Business News at 05:30 pm on 31st October 2023

You are listening to the Expresso Business Update. Here is the latest news from the world of Indian and International business brought to you by The Indian Express and The Financial Express.

Let’s begin. In a huge relief to Punit Goenka, the Securities Appellate Tribunal on Monday set aside the Securities and Exchange Board of India’s August 14 order that barred the former top executive at Zee Entertainment Enterprises from holding key managerial positions in group companies. The tribunal, however, allowed the market regulator to continue its investigation into the alleged fund diversion case, which the latter said involved Goenka and his father Subhash Chandra. The decision enables Goenka to return as managing director and CEO of Zee, where he will lead one of the largest merged entities in the domestic media and entertainment sector, following the proposed merger with Sony (Culver Max Entertainment).

Meanwhile, Colgate-Palmolive on Monday said it received a transfer pricing order worth Rs 170 crore from the Income Tax (I-T) Department for the assessment year 2021-22. According to a stock exchange filing by the consumer products company, the department has disallowed “certain” international transactions to the company. Transfer pricing refers to the actual price charged in a transaction between related entities which are part of a transnational group. Under the relevant rules, the taxman can prescribe adjustments to the prices involved in such transactions if they vary from similar transactions between unrelated parties. The company in a statement said, “The company is awaiting completion of the draft assessment proceedings and post the same, an application will be made before the Dispute Resolution Panel,” unquote.

On to banking. Public sector lender Indian Bank, having achieved an all-round robust performance in the second quarter of the current fiscal, said it will be able to sustain the momentum going forward, supported by its advances portfolio growth that will cater to diverse segments in both retail and corporate sectors. S L Jain, managing director & chief executive officer, Indian Bank told Sajan C Kumar that the bank’s core income had increased significantly and it is poised to replicate the trend in the coming quarters. The bank will start its proposed operational subsidiary in another six months’ time as it is ready with the new company’s framework and is awaiting RBI’s approval.

In some more banking news, SBI Cards and Payments Services will keenly monitor gross non-performing assets to ensure that it does not rise any further and also, look at bringing it down from current levels, said MD & CEO Abhijit Chakravorty. He said, quote, “While it will be difficult to give any numbers, we should not deteriorate from here. In case of delinquencies or GNPA or credit cost, the objective is to improve upon where we are today,” unquote. The gross non-performing asset ratio rose 29 basis points(y-o-y) to 2.43% as of September 30. Going ahead, Chakravorty said that the company will focus on growing its cards-in-force, spends and receivables, while simultaneously keeping an eye on bad loans.

Next up, the industry sector. Calling out food delivery apps for steep charges to restaurants, of as much as a total of 55%, restaurateurs Riyaaz Amlani and Zorawar Kalra say networks like the Open Network for Digital Commerce could help their businesses become more profitable. The restaurateurs said on a podcast that Zomato and Swiggy are eating up around 55% of their order values through charges for delivery, discounts and discovery. Speaking to Zerodha co-founder Nikhil Kamath on a podcast, they asserted food delivery commissions beyond 12% are simply not sustainable. Aggregators, they pointed out, were current charging around 24-28%.

Moving on. The Rs 11,530-crore Dabur India, amongst the oldest Ayurvedic companies in the country, is putting in place a strategy to draw younger consumers into its fold. The 138-year-old brand is prioritising e-commerce, direct-to-consumer channels, newer product formats and modern packaging to stay relevant to youth. “The aim,” as Dabur India’s CEO Mohit Malhotra explains, “is to increase the addressable market of the company and remain contemporary to consumers.” He says that there are multiple legs to this. One is the route-to-market strategy, the second is product format and variants and the third aspect is communication and packaging, adding that he sees this as a “virtuous cycle” to remain future-fit. Dabur’s total spends on digital advertising today constitutes 33% of its total advertising spends.

Lastly, let’s look at the stocks in focus today. These include Marico, TVS Motor, Castrol India, and UPL among others. For those unaware, Castrol India posted profit for the second quarter of FY24 at Rs 194.42 crore, up 3.9 per cent in comparison to Rs 187.17 crore during the same period last year. It posted revenue from operations at Rs 1182.92 crore, up 5.5 per cent as against Rs 1121.07 crore during the third quarter of FY23. Marico on Monday posted the Q2FY24 profit at Rs 360 crore, up 17.3 per cent in comparison to Rs 307 crore during the second quarter of FY23, surpassing estimates.