YES Bank extends gain after reporting net profit of Rs 129 crore in Q2
Shares of YES Bank rose 5 per cent at Rs 14.01 on the BSE on Monday, extending its Friday’s 5 per cent gain, after the lender returned to profit in the quarter ended September (Q2FY21).
However, the stock erased its early morning rally and was up 1.4 per cent higher at Rs 13.54 on the BSE at 09:30 am. In comparison, the S&P BSE Sensex was down 0.26 per cent at 40,579 points. A combined around 89 million equity shares had changed hands on the counter on the NSE and BSE.
Private sector lender YES Bank’s net profit rose sequentially to Rs 129 crore in Q2FY21 from Rs 45 crore in the first quarter ended June 30 (Q1FY21). The bank had posted a loss of Rs 600 crore in Q2 of the previous financial year (Q2FY20).
Net interest income (NII) rose 3.4 per cent sequentially to Rs 1,973 crore in Q2 from Rs 1,908 crore in the previous quarter. On year-on-year (YoY) basis, NII was down by 9.7 per cent from the base of Rs 2,186 crore in the second quarter of the previous year. Net interest margin (NIM) rose marginally to 3.1 per cent in Q2 from 3 per cent in the June quarter. NIM was at 2.7 per cent in Q2 of the previous year.
Its asset quality improved marginally as gross non-performing assets (GNPAs) stood at 16.9 per cent in Q2 from 17.3 per cent in Q1. Net NPAs have also come down 25 bps to 4.71 per cent.
Non-interest income was up 13.9 per cent to Rs 707 crore in Q2 from Rs 621 crore in Q1, due to the strong bounce-back across transactional and granular fee streams, aided by a pick-up in economic activity and improved credit ratings.
YES Bank’s Q2FY21 financial performance improved sequentially on the back of expansion in, better traction in non-interest revenue and opex control. Given the Supreme Court ruling halting recognition of NPAs, GNPAs (in absolute value terms) were largely unchanged at Rs 323.4bn, forming 16.9 per cent of the total advances. The outlook on asset quality remains dim as the bank has maintained its slippage guidance of 7-8 per cent for FY21.
“However, what still remains a concern is that the underlying pitch (to garner deposits) remains SBI-oriented rather than something that would seem more self-sustainable. And for this reason, it becomes difficult to assess the true standalone strength of the deposit franchise. In light of the expected near-term slippages, elevated NPAs and a very average revenue profile, we are not entirely convinced of the RoA guidance put out by the management,” analysts at Nirmal Bang Equities.
With more than 50 per cent of the shares under a lock-in for 3 years, whether the market price reflects the true value can be debated, the brokerage firm said.
Tata Motors PV vertical crosses 4 mn cumulative production milestone
Auto major Tata Motors on Saturday said its passenger vehicle vertical has crossed 4 million cumulative production milestone, nearly three decades after it rolled out its first model in the segment — Tata Sierra SUV in 1991.
The company, which over the years has produced models like the Indica, Sierra, Sumo, Safari and the Nano, had achieved the 1 million production mark for passenger vehicles in 2005-06 and 3 million milestone in 2015.
“This is a very significant milestone for Tata Motors. Very few players in the industry have reached such a milestone. This has been a long journey since we rolled out Tata Sierra in 1991,” Tata Motors President Passenger Vehicles Business Unit (PVBU) Shailesh Chandra told PTI.
Over the years, the company always challenged the conventions and brought in many paths breaking products, many times first in the market, like Sierra, Estate, Safari, Indica and the Nano, he added.
With Sierra, the company took its first shot at the SUV segment in the country. The company consolidated it further with Safari.
Further in honour of the legacy of Sumant Moolgaonkar, Tata Motors introduced the first-ever multi-purpose vehicle in Tata Sumo. With Indica, the company changed the customer perception in terms of how a passenger vehicle is received.
The company set up the PVBU vertical in 1998 and the first product to roll out under its aegis was Indica.
“It was the first indigenously developed car and since then we have always challenged conventions and have strived to bring in technologies which are supportive of the cause of the nation, whether it is safety or things related to sustainability,” Chandra noted.
