CPI inflation for the month of March 2021 came in higher at 5.52% compared to 5.03% in the month of Feb-21. The spike was led by a rise in food inflation which trended higher to 4.94%. The trend was clearly in favour of urban inflation which was nearly 200 basis points higher than rural inflation and was the clear driver of higher inflation. The core inflation also trended higher and got close to the 6% mark. The outer limit for inflation set by the RBI is 6% on the upper end and anything higher could impact monetary policy.
The index of industrial production or IIP for Feb-21 dipped lower to -3.58% as the manufacturing sector drove the contraction with its 77.6% weight in the IIP basket. However, the preliminary estimates of IIP for the months of Jan-21 and Nov-20 were upgraded in the final estimates. The cumulative IIP for the first 11 months of the fiscal year FY21 stands at -11.5% and it would mean that it could push the GDP contraction for FY21 to less than -8%. Weak IIP will incentivize the RBI to maintain accommodative stance.
Tata Consultancy Services reported 14.9% growth in consolidated net profits for the Mar-21 quarter at Rs.9,246 crore. The operating margins for the quarter stood at 26.8% while the net margins stood at 21.2%. During the full year FY21, the total attrition rate stood at 7.2%, the lowest rate of attrition seen by TCS in its entire history. TCS also reported a record $9.2 billion in order book TCV as of March 2021. The board of TCS has proposed a final dividend of Rs.15 per share. TCS added 19,388 employees in FY21.
It was a virtual Black Monday for the stock markets on 12 April as the Sensex lost over 1700 points in a single day, the worst correction since 26 February. The correction was triggered by apprehensions over a second round of lockdown in Maharashtra, although there has been no final confirmation from the state government. The sharpest cuts were seen in banks, NFBC, realty stocks and autos largely due to being rate-sensitive. The banks corrected on fears that the lockdown could deeply impact asset quality of banks.
SEBI has slapped a penalty of Rs.25 crore on Yes Bank over the AT-1 bond issue. This penalty pertained to Yes Bank mis-selling the bonds to customers without explaining the risk factors. It may be recollected that when RBI worked out a rescue plan for Yes Bank in March 2020, one of the conditions was that the entire amount of AT-1 bonds issued by Yes Bank would be written down to zero. The mis-selling was so intense that unsuspecting investors has been coaxed to close their bank FDs and invest the money in AT-1 bonds.
The expert panel has recommended the Russian Sputnik-V vaccine for approval and the final decision will be taken by the DCGI in India. The DCGI has till date only approved two vaccines viz. Covishield made by Serum Institute under license from Astra Zeneca and Covaxin by Bharat Biotech. Sputnik-V is already registered with the health authorities of 59 countries till date. Sputnik has an efficacy ratio of 91.6%, which is considered to be very good. Sputnik needs -20 degrees refrigeration but can be reduced to -2 degrees.
According to Barclays Research, the sporadic lockdowns in India would cost the economy nearly $1.25 billion or Rs.9,000 crore per week. In a subtle way, Barclays was warning the government not to repeat a prolonged lockdown in India. The urgency of rapid approvals came to the fore after India reported nearly 1.69 lakh cases in a day. While selective cuts may not impact outputs, Barclays is concerned that anything like a prolonged lockdown of economic activity could hit GDP by 35-40 basis points during FY21.
Flipkart has tied up with Adani group to strengthen the logistics and the data centre of the company. Adani Logistics will construct 534,000 SFT fulfilment centre in Mumbai and lease it to Flipkart. Adani group wants to strengthen its supply chain by combining offline and online offering capabilities. The centre is expected to be operational by the third quarter of 2022. Flipkart will also develop its third data centre at the Adani facility. The centre will also house nearly 10 million units of Flipkart inventory at any time.