Morgan Stanley agrees with RBI policy to the extent that headline inflation is still very high and it believes the macro conditions warranted higher rates
In its mid-quarterly review of monetary policy, the Reserve Bank of India (RBI) increased key policy rates on 28th January. The policy repo rate under the liquidity adjustment facility (LAF) was increased by 25bps to 8%. In its research note, Morgan Stanley agrees with the RBI policy to the extent that headline inflation is still very high, and it believes the macro conditions warranted higher rates.
As the inflation war is still not fully conquered, Morgan Stanley analysts feel that there are several forces that should help moderate CPI inflation in line with the RBI’s base projection of about 8% during the quarter ending March 2015: the recent monetary tightening, reduced misallocation in household balance sheets (lower allocation to gold and property), the corporate sector’s focus on improving productivity, and the year-on-year decrease in global commodity prices. The key source of concern is the continued high wage growth.
Morgan Stanley points out that in its war against inflation, RBI could be compromising on GDP growth and that it is correct at this stage.
Overall, the RBI policy has been hawkish and the research note underlines it with the words, “we have been arguing that the macro environment warranted higher (interest) rates for some time and hence we do believe that the hawkish move is the right step. We see the policy action indirectly indicating that the RBI is moving towards implementing the recommendations of the Urjit Patel Committee Report.”
GoodLife Products, the Mahendran Holdings unit with help from IVFA has bought back ISS Hicare, the second largest pest control services provider in the country, from Danish ISS Global for an undisclosed sum
India Value Fund Advisors (IVFA) has partnered with GoodLife Products Ltd, a group company of Mahendran Holdings Ltd, to acquire ISS Hicare Pvt Ltd for an undisclosed sum. ISS Hicare is owned by ISS Facility Services India Pvt Ltd, the Indian unit of Danish multinational ISS World Services A/S.
Vikram Nirula and Haresh Chawla from IVFA will join as directors on the Board of GoodLife Products and Mahendran will be serving as the company's chairman.
"The Indian consumer deserves the utmost safety and efficacy in pest control services - we have many ideas on how to transform and invigorate the industry. Hicare is well-positioned to provide a global standard of pest control services to the Indian consumer," said Mahendran, chairman of Mahendran Holdings Ltd.
ISS Hicare was founded by Godrej Industries and Mahendran Holdings in 2004 to provide pest control services to residential customers in Mumbai, eventually expanding to become a pan-India player serving both residential and commercial customers. It was acquired by Danish multinational ISS Global in 2009 and is now India's second largest pest control services provider.
During the December quarter, Shriram Transport Finance reported a decline in its net profit to Rs301.38 crore due to higher finance cost and provisions
Shriram Transport Finance Co Ltd, India's largest asset financing non banking financial company (NBFC) said its third quarter net profit fell 13% due to higher provisions, finance cost, despite healthy growth in its revenues.
For the quarter to end-December, Shriram Transport Finance said, its net profit fell to Rs301.38 crore from Rs345.99crore, while, its total revenues, including interest income, grew 22% to Rs2,032.33 crore from Rs1,673.49 crore, same period last year.
The Shriram group company’s December quarter net interest income (NII) increased 4% to Rs934.65 crore from Rs894.70 crore during the corresponding period last year.
The lender said during the quarter it made 41% higher provisions at Rs302.15 crore when compared with Rs213.79 crore a year ago period.
Driven by healthy inflows, the company’s total asset under management (AUM) increased 15% at Rs53,376.69 crore during the December quarter compared with Rs46,544.60 crore for the same period last year.
During October, Shriram Transport Finance made public issue of secured redeemable non-convertible debentures (NCDs) to raise Rs500 crore which resulted in higher expenditure and finance cost of the company. The finance cost of Shriram Transport Finance increased 42% to Rs1,052.93 crore from Rs741.76 crore a year ago period.
During one year period, between December 2012 and December 2013 foreign institutional investors (FIIs) share holding grew 7.99% to 49.72%; domestic institutional investors (DIIs) shareholding grew 4.04% to 5.59%. On the other hand, public shareholding fell 12.6% to 18.77% as on 31 December 2013.
Shriram Transport Finance paid an interim dividend of Rs3 per equity share during October.
Shriram Transport Finance closed Thursday marginally down at Rs611 on the BSE, while the 30-share benchmark also ended the day marginally down at 20,498.
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