The latest RBI Financial Stability Report has pegged gross NPAs of the Indian banking system in the range of 9.80%-11.22% as of Mar-22. This would be higher than the Mar-21 GNPA figure of 7.48%, but that was expected after COVID 2.0. The impact is likely to be more pronounced for PSBs with gross NPAs rising to 12.52% in Mar-22. RBI observed that consumer credit situation deteriorated after the loan moratorium programme ended in Sep-20. However, RBI admitted that the moratorium had helped avoid a credit crisis.
Auto numbers were robust as exemplified by 2 major players. Maruti saw 3-fold increase in total sales at 147,368 units in June compared to 46,555 units in May. Easing of restrictions helped. Domestic dispatches at Maruti were up nearly 3.5 times. The growth in sales was across all segments. Bajaj Auto, meanwhile, reported 7% growth in domestic sales numbers at 161,836 units in Jun-21. But the real big growth impetus for Bajaj Auto came from exports, which jumped by 45% at 184,300 units in the month of June 2021.
Loss making Shree Renuka Sugars is now the most valuable sugar company in India, overtaking Balrampur and EID Parry along the way. In fact, the stock of Renuka Sugars rallied by nearly 300% in the last 3 months. Renuka Sugars is quoting at a 9-year high, a price level last seen in February 2012. The trigger came after the Renuka Sugars board approved capacity expansion of ethanol production from 720 Kilo Litre per Day (KLPD) to 1,400 KLPD to take full advantage of the government front-ending ethanol blending targets.
Ashok Soota promoted Happiest Minds Technologies rallied 9% on Thursday and scaled an all-time high price of Rs.1100, gaining more than 100% since April this year. Since the public issue in September 2020, the stock of Happiest Minds has rallied nearly 560% in about 9 months. Being a digital only IT company, Happiest Minds is automatically preferred pick for institutional investors. Ashok Soota was also among the early founders of Mindtree. For FY21, Happiest Minds posted 127% growth in PAT at Rs.163 crore.
India’s factory activity, measured by PMI Manufacturing, contracted for the first time in the last one year. The second wave of the virus not only depressed demand, but also hit output, order books and job creation by manufacturing companies. The Markit PMI Manufacturing for Jun-21 came in at 48.1, against 50.8 in May-21. A PMI number below 50 is a sign of contraction. The intensification of the second wave followed by fears of a new delta variant, have kept manufacturers on tenterhooks leading to hit on PMI.
Dabur India rallied to an all-time high of Rs.588 and the stock has already rallied close to 10% in the last one month. This rally is on the back of expectations of improvement in operational performance. Dabur will also set up a new plant in the state of MP with an outlay of Rs.550 crore. Dabur is one of the major beneficiaries of the linked PLI scheme announced by the government to encourage Indian manufacturers. Dabur is expected to benefit from the general tend towards healthy lifestyles and immunity boosters.
It looks like the lenders of Jet Airways may be an unhappy lot. They are likely to get just Rs.380 crore from the Murari Lal Jalan / Kalrock consortium against their outstanding loans of Rs.7,810 crore, or a haircut of around 95%. Out of this Rs.380 crore, only Rs.190 crore will be paid upfront while the balance will be paid in tranches after the issue of zero coupon bonds. Lenders will also get a 9.5% stake in Jet Airways as well as a 7.5% interest in their loyalty program, Jet Privilege. Jet Airways ceased operations in April 2019.
NMDC reported 34% higher output at 8.89 MT in the Jun-21 quarter compared to 6.61 MT in the Jun-20 quarter. In the Jun-21 quarter, iron ore output was up 18% at 2.98 MT. In the Jun-21 quarter, NMDC reported a 49% increase in sales at 9.57 MT with a 28% growth in iron ore sales at 3.18 MT. For NMDFC, this has been a record quarter in terms of iron ore production. This could also result in record sales for FY22. NMDC’s mining portfolio includes copper, rock phosphate, lime stone, dolomite and gypsum.
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