Business News at 05:30 pm on 28th November 2023

Let’s begin – Jefferies has reiterated its ‘Buy’ recommendation on Larsen & Toubro and sees a 12% upside potential, setting a target price of Rs 3400 per share. The bullish stance is anchored in the backdrop of India’s ongoing capital expenditure upswing and L&T’s 45% outperformance compared to the Nifty Year-to-Date. This has prompted fund managers to explore the possibility of exemptions regarding defense-related concerns associated with holding L&T stocks. The report also stated that one of the key factors impacting the stock’s performance is the potential for an ESG rating upgrade. An improvement in the ESG rating would not only validate L&T’s commitment to environmental and social responsibility but could also serve as an additional positive catalyst for investors. The report highlights that, over the next 6-12 months, the traction in India’s capital expenditure cycle and the successful completion of legacy projects with low margins are expected to be key drivers for the anticipated upside.
In another development – The cement industry in India is looking at price correction with all-India average retail price declining by Rs 5 per 50 kg to Rs 391. According to a report by Elara Securities, two major highlights from November that showed early-November price hike attempts in several pockets were followed by reversals, and higher discount offerings by most firms, led to price corrections. Despite slight price dip, report said, all-India average price during October-November 2023 continued to be 5.6 per cent better than Q2FY24 average with the sharpest improvement in East India and the lowest in Central India. A strong October backed by a price uptick has been followed by reversals across North, Central and East India during November. In North India, prices in Delhi, Rajasthan and Punjab fell by Rs 5 per bag each.
In a separate development – Credit metrics of India Inc is expected to show slight sequential improvement in Q3FY24, with interest coverage increasing to 4.5-5.0 times in Q3FY2024 from 4.5 times in Q2FY2024, said ICRA. This, it added, would benefit from improved earnings of corporate India, on the back of continuing, albeit moderating tailwinds from commodity prices and seasonally strong demand during the recently concluded festive season. ICRA’s analysis of the Q2FY2024 performance of 601 listed companies (excluding financial sector entities) revealed expectedly improved operating profit margins, increasing by 398 bps and 64 bps on a YoY and sequential basis, respectively. This, ICRA said, was primarily aided by softening in commodity prices. However, while the input costs softened in recent months, they remain elevated compared to historic levels, and accordingly, India Inc’s OPM is yet to revive to its historic highs.
Now a news related to CRISIL Ratings – India’s top 18 states are expected to record a growth in capital outlay by 18-20 per cent on-year this fiscal, following ~14 per cent growth in fiscal 2023, said an analysis report by CRISIL Ratings. These states account for ~90 per cent of the aggregate gross state domestic product of all states. According to the report, the increase in spending will be driven by healthy goods and services tax collection, stable and upfront devolution from central government, and allocation of Rs 1.3 lakh crore in form of interest-free loans to all the states for capital expenditure. In terms of sectoral mix, on average over the past five years, transport has 22-26 per cent share in the total capital outlays of states, followed by irrigation, water supply & sanitation.
Meanwhile – Tata Motors, one of India’s leading automobile manufacturers has launched its fourth Registered Vehicle Scrapping Facility in Chandigarh. Named ‘Re.Wi.Re – Recycle with Respect,’ the facility was opened by Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility. It uses environmentally-friendly processes and has the capacity to disassemble 12,000 end-of-life vehicles safely and sustainably per annum. The RVSF is developed and operated by Tata Motors’ partner Dada Trading Company and is equipped to scrap both passenger and commercial vehicles, regardless of their brand. The new facility now joins list of three previous RVSFs in Jaipur, Bhubaneshwar and Surat.
In another development – Netweb Technologies India Limited, the Indian OEM in high-end computing, announced that it is now a manufacturing partner for the NVIDIA Grace CPU Superchip and GH200 Grace Hopper Superchip MGX server designs.Netweb will build and produce more than ten server variations under its Tyrone range of AI systems meant for wide range of AI and high-performance computing/supercomputing applications.
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Last but not the least – The benchmark equity indices ended Wednesday’s trading session in positive territory. The NSE Nifty 50 soars 95 points or 0.48% to settle at 19,889.70, while the BSE Sensex jumped 204 points or 0.31% to 66,174.21. The broader indices ended largely in positive territory, with gains led by Midcap and Smallcap stocks. Bank Nifty index jumped 111.85 points or 0.26% to settle at 43,880.95.