The Ministry of Defence has awarded a Rs2,269 crore deal with Bharat Electronics Limited (BEL) for the procurement of 11 Shakti warfare systems. This comes along with support equipment. These electronic warfare systems will be installed on-board the major ships of the Indian Navy. The Shakti system can very accurately intercept electronic emissions and implement responses even in a dense electromagnetic environment. Shakti electronic warfare (EW) system is indigenously designed, developed, and produced.
The spread between benchmark 10-year G-Sec yields corporate bond yields continue to shrink. This was after the 10-year started rising post the RBI’s hawkish monetary policy stance. Last week, the markets were also impacted by the variable rate reverse repo (VRRR) auctions conducted by RBI to soak liquidity. Corporate bond yields have held steady due to reduced supply in the market. On Tuesday, the yields on 10-year G-Secs were at 7.10% while the AAA-rated corporate bonds stood at 7.61%; a spread of 51 bps.
Indian electric car market is finally witnessing some serious price cuts by automakers. Tata Motors made its two popular EV models cheaper by up to Rs1.2 lakhs. Essentially, the lower battery prices have been passed on to the end customers. Now, the Nexon.ev will start from Rs14.49 lakh and Tiago.ev will start from Rs7.90 lakh. However, the price of the recently launched Punch.ev remain unchanged as lower prices of batteries are already factored in. Others like MG (Morrison Garages) have already cut EV prices in India.
Hindalco Industries reported 71.1% growth in net profits at Rs2,331 crore for Q3FY24. The profit growth was an outcome of 4.86% lower expenses in the quarter. Total revenues were flat at Rs52,808 crore, impacted by lower commodity prices. The stock price fell sharply, but that was more due to a cost overrun of $1 billion in its planned Novelis capex. The Novelis Bay Minette facility phase I was supposed to cost Hindalco $2.8 billion, but now the cost escalation is likely to $4.1 billion, which led to stock prices falling.
Jefferies initiated a “Buy” on Adani Enterprises Ltd (AEL) with target price of Rs3,800 per share. In fact, Jefferies expects the EBITDA of AEL to grow 3-fold between FY23 and FY26 on the back of scaling up of the business. This makes the stock relatively attractive at EV/EBITDA of 28X for FY25 forward and at 22X for FY26 forward. The valuation of AEL has been done on a sum of total parts (SOTP) basis by Jefferies and pegged at Rs3,800. AEL is the holding company of the Adani group and a new business venture incubator.
Oil India reported 9.3% lower net profits in Q3FY24 on account of lower crude oil prices, apart from the impact of the windfall tax imposed on extractors. It reported net profits of Rs1,584 crore for Q3FY24 due to average crude realizations falling by 6.5% yoy. In addition, the government had also reduced the prices of gas produced from old blocks to $6.50/MMBTU compared to $8.57/MMBTU. Top line revenues for Oil India fell 1% to Rs5,815 crore as revenues from the gas business fell by 15.1% yoy in the third quarter.
In an interesting study by Hurun, it has been noted that 31 of India’s most valuable companies by market cap hail from the state of Gujarat. Not surprisingly, the list is led by Adani Enterprises, Adani Ports SEZ, and Adani Green Energy. Despite the hit from the Hindenburg report, the group is still powerful. The other Gujarat based companies that find themselves in the list include Torrent Pharma, Intas Pharma and Zydus Lifesciences. West Bengal and Karnataka are the other big value contributors; though Maharashtra leads.
Even as the farmers agitation gathers steam in North India ahead of elections, the leader of the opposition (Rahul Gandhi) has a solution. According to Gandhi, the Congress was willing to give a legal guarantee of the minimum support price (MSP) to every farmer, as per the recommendations of the Swaminathan Commission. This is likely to positively impact about 15 crore farmers. Swaminathan Commission has proposed C2+50% formula where C2 includes cost of production, imputed cost of capita, and rent on land.