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Think Ahead with EZWealth – 08 Nov 2021
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COP26: ‘End of coal is in sight’ as more than 70 nations join new pact
UN conference host Britain said 77 countries had pledged to phase out coal, dirtiest of the fossil fuels that drive global warming, as a study showed the carbon dioxide they release into the atmosphere had rebounded to near pre-pandemic levels. “What surprised us was the intensity and rapidity of the rebound.” Alok Sharma, British president of the COP26 conference in Glasgow, said the two-week meeting was on its way to gradually ending use of the world’s most widely used fuel —for which demand is set to hit a new record this year. He said on Thursday 77 countries had signed a pledge to phase out coal-fuelled power plants — which produce more than 35 per cent of the world’s electricity —and stop building new ones.
The British government said on Wednesday it expected 190 nations and organisations to sign the non-binding pledge, in which richer countries would phase out coal power before 2040, and poorer countries before 2050. But the list published on Thursday left out both India and China, which is home to almost half the over 2,600 coal-fired plants operating or under construction around the world. Poorer countries are certain to demand financial help from developed nations as the price of ending their reliance on coal — and richer countries have failed to meet a promise of providing $100 billion a year in “climate finance” by 2020. There are signs of initiatives to address the funding issue.
Diwali festive sale crosses Rs 1.25 trn, breaks all records in 10 yrs: CAIT
Shoppers across the country bought products worth Rs 1.25 trillion this Diwali, helping retailers log decade-high sales — a sign of resilient demand even as inflation remains high. The Confederation of All India Traders (CAIT), which represents about 70 million traders, said the tremendous sales response came as a much-needed breather for retailers facing a slowdown for the past two years. It has also made businesses optimistic about the near future.
Traders are now gearing up for the wedding season, scheduled to start from November 14, said CAIT. “During Diwali this year, there is an estimated business of about Rs 1.25 lakh crore (trillion) in the entire country, which is a record figure in the last decade,” said CAIT National President B C Bhartia and Secretary General Praveen Khandelwal. “In Delhi alone, this business was about Rs 25,000 crore.” Bhartia and Khandelwal said consumers preferred Indian goods this time, leading to a direct loss of over Rs 50,000 crore of business to Chinese exporters.
‘Data breach at India’s biggest demat depository exposed 4.39 cr investors’: E-security firm
According to cybersecurity researchers at CyberX9, a Chandigarh-based company, the vulnerability in CDSL’s system exposed sensitive personal and financial data of an estimated 4.39 crore investors on whom CDSL has performed a Know Your Customer/Client (KYC) operation since 2005. The team said those exposed included investors with a net worth of over Rs 1,000 crore. CyberX9’s founder and managing director, Himanshu Pathak, called the data “exposed” in the CDSL vulnerability a “virtual gold mine” for phishers, scammers, and for “malicious attackers looking to spread misinformation to manipulate Indian share markets”.
However, a CDSL statement in response to an email from ThePrint sent on 27 October said there had been no breach, but a vulnerability was found and sorted out. “CDSL would like to clarify that there has been no security issue or data breach at CDSL. However, CVL has received a vulnerability alert on the website of CVL, which has since been mitigated. There has been no data breach at CVL.”
Excise duty cut on petrol, diesel could reduce inflation by 30 bps
The Centre’s move to cut excise duty on petrol by Rs 5 a litre and on diesel by Rs 10 a litre could reduce the consumer price index (CPI) inflation rate by up to 0.30 percentage points. However, not all of it will be visible in the November inflation data, which will be released in December, as the second-round impact takes time to take effect. Meanwhile, petrol prices were down by Rs 5.26 to Rs 6.77 a litre and diesel rates were lower by Rs 11.16 to Rs 12.48 per litre in the four major metros — Delhi, Mumbai, Chennai, and Kolkata — as on November 4, when the cuts we enforced, over those on November 3 and held on to those rates on November 5.
Several Economics experts are of the opinion that this move would lead to a reduction in inflation; the impact of which would be visible in November CPI data, to be released by December 12.
