June 2022 US consumer price inflation surged to 9.1%, the highest level of inflation since November 1981. On a sequential MOM basis, the inflation surged by 1.3%. The spike in inflation was despite core inflation tapering from 6.0% to 5.9%. However, the spike in gasoline prices and food prices led to higher inflation. Energy was a major contributor to overall inflation as gasoline jumped 11.2% on MOM basis and by 59.9% on a yoy basis. The war in Ukraine pushed retail gasoline prices in the US to a record level of $5 per gallon.
Hindustan Zinc has announced an interim dividend of Rs21 per equity share with the dividend pay-out likely to lead to an outflow of Rs8,873 crore. July 21st has been fixed as the record date for payment of
dividend. Currently, Vedanta Group owns 64.9% stake in Hindustan Zinc, so it will be biggest beneficiary of this dividend pay-out. The government of India currently owns 29.5% in Hindustan Zinc and it is planned to offload the government stake in HZL via the open market in tranches during the current financial year.
Mindtree, part of Larsen & Toubro group, reported 37% growth in net profits at Rs472 crore for the June 2022 quarter. Consolidated top line revenues from operations were up 36% to Rs3,121 crore for Q1FY23
on a yoy basis. This also marked the sixth consecutive quarter for Mindtree of more than 5% revenue growth in constant currency terms. EBITDA margins for Mindtree stood at 21.1%, while its order book stood at $570 million. The company is likely to complete the merger with L&T Infotech during fiscal 2023.
For the first half of calendar year 2022, India’s imports from China touched a record level of $57.51 billion. In 2022, India looks all set to cross the previous year’s China import figure of $97.5 billion.
However, the total Indian exports to China in the first half tapered to just $9.57 billion, resulting in an Indo-China trade deficit of $47.94 billion. India runs one of the largest trade deficits with China. India’s biggest imports from China in 2021 were electrical and mechanical machinery, industrial chemicals, APIs and auto components.
Government may look to withdraw export taxes on diesel and petrol and the windfall tax on crude oil if low oil prices persist. The sharp fall in gross refining margins of diesel, petrol and ATF was co-terminus with the cooling of crude prices, which had diminished the super profits made by the oil companies. On July 01st, government had slapped export duties of Rs6 per litre on petrol and Rs13 per litre on diesel. In addition, the government had imposed windfall tax on domestic crude production at Rs23,250 per tonne.
The stock of Insecticides India touched a 52-week high of Rs937 on the back of a healthy business outlook. The stock is less than 4% away from its all-time high of Rs966 scaled in the year 2017. Insecticides provides farmers with a range of crop protection products. It had also been granted a
patent for its invention, Novel Fungicidal Carbamate Compounds for 20 years. The stock is up 43% in the last 6 months against Nifty returns of -8%. Insecticides has seen a sharp growth in institutional sales as well as doubling of exports.
Nomura has pruned India’s GDP growth forecasts for 2023 by 70 basis points from 5.4% to 4.7%. This cut in estimates comes in the light of recession fears and higher interest rates. According to Nomura,
exports are struggling resulting in record trade deficits. However, Nomura also underlined that Indian economy was racing above its pre-pandemic levels; triggered by a sharp recovery in the services sector.
The bank credit growth has been robust. Nomura sees the RBI continuing its rate hike cycle till inflation was tamed.
Directorate of Revenue Intelligence (DRI) slapped a Rs4,389 crore show cause notice on Oppo India for evading customs duty by wrongfully availing exemptions. China based Oppo deals in various brands of
mobile phones. DRI has competed the searches as part of the investigation. DRI also revealed that Oppo had remitted funds to China that were not authorized, apart from some suspected fictitious payments.
The DRI notice has also proposed penalties on Oppo India and Oppo China under the Customs Act, 1962.