The Nifty and the Sensex opened the day on a positive note with gains of nearly 1% as a strong uptrend is in progress.
Join us as we follow the top business news through the day.
Sensex, Nifty end marginally higher; ONGC rallies 6%
A flat day for stocks.
PTI reports: “Equity benchmarks Sensex and Nifty ended marginally higher on Tuesday amid high volatility and tepid cues from global markets.
After gyrating 667.46 points during the day, the 30-share BSE Sensex ended 7.09 points or 0.01 per cent higher at 49,751.41.
After a similar movement, the broader NSE Nifty settled 32.10 points or 0.22 per cent up at 14,707.80.
ONGC was the top gainer in the Sensex pack, rallying around 6 per cent, followed by IndusInd Bank, L&T, UltraTech Cement, Titan, SBI and NTPC.
On the other hand, Kotak Bank, Maruti, Bajaj Auto, HDFC Bank and HCL Tech were among the laggards.
Domestic equities witnessed roller coaster ride amid high volatility, with metals and realty indices recording substantial gains, said Binod Modi, Head – Strategy at Reliance Securities.
“Concerns pertaining to increase in bond yields and higher commodity prices dented investors’ sentiments in last couple of days. However, underlying strength of economy and market remains intact,” he added.
Elsewhere in Asia, bourses in Shanghai and Seoul ended on a negative note, while Hong Kong settled with gains.
Stock exchanges in Europe were also trading in the red in mid-session deals.
Meanwhile, the global oil benchmark Brent crude was trading 0.81 per cent higher at USD 64.88 per barrel.”
Indian media, entertainment sector to see 27% revenue growth in FY22: Crisil
Some good news for the media sector.
PTI reports: “Indian media and entertainment (M&E) sector is expected to witness a strong 27 per cent growth in revenue to around Rs 1.37 lakh crore in 2021-22, after contracting 26 per cent this fiscal, according to ratings agency Crisil.
Segments such as digital and television (TV) will have relatively shorter time to bounce-back to pre-pandemic levels while print, films, outdoor, and radio would take longer.
Crisil Ratings Ltd Director Nitesh Jain said advertisement and subscription revenues contribute nearly equally to the overall M&E sector’s topline, but since the former correlates strongly with economic growth, the pandemic has had a bigger impact on it.
“Next fiscal, with strong economic rebound on the cards, ad revenue should grow 31 per cent on-year and subscription revenue around 24 per cent,” Jain added.
The TV segment – contributing around half of the sector’s topline – has recovered fully and will report healthy growth next fiscal. Ad revenue saw a sharp contraction initially, but recovered swiftly thereafter, aided by airing of new content, sports events such as the Indian Premier League and a buoyant festive season, Crisil Ratings Ltd said in a statement.
“As for subscriptions, TV was resilient even during the peak of pandemic as people remained indoors,” it added.
The print segment, which contributes a fifth of the M&E sector topline, is recovering, though at a much slower pace, and should be able to rebound fully only by the end of next fiscal, it added.
“Print is losing share in ad revenue mainly to the digital segment. Circulation too, especially for English language, could see a loss of 8-10 per cent, because of increased preference for e-papers in metros. However, print companies are rebooting their cost structure and accelerating digital adoption to stay relevant,” the ratings agency added.
Stating that digital has emerged as the medium of choice, Crisil Ratings Ltd Associate Director Rakshit Kachhal said the pandemic accelerated adoption of over-the-top (OTT) platforms, online gaming, e-commerce, e-learning, e-papers and online news platforms.
“This has meant the focus of advertisers has shifted from traditional to digital media. We expect the digital segment revenue to grow 14-16 per cent annually over the medium term. Its share of M&E sector revenue is expected to double to around 20 per cent by fiscal 2024 compared with last fiscal,” Kachhal added.
Credit profiles of large media companies would be unaffected due to strong balance sheets, liquidity and the revenue rebound, while mid-sized and small ones could see stress, Crisil Ratings citing an analysis of over 80 of them rated by the agency.
Accordng to Crisil Ratings, films segment that contributes a sixth to the sector topline, is one of the most impacted segment but occupancies in theatres should improve with the vaccination rollout and a strong pipeline of content.
“However, this segment is likely to remain impacted even next fiscal due to social distancing norms and fear of closed spaces,” it said, adding that other traditional media such has radio and outdoor, are seeing persisting pain, and will likely take much longer to recover.
This is because commuting as well as ad budgets for micro, small and medium enterprises – the key drivers for these segments – will remain restricted even in fiscal 2022, it said.
The ratings agency said credit profiles of small and and mid-sized media companies have weakened and liquidity pressure may intensify for them if recovery in ad revenue is delayed.
However, Crisil said M&E companies have adopted aggressive cost rationalisation initiatives. Besides, the pandemic-led change in consumer behaviour has accelerated monetisation opportunities for these players through integration of digital media into their traditional businesses.
