The minutes of the May FOMC meeting announced late on 24th May, saw the members continuing to maintain a relatively hawkish stance. The members concurred that inflation was coming down but not to the extent expected. However, they also cautioned that rate cuts were ruled out in 2023 and they wanted the Fed minutes to clearly convey the same to the market. In terms of guidance, the FOMC would be data driven. However, Fed has highlighted the possibility that rates may be hiked further if inflation warranted.
LIC of India announced a 5-fold jump in net profits for the March 2023 quarter at Rs13,421 crore. LIC has approved the transfer of 92.5% of the surplus of the participating fund to the policyholders and 7.5% to the shareholder fund. LIC reported net profits of Rs36,397 crore for FY23, which includes Rs27,241 crore pertaining to accretion on available solvency margin transferred from non-par fund to shareholder account. However, net premium income of LIC for the year fell by 8.3% for the period to Rs1.31 trillion.
According to data released by TRAI, more than 10 crore mobile phone subscribers changed their telecom operator (under the mobile number portability scheme) in FY23. This was largely on account of internal poaching of customers with lower prepaid plans. Most agents also enable MNP for higher commissions offered by the telecom operators. A good number of MNPs have entailed customers moving away from Vodafone Idea to other players, principally Reliance Jio. Analysts feel that the churn may have topped out.
With the MOSPI likely to announce the Q4 GDP and the full year FY23 GDP on the last day of May, the big estimates are doing the rounds. The consensus is of a growth rate of 5% or lower for the fourth quarter with FY23 GDP growth coming in possibly at under 7%. In the third quarter, the GDP growth had tapered to just 4.4%, so the March quarter should be better than that. However, weakness in manufacturing and in consumption is expected to have continued in the fourth quarter also. GVA for Q4 could be over 6.4%.
The Ministry of Agriculture initiated a series of meetings with state governments to gauge the readiness on the Kharif front. This includes, readiness on basis of seeds, fertilisers, fodder, and other inputs required for the forthcoming kharif season. The centre is also keen on activating district-level agricultural contingency plans if there is a shortfall in monsoons. Monsoons are critical as the southwest monsoon (June-September) rains contribute to 73% of annual precipitation. State buy-in in critical to its success.
Gross FDI flows in FY23 were lower for the first time in the last decade at $71 billion in FY23. This was due to the slowdown in the global economy. The yoy fall was 16.3%. In fact, FY13 was the last that India had seen yoy contraction in gross FDI. However, there is a lot of optimism on the street as big investments in chip FDI projects are underway. The RBI note also pointed out that the foreign portfolio investors (FPIs) had finally turned net purchasers for calendar 2023, after remaining net sellers in 2021 and also in 2022.
Hindalco Industries, which announced fourth quarter and FY23 results on 24ths May 2023, has earmarked capex of Rs5,000 crore each FY24 and FY25 to fund the ongoing expansion plans. This is 67% higher than the capex outlay in FY23. The entire capex will be through internal accruals and no debt will be raised. For Q4FY23, Hindalco had posted 37% lower net profits at Rs2,411 crore, albeit higher on a sequential basis. The capex plan entails setting up 170 KT flat rolled products capacity in Aditya Aluminium and in Hirakud.
Nykaa, the brand owned by FSN E-Commerce Ventures, saw 72% fall in net profits for Q4FY23 at Rs2.41 crore. Nykaa reported total income of Rs1312 crore in Q4FY23. Its EBITDA was up 84% yoy at Rs70.6 crore.
Among its principal cost spikes, Nykaa reported a 277% spike in the cost of material consumed during the quarter at Rs97.28 crore, even as other income fell. For FY23, Nykaa posted operating revenues of Rs5144 crore with net profits of Rs19.26 crore. For FY23, revenues were up 36.2% but PAT was down 53.1% yoy.