China October exports beat forecasts, offer buffer to slowing domestic economy
China’s export growth slowed in October but beat forecasts as booming global demand for holiday seasons, an easing power crunch and mitigating supply chain disruptions offset some pressures facing the world’s second-largest economy. Imports, however, missed analysts’ expectations, likely pointing to the overall weakness in domestic demand. Outbound shipments jumped 27.1 percent in October from a year earlier, slower than September’s 28.1 percent gain. Analysts polled by Reuters had forecast growth would ease to 24.5 percent.
Zhiwei Zhang, chief economist at Pinpoint Asset Management, said the strong exports would help to mitigate the weakening domestic economy, and offer the government with more room to manoeuvre economic policy. “The government can afford to wait ’til the year end to loosen monetary and fiscal policies, now that exports provide a buffer to smooth the economic slowdown,” he said. Recent data has pointed to a manufacturing slowdown. Factory activity shrank for a second month in October, an official survey showed, while growth in industrial output eased to the lowest since March 2020 – the first wave of the pandemic.
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Stocks in the news
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Results on November 8: Britannia Industries, Aurobindo Pharma, Sobha, 3i Infotech, Action Construction Equipment, Balrampur Chini Mills, Elgi Equipments, GVK Power & Infrastructure, HG Infra Engineering, KRBL, MM Forgings, PTC India Financial Services, Pricol, RSWM, Shankara Building Products, Shyam Metalics and Energy, Talbros Automotive Components, Ujjivan Small Finance Bank, Vijaya Diagnostic Centre, V-Mart Retail, and Wockhardt will release September quarter earnings on November 8.
Bharti Airtel aims at leveraging its 180 million plus digital service customers and wide presence in rural areas to grow its payment bank business. Airtel Payments Bank has a customer base of around 115 million with a monthly transacting user base of 21 million. The payment bank’s take rate (rate of conversion of gross merchandise volume into revenue) is 0.74%. This is among the highest in the industry, he added.
Excerpts from conversation with Hardayal Prasad, CEO of PNB Housing Finance: “On the retail side, for eight quarters, our portfolio shrank, but this quarter has witnessed flat growth. We will start growing from the next quarter in terms of retail books. From next quarter, we will either look at a slight or zero growth. It will not be negative, as we are experiencing for 8-9 quarters. And later, the growth would be 7-10%, in line with the industry growth”
Excerpts from conversation with Kishor Patil, CEO of KPIT Technologies: “In automotive, because of the new technologies being introduced and the new architecture coming in the next five years, we see a very good demand environment. That’s why we have increased the revenue and profit outlook for the year. While we are aware that chip shortages are affecting production models, none of the original equipment manufacturers, irrespective of the environment have reduced tech spending. In fact, they are accelerating. Otherwise, they will lose on the models to come by 2025 and lose the market share in the new set of vehicle models, specifically driven by electrification.
SunTV Networks: The company had reported a PAT of Rs 335.02 crore in the July-September period a year ago, Sun TV Network said in a BSE filing. Its revenue from operations was Rs 848.67 crore during the period. It was Rs 768.69 crore in the corresponding quarter of the previous fiscal. Sun TV Networks total expenses were Rs 385.20 crore in Q2 of FY 2021-22.
Gail (India): National Company Law Tribunal (NCLT) has granted approval for acquisition of 26% equity stake of Infrastructure Leasing & Financial Services (IL&FS) Group by Gail (India) in ONGC Tripura Power Company (OTPC).
Dhanlaxmi Bank: The bank reported lower net profit at Rs 3.66 crore in Q2FY22 against Rs 14.01 crore in Q2FY21, net interest income increased to Rs 90.66 crore from Rs 88.66 crore YoY.
Grasim Industries: The company has successfully commissioned Chloromethane (CMS) project at Vilayat Unit, Gujarat, having capacity of 150 ton per day (TPD) or 50,000 ton per annum (TPA). This will result into an additional annualised revenue of around Rs 400 crore.
NMDC: The company has fixed prices of iron ore. Lump ore price is at Rs 5,950 per ton, and fines rate at Rs 4,760 per ton.
SJVN: The company has bagged 100 MW Grid connected solar PV power project from Punjab State Power Corporation (PSPCL) through tariff based competitive bidding process, on build own and operate (BOO). The tentative cost of construction of this project is Rs 545 crore.
