Business News at 10:00 am on 25th April, 2024

Let’s begin – The earnings season has got off to a modest start with most companies and banks reporting results in line with expectations. Among the 93 early birds, only Bajaj Auto has beaten estimates while Hindustan Unilever has been a big disappointment. The FMCG major’s sales grew just 3% y-o-y while net profits were down 5.5% y-o-y. Net sales for the sample were up a strong 17.4%, some of it due to a 29% jump in the revenues of Bajaj Auto. Operating margins, however, were down 420 bps y-o-y, as total expenditure went up by a sharp 24%. Despite a huge boost in other income and a drop in raw material costs, net profits for a sample of 93 companies were up 12.6% y-o-y.

Meanwhile – Undeterred by regulatory concerns around valuations and manipulation in some counters, the SME-IPO index hit a fresh lifetime high of 66,396.09 points on Wednesday. The index has risen nearly 26% so far in April – its best month since December 2021 when the index zoomed by 60%.The renewed interest in SMEs came in April after it went through a lean period in March when the index fell 10.8% after the Securities and Exchange Board of India chairperson Madhabi Puri Buch sounded alarm bells about the segment’s overwhelming performance in the past couple of years. On Wednesday, the index rose for the fifth consecutive session and ended 1.9%. Among top gainers were Shri Balaji Valve Components, Gconnect Logitech and Supply Chain, Retina Paints, Sunita Tools, and Sonalis Consumer Products.

In another development – Tesla’s plans to build an assembly line in India under the government’s new electric vehicles policy, may get delayed as the company has announced that it will focus on utilising its existing factories to produce new, more affordable vehicles by late this year. The new product range which the company has planned for launch in early 2025 includes the ‘more affordable’ models it has been working on for emerging markets like India. Model 2, that is popularly known to be the ‘$25,000 Tesla’ is one of these models. The announcement comes days after Musk postponed his India visit. Musk’s India visit was scheduled on April 21-22, which got postponed on April 20.

In a separate development – The Indian IT services sector is likely to see a second year of subdued growth in FY25, with modest projected revenue increases of 5-7%, amid ongoing global economic challenges that have limited growth in tech spends in primary markets in the US and Europe, according to a Crisil Ratings report. This has poured water on the much-anticipated recovery in the second half of FY25. This follows a 12% compound annual growth rate over the past decade, barring a 6% growth in FY24. The study by Crisil Ratings, covering the top 24 firms that make up about 55% of the sector’s revenue last fiscal, supports these findings. Crisil’s estimation is higher than Infosys’ revenue guidance for the fiscal 2025 of 1-3% from 4-7% a year back.

In another development – The government’s plea in the Supreme Court on administrative allocation of spectrum in limited areas of public interest except mobile services, will not affect the regulatory process for satellite service launch in the country, officials said on Wednesday. This means that companies such as Bharti-backed Eutelsat OneWeb, Jio Satellite, which are in the forefront of starting satellite Internet services in the country, will not face additional challenges and have to wait only for the regulatory process to get over. The matter in the Supreme Court won’t have a bearing on the government’s satellite service plans because the Telecommunication Act, 2023 has already paved way for allocation of spectrum for satellite communication services through the administrative route.

Now a news related to ‘Lodha’ brand – Macrotech Developers, which develops properties under the ‘Lodha’ brand, posted a 21% jump in its profit after tax (PAT) at Rs 670 crore in Q4FY24, a tad higher than analyst estimates. Analysts had estimated a profit of Rs 630 crore. Its revenues from operations went up 23% y-o-y at Rs 4,020 crore, higher than analyst estimates of Rs 3,824 crore. The company said it posted its best ever annual pre-sales at Rs 14,520 crore and best ever quarterly pre-sales at Rs 4,230 crore. Its collection went up 20% to Rs 3510 crore.

Lastly – GIFT Nifty traded down by 50 or 0.22% at 22,370 indicating a negative opening for domestic indices NSE Nifty 50 and BSE Sensex on Thursday. Shares in the Asia-Pacific region are trading in mixed territory on Thursday morning. The Asia Dow is trading up by 1.63%, where as the Japan’s Nikkei 225 is trading in red, down by 1.33%, Hong Kong’s Hang Seng index is ended higher by 2.21% and the benchmark Chinese index Shanghai Composite is ended up by 0.76%.