“Some of these aspects can lead to structural changes in business models of the M&E sector over the longer term,” it said.”
Airtel, Qualcomm team up for 5G push in India
Telecom operator Bharti Airtel and US chipmaker Qualcomm on Tuesday announced collaboration for accelerating 5G in India.
Airtel recently became India’s first telco to demonstrate 5G over a live commercial network in Hyderabad city, underlining the company’s technology capabilities.
“Through Airtel’s network vendors and device partners, Airtel will utilize the Qualcomm 5G RAN Platforms to roll-out virtualized and Open RAN-based 5G networks. Airtel, as a board member of the O-RAN Alliance, is committed to driving the success of O-RAN and is working with Qualcomm Technologies to explore and implement the O-RAN approach for India,” according to a company statement.
The flexible and scalable architecture of O-RAN will enable new opportunities for small and medium-sized businesses to become viable players in the deployment of 5G networks, it added.
Microsoft, Bosch partner to build a connected car software platform
Microsoft and Bosch have partnered to build a vehicle platform to streamline and accelerate development and deployment of vehicle software for cars.
The platform will run on technology giant’s cloud service, and have software modules from the German auto component maker. The duo plan to integrate cars with cloud to allow software downloads to happen easily and to reduce technical complexities in development.
“Having a comprehensive software platform from the vehicle to the cloud will reduce the complexity of the software development and the vehicle system integration,” Markus Heyn, board member at Bosch, said in a release. “In this way, we will create the conditions for wireless updates to work just as smoothly and conveniently in vehicles as they do in smartphones.”
Bharat Forge shares jump over 4% in afternoon trade
Today’s big-moving stock.
PTI reports: “Shares of Bharat Forge rose over 4 per cent in afternoon trade on Tuesday after the company inked a pact with global aerospace and technology firm Paramount Group to manufacture armoured vehicles in the country.
The stock gained 4.05 per cent to Rs 612 apiece on the BSE. On the NSE, it rose by 4.12 per cent to Rs 612.85.
In afternoon trade, the benchmark 30-share Sensex was up nearly 180 points at over 49,922 points.
Bharat Forge has inked a pact with Paramount Group to manufacture armoured vehicles in the country.
“This collaboration brings together the manufacturing and technology excellence of two leading companies, which have matching synergies and complementary capabilities. The Kalyani M4 is a fantastic new generation vehicle, and we want to position it as the future of protection in all markets world-wide,” Bharat Forge Deputy Managing Director Amit Kalyani said on Monday.
The Kalyani M4 is a multi-role platform, designed to meet the specific requirements of armed forces for quick mobility in rough terrain and in areas affected by mine and IED threats.”
Reliance expects approvals for oil-to-chemicals business spin-off by Q2
Reliance Industries Ltd expects to get the necessary approvals to hive off its oil-to-chemicals (O2C) business into a separate unit by the second quarter of the next fiscal year, the company said in a presentation to investors on Monday.
The company had initiated the process of spinning off the O2C business at a time when the COVID-19 pandemic has caused a slump in fuel demand and weighed on the segment’s recent results.
Reliance, owned by billionaire Mukesh Ambani, will retain full control of the business post-restructuring, the company said in the presentation.
The Mumbai-headquartered conglomerate also announced its aim to work with the O2C business to reduce its carbon footprint and become “net carbon zero” by 2035.
Bitcoin battles for support at $50,000
A technical view on bitcoin.
Reuters reports: “Bitcoin dropped below $50,000 on Tuesday, as investors began to get a little nervous about the digital currency’s lofty valuation and some leveraged players took profit.
The cryptocurrency dropped more than 10%, its largest daily drop in a month, to hit $48,575. That extends a sharp withdrawal of more than 16% from a record high hit on Sunday, although bitcoin remains up around 75% for the year.
The drop came despite broad U.S. dollar weakness.
“The market’s rallied almost unimpeded since the beginning of the month and to some degree since the beginning of the year,” said James Quinn, managing director at digital asset platform Q9 Capital in Hong Kong.
“Seeing some selling at all is perfectly healthy and normal,” he said, though adding that some $1.5 billion in liquidation of leveraged positions on crypto exchange Binance was large and suggested retail investors might be selling.
The cryptocurrency market has been running hot this year as big money managers begin to take the asset class seriously and have made large purchases that have driven even more confidence among small-time speculators.
A $1.5 billion investment in the crytocurrency by electric carmaker Tesla this month has helped vault bitcoin above $50,000 but may now lead to pressure on the company’s stock price as it has become sensitive to movements in bitcoin.
U.S. Treasury Secretary Janet Yellen, who has flagged the need to regulate cryptocurrencies more closely also said on Monday that bitcoin is extremely inefficient at conducting transactions and is a highly speculative asset.
Ether, a coin linked to the ethereum blockchain, which often moves in tandem with bitcoin also dropped more than 10% and last bought $1,613, down about 20% from last week’s record peak. Bitcoin bought $49,846 at 0605 GMT.
