As per the instructions of SEBI, Dish TV declared the results of the voting conducted at the 33rd AGM held on 30th December. According to the Dish TV report, all the 3 resolutions put to vote at the AGM failed to obtain the majority. The resolutions were adoption of audited financial statements, re-appointment of Ashok Kurien as director and ratification of remuneration of cost auditors for FY22. All resolutions were defeated in the E-Voting. SEBI had directed freezing of demat accounts of the directors till the disclosure.
Credit Suisse downgraded Indian equities from “Overweight” to “Underweight” citing oil prices at 14-year highs. This comes on top of existing risk factors like inflationary pressures and sensitivity to Fed rate hikes, according to Credit Suisse. They will reallocate these funds to Chinese stocks, which is upgraded to the Overweight classification. Credit Suisse upgraded Malaysia but downgraded South Korea and Thailand, due to high exposure to Russian tourism. Crude rally is expected to add $60 billion to India’s import bill.
Effective 27th March, scheduled international passenger flights will begin after a gap of 2 years. This will mark the end of air transport bubbles with the large scale normalization. This move will not only boost international capacity but also soften airfares. Currently, around 617 international flights are operating representing 50% of pre-COVID capacity. This is likely to be a blessing in disguise for international tour operators who have been the worst hit on account of the contact sensitive nature of their core business.
The privatization of Shipping Corporation of India may have to wait for some time due to the market turbulence triggered by Russia’s invasion of Ukraine. The DIPAM is concerned that divesting SCI at this time would mean getting a lower than expected price. The sanctions on Moscow are creating a major supply chain bottleneck in oil, food and key minerals. With the ports on the Black Sea being embargoed, hundreds of ships are already stranded. While India buys limited crude from Russia, sentiments are hit.
The stock of Ashok Leyland hit a 15-month low of Rs.93.20 as the stock has now slipped nearly 22% in the last one week. There are margin concerns due to rising raw material costs. The stock is already down 30% in the last one month. For Dec-21 quarter, the EBITDA margins had shrunk by 123 bps to 4% while input costs had risen by 78% yoy. However, the company is confident that the demand for MHCVs would remain strong in the medium term. ALL has transferred its electricals vehicles (EV) business to Switch Mobility.
Sugar continues to have a sweet time as sugar stocks rallied up to 18% on strong outlook. With a favourable heavy mix of ethanol, coupled with higher sugar realisations; sugar companies are expected to report record OPMs in the Mar-22 quarter. Ethanol demand is expected to grow at a CAGR of 15% over the next 8 years, driven by the government mandate of 20% ethanol blending in petrol. Sugar sector is likely to grow at 25% CAGR in the coming years. Fresh distillation capacities will go on board from FY23.
In a major development, the US could put a total ban on imports of Russian energy as early as 09th March. However, Europe is unlikely to participate in this ban. US plans to ban Russian oil, LNG and coal. However, with Europe relying on Russia for 27% of its energy needs, their participation is doubtful. This led crude to close beyond the $130/bbl mark. It is now just 12% short of its all-time high. Meanwhile, Russian oil minister Alexander Novak, warned that Brent Crude could hit $300/bbl if the US and EU ban Russian oil.
Adani Ports and SEZ signed an agreement with IOCL for augmenting IOC’s crude oil volumes at Mundra. IOCL will expand its existing crude oil tank farm at Mundra Port, enabling it to blend additional 10 MMTPA crude at Mundra. This will also support IOCL’s expansion of Panipat refiner by 66% to 25 MMTPA. Mundra port is one of the major economic gateways to India. IOCL has refining capacity of 80.55 MMTPA and over 15,000 KM of pipeline network. For IOCL, this will entail a capital outlay of Rs.9,000 crore for the tanks.
