According to preliminary data released by the Ministry of Commerce, India’s merchandise exports for June 2022 was up 17% at $37.94 billion. However, with merchandise imports at $63.58 billion, the trade deficit ballooned to an all-time high of $25.63 billion. The final trade figures will be released by the Commerce Ministry around the middle of the month. Cumulative exports for the first 3 months of FY23 (April to June) was up 22.2% yoy at $116.77 billion while imports were up 47.31% to $187.02 billion for the June quarter.
The day after the windfall tax was imposed by the government on the domestic production and export of oil, the first calculations are out. The windfall tax is likely to wipe off $12 from the gross refining margins (GRM) of Reliance while ONGC will take a big hit on earnings. The total collections for the government from this windfall tax will be to the tune of Rs130,000 crore. On Friday, government had increased gold import duties by 5%, hiked duties on petrol and diesel and levied Rs23,250 per tonne on crude extracted.
The start-up ecosystem is feeling the pain of layoffs as more than 12,000 employees have been given the pink slip in recent months. Edtech and ecommerce have been worse affected as growth failed to keep pace with the costs and the cash burn has been growing in intensity. Also, sectors like Edtech are feeling the pinch of normal schools reopening. Lay-offs happened across marquee names like Ola, Unacademy, Vedantu, Cars24, Blinkit, Whitehat Jr, Toppr, Lido etc. Start-ups layoffs are likely to cross
50,000 this year.
The stock of ITC touched a 2-year high of Rs293 on Monday on expectation of strong earnings growth. The stock surged 7% in just the last 2 days. At 33% returns in last 6 months, it is the star performer in the Nifty. Apart from a stable tax environment, an all-round pick-up in FMCG stocks also helped ITC. It expects to report improved cigarette volumes and earnings visibility. While FMCG margin pressures are likely, its strong earnings traction in cigarettes, hotels and paperboards should hold the company in good stead.
It has not been a great period for ecommerce players and the best representative is IndiaMart Intermesh which recently hit a 52-week low of Rs3,751. In fact, the stock is now below its pandemic lows. Despite the company making a buyback offer at Rs6,250 per share, the markets were not enthused. In the last 6 months, IndiaMart has lost over 43%. For FY21, its operating margins has contracted by almost 800 basis points due to higher manpower, operating and sales and distribution costs. EBITDA margins stand at 28%.
Risk-off investing by foreign investors is hitting Indian markets real hard. In fact, ex-China, global funds have offloaded $40 billion worth of equities across 7 regional markets as funds are moving to safer havens. The steepest selling was visible in Taiwan, South Korea and India; which are the 3 most liquid EMs for global investors in the Asian region. Even Indonesia saw heavy selling. Amidst rampant inflation and rising central bank hawkishness, FPIs are opting to err on the side of caution. Asian currencies are under strain.
Tata Power inked a pact with Tamil Nadu government to invest Rs3,000 crore for setting up a new facility to manufacture solar cells and modules. The Rs3,000 crore investment will be for setting up a greenfield 4GW solar cell and 4GW solar module manufacturing plant. Tata Power has been investing heavily in green technologies and this gels with the longer term commitment of the company. This unit in Tamil Nadu will be the second manufacturing unit of the company after Bengaluru, where it already
has a huge presence.
For all those sceptical of the quick commerce business model, Hindustan Unilever plans to leverage quick commerce to ensure timely delivery of ice creams. Demand for ice creams is back to pre-pandemic levels due to an extreme summer this year. Kwality is the flagship brand at Hindustan Unilever for ice-creams and it will leverage the quick commerce platform to boost home delivery in the business. India’s per capita consumption of ice creams is among the lowest in the world and it opens up vistas of
opportunity for HUL.