“They have had a spectacular run and the sharp reversal overnight is really not unexpected,” said Michael McCarthy, chief strategist at brokerage CMC Markets in Sydney.
“But because we’re so lacking in fundamentals, it’s the big figures that have proved to be support and resistance points – so $50,000, $40,000 and $30,000 are the key chart levels at the moment. If we see it heading through $50,000, selling could accelerate.””
Zomato raises $250 million in funding from Tiger Global, Kora and others
Info Edge on Monday said its investee company Zomato has raised $250 million (over ₹1,800 crore) in funding from Tiger Global, Kora and others, valuing the online food ordering platform at $5.4 billion.
“Zomato Pvt Ltd has closed a primary fundraise of $250 million from five different investors…The transactions valued Zomato at a post-money valuation of $5.4 billion (exchange rate of ₹73.5 per U.S. dollar),” Info Edge said in a regulatory filing.
On a fully converted and diluted basis, Info edge’s effective stake in Zomato stands at 18.4%, it added.
Comments from Zomato could not be elicited immediately.
Bitcoin falls as much as 6% as it pulls back from record high
Bitcoin volatility continues.
Reuters reports: “Cryptocurrency bitcoin dropped as much as 6% in Asia trade on Tuesday and was trading around $52,000 as it pulls back from record highs following a long and sharp rally.
Bitcoin hit a low of $50,848 in the session following a wild ride on Monday where it traded in a $10,000 range. It’s up nearly 90% from the year’s low of $27,734.
Ether, the coin linked to the ethereum blockchain, also dropped more than 5% and last bought $1,707, down almost 17% from last week’s record peak.”
Tata Motors confident of sustaining growth amid supply chain concerns
Even as shortage of semiconductors, steel prices and muted macroeconomic indicators pose a challenge for the auto industry as it recovers from the impact of COVID-19, Tata Motors said growth momentum in its passenger vehicles was sustainable, as it was driven by latent demand and its ‘new forever’ range of products, a senior company executive said.
Speaking to The Hindu, Shailesh Chandra, president, Passenger Vehicles Business Unit, Tata Motors, said that he expected the passenger vehicle segment to close the current fiscal year with a decline of about 5%. This, he said, was an improvement given an earlier expectation of a 20% decline. For the coming financial year he expects a double-digit growth for the entire segment.
DHFL auditor Grant Thornton reports further fraud of ₹6,182 crore
Dewan Housing Finance Corporation (DHFL) on Monday said its transaction auditor, Grant Thornton, had reported further fraudulence amounting to ₹6,182 crore in the company.
The administrator of the company received an initial report from the agency appointed as the transaction auditor indicating there were certain transactions that were “undervalued, fraudulent and preferential in nature”, DHFL said in a regulatory filing.
“The monetary impact of the above transactions covered under the application amounts to ₹5,381.90 crore towards outstanding principal, ₹589.36 crore towards accrued interest and ₹210.85 crore towards notional loss of interest on account of charging lower rate of interest,” said the filing about the estimated impact on the company. These transactions happened over a period of time. The management of DHFL is currently being run under an administrator appointed under the Insolvency and Bankruptcy Code after frauds were detected in the company. The administrator later appointed GT as the transaction auditor to conduct an investigation of the affairs of the firm.
‘Growth momentum needs to be strengthened’
The growth momentum needs to be strengthened for a sustained revival of the economy and a quick return to the pre-COVID trajectory, RBI Governor Shaktikanta Das said, pitching for a status quo on rates, at the last meeting of the Monetary Policy Committee (MPC).
All the six members of the MPC had voted for keeping the policy repo rate unchanged at 4% at the three-day meeting which began on February 3, citing similar reasons.
Mr. Das, according to the minutes of the meeting released by the central bank on Monday, had said: “Growth, although uneven, is recovering and gathering momentum, and the outlook has improved significantly with the roll-out of the vaccine programme in the country.”
“The growth momentum, however, needs to strengthen further for a sustained revival of the economy and for a quick return of the level of output to the pre-COVID trajectory,” he added.
India Ratings raises banking sector outlook to ‘stable’
India Ratings and Research on Monday revised its outlook on the overall banking sector to ‘stable’ for the FY22 from ‘negative’ even as it saw higher stress emerging in the retail loan segment, going ahead.
For public sector banks (PSBs), the outlook has been revised to ‘stable’ from ‘negative’ and for private banks, the agency continues to have ‘stable’ outlook.
It estimated that overall stressed assets (gross non-performing assets + restructured assets) could rise 30% for the banking system; the increase is almost 1.7 times in the retail segment in the second half of FY22.
“The last nine months have provided banks the opportunity to beef up their provisions even more for legacy stressed assets, which were existing before the pandemic,” said the agency’s director (financial institutions), Jindal Haria.