Companies & Sectors
1QFY17 results helped by non-operating factors
The June quarter results of Indian companies have so far been good with net profits of the Nifty-50 Index (25 companies have reported so far) being 5.5% ahead of expectations. But in several cases, the results are helped at net level by non-operating factors, says a research report.
 
In a note, Kotak Institutional Equities Research, says, "India’s macro continues to look good with the recent sharp decline in crude oil prices, fall in bond yields and decent monsoons. The chances of goods and services tax (GST) implementation are also looking better. Thus, the dilemma over our positive top-down view and dwindling number of good bottom-up ideas has become deeper."
 
While 1QFY17 results have been good so far, EBITDA is in line with only RIL and ZEE, surprising positively meaningful, the report says. "Also, the outperformance in net profits has come from higher non-interest income (private banks), lower selling, general and administrative (SG&A) costs (IT companies), adventitious gains (RIL), lower finance cost (Bharti Airtel), lower depreciation, depletion and amortization (DD&A) due to change in depreciation rates (Maruti Suzuki India Ltd) and extraordinary gains (HDFC).” Below table gives details of the nature of the earnings outperformance. Without RIL’s adventitious gains, the overall results look less impressive, it added.
 
 
 
According to Kotak, during the June quarter, volume growth continues to be sluggish and summer months may have aggravated demand. It says, "We note that revenue and volume growth has been disappointing in general while cement and consumer staples volumes have been weak in particular (see table below). We note that that 1QFY17 coincided with India’s summer season and water scarcity in several parts of the country, which may have exacerbated an already-weak rural demand. It would be too much to expect high soaps and shampoo usage and construction activity without water."
 
 
Due to the good monsoon and the seventh pay commission-related payouts, Kotak hopes that there would be a pickup in overall consumption demand. "For now, we attribute the slowdown in recent economic activity over the past one-two months (see table below) and weak 1QFY17 volumes for the companies that have reported so far to severe weather conditions and water scarcity. Of course, many parts of India including certain cities are now facing floods, which may disrupt demand in 2QFY17 too. As an aside, droughts and floods are a telling commentary on the state of India’s infrastructure and its growth and investment challenges and opportunities, if policies and politics permit," the report added.
 
 
Kotak feels that the valuations in the Indian market, except a few areas where stocks are trading near its FY2018-E-based fair valuations, are expensive based on any reasonable parameter or timeframe. "Without a strong economic and earnings recovery in second half of FY17, we see further earnings downgrades, which would make valuations even more expensive. However, valuations hardly matter these days. The more interesting part is that almost all market participants acknowledge the expensive valuations but most are reluctant to act on the same. It seems to us that passive investment has taken a new form," the report concluded.

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Government seeks Rs1.03 lakh crore additional spending
The government on Monday sought Parliament's nod for additional spending of Rs 1.03 lakh crore, though the cash outgo will only be Rs 20,948.26 crore.
 
"Approval of Parliament is sought to authorise gross additional expenditure of Rs 1,03,013.74 crore. Of this, the proposals involving net cash outgo aggregate to Rs 20,948.26 crore and gross additional expenditure," a Finance Ministry document tabled in the Lok Sabha said.
 
This is in addition to the total expenditure of Rs 19.78 lakh crore, consisting of Rs 5.50 lakh crore under Plan and Rs 14.28 lakh crore under Non-Plan, projected in the Union Budget 2016-17.
 
Presenting the Supplementary Demands for Grants for 2016-17 in the Lok Sabha, Finance Minister Arun Jaitley sought Parliament's approval for transfer of Rs 5,000 crore towards National Employment Guarantee Fund and Rs 1,000 crore for providing funds to Indian Strategic Petroleum Reserves for Sovereign Strategic Crude Oil Reserve at Vizag, Mangalore and Pudur.
 
The Demands For Grants also include Rs 40,000 crore as Ways and Means Advance to Food Corporation of India (FCI) to meet the working capital requirements towards procurement of food grain for targeted public distribution system.
 
The government has also sought Rs 5,000 crore towards Mahatma Gandhi National Rural Employment Guarantee Scheme (MNGREGA).
 
The Demands for Grants include 51 grants and one appropriation.
 
Jaitley sought approval for additional assistance of Rs 2,000 crore to states affected by natural calamities like hailstorm and non-seasonal rain under National Disaster Response Fund (NDRF).
 
Among other sectors, the government sought Parliament's approval for providing Rs 31,957 crore to the Ministry of Road Transport and Highways under various heads.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

 

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Cleaning India at night, over 90% ready to change their lifestyles: Survey
Cleaning cities during the night would save children and others from dust in the morning and 91% of those surveyed said they would be willing to change their lifestyles for this.
 
"Very little is done in India when it comes to cleaning at night. Schools, homes, offices and streets are all cleaned during morning hours and that leads to dusty air, piled-up garbage and mosquitoes, leading to many negative implications on our health and quality of life," said the countrywide survey of 15,000 persons conducted by the Local Circles citizen engagement platform.
 
80% citizens felt that their localities are not cleaned during the night. A mere 14% said this was happenning while 6% did not comment. 
 
"91% people are ready to change their lifestyle for night time cleaning, which also includes garbage collection," survey said.
 
However, it further pointed out that unlike developed countries where garbage is kept outside houses in night and collected in the morning, for Indians, it's hard to adapt to a new system. 
 
"At present, household garbage is taken away in the forenoon. In the new system, garbage will go out at night," survey said.
 
It also said that more than 50% of women are deployed on cleaning jobs and might be unwilling to accept the new system. 
 
The report suggests home cleaning in the second half of the day between 1 p.m. to 8 p.m. and placing garbage out at night. For offices, cleaning is recommended post closure starting 7 p.m. to 8 p.m. and placing garbage out by 10 p.m.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Jyoti Dua

4 months ago

The night cleaning is the RIGHT way. However, placing Night Cleaning in operation is going to be a difficult task for administration. Our garbage management system needs induction of technology and change of mind set of managing team.

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