One of the marquee names in the IT space, TCS, announced slightly disappointing results as the net profit fell by 3.6% on the back of weak performance by the BFSI segment. However, the digital space was the redeeming feature for TCS during the quarter. Revenues grew by 3.9% in the quarter which is slightly better than expectations. However, the company is confident of a turnaround in the BFSI business even as digital continues to drive growth and margins. The company still reported a 10 bps improvement in the operating margins at 25.2% for the third quarter.
SBI proposes to raise Rs.20,000 crore by way of long term funds to give a big boost to the affordable housing sector. The government, in its previous budget had accorded infrastructure status to low cost housing and that has been attracting a lot of interest from housing finance companies as a viable business model for the future. It would be a mix of rupee- denominated and dollar-denominated paper. These funds are expected to be raised by the end of the current fiscal year in March 2018. Apart from the potential of low cost housing, this will also help SBI meet its Basel norms by March 2019.
IndusInd Bank continued to flatter the street with a 25% growth in profits for the third quarter of the fiscal. Its NII (net interest income) for the quarter grew by 20% even as the credit growth came in at a healthy 25%. The net interest margin (NIM) was almost stable at 3.99%. IndusInd Bank has now emerged as a sizable bank with balance sheet above Rs.2 trillion. The vehicle loan book grew at 34% and was the major driver for the growth. There was a marginal deterioration in Gross NPAs from 1.08% to 1.16% but that is likely to be the case across most banks in this quarter.
After hovering around the $67 levels for a long time, Brent Crude finally crossed the $70/bbl mark on Thursday. This is the highest level for oil since the end of 2014. Apart from the impact of the OPEC production cuts, the rising demand for oil across the world has been largely responsible for higher oil prices. This only means that the OPEC and Russia have largely manage to clear the glut created by US shale as falling inventories have been one of the reasons for the spike in crude prices. Also, there are supply disruptions expected due to political unrest in Iran and Venezuela, 2 key OPEC members.
In what could be a big surprise for analysts and telecom industry observers, Reliance Jio could be close to declaring a profit in the current quarter ended December 2017. Sources have clarified that Jio could declare net profits after declaring an operating profit in the previous quarter. The MDAG group has already pumped in nearly $31 billion into the telecom business and this net profit has obviously not made provisions for the capital investment. Jio is already planning for an IPO and it could be one of the biggest IPOs coming from Indian companies. Since Jio’s launch 18 months ago, it has not only managed to dominate the data market but has also forced other telecom players to desperately seek mergers and acquisitions. Jio will be the big beneficiary of the cut in interconnects fees levied by telcos.
SBI has initiated insolvency proceedings against IVRCL, once an iconic construction and infrastructure company based out of Hyderabad. The NCLT is yet to give its final order on this matter. IVRCL, it may be recollected, is in the second list of stressed accounts put out by RBI. These stressed accounts have been largely responsible for the $200 billion of stressed assets that banks have been carrying in their books. The process of using the IBC to recover money from corporates has just about started and is likely to get more pronounced in the months to come. IVRCL has been in the red for the last few quarters.
