India’s market cap at $4.33 trillion just crossed that of Hong Kong at $4.29 trillion. The last few months have seen sharp outflows from China and heavy inflows into India. Nearly half of the Indian market cap accretion has happened in the last 4 years. Apart from foreign flows, a sharp spike in demat accounts and SIP flows have also resulted in the sharp spike in market cap. Hong Kong market largely comprises of the Chinese companies and this has more to do the Chinese stocks losing more than $6 trillion from the peak.
Shares of Zee Entertainment plunged 30% intraday to a low of Rs162.25 after Sony Pictures called off the merger. Sony has not only issued termination notice to ZEE, but has also sought $90 million as termination fees from ZEE for not honour their part of the agreement. Several brokers have already downgraded the stock of Zee. Puneet Goenka of Zee was to become the CEO of the new venture as per the initial deal, but Sony had second thoughts about it after SEBI passed an order barring Goenka from holding KMP positions.
The 90% write-down in the value of Byju’s is not just about investors. Now, even Byju’s is willing to raise funds at a valuation of $2 billion, against its previous valuation of $22 billion. It currently needs to address its liquidity problems after report Rs8,000 crore loss in FY22. Apart from the cash crunch and continuous need to lay-off staff, Byju’s is also fighting legal battles in international courts about a recent default. The start-up has marquee stakeholders like the Chan Zuckerberg Initiative, General Atlantic and Prosus NV.
Axis Bank reported 3.7% higher net profits for Q3FY24 at Rs6,071 crore. Net interest income (NII) grew 9% yoy to Rs12,532 crore; but flat on sequential basis. Net interest margin (NIM) for Q3FY24 at 4.01% was robust. Gross NPAs fell 15 bps to 1.58% for the quarter on a sequential basis, while the net NPAs were flat at 0.36%. At the close of Q3FY24, the provisions for doubtful debts were nearly 50% higher at Rs1,028 crore. The bank has been adjusting to the recent mega buy of the Citi consumer banking business in India.
According to a recent Jefferies report, the consecration of the Ram Mandir at Ayodhya could be a game changer for the Indian economy in several ways. It is likely to be a big boost to tourism, with the footfalls expected to even better Tirupati, Mecca and the Vatican. It is expected to attract 50 million tourists a year after the $10-billion makeover; which includes a new airport, revamped railway station etc. According to the report, the multiplier effect will be felt on new hotels, transport, tourism services and millions of jobs.
Indian cement sector is estimated to add 150-160 (MTPA) capacity in next 5 years. CRISIL feels the growth in cement capacity will be a mix of organic and inorganic. In the last 5 fiscal years, India added 119 MTPA of cement capacity and that is likely to expand in the next 5 years. India’s current cement capacity stands at 595 MTPA. Much of the capacity enhancement will be concentrated in the eastern and central region of India. Large cement players will corner around 55% of the accretion to cement capacity in next 5 years.
India’s National Monetization Pipeline (NMP), which was rolled out in FY22, is turning out more lucrative than originally imagined. In FY24, the NMP is expected to yield close to Rs1.50, which is 50% higher than the FY22 figure and 14% higher than the FY23 figure. Like in FY23, the monetization of assets in FY24 was also led by coal / mining blocks generating Rs60,000 crore. Roads and highways under National Highways Authority of India (NHAI) was the second biggest contributor expected to generate Rs45,000 crore in FY24.
Amidst the relentless selling in HDFC Bank counter post the Q3 results, there appears to be a whiff of fresh air. CLSA has come out with a buy report on HDFC Bank with target price of Rs1,537 per share. CLSA has based its report on the interactions with 20+ clients post the HDFC Bank Q3 results. Many foreign investors appear to be of the view that the “EPS cuts” cycle may be nearing its end. The big concerns in Q3 results of HDFC Bank were the deposit growth lagging loan growth and NIMs at 3.4% lagging most of its big peers.