Independent directors of Future Retail (FRL) have complained to the Competition Commission of India (CCI), saying that American retail giant Amazon had violated foreign direct investment norms when it picked up a 49 per cent stake in the company’s promoter entity, Future Coupons (FCPL), and applied for the CCI’s approval by concealing facts. Asking the CCI to revoke the approval granted to Amazon to buy a stake in FCPL, the independent directors said the watchdog should act to stop Amazon from perpetuating “its evil non-desirable designs” against the Indian company. FCPL owns 9.9 per cent in FRL and Amazon had picked up a stake in FCPL in September 2019 just before FRL’s sales started falling and the company started defaulting in payments to its vendors.
Tata Motors-owned Jaguar Land Rover (JLR) expects the semiconductor shortage situation to gradually start recovering in the remaining part of the current financial year. The British multinational automotive company in the meantime will continue to take steps to contain the impact of the shortage on its operations across the globe. While the supply of semiconductors remains constrained, the company will continue to take mitigating actions, including prioritising the production of higher-margin vehicles and closely managing costs to reduce its break-even point, it added.
Express logistics company TCI Express is looking to begin deliveries using drones by the end of the ongoing fiscal, a top company official said. Recently, the company concluded its initial trials, TCI Express Managing Director (MD) Chander Agarwal told PTI. In the trials conducted in Ahmedabad, medicines and other urgent/immediate delivery packages weighing 5-10 kgs were delivered to customers, he said.
Urban sales are recovering and trending better than rural sales, which is presently ‘very resilient’ after the second wave of COVID-19 pandemic, and Dabur India is continuously investing in rural infrastructure as it is ‘hopeful on the macroeconomics’, a top company official said. Notwithstanding the uptick in sales, urban markets are still not in line with pre-COVID growth and are on a recovery path helped by the comeback of modern trade channels, e-commerce sales and improvement of mobility as restrictions are eased out, according to Dabur India CEO Mohit Malhotra. The sales network of Dabur India covers around 83,500 villages and the company aims to cover 90,000 villages directly by next year.
Dalmia Cement has turned to using biomass and industrial waste to protect itself from fuel price fluctuations that are eating into its margins. The company is also looking to raise Rs 10,000 crore for capital expenditure between FY22 and FY24 after reaching a negligible debt level. “We are almost debt-free now. This capex will be a combination of internal accruals and debt,” said Singhi. The firm’s net debt to EBITDA ratio was at 0.48x as of September 30. The company’s green fuel is an industrial waste derived from chemical, pharma, and even automobile units through pyro-processing, which helps to reduce reliance on coal. “The overall cost of this green fuel is about 60 per cent lower than the normal fuel that we use,” said Singhi, without divulging much on total cost savings because the transition to green fuel is still in the initial stage.
Coal India’s plan to raise prices, which has been pending for some time, is likely to be delayed further as the mining major has failed to secure the nod of key stakeholders amid an outstanding of Rs 24,000-25,000 crore pushing the company in a tough situation, a source close to the development said on Sunday. The recent coal crisis at power plants in several parts of the country has caused the dry fuel producer to relax payment terms and push coal to ensure that there is the least shortage of power to keep the economy on track
IndusInd Bank: The bank is facing whistle-blower allegations on loan evergreening. The lender, however, has denied the allegations and has termed them as “grossly inaccurate and baseless”. The bank said it had rectified a glitch that arose with regard to lending without customer consent.
Divi’s Labs: The company reported increase in Q2 profit by 18% to ₹606 crore over the corresponding quarter of the last year. The company’s revenue from operations rose 15% to ₹1,967 crore for the period under review as against ₹1,713crore in the same quarter last year.
DLF: Realty major DLF’s arm DCCDL, which holds bulk of its office and rental assets, has reported a 3% increase in net debt at ₹19,640 crore during the September quarter due to higher capex. DLF Cyber City Developers Ltd (DCCDL) is a joint venture between DLF Ltd and Singapore’s sovereign wealth fund GIC. DLF has nearly 67% stake in the JV firm, while GIC has the remaining.
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