Mahindra and Mahindra plans capex of Rs15,300 crore in its auto, farm equipment and EV businesses over next 2 years. While Rs3,200 was pumped in FY22, M&M plans to invest the balance Rs12,100 crore by FY24. Due to the chip shortage, it deferred its capex plans, but now intends to make up for lost time. M&M will leverage on capex to consolidated its position in the SUV and tractor segments. Its “Born EV” platform is about how M&M sees the future of mobility. M&M dominates SUV segment with 17.9% share.
The much awaited results of LIC for the March 2022 quarter were below street expectations. Its net profits fell 17% at Rs2,409 crore for Q4FY22. This is the first quarterly results announcement by LIC after its IPO. The stock of LIC still trades about 13-14% below the general IPO price. Total income of LIC for the March 2022 quarter was up 11.6% at Rs212,230 crore. For Q4FY22, LIC’s first year premiums rose 32.7% at Rs14,663 crore. The LIC board declared dividends of Rs.1.50 per share subject to shareholder approval.
Amazon, with key investors, is in talks with AV Birla group to invest up to Rs20,000 crore in Vodafone Idea. The company will use the funds to bankroll its bidding for the upcoming 5G spectrum auctions as well as capex for the rollout. The funding may be a 50:50 mix of equity and debt, although finer details are still awaited. Vodafone recently got a small fund infusion from its promoters but it needs heavy funding to pay for spectrum auctions and to repay its statutory dues. It has converted part of its dues into equity.
Sun Pharma reported net loss of Rs-2,277 crore for Q4FY22, against net profit of Rs894 crore in Q4FY21. The current loss was entirely on account of Sun Pharma writing off Rs3,936 crore towards settlement payments and provisions for Taro Pharma and Ranbaxy litigations. Sales for the fourth quarter were up 11% at Rs9,386 crore and was spearheaded by formulation sales in India and the US. Sun Pharma board proposed final dividend of Rs3 per share taking total dividend for FY22 to Rs10 per share, despite losses.
Recently listed IPO, Delhivery Ltd, doubled its top line revenues for Q4FY22 at Rs2,072 crore. The net loss for the quarter was flat at Rs-120 crore in March 2022 quarter. However, for fiscal FY22, the net loss more than doubled to Rs-1,011 crore even as annual revenues were up 89% at Rs6,882 crore. The expenses in FY22 were largely on account of ESOP (employee stock options) costs, which were up 98% yoy at Rs341 crore. Interestingly, Delhivery saw a 75% fall in overall freight handling charges despite costlier fuel costs.
Ahead of the Q4 GDP data announcement on 31st May, the forecasts for growth range from 2.8% on the lower side to 5.5% on the higher side. However, some dent due to Omicron, inflation and the Russia-Ukraine war cannot be ruled out. SBI Research pegged Q4 growth in GDP at a very conservative 2.7%, while ICRA has pegged GDP growth for FY22 at 3.5%. Both expect multi-pronged pressures on the growth levers during Q4FY22. Reuters consensus poll has pegged Q4FY22 GDP growth at 4%, down 140 bps yoy.
In the last 3 sessions, the Sensex has gained 2,100 points at 55,923 levels as banks and technology stocks led the recovery. The global sentiments turned positive as China began eased lockdowns in Shanghai. The Nifty is above its technical resistance level of 16,400 and now 16,800 could be the next level to watch out. Even mid-caps and small caps have joined the rally in the last 3 days. The trigger for the rally came from the aggressive inflation fight by central banks, which had resulted in tapering of inflation already visible.
As Fintechs are getting aggressive in the financial space, RBI continues to remain sceptical about allowing too much of big technology companies involvement in the Fintech space. RBI is currently taking a close look at a deal between Google Pay and Equitas SFB, enabling customers to use Google Pay to open FDs with Equitas SFB. RBI was never comfortable with a large technology player getting involved in public deposits. Data storage remains another issue. Regulation is surely getting a lot more complex for the RBI.