Wednesday, 21st April 2021

Nestle India reported 14.6% growth in net profit at Rs.602.50 crore for Mar-21 quarter helped along by double-digit growth in domestic sales and lower raw material costs. Net sales revenues were up by 8.9% at Rs.3,610 crore. Domestic sales were up 10.2% while exports fell 13%. In the quarter, Nestle also saw a 66% growth in digital sales, which now accounts for 3.8% of revenues. However, even Suresh Narayanan has warned that raw material cost could be a major headwind in the next few quarters and hit profits.

Brent Crude oil rallied to $68/bbl due to a major disruption to Libyan exports as well as a likely drop in US crude inventories. However, weak oil demand due to COVID resurgence could keep a lid on prices. Libya had declared a force majeure on exports from the port of Hariga and could soon extend it to other ports as well. Meanwhile, the US crude stockpiles are expected to fall by 2.9 million barrels. Crude prices are also negatively correlated to the dollar levels and a weak dollar index has helped crude scale new highs.

The NSE Pharma index gained 2% in the bourses on 20 April after a significant resurgence in COVID-19 cases resulted in a surge in demand for Covid-related drugs. A number of stocks like Cipla, Gland Pharma JP Chemicals, Neuland, Glenmark, Sun Pharma and Cadila Life hit life-time highs on 20 April. The demand for pharma stocks was driven by the government decision to open up vaccination to anyone over 18 years of age from 01 May. That gives more leeway to the private sector. India needs to scale up output rapidly.

Cloud data management start-up, Druva Inc, raised $147 million in its latest funding round from CDPQ of Canada, better known as the Canadian Pension Fund. This deal values Druva at $2 billion. Others like 

Viking Global and Atreides Management also partnered in this stake buy. Druva cloud platform allows organizations to centrally protect data, irrespective of location. There has been a big shift to cloud in the post-pandemic situation due to distributed workplaces. Druva has a collaboration with Dell Technologies.

Continuing on start-up funding, SAAS player Qapita has raised $5 million as part of its Pre-Series A round led by MassMutual Ventures. Qapita proposes to use the fresh funding to add high-end engineering talent, accelerate product development and build clientele across India, Indonesia and Singapore. Qapita has attracted new customers but has also successfully made a pitch to over 100 customers in the last one year. The fund raising comes just 6 months after Qapita raised its first seed fund led by Vulcan Capital.

Sirona Hygiene is a Bengaluru manufacturer and distributor of female hygiene products. Sirona has just raised $3 million as part of its Series-A funding from NB Ventures and IAN Fund. Sirona will use the proceeds of the sale to enhance R&D and improve on its products. Sirona specializes in menstrual hygiene, herbal pain relief, degradable sanitary pads and menstrual cup kits. Sirona has been growing its top line at 100%  in the last 3 years and that has also contributed to company profits in a rather substantive way. 

Tech Mahindra acquired DigitalOnUS, for $120 million or approx. Rs.900 crore. DigitalOnUs is a hybrid cloud and DevOps services provider and caters to enterprise customers globally. The target company has full year revenues of $31 million and employs 380 people. This deal will improve Tech Mahindra’s ability in cloud native engineering and digital solutions. Even for DigitalOnUS, the strength of Tech Mahindra’s balance sheet gives them room and ammunition to grow. Founder Suri will continue to play a key role.

RBI has constituted a 6-member committee to review and restructure ARC regulations. The committee will be headed by former RBI ED, Sudarshan Sen. The committee will submit its detailed report within 3 months of its first meeting. This was articulated by the RBI governor in the previous monetary policy. Apart from reviewing the existing regulatory and legal framework, the committee will recommend ways to improve efficacy of ARCs. It will also explore and give recommendation on trading of security receipts

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