The company has been focussing not only on the safety aspect of its vehicles but has also been leading the electric vehicle space in the country, he said.
“We have brought a paradigm shift to the industry that safety is also important otherwise it was not taken that seriously and to ensure that we were also the first company to commission crash safety testing in the country,” Chandra said.
The company’s compact SUV Nexon was the first model in the country to receive a 5-star rating from Global Ncap. Tata Motors is also the country’s largest electric vehicle manufacturer with 67 per cent market share.
It currently sells Nexon EV and two trims of Tigor, with a different range, in the electric vehicle segment. The company also has ambitious plans to launch further electrified models in the future, with an electric version of its premium hatchback Altroz next in the line.
Chandra said with greater acceptance of its current model line up, the company would be able to reach the next 10 lakh production mark in much lesser time.
“It will take us a shorter time to achieve the next one million production mark. This should be on the back of the Indian growth story as well.
“So the industry should also reach higher peaks. It has been growing, barring last year and this year as well due to the pandemic, but the underlined fundamentals of the passenger vehicle industry remain intact whether it is from penetration perspective or buying capacity of people,” Chandra said.
From all the angles the growth story should come back as the economy also stabilises post-pandemic, he added.
“So on the back of that growth and certain actions that we are taking to strengthen our product portfolio and the traction we are already seeing, I am sure the next one million should be faster than three to four million marks,” Chandra said.
The company now sells five BSVI compliant models — Tiago, Tigor, Nexon, Harrier and the Altroz.
Tata Motors has manufacturing facilities at Chikhali, Pune; Sanand in Gujarat; and a joint venture plant with Fiat at Ranjangaon in Pune.
How Many Stocks Should you trade?
If you are a stock investor, especially someone who has just begun exploring the world of stocks, chances are you’ve wrestled with the same doubt. What Is the Ideal Number of Stocks to Have in a Portfolio? There is no single correct answer to this question.
Let’s discuss the approach you can take to arrive at a satisfactory conclusion.
For any investor, it is safe to say that no single stock should be more than 5-6% of the entire portfolio, as suggested by Seth Klarman, a successful investor and author.
The correct number of stocks to hold in your portfolio depends on several factors, such as your country of residence and investment, your investment time horizon, the market conditions, and your propensity for reading market news and keeping up-to-date on your holdings.
The more equities you hold in your portfolio, the lower your unsystematic risk exposure. A portfolio of 10 stocks, particularly those across various sectors or industries, is much less risky than a portfolio of only two stocks.
Of course, the transaction costs of holding more stocks can add up, so it is generally optimal to hold the minimum number of stocks necessary to effectively remove their unsystematic risk exposure. What is this number? There is no consensus answer, but there is a reasonable range which is 15 to 25, depending on the investment strategy.
The investment strategy also determines how many stocks you should own; whether you want a concentrated portfolio of high dividend-yielding blue-chip stocks or if you are investing in high growth small cap stock or diversify it to a larger number of stocks to lower the overall risk of investment. The final decision is yours.
Vedanta gains 6% as board to consider interim dividend on Saturday
Shares of Vedanta moved higher by 6 per cent at Rs 107.75 on the BSE in intra-day trade on Thursday after the company said the board of directors is scheduled to meet on Saturday, October 24, 2020, to consider the first interim dividend.
“The board of directors of the Company on Saturday, October 24, 2020, will consider and approve first interim dividend on equity shares, if any, for the financial year 2020-21 (FY21),” Vedanta said in an exchange filing.
The record date for the purpose of determining the entitlement of the equity shareholders for the said dividend, if declared, is being fixed as Saturday, October 31, 2020, it said.
With today’s gain, the stock of Vedanta has recovered 13 per cent in the past four trading days from a level of Rs 95 hit on October 16, 2020. Earlier, in the past three weeks, it had tanked 32 per cent from a level of Rs 140, after the promoter’s delisting offer was failed.
