TCS reported 8.3% higher consolidated net profit of Rs10,431 crore for Q2FY23 on yoy basis. TCS, as usual, has set the tone for the IT results in the second quarter. Revenues were up 15.4% at Rs55,309 crore in CC terms with solid growth coming from the US and UK markets. Retail sector posted highest growth of 22.9% yoy. The operating profits were higher sequentially at 24%, but attrition at 21.5% continues to be a major challenge for TCS. This is the quarter with profits over Rs10,000 crore and it paid dividend of Rs8 per share.
Consolidation in cement is picking up. There were 2 different consolidation deals announced on Monday. Adani group will acquire the cement assets of the Jaypee group for Rs5,000 crore. On the other hand, India Cements sold its Madhya Pradesh limestone mine and land for Rs477 crore to JSW Cement. It may be recollected that a large chunk of Jaypee cement business was acquired by UltraTech in 2016. The total cement capacity accretion for Adani would be 10.55 MTPA. This will add to its existing 70 MTPA capacity.
Net inflows into equity funds more than doubled to Rs14,100 crore in September 2022. SIP inflows scaled a record high of Rs12,976 crore. However, the debt segment saw net outflows of over Rs65,000 crore in September, largely due to quarterly advance tax payout. On the equity funds side, there was buying across categories with the sector funds seeing maximum buying interest in Sep-22. Assets under management (AUM) stood at Rs39.87 trillion. The surge in equity and SIP flows are encouraging amidst volatile markets.
It looks like Navaratri has brought in festive cheer for the auto industry. Retail vehicle sales were up 57% yoy at 539,227 units. Of course, due to a COVID hit base, the growth may look magnified. Even if you look at with reference to the Navaratri of 2020 and 2019, vehicle sales are still higher by 27% and 16%. Even the two-wheelers space and the commercial vehicles space saw good growth traction this season. This trend is expected to continue till Diwali. Auto industry sees bulk of the bookings during the festive season.
Shipbuilding stocks are literally on fire. Most shipbuilding stocks on Monday rallied by over 11% as stocks like Garden Reach Shipbuilders, Mazagon Docks and Cochin Shipyards got close to 52-week highs. The bullishness is an outcome of strong earnings outlook and robust defence orders coming from the centre as part of the Atma Nirbhar Bharat effort. Shipbuilding stocks have rallied between 25% and 60% in the last one month. The story is largely about the big flow of orders from the defence forces, farmed locally.
Gautam Adani is in discussions with investors to raise close to $10 billion. While specifics are not yet made public, two of Singapore’s largest sovereign wealth funds (Temasek and GIC) are said to be in the fray to participate in the fund raising. Over the next 10 years, Adani plans to spend close to $100 billion as the group transitions towards a green energy ecosystem. The capital is likely to be raised through multiple tranches and will entail the sale of stake in group firms to investors. It will also improve investor profile.
Benchmark 10-year bond yields in India scaled a 4-month high as it scaled above 7.501% but closed the day at 7.4758%. This spike has been on the back of hawkish noises coming from the Fed, which has spoken about another 75 bps rate hike in November and 50 bps in December. The spike in bond yields can also been seen as a reversal after yields fell on expectations of inclusion of Indian bonds in the global indices. That did not happen. Higher inflation is being pencilled in by markets in India and also in the US markets.
An interesting trend during Navaratri bumper sale was of small cities ruling festival sales on ecommerce platforms. These smaller cities and towns accounted for 60% of all sales in the festive season. Now Tier-2 cities are at par with Tier-1 cities and metros in terms of online sales. The trend of over 60% sales from Tier 2 cities was seen across Flipkart, Amazon, Meesho and JioMart. Most web selling platforms have offered generous discounts to attract customers. 85% of new customers are from Tier-2 and Tier-3 cities.