The Economic Survey announced on Monday ahead of the Union Budget had some positive takeaways and some warning signals issued by the government. On the positive side, the Survey expects GDP for 2017-18 at 6.75% and for 2018-19 in the range of 7-7.5%. The survey has also commented on the sharp increase in the number of direct tax and indirect tax filers. However, the Survey has expressed some concern over the rising price of oil and has almost ruled out further rate cuts in the future since growth and inflation are expected to be at elevated levels in the coming years.
The third quarter loss of RCOM narrowed to Rs.130 crore after the company managed to entirely exit the wireless business. Due to its exit from the wireless business, which it sold to Reliance Jio, the losses narrowed by almost 95%. Post the sale to Reliance Jio, RCOM’s key business now consists of the enterprise business, internet data centres, global submarine network cable and international long distance voice. RCOM will be completing its asset monetization by March 2018. The company had been a deep spot last year with total debt in excess of Rs.45,000 crore.
Contrary to the tepid trend among IT companies, Tech Mahindra managed to get the better of street expectations reporting a profit of $147 million. Revenues also showed growth at $1.21 billion. The sales and profit numbers are way better than street expectations. Margins also improved by 180 basis points to 16.3%. Speaking about the results, Mr. Gurnani said that while spending on the traditional BFSI was stagnant, there was solid growth in the digital space, where Tech Mahindra has been focusing. The IMF is already expecting an uptick in the global economy and TECHM stands to benefit.
JSW Steel appears to be raising the pitch for stressed assets. After quoting almost double the reserve price for Bhushan Steel, JSW Steel has put up a bid of Rs.3700 crore for the distressed assets of Monnet Ispat. Monnet Ispat currently owes more than Rs.10,000 crore to banks. As per the extant rules, the entire insolvency proceedings have to be completed within a period of 270 days which includes a grace period of 90 days. Monnet Ispat has a sponge iron unit with a capacity of 1 lakh tonnes as well as an integrated steel plant in Raigarh with a capacity of 1.5 MTPA to produce HR plates and rebars.
The net profits of HDFC Ltd surged 3-fold which was largely helped by the one-time gain derived from the sale of HDFC’s partial stake in HDFC Life as part of the IPO. Out of the net profit for the third quarter of Rs.5670 crore, the one-time gain from the sale of HDFC Life stake alone netted Rs.3675 crore for the company. But even in operating terms, HDFC performed really well with net interest income up by 14% and the loan book growing by 19.7%. The Gross NPAs of HDFC were almost flat at 1.15%, which is pretty impressive considering the size of its book. HDFC currently trades at 28 times its trailing 12 months EPS, which is relatively undervalued considering that housing finance companies stand to benefit from the government’s decisive thrust in programs like low cost housing and housing-for-all.
The under-stress Unitech has agreed to sell land parcels for Rs.400 crore to deposit the Rs.750 crore as ordered by the court in the homebuyers’ case. Both the land parcels that are part of the deal are located in Chennai. The company needs to deposit this amount urgently with the Court to secure the release of their MD, Sanjay Chandra. The government has also initiated a case for winding up against Unitech but had taken over the management of the company considering that homebuyer interests were involved. Unitech has Rs.6000 crore of debt and nearly 16,000 undelivered units.
