Tuesday, 20th July 2021

It was a sort of Black Monday on 19 July with the Sensex closing 587 points lower on concerns over rising COVID 3.0 cases as well as a spike in global inflation. Even the Nifty fell 171 points to close at 15,752. One of the main reasons for this cautiousness was also the strength in the dollar, which resulted in selling of Rs.2,198 crore by FPIs. The spike in bad loans at HDFC Bank spoiled the private banking party as HDFC Bank was the top loser on the Nifty. COVID 3.0 and slow vaccination rollout are a potent risk for EMs.

There is good news for airlines as domestic air passenger traffic surged 47.2% in Jun-21 over May. The data was released by the DGCA. For Jun-21, the passenger load stood at 31.13 lakhs in June against 19.84 lakhs in May, as restrictions on flying were substantially eased. Even on yoy basis, this marks a 57% growth in air traffic. SpiceJet led the PLF (passenger load factor) rankings at 71% followed by Go Air at 70.9% and Air India at 58.4%. Indigo continued to lead the aviation market in India with a market share of 54.7%. 

HCL Technologies reported 9% rise in consolidated net profit at Rs.3,205 crore for the Jun-21 quarter. Revenues were up 12% yoy at Rs.20,068 crore. The growth in the top line was largely driven by Cloud and Digital Transformation clients. EBIT margins expanded from 19% to 21%, while the all-important operating margins rallied by over 250 bps to above 19% in Jun-21 quarter. HCL Tech has guided for over 10% growth in revenues in constant currency terms in FY22. HCL Tech declared interim dividend of Rs.6 per share.

India exported a record 10.7 million tonnes of finished steel during FY21 compared to just 4.7 million tonnes in FY20. In the first quarter of FY22, India has already exported 3.5 million tonnes of finished steel, so FY22 promises to be another bumper month. In 5 out of the 12 months in FY21, the steel exports were in excess of 1 million tonnes. Clearly, the US infrastructure thrust has boosted demand while China and Russia have sharply cut steel exports, opening up the floodgates for India in the global steel export market.

Blackstone, one of the world’s largest private equity firms, will acquire a controlling stake in Simplilearn Solutions for $250 million. Simplilearn is an education technology start-up founded in 2010. It offers more than 100 programs to help early to mid-career professionals acquire specialized skills in cloud computing, data sciences, artificial intelligence, machine learning etc. The pandemic underlined the urgent need to develop such skills for people to be employable in the new paradigm job market emerging in Indian IT.

ACC reported 2-fold jump in consolidated net profit at Rs.570 crore for the Jun-21 quarter helped by the base effect, higher revenues and cost efficiencies. Revenues from operations were up 49.3% at Rs.3,885 crore. Cement sales volume jumped 43.7% to 6.84 million tonnes in the Jun-21 quarter. Even the revenues from ready-mix concrete, or RMC, were up 4-fold at Rs.255 crore. The management of ACC expects the demand to recover strongly on the back of increased state spending on large scale infrastructure projects.

HDFC Life reported 33% fall in net profits at Rs.302 crore for Jun-21 quarter. This fall in profits was on the back of higher claim pay-out and additional provisioning of Rs.700 crore to mitigate the impact of COVID claims. In the Jun-21 quarter, HDFC Life settled 70,000 claims with gross claim pay-out of Rs.1,598 crore. The death claims were 3-4 times the death claims in the first round of COVID. For FY21, total premiums were up 31% at Rs.7,656 crore, with new business premium (NBP) up 44% and renewal premiums up 20%.

SEBI told the SAT on Monday that all listed companies will need mandatory prior valuation before raising capital via preferential allotment of shares. This would be fair to shareholders. This was in the context of the Rs.4,000 crore fund raising by PNB Housing from Carlyle, which was objected to by proxy firms. While the SAT reserved its order, SEBI was categorical that irrespective of the AOA, an independent valuation report is essential to arrive at appropriate price level. This must be above the price as per ICDR formula.

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