RBI has allowed trade settlement between India and other nations in rupees in a move that will help settle trade with Russia and Sri Lanka with ease. Last month, Ultratech imported coal from Russia and settled the deal in Yuan. Now that will not be required. Banks have to take RBI’s approval for the same. This can help countries like Russia circumvent global sanctions. Currently, such trade can be paid for in dollars or other hard currencies since Russia is under sanctions. For Sri Lanka, it can see them through their crisis.
It looks like tough times for Byju’s as the Edtech leader struggles to close a funding round of $800 million. PE funds are yet to transfer the funds to Byju’s. This is likely to add to concerns in the market about the valuations of edtech companies, which are facing pressure after normal schools reopened. The valuation of Byju’s has already been toned down in the last few weeks to around $22 billion and may go lower. Byju’s started operations only in 2015 but has gathered cult status in Edtech with its aggressive approach.
It looks like tough days for the downstream oil companies. In fact, IOCL, BPCL and HPCL are expected to post a combined net loss of Rs10,700 crore in June quarter as they have been selling petrol and diesel at below cost. Raw material prices of crude had soared but the selling prices were stuck, leading to thinning of marketing margins. Ironically, despite record prices for oil producers and refiners, the marketers appear to be in trouble. On an average, these oil companies are losing Rs12 to Rs14 per litre on petrol and diesel.
If China has its way, it plans to make an aggressive investment of $220 billion via the issue of special bonds. This news led to a rally in the price of commodities and this looks to help commodities pare some of their steep losses amidst robust Chinese demand. China has normally taken the lead in bring the global output to a new high. We saw that in 2008 and in 2020. China accounts for half of all metals and minerals consumption and includes aluminium, copper etc. China also has a bear grip on the real estate sector.
Adani Enterprises gained 2% after reports that the Adani Group was participating in the 5G auctions. It had a negative impact on Bharti Airtel, which fell 5% and was the top loser for the day. However, Adani does not plan to foray into consumer mobility space and would only focus on private network solutions. They would also use it for enhanced cyber security at airports, ports, power generation etc. Adani is likely to acquire the passive networks of GTL and RCOM. Bharti corrected on fears of competition from Adani.
The stock of Dr. Reddy’s Laboratories surged 3.4% to Rs4,554 after they launched a generic version of fesoterodine fumarate to treat overactive bladder in the US markets. This is already approved by the USFDA and will be available in 4 mg and 8 mg tablets. It has sales potential of $211 million annually in the US. In the last quarter, Reddy Labs outperformed the market gaining 4% when the index fell by 8% overall. Its next big focus area for the Indian market is Nutraceuticals and OTC segments its presence is quite small.
Paytm has recently touched a new lending milestone of 8.5 million loans in the Q1FY23 quarter. Its loan disbursements crossed annualised run rate of Rs24,000 crore while its super app touched a peak of 76 million downloads. In Q1FY23, number of loans through the platform grew 492% while the value of loans disbursed grew 779% yoy. In Q1FY23, the gross merchandise value (GMV) was nearly Rs2.96 trillion, more than doubling over last year. The average monthly transacting users (MTU) stood at a robust 74.8 million.
The latest trend is TCS and Infosys are venturing into smaller towns. Last month, these IT names opened new centres in Tier-II cities like Coimbatore, Guwahati and Nagpur. While the focus till date was on Bengaluru, Pune, Gurugram and Hyderabad; it is for the first time that they are going to smaller towns. With attrition at an all-time high, IT companies have to thing out of the box now. The attrition at TCS is up from an average of 8-11% pre-pandemic to 19.7% in Q1FY23. Home office is making geography irrelevant.