The data over the weekend was absolutely flattering for the Indian economy. The core sector growth came in at 6.2% for April, with 7 out of 8 core sectors showing positive growth. GDP for Q4 grew at 7.8% while FY24 fiscal year GDP grew at 8.2%. The bounce in GDP growth was largely driven by a sharp bounce in quarrying and manufacturing, even as agriculture was under strain. The icing on the cake was the fiscal deficit for FY24 coming sharply lower at 5.6%, raising hopes that FY25 could see fiscal deficit below 5%.
The exit polls were in line with the market expectation, but the extent of the victory for the NDA projected by the exit polls was very strong. The exit polls projected around 400 seats for the NDA combine with major successful forays into West Bengal, Odisha, Andhra Pradesh and even into Tamil Nadu. The NDA juggernaut rolling for another five years should give comfort to the markets as it would mean that the reforms process will go on unhindered. The first signals will come from full budget presented in July 2024.
The market cap of 10 of the most valuable companies on the NSE eroded Rs2.08 trillion in the week. The fall was largely led by Reliance, TCS and Infosys. In terms of market cap loss in the week, Reliance plunged Rs67,792 crore, TCS by Rs65,578 crore, Infosys Rs24,338 crore and ITC Rs12,422 crore. In addition, LIC, Hindustan Unilever and Bharti Airtel also saw market cap erosion of more than Rs9,000 crore each. HDFC Bank was an exception in the week gaining market cap of Rs10,955 crore, while SBI added Rs1,339 crore.
The IPO of Kronox Lab Sciences will open on Monday and will be kept open for 3 days. The stock is slated to list on the coming Monday. However, the anchor allocation ahead of the IPO was very robust, with the anchors absorbing nearly 30% of the total issue size of Rs130 crore on Friday. This is the only mainboard IPO in the coming week, and the issue is entirely by way of an offer for sale. There is no fresh issue part in the IPO. The basis of allotment will be done on Thursday with refunds and demat credits done on Friday.
According to a poll conducted by the Financial Express, the RBI was likely to maintain the status quo on rates and may not even try to tinker with the monetary stance. Ideally, the RBI would wait for the full budget to be presented apart from the election outcome. That will set the tone for monetary policy. The street view is that the RBI may attempt pre-emptive rate cuts to reduce the funding cost burden of Indian corporates. The RBI may prefer to think about rate cuts only from the August 2024 credit policy onwards.
It looks like artificial intelligence is taking over the world as NVIDIA market cap could outpace that of Apple and become the second most valuable company after Microsoft. The market cap of NVIDIA has nearly tripled in the last one year to $2.68 trillion and at $2.92 trillion, Apple is just a short distance away. Apple seems to be facing a crisis of innovation with sales in China dwindling and new cheaper competition now coming up in Asian countries. NVIDIA was the fastest mover from a market cap of $1 trillion to $2 trillion. .
Coal India has reported 7.5% growth in coal production in the month of April and May 2024. The offtake was up 7.2%. Coal India produced 126.2 million tonnes of coal compared to 117.5 million tonnes of coal in April and May last year. The output in May 2024 was 64.4 million tonnes while the offtake was at 68.2 million tonnes. Coal India accounts for 80% of coal production in India with Singareni Collieries and the captive players accounting for the balance. CIL is producing coal at record levels to cater to thermal power.
Adani group has reported record EBITDA in FY24 at Rs82,917 crore. This is 45% higher than the year ago period. Bulk of the EBITDA of Rs69,337 crore was generated by the core infrastructure and utility platform even as the customer base of the group rose to 35 crore. Even cash profits for the year were up 51% yoy at Rs56,828 crore. The share of equity to total assets has risen sharply to 62% in FY24 compared to just 55% in FY23. Its net debt position is a lot more comfortable than it was during Hindenburg crisis of 2022.