attributed to the new tax regime for corporates introduced in FY20, wherein the corporate tax rate was cut drastically to just 22%.
Ultratech Cement as acquired a grinding unit from India Cements for Rs315 crore and it will invest an additional Rs504 crore to expand capacity. The grinding unit has an installed capacity of 1.1 million tonnes per annum (MTPA). Ultratech has entered into an asset purchase agreement with India Cements, which will help Ultratech strengthen its presence in the rapidly growing Maharashtra markets. Bulk of the cash consideration will be paid right away. Ultratech has plans to expand capacity to 170 MTPA by year 2030.
HDFC Bank net profits grew 37% yoy, but just 0.84% sequentially as the bank was hit by additional loan loss provisioning. In the March quarter, HDFC Bank had to make Rs10,900 crore floating provisions. HDFC Bank did not offer any guidance on net interest margins (NIMs) or on NII growth. For the quarter, NII grew 24.5% at Rs29,080 crore while the net interest margins (NIM) stayed tepid at 3.6%. Its CASA ratio was up marginally at 38.2% in Q4. HDFC Bank earned Rs7,340 crore exceptional gains from sale of HDFC Credila.
Several brokerage firms have cut their price targets for Infosys after the IT major reduced revenue forecast for FY25. From 4-7% revenue growth guidance last year, Infosys has cut the guidance to 1-3% range. The net profit growth was also driven by the tax refunds received in the quarter, as the operating margins in the quarter were actually lower. Nomura slashed Infosys target to Rs1,400, while I-Sec cut its forecast for Infy to Rs1,570. One positive feature was the highest-ever deal total contract value (TCV) at $17.6 billion.
In a sense, China has been central to the gold rally to $2,400/oz over the last few months. Of course, the worsening geopolitical tensions, war in the Middle East and Ukraine, and prospects of US rate cuts have all made a case for higher gold prices. However, the unrelenting Chinese demand for gold has come from retail shoppers, investors, futures traders and even the central bank. Last year, Chinese gold demand rose by 10% while India saw its demand falling by 6%. Weak yuan and volatile stocks are driving people to gold.
An interesting piece of data has emerged from the F&O market. The long-short ratio of FPI on the Nifty futures bets fell sharply from 56% to 35.4% in the latest week. Incidentally, the long-short ratio in index futures measures the number of bullish positions versus bearish positions. A low reading means foreign investors are bearish, and a sharp fall means a trend shift towards bearish. The had touched a low of 12.4% on February 28, 2020, when concerns over the pandemic had pushed Nifty shorts to record levels.
In an interesting move, IRDAI removed the age limit of 65 years for individuals buying health insurance policies. This is a significant departure from the current scenario where people above 65 are not eligible for health insurance. This should make health insurance more inclusive and accessible. This will help many of the senior citizens to get a cover for their health risk after they cross the age of 65. However, with the regulatory changes having been made, the million dollar question is if the insurer will underwrite this risk.
The combined market cap of 6 out of the 10 most valuable companies on the NSE eroded by Rs1,40,478 crore, in the week to April 19, 2024. Not surprisingly, the tech giants; TCS and Infosys did most damage. Last week, the Sensex fell by 1,157 points. Major losers included TCS Rs62,539 crore, Infy Rs30,488 crore,
ICICI Bank Rs26,424 crore, SBI Rs14,235 crore, and ITC Rs6,617 crore in the week. Among gainers, Bharti Airtel gained Rs37,797 crore, HDFC Bank Rs9,420 crore and Reliance Rs4,398 crore in a truncated week.
