Bharat Petroleum Q3 PAT was down -11.9% at Rs.1,565 crore largely on the back of exceptional losses. The top-line was flat with 1.59% growth in the Dec-20 quarter at Rs.87,293 crore. For the 9-month period to Dec-20, the gross refining margins or GRM fell from $3.15/bbl to $2.90/bbl with HSD Retail and ATF coming under pressure. Sound inventory management helped OPM expanded from 2.39% to 5.02% in Dec-20 quarter. PAT tapered as BPCL took a hit of Rs.419 crore on account of ESOP expensing and another Rs.730 crore due to asset impairment provisions for its subsidiary Bharat Petro Resources.
In a significant boost for the Future-RRVL deal, the Delhi High Court overturned an order stalling the $3.4 billion deal to sell the retail assets of Future group to Reliance Retail. Amazon had challenged the sale as it depleted the value of their investment in Future Coupons. Last week, the court sided with Amazon and put Future’s RRVL deal on hold. Future group had appealed against this order saying that its creditors would be at significant risk if the deal failed. While neither company has made a public statement due to the matter being sub-judice, it is certainly a setback for Amazon. While Amazon has made allegations against the Future group and its promoters, Kishor Biyani has consistently denied such allegations. One view in the market is also that Amazon may be just trying to push the deal to a corner.
Torrent Pharma reported an 18.33% spike in net profit to Rs.297 crore on the strength of cost controls. Top line was almost flat with just 1.48% growth in revenues for the Dec-20 quarter. While the overall revenues of Torrent may have been flat, the India revenues grew by 7% at Rs.930 crore, which led the market recovery. India also saw momentum in chronic brands and sub-chronic brands. The US revenues for the quarter were sharply down 24% on a yoy basis. Brazil revenues also contracted but German revenues grew by 21%, among Torrent’s major markets. It was a case of cost optimization working.
India has challenged the international arbitration tribunal’s verdict on Vodafone in a Singapore High Court. The tribunal had overturned India’s demand for Rs.22,100 crore in retrospective taxes from Vodafone. The government is yet to crystallize its response to the Cairn order by the Singapore arbitration tribunal, which is along similar lines. These demands pertain to the 2007 acquisition of Hutch India by Vodafone PLC from Hutchison Whampoa based out of Hong Kong. In both cases, the Tribunal had given an order against India as the Indo-UK treaty makes it mandatory to offer this concession.
Securitisation volumes may have taken a hit during the pandemic but has sharply risen in the Dec-20 quarter. The shadow banking or NBFC sector securitised Rs.24,400 crore of retail loan assets; a yoy growth of 61%. What is more interesting is that the NBFC securitization value has been consistently growing every sequential quarter. The number of originators undertaking securitization has shown signs of improvement. In Dec-20 quarter 50 originators were active in securitization while it was 45 and 18 in Q2 and Q1. ICRA has projected annual securitisation volumes of Rs.90,000 crore in FY21.
President Vladimir Putin may have reasons to celebrate as Russia’s COVID vaccine, Sputnik V, is suddenly garnering a lot of interest globally. Already, the companies across the world are lining up for supplies of Sputnik V. Recent tests have evidenced that the Sputnik V protects against the Coronavirus as well as the US and European shots. Also, the Russian vaccine is noted to be a lot more effective than the Chinese vaccine candidate. As of now, over 20 countries approved the vaccine for use and this includes Hungary from the EU as well as other countries like Brazil and India on the threshold of approval. In fact, the results the late-stage trials of 20,000 participants showed that the vaccine had 91.6% success rate. Ironically, the domestic demand for the vaccine remained weak as the local public remains suspicious.
