IDBI Bank got one step closer to exiting PCA as it posted net profits for the fourth quarter in succession. IDBI Q3 net profit turns around to Rs.399 crore following a huge loss in Dec-19 quarter. Overall revenues fell by -4.5% in the Dec-20 quarter at Rs.5,988 crore. Revenues were lower across retail banking, corporate banking and treasury. IDBI Bank operating profits improved due to a 20% fall in interest costs. OPM for the quarter expanded from 20.78% to 27.87%. The concern for IDBI Bank remains on the asset quality with gross NPAs at 23.5%, but nearly 95% is provisioned. Capital raising is the next big challenge.
Adani Ports, which operates India’s largest port and SEZ, raised $500 million via 10-year bonds placed with global investors at an attractive coupon of 3.10%. Interestingly, the senior unsecured Dollar notes were subscribed 6X. This coupon is sharply lower than the 4.2% it paid last July. Adani Ports is also right now in the global bond markets with $500-million Reg-S issue, in which American citizens cannot put in their applications. Since July 2020, Adani has managed to raise $1.55 billion via the dollar-debt route. Due to its pre-eminent position in the Indian market and its strong presence in the infrastructure space, Adani has been raising cheap dollar debt to refinance and retire its high cost debt. Cost of debt matters, as the group is highly leveraged. Adani Ports currently has 11 operational ports and terminals.
Colgate Palmolive reported PAT growth of 24.7% on yoy basis to Rs.248.36 crore for the Dec-20 quarter. This growth in profits was spurred by lower input costs. Top line revenues grew by 7.4% for the Dec-20 quarter to Rs.1,232 crore. Colgate is currently expanding its product range with toothpastes for diabetics helping them keep their gums strong with a focus on the naturals portfolio. Operating profits were up 22.9% at Rs.325 crore on a 15% fall in cost of materials consumed. The OPM was up 333 bps at 26.39% in the Dec-20 quarter. The operating advantages also transmitted to the bottom line with 24.4% growth.
The IPO of Stove Kraft got subscribed a healthy 18 times on close of the issue. Against an issue size of 58.94 lakh shares, the bids received were to the tune of 10.63 crore shares. The QIB portion got filled eight times while the HNI portion was subscribed 32.72X and retail portion 26 times. The IPO comprised of fresh issue worth Rs.95 crore and an OFS of Rs.318 crore. The price range has been fixed at 384-385 and it looks to settle at the upper end with the current oversubscription. It may be recollected that Stove Kraft raised Rs.185 crore last week from anchor investors. Company is backed by Sequoia Capital.
Maruti Suzuki appears to have gleaned full benefits of the festive season as Q3 PAT was up 25.8% at Rs.1,997 crore for the Dec-20 quarter. Even top line revenues were up 13.27% at Rs.23,471 crore. The festive season resulted in car sales picking up across key segments and successfully combined with pent up demand post-COVID. Operating profits were up 24.8% at Rs.1,601 crore leading to OPM expansion to 6.82%. PAT for the Dec-20 quarter increased by 25.8% to Rs.1,997 crore as the bottom line got a veritable boost from a sharp increase in investment and miscellaneous income adding heft to profits.
The AMC space is in for more consolidation with Sundaram AMC buying the AMC business of Principal Group. Sundaram will acquire all schemes managed by Principal and also buy 100% of the share capital. The deal has to be approved by SEBI but both the players see a distinct advantage in getting together. While Sundaram AMC manages Rs.40,000 crores in AUM, Principal handles Rs.7,447 crore AUM. Both the AMCs are predominantly equity oriented fund houses. Principal funds have an established performance track record across large and mid-cap segments. This will create synergy for Sundaram AMC as they have been predominantly focused on small caps and mid caps. There is unlikely to be any disruption of services in the case of either unit holders. However, Principal Global Services will continue operating out of Pune and Hyderabad to provide critical technical support to its vast global operations.
