Business News at 10:00 am on 5th August, 2024

Let’s begin… Private banks are grappling with declining current account-savings account (CASA) ratios as customers shift to fixed deposits (FDs) in search of higher interest rates. Private lenders have witnessed a decline of up to 370 basis points (bps) quarter-on-quarter in the CASA ratio during the first quarter of the current financial year. The decline is even steeper on a year-on-year basis, with the ratio dropping by up to 600 bps. As banks continue to raise interest rates on term deposits to attract customers, experts do not expect any relief for lenders in the next couple of quarters. On a quarter-on-quarter basis, Bandhan Bank’s CASA ratio dropped the most, falling by 370 basis points to 33.40%, followed by Kotak Mahindra Bank, which witnessed a decline of 210 bps to 43.40%.

Up next, Adani Wilmar, maker of the Fortune brand of edible oils, will pursue both organic and inorganic growth opportunities, as it seeks to double its revenue from the food and fast-moving consumer goods vertical in the next 3-4 years. In a conversation with FE, Angshu Mallick, CEO & MD, Adani Wilmar said that the company was open to inorganic opportunities within regional branded staples including areas such as spices, which it saw as a natural extension to its business. We are clear that staples and kitchen essentials are where we want to be and we are not veering away from this strategy. Regional brands may not have the bandwidth to expand like the way national players do, Mallick said.

In other news, India’s export of petroleum products in the first four months of the current fiscal year 2024-25 increased marginally by 1% to 4.9 million barrels per day against 4.8 million barrels per day in April to July period of 2023-24, as per data from energy cargo tracking firm Vortexa. In July, however, the total export of petroleum products increased by 4% to 1.27 million barrels per day against 1.22 million barrels per day registered in June. The country’s top destinations for the exports in July were Southeast Asia, Europe, and the Middle East. While exports to Europe surged by 26% last month to 266,000 barrels per day, supplies to Southeast Asia slumped 9% to 254,000 barrels per day compared to the previous month.

Moving on, Investing in focused funds through systematic investment plans (SIPs) now is wise given the current market conditions of sector rotation and high valuations. As these funds concentrate their investments in a limited number of stocks, SIPs will help mitigate this risk by spreading the investments over time. Focused funds typically invest in a concentrated portfolio of stocks, often in high-conviction investment ideas. By investing in these funds through SIPs, investors can gain exposure to potentially high-growth areas of the market while managing risk through regular investment and diversification. These funds, with their concentrated portfolio of high-conviction stocks, offer the potential for superior returns by allowing fund managers to meticulously select a limited number of quality companies.

In another development, The under construction Navi Mumbai International Airport (NMIA) will hit peak capacity in the very first quarter of its operations early next year, as per traffic guidance given by Adani Enterprises, the flagship company of the Adani Group. “For Navi Mumbai we are putting up the first phase where the initial capacity will be 20 million passengers. We are 100% sure that with the way Mumbai travels and the catchment area travel is, (NMIA) should hit peak capacity in the first quarter itself of operations,” Saurabh Shah, deputy chief financial officer, Adani Enterprises. In a post results conference call, Shah further added that he does not expect any dent in traffic operations at the existing Mumbai International Airport (MIAL), which is also run by the Adani group.

Furthermore, Vodafone Idea has paid dues worth Rs 1,500 crore, comprising revenue share licence fee and spectrum usage charges, to the department of telecommunications (DoT). This includes, around Rs 720 crore which were pending for the January-March quarter. The balance is the full payment for the April-June period. These are concurrent dues, which are not covered by the four-year moratorium. This is for the first time in recent years, that the company has paid the statutory quarterly bills raised by DoT in full and on time. The regularisation of payments come as the company in April raised Rs 18,000 crore via follow-on public offering (FPO). Besides, one of the promoter entity — Aditya Birla Group (ABG) — also infused Rs 2,075 crore equity into the company.

Lastly, Stocks to watch include SBI, Infosys, Titan, Britannia, Divis Lab, Ambuja Cements, and JK Tyre. State Bank of India (SBI) announced a net profit of Rs 17,035.16 crore for the first quarter of the financial year 2024-25. This marks a 0.89% increase from the Rs 16,884.29 crore reported in the same period the previous year. The IT major On Saturday said that it received a communication from the Directorate General of GST Intelligence (DGGI) indicating the closure of pre-show cause notice proceedings for the financial year 2017-2018. The proceedings involved an amount of Rs 3,898 crore. Britannia Industries, the Indian biscuit maker, reported a consolidated net profit of Rs 524 crore for the June quarter.