In another development, Hindustan Zinc, Vedanta’s subsidiary announced a healthy dividend of Rs 21.3 per share i.e. 1065 per cent on the face value of Rs 2 per share for the FY21 amounting Rs 9,000 crore on Tuesday. Vedanta, which holds 64.92 per cent stake in Hindustan Zinc as of September 30, is likely to get Rs 5,843 crore by way of dividend.
“While Vedanta will continue to stay listed on the exchanges, and may bear the brunt of the failed attempt at de-listing in the near term, the focus will be on, how Vedanta will utilise the $3.15 billion and what could be the operating performance over the next few quarters,” said Hemang Jani, Head – Equity Strategy, Broking & Distribution, Motilal Oswal Financial Services.
The discussion around capital allocation will dominate investor concerns, while the operating performance of mining companies is getting better, due to firm commodity prices globally. Book value of Vedanta as of March 31, 2020, was Rs 147.
“While a buyback may not be considered in order to make the next attempt at delisting successful, a generous dividend can be expected given the strong cash on the balance sheet and the need of liquidity by Promoters. But, any increase in intercompany loans will be a negative,” MOFSL said in a report. The brokerage has ‘neutral’ rating on the stock.
At 01:43 pm, Vedanta was trading 5 per cent higher at Rs 106 on the BSE, as compared to 0.54 per cent gain in the S&P BSE Sensex. A combined around 59 million equity shares had changed hands on the counter on the NSE and BSE till the time of writing of this report.
Sebi issues framework for processing AIF registration applications
Markets regulator Sebi on Thursday came out with a framework for processing of applications for registrations of Alternative Investment Funds (AIFs).
While processing the applications and launching of new schemes, it has been observed that the manager of an AIF often proposes to set up an investment committee with the mandate to provide investment recommendations to the manager, according to Sebi.
In some applications, the investment committee is mandated to approve the investment decisions of the AIF. Such committees may consist of internal members — employees, directors or partners of the manager– and/ or external member.
Earlier this week, the regulator amended AIF rules to provide that the manager may constitute an investment committee to approve investment decisions of the AIF subject to certain conditions.
“The applications wherein investment committee proposed to be constituted to approve investment decisions of AIF includes external members who are ‘resident Indian citizens’, shall be duly processed,” Sebi said in a circular.
According to the regulator, applications wherein investment committee proposed to be constituted to approve investment decisions of AIF includes external members who are not ‘resident Indian citizens’, then those will be considered only after receiving clarification from the government and the Reserve Bank of India (RBI).
Sebi also said that it has written to the government and the RBI seeking clarity on the applicability of rules to the investment made by an AIF whose investment committee approves investment decisions and consists of external members who are not ‘resident Indian citizens’.
In a separate circular, Sebi has issued certain clarifications on the usage of the word “promoter” in its framework issued in August pertaining to handling investor complaints by exchanges as well as the standard operating procedure for actions to be taken against listed companies for failure to redress such grievances.
Bajaj Auto net profit declines 22% to Rs 1,194 cr in September quarter
Bajaj Auto on Thursday said its consolidated net profit declined by 21.62 per cent to Rs 1,193.97 crore for the quarter ended September.
The two-wheeler major had posted a net profit of Rs 1,523.31 crore in the July-September period of previous fiscal.
The company’s revenue from operations declined to Rs 7,155.86 crore during the period under review as compared with Rs 7,707.32 crore in the year-ago period, Bajaj Auto said in a regulatory filing.
The Pune-headquartered firm reported total volumes of 10,53,337 units in the second quarter, down 10 per cent from 11,73,591 units in July-September quarter of 2019-20.
Domestic two-wheeler volumes, however, saw an increase of 6 per cent at 5,50,194 units during the second quarter as against 5,21,350 units in the same period last fiscal.
“Domestic two-wheelers registered a strong turnaround in the first half of the quarter driven by pent up demand. While the exact festive spike is awaited, early signs show (strong) indications of a recovery,” the two-wheeler major noted.
The industry grew by 7 per cent in the second quarter and the company’s growth was in line with the industry, Bajaj auto said.
“Hence, our market share was 18.2 per cent in the first half of the fiscal as against 18.1 per cent in the first half of 2019-20,” it added.
