Q3 results: Net profits disappoint, but EBITDA and revenues are better, says Edelweiss

Edelweiss said while net profits of companies it tracks grew by just 2.7%, revenues increased 11.7% during the December quarter as against its expectations of 10.4%, which came as a positive surprise

The December quarter for Indian companies, excluding oil marketing companies, proved to be lacklustre with net profits growing merely 2.7% compared with the year-ago period. This was due to increase in interest cost. However, the encouraging factor during the quarter was the 2% beat on earnings before interest, taxes, depreciation, and amortization (EBITDA) front for our coverage universe, says Edelweiss Securities, in a report.

“Net profit for Sensex companies grew 4% on year-on-year (YoY) basis, higher than 3.3% estimated. The big misses in Bharti Airtel (Bharti), Tata Steel and Tata Motors were offset by positive surprises in GAIL, NTPC and Hindalco Industries. EBITDA margin for Sensex companies expanded 24 basis points (bps) quarter-on-quarter (QoQ) against expectation of 14bps QoQ decline. Revenue of Sensex companies surged 9.6%YoY against the estimate of 8.9%,” the brokerage said.

According to Edelweiss, higher interest costs are hurting profitability of companies. “The difference between the positive EBITDA surprise and negative surprise in PAT is the surge in interest costs. Interest costs, as percentage of sales for our coverage universe (ex-OMCs), jumped 40bps QoQ to 3%, highest in the last three years. With the RBI in easing mode, this component should decline going forward and could act as a tailwind,” it added.


On the sectoral front, according to Edelweiss, infrastructure issues continue to plague the economy with capital goods and construction sectors facing execution delays. While higher ad spends dented auto margins, IT and energy were the bright spots. The divergence between PSU banks and their private sector counterparts continued in Q3FY13 as well. PSU banks’ results were characterised by weak asset quality, moderating loan growth and higher provisioning on restructured assets. Private banks, meanwhile, showed little stress on asset quality, it added.


Given the slowing momentum in economic growth, Edelweiss said, discretionary demand took a hit with categories like food and certain personal products posting a slowdown; however, non-discretionary items were impervious. Consumer companies surprised positively in terms of volume growth with 10 out of 14 companies growing in line/better than expectations. Premiumisation trend continues with no major signs of down trading and rural demand remained healthy while gross margins for the sector also improved.


Coal and gas supply issues continued to loom over the utilities sector. Slowdown in volume growth was also observed in a few discretionary categories. Improvements in discretionary spending and in realisations were the primary positives for IT. For energy, the improvement in gross refining margins (GRMs) of complex refiners was positive, but upstream continues to remain a concern, Edelweiss said.


RTI Judgement Series: MCD was clueless about banquet halls operating in the capital

In an important order, the Central Information Commission asked MCD to provide all information about banquet halls operating in the city, whether they are licensed and number of challans issued against them. This is the 44th in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

The Central Information Commission (CIC), while allowing an appeal, asked the Public Information Officer (PIO) of the Municipal Corporation of Delhi (MCD) to provide all information about banquet halls operating in the city, whether they are licensed and number of challans issued against them to the applicant and also update the same on the MCD portal.


While giving this important judgement on 3 February 2010, Shailesh Gandhi, former Central Information Commissioner, said, “The Commission feels that the citizen has brought up a very valid issue and it is surprising that MCD claims it does not have centralized information on the number of banquet halls in Delhi and how many are licensed. This is one of the basic duties of a Municipal Corporation.”


Delhi resident S Chandra sought information about banquet halls particularly in residential areas from MCD. Here is the information sought by him...


1. Whether the MCD has fixed norms for allowing operation of banquet halls in the areas falling within the municipal limits of Delhi? If so the same may be indicated. If the norms have not been fixed kindly intimate the time the norms are likely to be finalized.

2. Whether MCD has permitted for operation of banquet halls in residential areas? If yes, the conditions governing such authorization may be intimated.

3. Whether any license is issued to owners of banquet halls for operation of that? If so, please intimate the authority which issues the licenses and conditions on which license is issued.

4. List of banquet halls which have been granted permission by MCD to operate within the Municipal limits.

5. How many banquets halls are operating in the residential areas in municipal limits of Delhi?

6. How many banquets halls are operating in the residential areas in Municipal limits of Delhi without permission of the MCD and what action has been taken against the owners of those Banquet Halls during past one year?

7. How many banquets halls are operating in Shahdra South District? Please give the list of those ones.

8. What preventive steps have been taken by the concerned district authority to check operation of such unauthorized banquet Halls in the past one year?

9. What preventive action has been taken by concerned district authority to check operation of such unauthorized banquet halls in past one year? MCD is requested to indicate number of Banquet halls located in residential areas on roads having width less than 60 feet in Shahdra South District and are in operation in violation of judgments of various court orders. What action has been taken against the owners of those banquet Halls who are violating court orders during past one year?

