Thursday, 14th October 2021

Infosys raised its revenue growth guidance for FY22 to 16.5-17.5%, nearly 150 bps higher at the upper end. For the Sep-21 quarter, Infosys reported 11.7% growth in net profits at Rs.5,428 crore while revenues were up 20% at Rs.29,602 crore. Total contract value (TCV) stood at $2.15 billion for the quarter. The Infy story was broad-based across geographies and segments with North America, growing at 23.1% and the BFSI vertical growing 20.5%. Operating margins for Sep-21 stood at 23.6% and attrition was controlled.

Invesco admitted that it had facilitated talks between Reliance and Zee for a possible merger. Invesco, however, rejected Zee’s allegations that Invesco was acting as an agent for some corporate interests. Subhash Chandra has accused Invesco of plotting a hostile takeover of Zee through the back door. But, Invesco is firm that it only tried to facilitate the RIL deal, being the largest shareholder in Zee. Incidentally, Reliance has a vast media presence including VH1, Nickelodeon, MTV and a range of other TV channels.

India is going green, and aggressively. In the period between Jul-20 and Jun-21, India added 6,530 MW of solar and wind capacities, marking an addition of 3%. Out of this overall accretion, the state of Gujarat alone added 2,256 MW capacity and leads the tables. Apart from Gujarat, Rajasthan added 1,438 MW while Uttar Pradesh 822 MW of renewable capacity in the last one year. However, despite the government policy support to renewable energy, investors are wary due to execution risks and land-related issues. 

IMF has projected combined Indian government debt of the Centre and states to scale 90.6% of GDP by the end of FY22. However, it is expected to moderate after that and gradually taper down to 85% levels over the next 3-4 years. Prior to COVID, the Debt/GDP ratio had been consistently under 75%. However, the spike in fiscal deficit due to welfare spending, resulted in a spike in borrowings. Even Moody’s , while upgrading India’s outlook recently, had pointed to high debt levels and low affordability as key risk factor.

Indo-China trade is all set to cross $100 billion for 2021, with shipments already crossing $90 billion after 3 quarters. India’s imports from China surged 51.7% to $68.4 billion, while India’s exports to China rose 42.5% to $21.9 billion. Even on a pre-pandemic basis, the Indo-China trade stands higher by 29.7%, with exports growing much faster than the imports, albeit on a lower base. India exports iron ore and cotton to China and imports mechanical and electrical machinery in a big way. This contributed to trade deficit.

Dish TV board rejected YES Bank’s demand to hold an EGM, citing absence of prior approvals from the government and lenders. Dish TV’s largest shareholder with 25.93% stake, YES Bank, sought the removal of Jawahar Lal Goel from the board appointment of its own nominees. Jawahar Lal Goel is the brother of Subhash Chandra of Zee. The bone of contention was the rights issue, which YES Bank considered as a dilution of its interests. Yes Bank needs the prior approval from Ministry of Information and Broadcasting.

Franklin Templeton Mutual Fund has distributed Rs.24,000 crore to unitholders of the 6 shuttered debt schemes. The fund also announced that it had Rs.693 crore as cash for future disbursal. According to Sanjay Sapre, this represented 95% of the aggregated reported AUM as of Apr-20, when the 6 schemes were wound up. FTMF also said that the NAV of each of the funds was higher than when it was shuttered. The legal case pertaining to SEBI order on disgorgement on unlawful gains and launch of schemes is on.

IndiGo expects the combined Tata Aviation entity to pose a formidable challenge in the airlines sector. Post winning the deal for Air India, Tatas are expected to have a 27% market share with Air India, Vistara and Air Asia combined. Tatas are expected to resume control over Air India by the end of the year. As of today, Indigo has a dominant market share of 55% of the aviation market in India. However, IndiGo feels that Akasa Air, the low-cost carrier backed by billionaire Rakesh Jhunjhunwala may have a tougher time.

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