This is a roundup of the day’s top stories in brief.
1. Uday Kotak Says Move Beyond ‘Quarter-To-Quarter’ Mindset
Billionaire banker Uday Kotak has said corporate India needs to start focussing on a medium-term outlook instead of looking at their business situation on a quarterly basis.
- “It’s important that the private sector changes its quarter-to-quarter psychology and adopts a medium-term strategy instead,” Kotak, president of Confederation of Indian Industry, told Quintillion Media’s Sanjay Pugalia in an interview.
- “Along with growth, sustainability is important. Over a longer period, growth needs to be resilient and not volatile,” he said.
- This, he said, will also help address a lack of trust in private corporates.
Read more to see Kotak’s view on banking, digital services, IL&FS and areas where India needs investments.
2. Infosys Raises Growth Guidance, Resumes Salary Hikes
Infosys Ltd.’s quarterly profit rose in the September quarter after it ramped up deal execution as headwinds due to the Covid-19 pandemic eased. That gave the software services exporter enough confidence to increase its revenue growth forecast for the rest of the fiscal.
- Net profit rose 13.72% sequentially to Rs 4,858 crore.
- Margin expanded to 25.3% from 22.7%.
- Infosys now expects revenue to grow 2-3% in FY21, higher than the 0-2% growth it had guided for earlier.
Find out the drivers behind the company’s growth.
New Year’s Gift
The Bengaluru-based IT firm will resume salary increments and promotions from 2021—a practice it had put on hold due to pandemic-related uncertainties.
The wage hikes, promotions and fresh hiring will impact margin in the next quarter.
3. Big Bull Sees A New Bull Run
It’s the darkest before dawn—that’s how billionaire investor Rakesh Jhunjhunwala describes his optimism about India and its equity markets.
- “There are too many indicators to show that typically before the start of a bull cycle, there is a deep fall,” Jhunjhunwala, partner at Rare Enterprises, told BloombergQuint.
- “It happened in September 2001, and then the index that we got never came back,” Jhunjhunwala said.
- Signs are similar to the creation of the bull market, he said.
Watch the full interview to see why Jhunjhunwala thinks the bull run will stay alive.
4. Sensex’s Best Winning Streak Since 2007
India’s equity benchmark rose, clocking its tenth straight session of gains, as investors piled into beaten-down shares in the last hour of trading.
- The S&P BSE Sensex closed 0.4% higher to complete its longest winning streak in 13 years, reversing losses of as much as 0.9% earlier in the day.
- The NSE Nifty 50 Index rose 0.3%, also climbing for 10 days to mark its best run of gains in more than five years.
Follow the day’s trading action here.
U.S. stocks rose as earnings of big banks showed the trend for bad loans has stabilized, tempering concern over dwindling prospects for a pre-election stimulus deal.
- The S&P 500 extended this week’s rally, led by energy, industrial and technology shares.
- The Stoxx Europe 600 Index was little changed.
- West Texas Intermediate crude increased 1.5% to $40.82 a barrel.
Get your fix of global markets update here.
- Why Howard Marks says V-shaped recovery is too much to hope for.
- Midcaps continue to gain, and so do portfolio managers.
5. Future Enterprises Defaults On Bond Payments
Tycoon Kishore Biyani’s Future Enterprises Ltd. failed to pay interest on some of its bonds this week, the latest sign that Indian businesses are still reeling under the pandemic.
- The company was unable to service interest payments that were due Monday amounting to Rs 15.14 crore ($2.1 million) on two of its local-currency notes, Future Enterprises said in an exchange filing late Tuesday.
- The company had also missed paying obligations due last month, and another group firm sought to defer debt obligations.
The retailer is the latest among at least 17 companies that haven’t serviced principal or interest on rupee notes this year.
6. FMCG Firms Try To Revive Demand With Incentives
Makers of soaps to deodorants are offering retailers incentives to push products as the demand has tapered off following an initial burst after India eased lockdown restrictions.
- Companies have increased margins by 3-4% for soaps and 4-5% on other personal care categories such as hair oils and body lotions, according to distributors that BloombergQuint spoke to.
- Typically, they offer from 6-7% to as high as 18% in the category.
FMCG companies have seen rural demand bounce back but demand from urban India continues to lag.
7. Four Questions Around RBI’s Plan To Support State Borrowings
- Does it add risk to the RBI balance sheet?
- How much state debt will the RBI buy?
- Which state’s debt will RBI buy?
- How does the OMO plan fit into the GST tussle?
- The RBI will need to tread tricky ground, writes Ira Dugal.
Here’s how it may go about doing that.
8. RBI Clarifies Eligibility Criteria For Covid Restructuring
The Reserve Bank of India has clarified that debt availed after March 1, 2020, will be eligible for restructuring under the Covid-19 scheme.
- In its FAQs, the RBI clarified that “the actual debt that may be considered for resolution will be the outstanding as on the date of invocation.”
- The debt, however, should not have been overdue by more than 30 days as on March 1, 2020.
Click here to see other clarifications issued by the RBI.
9. North Indian States Leading India’s Economic Recovery
As India continues to unlock, economic activity has picked up the pace, with several high-frequency indicators now back at levels seen before the Covid-19 crisis hit.
- An index of coincident indicators, published by the RBI in its October Monetary Policy Report, shows that activity levels across India are close to what was seen in mid-March but remain below what was seen in February.
- The northern region registered positive momentum from mid-June but lost steam in the second half of August before gaining traction again in September, it said.
- On the other hand, the western and southern regions have experienced a fall in the momentum in the September after registering some signs of recovery, the report said.
Even within the northern region, some states stand out on account of a pick-up in activity.
10. India’s Covid-19 Tally Tops 72 Lakh
India’s confirmed Covid-19 cases crossed the 72-lakh mark.
- India added over 63,000 fresh cases in 24 hours taking the total tally to nearly 72.4 lakh, according to health ministry data.
- Meanwhile, the Maharashtra government has allowed Mumbai Metro rail to reopen in phases from Oct. 15 under its Unlock 4.0 guidelines.
Track the latest updates on the Covid-19 pandemic in India, here.
Globally, confirmed Covid-19 cases neared the 3.8-crore mark with 10.8 lakh dead.
- Infections rose at the fastest pace since April in Germany, the Dutch prime minster has ordered a partial lockdown and France reported a surge in patients needing intensive care.
- New cases in Italy jumped to the highest since March.
Follow the global spread of the virus here.
Also Read: The ‘State’ Of Bihar And Why It Matters
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