10. MCD commissioner is requested to intimate the direction issued to the zonal officer (Shahdra South Zone) for taking action against the owners who have been violating the court orders during past one year.


Since the information sought was concerned with different PIO, the applicant received several replies. Here are the replies provided by various PIOs...


PIO/SE-II Shahdra South Zone replied as under:

In regard of query 1, it was stated that the development control norms are available in the Master Plan of Delhi 2021 which is a public document and can be had from any book shop. In regard of queries no2 to 7 & 10 the list was provided as the copy is enclosed. In regard of query no8 the PIO replied that the action is being taken by the concerned department and in regard of query no9 the reply was that information is not available in this office.


Reply by PIO/Deputy Health Officer, Central Zone as under:

1.       Banquet Halls are allowed in commercial and industrial areas.

2.       Banquet halls are not permitted in residential area.

3.       Health Department has not granted any license to any banquet hall in residential areas.

4.       Not applicable.

5.       No banquet hall is operating in residential areas in the Central Zone.

6.       Reply as in query no5.


In regard of queries no. 7 to 10, it was stated that the information does not relate to the Health Department, Central Zone.


Reply by PIO/Deputy Health Commissioner, Shahadra North Zone:

In regard of queries no1 & 2 the information pertains to HQ. In regard of queries no3 to 6 as reply was given as by PIO, Central zone. In regard of queries no7, 9 & 10 the information does not relate to the Health Department of this zone.

In regard of query no 8 instructions were given to PHIs for during the prosecutions of unauthorized and unlicensed banquet halls time to time.


Reply by PIO/SE-I, South Zone, Green Park:

The information does not relate to the concerned department.


Chandra, not satisfied with the replies received from the PIOs, filed his first appeal with the First Appellate Authority (FAA). In an order, the FAA directed the PIOs to provide complete information on query nos8, 9 and 10 as the appellant was not satisfied.


Chandra, seeking a direction for the Commissioner, MCD, to provide complete and definite information in place of piece meal responses provided by Zonal officers, then approached the CIC with his second appeal.


During a hearing, Mr Gandhi, the CIC, noted that in the traditional method of MCD it appears that 50 to 80 officers must have got involved in terms of transferring papers and initialling on them. The RTI application appears to have reached the 12 zones and the Health Department after being transferred multiple times, he observed.


The CIC said, “The information provided by Shahdara South Zone is very revealing since it shows that there are 38 banquet halls operating out of which 35 are without any license and the three which has been ad hoc registrations are in residential areas which the Dy. Health Officer Dr Ajay Handa states is not permissible."


“It is also revealing that in the one year it appears not a single challan has been issued in this zone for serving food in these banquet halls without a license. If the MCD does not wish to regulate this activity it would serve a social purpose better if it decided to remove all licensing norms. This might results in lesser contempt for the law,” the Commission said.


While allowing the appeal by Chandra, the CIC then directed Dr Handa, Deputy Health Officer of Shahdara South to collect the information from all the zones about the names and addresses of banquet halls, whether they are licensed and number of challans issued against them in 2009 and also put up the information on MCD website before 28 February 2010.


The Commission also asked the PIO to ensure that information about challans issued against unlicensed banquet hall will be updated every day. “The PIO will also ensure that the regulations for the banquet halls are put up on the website. This direction is being given and the MCD must comply with it in discharge of its obligation under Section 4 of the RTI Act,” Mr Gandhi said in his order.




Decision No.CIC/SG/A/2009/003226/6680

Appeal No. CIC/SG/A/2009/003226


Appellant                                            : S Chandra,

                                                            New Delhi-110001


Respondent                                       :   1. Harminder Singh

                                                                   APIO  & EE (HQ)

                                                                   Municipal Corporation of Delhi

                                                                    Town Hall Chandani Chowk,



                                                                   2. Pushkar Sharma


                                                                   Shah South Zone,

                                                                   Municipal Corporation of Delhi

                                                                   Kakardooma Court, New Delhi


                                                                   3. Dr Hazarika

                                                                   APIO/ DHO,

                                                                   Municipal Corporation of Delhi

                                                                    Central Zone, Lajpat Nagar, New Delhi                                                                  

                                                                   4. Dr Ajay Handa

                                                                   PIO/Dy. Health Officer,

                                                                   Shah, North Zone, MCD

                                                                   Keshav Chowk, Shahdara, Delhi


                                                                   5. Pradeep Khandelwal


                                                                   South Zone, MCD

                                                                   Green Park, New Delhi


Delhi High Court issues notice to SEBI, BSE and NSE on suspended companies

A PIL by Midas Touch seeks action against SEBI for failing to regulate BSE and NSE regarding monitoring of compliance by listed companies. Despite recommendations from the Sahoo Committee, the market regulator has so far failed to take action against 2,048 companies and its promoters and directors

The Delhi High Court has issued notices to Union Government, Securities and Exchange Board of India (SEBI), Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on a public interest litigation (PIL) filed by Midas Touch Investors Association. The PIL also seeks a probe against SEBI and the bourses by the Central Bureau of Investigation (CBI) for their inaction to initiate action against defaulting companies.


