Morgan Stanley Capital International (MSCI) added Max Healthcare, HAL and Sona BLW Precision to its India Standard Index in the May 2023 rejig. This will translate into inflows of $675 million across these 3 stocks. In lace of these 3 stocks, Adani Transmission, Adani Total Gas, and Indus Towers were removed from the MSCI India Standard Index. Total outflows from these 3 stocks would be around $465 million. As expected, the biggest weight increase is Kotak Bank, which is likely to result in fund inflows of $810 million.
SIP inflows stayed robust in April 2023, despite volatility in equity flows overall. SIPs saw gross inflows of Rs13,728 crore in April 2023 with the number of SIP folios growing to 6.42 crore as of end April 2023. Active equity funds saw inflows of Rs6,480 crores while debt funds attracted the bulk of the inflows in April 2023 at Rs1.07 trillion. Within the equity category, small cap funds attracted the best inflows. The flows into passive funds were also passive, but relatively more subdued. Liquid funds saw huge inflows.
Eicher Motors posted 49% higher net profits for Q4FY23 at Rs906 crore. Even total revenues for the March 2023 quarter were up 19% at Rs3,804 crore in the quarter. The board has also recommended dividend of Rs37 per share. For the full year FY23, Eicher Motors reported net profits of Rs2,914 crore compared to net profits of Rs1,677 crore in FY22. For FY24, the company also approved capex outlay of Rs1,000 crore for electric vehicle manufacturing facility and new product development under the IC engine portfolio.
NCLT decision to admit Go First’s voluntary insolvency plea has irked the lenders and lessors of the airline. Most of the staff are also living through very uncertain times. But the big worry is for vendors and travel agents, who normally fall much lower than financial creditors in the pecking order of distribution in the event of insolvency. However, top lessors like SMBC Aviation Capital warned that NCLT’s decision to block leasing firms from reclaiming Go First planes will spark a confidence crisis. Courts may take a final call.
Asian Paints reported 44% jump in net profits for Q4FY23 at Rs1,258 crore; much better than the street. Revenue from operations were up 11.3% at Rs8,787 crore. Asian Paints also recommended a final dividend of Rs21.25 per share. While its global business was lower on the top line, profit performance was still on track. However, Asian Paints clocked double-digit growth in the India business. Growth in the industrial coatings segment has been specifically impressive. Industrial business, revenues grew 17.2% in Q4 FY23.
IT companies are increasingly shifting focus to tier-2 and smaller owns to cut real estate cost and also to stabilise attrition. The view is that employees working closer to home would reduce attrition. Infosys has been actively adding office spaces grow in smaller towns like Mysore, Nagpur, Indore, Mohali; in addition to bigger campuses in Bhubaneswar and Jaipur. Even others like Tech Mahindra are going one step down since the advent of internet learning has resulted in a lot of smaller towns with employable professionals.
Larsen & Toubro expects order book to rise to Rs5.0 trillion in next 2 years, from the current Rs4.0 trillion. L&T is also betting heavily on capex in data centre and electrolysers. The infrastructure division of L&T accounts for bulk of the order book with projects across public spaces, hydel projects, tunnels, irrigation systems and ferrous metals. L&T expects 70% of order book from infrastructure and 20% from energy. In its Q4 results announcement, L&T had guided 12-15% revenue growth and higher OPMs at 9% for FY24.
The ED investigations against Manappuram Finance MD, V P Nandakumar, could mean further correction in the stock price of the company. There have been serious corporate governance lapses and money had bene laundered out of the company by the MD and CEO. These investigations raise reputational risks for the company and could result in reduced funding channels and also lower market confidence. Analysts are also worried that this could impact the credit profile. ED has already frozen assets worth Rs143 crore.