However, domestic commercial vehicle volumes continue to remain muted and are dependent on the return of adequate short distance mobility demand, the company said.
“Within CV, cargo has fared better than passenger and our share has increased to 37 per cent which is the highest ever. Overall, our market share was 53.3 per cent,” it added.
As on September 30, the company’s surplus cash and cash equivalents stood at Rs 16,240 crore as against Rs 14,232 crore as on June 30, 2020, and Rs 14,322 crore as on March 31, 2020, Bajaj Auto said.
NTPC ranks first among Indian PSUs in Forbes’ ‘World’s Best Employer 2020’
State-run power giant NTPC on Thursday said it has featured on the top on the list of Indian PSUs under ‘World’s Best Employer 2020’, published by Forbes.
The recognition is testimony to the NTPC’s commitment towards inculcating best in class practices that are thoughtfully designed and robustly executed, the company said in a statement.
During the lockdown phase and the subsequent unlock period, NTPC’s learning and development strategy moulded itself significantly to further evolve as per the requirement of the current scenario, the power producer said.
Its training methodology enriched the lives of thousands of its employees through intensive digitisation and online training enabling them to avail services even from remote locations, it added.
The modules have helped thousands of workforce from NTPC to grow and think beyond the professional sphere.
NTPC has been successfully innovating and introducing people practices in the domain of hiring; engagement; diversity and inclusion; rewards and recognition; and performance management.
In the recent past, the company has initiated an NTPC Series’ on success stories beyond official work, ‘Ambition, Growth, Success Beyond Work’, a series on the achievements of employees beyond their official assignments.
Around 160,000 full-time and part-time workers from 58 countries working for businesses with operations in multiple nations or regions took the survey and these participants rated their eagerness to endorse their employers to others.
The employers were also judged based on their COVID-19 responses, image, economic footprint, talent development, gender equality and social responsibility. The final list comprised 750 multinational and large corporations headquartered in 45 countries.
Sterlite Tech Q2 profit dips 63% to Rs 58 cr
Data network solutions provider Sterlite Technologies on Thursday posted over 63 per cent year-on-year decline in consolidated net profit for the second quarter ended September 2020 at Rs 58.5 crore, hurt by lower revenue and a higher mix of service business.
However, the profit and revenue in September quarter were substantially higher sequentially, and the company exuded confidence that the sequential growth logged would continue for the next two quarters as well.
The net profit (attributable to owners) for Q2FY21 came in at Rs 58.47 crore, down 63.3 per cent year-on-year. The net profit in the corresponding period of the previous year stood at Rs 159.56 crore, according to a regulatory filing.
Revenue from operations slipped nearly 15 per cent to Rs 1,159.5 crore in Q2FY21 from Rs 1,359.6 crore in the year-ago period.
However, the net profit was nine-fold higher than Rs 6 crore reported in the first quarter of the current fiscal. Revenue also rose over 32 per cent from June quarter.
The company said its manufacturing operations have exceeded pre-COVID levels and its order book is at an “all-time high” of over Rs 10,705 crore with diversified wins.
“Digital network creators globally continue to invest aggressively in strengthening their current network, to increase the reach and quality of their networks. Our strategic investments in building deep technology expertise, integrated digital network solutions, and global talent, positions us strongly to address this market demand,” Sterlite Technologies Ltd (STL) Group CEO Anand Agarwal said in a statement.
Agarwal told PTI that the drop in profit on a year-on-year basis was primarily on account of the overall decline in revenue and increasing proportion of service business, which runs on lower margins, but offers better returns on capital employed.
STL has initiated the expansion of its optical fibre cable capacity to 33 million fibre km from 18 million fibre km as the company’s strong customer engagement and solution offerings demonstrate positive long-term growth, the company statement said.
It said the capacity expansion is expected to be completed by June 2021.
The company, in an investor presentation, expressed confidence that it will continue to grow in the fiscal’s third and fourth quarter on a sequential basis, and that the second half of FY21 will be better than the year-ago period.
Shares of STL on Thursday closed 4.12 per higher at Rs 158 apiece on the BSE.
