Skip to main content

FIRM COMMODITY PRICES SUPPORT INDIA Inc GROWTH

Despite reverses of note ban, India Inc was able to post a 5.1 per cent revenue growth in the December quarter on commodity price recovery and a low-base effect, a report said today. "Indian corporate sector posted healthy revenue growth of 5.1 per cent in Q3FY2017...revenue growth was supported by recovery in commodity prices and low-base effect," domestic rating agency Icra said in a note. In the analysis of 497 companies, the agency said the 5.1 per cent revenue growth, which is significantly higher than the preceding quarters of the fiscal, was supported by commodity prices which is reflected in performance of sectors such as metals, oil and gas and capital goods. On demonetisation, it said consumption-driver sectors like auto, cement and fast moving consumer goods suffered a contraction of revenues during the quarter. Companies had to adopt strategies like offering credit to its channel partners, higher incentives and supply chain efficiencies to reduce the impact of demonetisation, it said. For the consumer durable segment, which witnessed a contraction in sales during November and December, the impact was limited as most companies were entering new product segments during the time. Cement volumes contracted by 0.8 per cent during the October-December period, with the north and west regions impacted the most, it said. "Demonetisation impact was felt across many domestic economy-oriented sectors," it said, specifying that e-commerce, toll roads, realty, construction and commercial vehicles were among other sectors hurt by the move. It, however, said that margins of the corporate sector expanded by 1 percentage point to 18.1 per cent but said this was on account of a low base effect where the earnings of metal and capital goods companies were impacted severely in the same period last year. Companies in the airlines, automobiles and auto components, logistics, tyres, telecom and shipping sectors, however, witnessed a contraction in margins, it said. The interest coverage ratio was stable at 3.3x, while that for stressed sectors like steel and construction improved.

Comments

Popular posts from this blog

JIO TARIFF CICK FOR TELECOM STOCKS

Telecom stocks today surged up to 8 per cent after the recent increase in Reliance Jio tariffs, which is largely seen as positive for the sector. Shares of Bharti Airtel jumped 4.99 per cent to close at Rs 497.50 on BSE. Bharti Airtel was the biggest gainer among the 30-share index components. The scrip of Idea Cellular soared 7.74 per cent to end at Rs 98.15 and Reliance Communications zoomed 7.60 per cent to Rs 17.70. Reliance Jio made its service dearer by about 15 per cent for its popular 84-day plan at Rs 459 from October 19, under which subscribers get 1GB 4G data at high speed per day. The company restructured its various schemes by reducing their validity period. The recent increase in Reliance Jio tariffs will increase its average revenue per user by up to 20 per cent and is a positive for the telecom sector, which is seeing a rapid consolidation, says a Philip Capital report. Established telecom sector players have seen huge reduction in their margins. Idea Cellular and Reli…

STOCK MARKET WELCOME NEW YEAR WITH LOSS

Sensex drops 244 pts
A late sell-off in auto, banking and IT shares pulled back the benchmark BSE Sensex from record high level to close down by 244 points, its biggest single loss in past one month, on the first trading day of 2018. Investors preferred to book profits at record highs amid concerns over fiscal slippages and rising crude oil prices and absence of cues from global markets which were closed for the New Year holiday. The benchmark Sensex touched a low of 33,766.15 before settling lower by 244.08 points, or 0.72 per cent, at 33,812.75. This is the biggest single-day fall since December 1 when the index had lost 316.41. The 30-share index had closed at an all-time high of 34,056.83 in the last session of 2017 on Friday. Also, the 50-share Nifty cracked below the 10,500-mark to hit a low of 10,423.10 before settling 95.15 points, or 0.90 per cent down at 10,435.55. Stocks opened on a weak note and remained range-bound for the better part of the day but an intense sell-off in…

NIFTY EARNINGS FLAT IN 2018

UBS Cautious Note

Projecting zero returns from the Nifty, Swiss brokerage UBS has projected a 10 per cent cut in its index target at 10,500 for calendar 2018, even as it remains positive over the long-term. "Top-down, we forecast Nifty earnings growth will recover from 9 per cent in fiscal 2018 to 13 per cent in 2019, but driven largely by financials," the brokerage said in a report. "However, earnings growth is likely to disappoint against consensus forecast of 22 per cent growth for fiscal 2019, implying a 10 per cent cut," it added. Accordingly, the brokerage estimates "no returns from the Nifty in 2018" and has set the index target at 10,500 for this December. The report noted that a sharp earnings recovery, with continued robust macro stability appears priced in by the markets. "A sharp earnings recovery appears priced in. The markets are already close to our 2018 target, given optimistic fiscal 2019 consensus earnings expectations, which build …