Business News at 10:00 am on 18th July, 2024

Reliance Industries is expected to post a modest growth in its revenue and net profit in Q1FY25 on a year-on-year basis. But its Ebitda may fall on a sequential basis, according to analysts. Global brokerages such as Goldman Sachs, Morgan Stanley and others expect the second quarter to be better for the company due to improvement in refining margins and business metrics in the telecom and retail businesses. As per a Bloomberg poll, 13 analysts estimated RIL to post a revenue of Rs 2.3 trillion in Q1, 11.8% higher than the corresponding quarter of the previous fiscal. Six analysts expect the company to post a net profit of Rs 17,655 crore, about 10.3 % higher than Q1FY24 but down 6.8% on a quarterly basis.

Over to industry, India’s plan to preempt a crisis of electricity shortage by quickening the capacity addition across the value chain is facing a hurdle, with as many as 32 transmission projects entailing investments of Rs 44,254 crore being already or likely to be delayed. According to data from the ministry of statistics and programme implementation, as of April 2024, of the 50 large projects worth Rs 60,439 crore being implemented by the Power Grid Corporation of India, 18 with total value of Rs 29,300 crore are facing an average delay of 32 months. Another 8 projects bid out by the state-run entity under the Tariff Based Competitive Bidding route with total value of Rs 8,755 crore are reporting an average delay of 12 months.

Next up, market. Investment by foreign portfolio investors in fully accessible route bonds has crossed the $1-billion mark in just 19 days after government securities were included in the JPMorgan global bond index on June 28. Overseas investors have poured over $1.05 billion into index-eligible bonds since June 28, according to data from the Clearing Corporation of India. With the softening bias in bond yield, experts expect inflows to increase at an accelerated pace in the coming months. In terms of the FPI utilisation rate, the benchmark security has the highest concentration due to higher liquidity, Dipanwita Mazumdar, an economist with Bank of Baroda, told FE.

In some more market news, The over-a decade-old SME platform, which has seen a notable exuberance over the past few years, may need to undergo significant changes in regulations to deal with manipulation and liquidity issues. The recent NSE circular capping the opening price of SME IPOs at 90% of the issue price may just be the beginning of a slew of changes that may be on the way, according to experts. In fact, this is not the first time that the exchanges have tightened the screws on the SME platform. In September 2023, additional surveillance measures and trade-for-trade frameworks were extended to the SME segment to discourage speculative trading.

Meanwhile, With the mandi prices of key pulses varieties – tur, urad and chana – declining due to rising imports, the government is currently assessing stock availability with the big retailers for ensuring that moderation in prices is passed on to consumers. Nidhi Khare, secretary, department of consumer affairs, told FE that they are monitoring pulses held with wholesalers, importers and retailers as imports of pulses have eased domestic supplies. Khare in a meeting on Tuesday attended by the officials of the major retailers including Reliance Retail, D Mart, Tata Stores and Spencer’s stated that mandi prices of chana, tur and urad in key mandis have declined by around 4% compared to prices prevailed in June, but “retail prices are not seen similar decline”.

Moving on. The Union cabinet may soon take up a proposal from the commerce and industry ministry, seeking approval for the country to sign the clean-economy and fair-economy agreements of the Indo Pacific Economic Framework for Prosperity, a senior official said. The official added that the inter-ministerial consultations are complete. The commerce ministry has sent both the pacts to the Cabinet Secretariat. The clean economy is Pillar III and the fair economy is Pillar IV of IPEF. India has already signed Pillar II of IPEF that deals with supply chain. The supply chain agreement entered into force in February.

Lastly, let’s see the stocks in focus today. These include LTIM, Asian Paints, IREDA, Glenmark Pharma, and L&T Finance among others. LTI Mindtree reported a sequential increase in its revenue and net profit for the quarter that ended June, driven by deal ramp-ups and a rise in digital spending by clients. However, while the topline exceeded estimates, the bottom line slightly missed Street expectations. The consolidated revenue rose nearly 3 per cent quarter-on-quarter to Rs 9,142.6 crore in April-June. This is also higher than the Bloomberg estimate of Rs 9,075 crore. Asian Paints released its fiscal first quarter earnings with a profit drop of 24.6% on-year during the first quarter of FY25.