Midas Touch, in its instant writ petition has stated that SEBI as market regulator and both the exchanges, as first line of regulators have failed to perform their statutory duties. This has resulted in thousands of listed companies, their promoters and directors to get away with unfair practices without any statutory monetary penalty and penal action.


According to the PIL, over the years, over Rs58,000 crore of around one crore investors are blocked due to suspension of 1,450 companies by BSE and NSE.


India has one of the highest household savings but its investor population has shrunk from 20 million to 8 million in the past two decades of liberalisation and enactment of SEBI Act in 1992, notwithstanding the fact that the economy has done exceedingly well leaving increasing number of young people with money to invest. Bad administration by the regulator has eroded the faith of small investors in the securities market who have virtually stopped investing in it to the detriment of the economy, the PIL stated.


Midas Touch said it received over 14,000 grievances from investors on its portal, out of which about 2,000 were against 450 companies that were suspended by the stock exchanges for non-compliance of listing agreement. When Midas Touch took the grievances to the BSE and NSE, the first line of regulators, the bourses expressed their inability in resolving the complaints against suspended companies and advised the investor association to take up the matter with SEBI.


During a meeting between SEBI and Investors’ Associations, a Midas Touch representative on 7 December 2010 raised the issue. He stated that though suspension does not affect the company’s working, it has an adverse impact on shareholders since they cannot sell their shares on the exchange until suspension is revoked by the exchange or SEBI.


The market regulator formed a committee under the chairmanship of MS Sahoo, a whole-time member of SEBI to look into investor grievances against suspended companies. The committee was apprised that 1,845 companies listed at BSE and 203 listed at NSE were not in compliance of various clauses of the listing agreement. These included 425 active companies—comprising 60 listed on NSE and 365 on BSE—which were not suspended.


The Sahoo Committee recommended specific action under Securities Contracts (Regulation) Act to be taken against these companies and its promoters, directors, etc by NSE, BSE and SEBI, for non-compliance of listing agreement. It also recommended several measures for strengthening the monitoring system.


However, till date the recommendations of the Committee for taking action against 2,048 companies and its promoters and directors are not implemented. Since SEBI failed to provide any information about the action taken by the market regulator, BSE and NSE against these companies, Midas Touch filed a PIL in the high court.


The investor association has requested the high court to direct SEBI to take similar action under Securities Contracts (Regulation) Act, 1956 (SCRA), against all those defaulting companies, their promoters, directors and company secretaries which are listed at other exchanges but not at NSE and BSE and to frame regulations and implement an action plan for effective monitoring of companies which were listed at now de-recognised stock exchanges.



sudip sheth

4 years ago

since 2010 Midas Touch had put effort, it is 2013, court has just notice is taken out.

It will take Years .... No one can do anything to SEBI,BSE,NSE nor Promoters.....

This is just silver line to Dark Cloud.
All investor requested to put Complaint of non-receipt of even balance-sheet on Scores(sebi) as it says co'is livin & not -dead.


4 years ago


arun adalja

4 years ago

very good decision by court and regulatories are not doing anything for the investors.they always take side of companies and no encouragement to poor fellow of bse asked me why you invested in this company?i replied why did you list this company?


4 years ago

One of the SEBI official caught taking bribe .. few months back that news came what happened I dont know... but that is their bread butter.. why they can give attention of all these indsider trading,manipulation and fund diversion.. because retail investors can not bribe them


4 years ago

This PIL requires elaborate Litigation by all Concered,so that SEBI, BSE, NSE gets Cleaned and Investors Protected.
Whenever ,Listed Companies are Block-Listed,simultaneously Invetors Invested Money In those Companies should be Refunded by those Companies,Other-wise , Declared Offenders and SEBI should attach their Properties ,Sell and Refund to Investors ).SEBI should get Laws Passed to it.Then omly 90%( if not 99% ) Investors Losing Their Life Savings in Share Market ,can be Avoided-which is Paramount important work of SEBI.


4 years ago

Sebi is busy in passing consent order to help guilty brokers and can they have time for poor small investors?

Vaibhav Dhoka

4 years ago

If SEBI and NSE/BSE do not take firm stand against directors of such companies this fly by night operators will DOOM stock market.

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