What Is Grey Market & Grey Market Premium?
What Is Grey Market?
A grey market, also known as a parallel market, is one where trading of goods takes place outside the realm of the manufacturer’s official trading channels.
A typical example of a grey market is a small business selling merchandise of a particular company even though they are not the authorised dealers in the market. But it is important to note that the small businesses doing this are legal entities.
In comparison, a black market deals with goods that are generally smuggled into the country to avoid paying import duty and other charges.
What is IPO Grey Market?
IPO Grey Market is an unofficial market where IPO applications or shares are bought and sold before they become officially available for trading on the stock exchange.
It is an over-the-counter market where dealers may execute orders for preferred customers as well as provide support for a new issue before it is actually issued. As IPO Grey Market is an unofficial over-the-counter market, there are no regulations around it. All transactions are done in cash on a personal basis. SEBI, Stock Exchange or Brokers are not involved or back these transactions.
What is the Grey market premium?
Grey market premium (or grey market price) is a premium amount in rupees at which IPO shares are being traded in Grey Market before they get listed in the stock exchange. Grey market premium can be in positive or in negative based on demand and supply of the stock. Grey Market Premiums are also attached with words ‘Buyer’ or ‘Seller’. They tell the price either at which buyers are willing to buy shares or the price at which sellers are willing to sell their IPO shares.
For instance, let’s assume the issue price for stock X is Rs 200.
If the grey market premium is Rs 400, it means that people are ready to buy the shares of company X for Rs 600; (i.e. 200+400).
This is how a typical deal works out in the grey market.
Bajaj Finance reports 36% dip in net profit in July-Sept qtr at Rs 965 cr
Bajaj Finance Ltd (BFL) on Wednesday reported a 36 per cent drop in its consolidated net profit at Rs 965 crore for the second quarter of the 2020-21 fiscal year. The non-banking finance company had posted a net profit of Rs 1,506 crore in the July-September quarter a year ago.
Its total consolidated income grew 3 per cent to Rs 6,523 crore during the July-September period of 2020-21 as against Rs 6,323 crore in the same quarter a year earlier, BFL said in a regulatory filing.
Net interest income was up 4 per cent at Rs 4,165 crore as against Rs 4,000 crore.
The Pune-headquartered company said new loans booked during the second quarter of this fiscal dropped 44 per cent to 36.2 lakh as against 64.7 lakh in the corresponding period a year ago.
Customer franchise as of September 30, 2020, stood at 4.41 crore as against 3.87 crores a year earlier, it added.
Its consolidated assets under management (AUM) as of September 30, 2020 grew 1 per cent to Rs 1,37,090 crore from Rs 1,35,533 crore. On a standalone basis, the AUM was Rs 104,986 crore as against Rs 110,946 crore as of September 30, 2019.
The consolidated results of the BFL included results of its wholly-owned subsidiaries Bajaj Housing Finance Ltd (BHFL) and Bajaj Financial Securities Ltd (BFinsec).
The company’s liquidity surplus stood at Rs 22,414 crore at the end of the second quarter of 2020-21 against Rs 8,107 crore a year ago, it said.
The company’s liquidity position remains very strong, the company said.
Bajaj Finance said its total operating expenses to net interest income during the quarter was 27.8 per cent as against 34.6 per cent a year ago.
“With the onset of COVID-19 pandemic, the company had taken significant measures to reduce operating expenses in April 2020. As a result, total operating expenses for Q2FY21 was down by 16 per cent to Rs 1,160 crore from Rs 1,384 crore,” it said.
The loan losses and provisions for the September quarter were Rs 1,700 crore as against Rs 594 crore.
“Consequent to the ongoing pandemic, the company has further increased its provisions on stage 1 and 2 assets by Rs 1,370 crore to Rs 5,099 crore as of September 30, 2020, as against Rs 3,729 crore as of June 2020. The company has strong pre-provisioning profitability to manage loan losses arising out of COVID-19,” BFL said.
Shares of Bajaj Finance ended at Rs 3,253 apiece on the BSE, down 0.28 per cent from their previous close.