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RBL Bank Swings to Q1 Loss as Provisions Nearly Triple

02/08/2021

RBL Bank has slipped into a loss for the first quarter through June 2021 from a profit a year earlier after it set aside almost thrice the amount than before to cover for possible bad loans.

The private-sector bank posted a standalone net loss of Rs 459.5 crore for the April-June period compared with a net profit of Rs 1,412.2 crore a year earlier.

Net interest income—the difference between interest earned and paid—fell 7% to Rs 970 crore while the net interest margin shrank to 4.36% from 4.85% a year earlier.

The bank’s provisions to cover for potential non-performing assets (NPAs) jumped to Rs 1,425.67 crore from Rs 500 crore in the corresponding period of the last financial year.

 

Other key details:


1. Operating profit for Q1 grew 17% from a year earlier to Rs 807 crore.

2. Total deposits rose 21% year-on-year to Rs 74,471 crore while the low-cost CASA deposits grew 35%

3. Retail deposits jumped 47% to Rs 29,505 crore but retail advances grew only 7% to Rs 32,071 crore.

4. The bank’s overall capital adequacy ratio is at 17.2%, slightly above the minimum norm of 15%.

5. Asset quality worsened as gross NPA ratio came in at 4.99% versus 3.45% a year earlier.

 

Management Commentary: 


RBL Bank MD and CEO Vishwavir Ahuja said the lender’s revenue and operating profit “held up well” during the quarter.

However, the effect of the second wave of the COVID-19 pandemic on the asset quality was “rather severe and different from the first wave” given the nature of the bank’s businesses, he said.

Ahuja also said that economic activity and growth revival are now visible.As a result, the bank decided to increase its provisions to preparefor normalized levels of business.

The bank is also ramping up its physical and digital presence as well as expanding its secured retail assets business in a bid to improve its financial performance, he added.

 

Also Read: Quarterly Results - RBL Bank and PNB Bank

 

 

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SBI Posts Record Profit in Q1 as Loan Loss Provisions Fall

SBI
04/08/2021

State Bank of India reported a record profit for the first quarter through June 2021, helped by a sharp drop in provisions to cover potential bad loans.

The nation’s biggest lender said standalone net profit jumped 55% to Rs 6,504 crore for the April-June period from Rs 4,189.34 crore a year earlier.

Net interest income—the difference between interest earned and paid—rose3.74% to Rs 27,638 crore even though the net interest margin for its domestic business shrank a little to 3.15% from 3.24% a year earlier.

The bank’s provisions to cover for potential non-performing assets (NPAs) slumped47% to Rs 5,030 crore from Rs 9,420 crore in the corresponding period of the last financial year.

 

Other key details:


1. Operating profit for Q1 grew 5.06% from a year earlier to Rs 18,975 crore.

2. Total deposits increased 8.8% year-on-year but gross advances grew at a slower pace of 5.8%.

3. Retail personal loans recorded the fastest growth, of 16.5%, while corporate loans fell 2.33%.

4. The bank’s capital adequacy ratio improved by 26 basis points to 13.66%.

5. Asset quality slightly improved as gross NPA ratio was at 5.32% from 5.44% a year earlier.

 

Management Commentary: 


SBI said its digital strategy is on track as it opened 38% of retail asset accounts and 72% of savings accounts through its Yono app in the first quarter.

The bank recorded strong growth in personal retail loans, driven by home loans, credit and gold loans. It added the growth in corporate loans will revive in line with recovery in the investment cycle in the broader economy.

The state-run lender also said it has well provided for its stressed book with its provision coverage ratio at 85.93% as of June 30, 2021.

It acknowledged that the Covid-19 pandemic across the globe has resulted in a decline in economic activities and that the situation remains uncertain.It said that major challenges for the bank could be from extended working capital cycles, fluctuating cash flow trends and probable inability of the borrowers to repay their loans timely.

However, the bank is proactively providing against the challenges of likely stress on its assets, SBI said.

 

Also Read: State Bank of India - Quarterly results 2021

 

 

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Titan Ekes Out a Profit in Q1 but Local Lockdowns Hurt

04/08/2021

Titan Company Ltd swung to a consolidated net profit for the first quarter through June 2021from a steep loss a year earlier when a nationwide lockdown to control the Covid-19 pandemic forced it to keep its stores closed.

The Tata Group company posted a consolidated net profit attributed to shareholders of Rs 20 crore for the April-June quarter, compared with a net loss of Rs 291 crore for the corresponding period of 2020.

However, the first-quarter profit was down 96.5% from Rs 564 crore in the preceding three-month period due to localised lockdowns that state governments imposed to tackle the pandemic’s devastating second wave.

The maker of Tanishq jewellery and Fastrack watches recorded revenue of Rs 3,473 crore in the first quarter. This is up from Rs 2,020 crore a year earlier but less than half the revenue it generated in the January-March period.

 

Other key details:


1. Jewellery division recorded revenue of Rs 2,467 crore for Q1 versus Rs 1,182 crore a year earlier.

2. Jewellery division clocked earnings before interest and tax of Rs 207 crore for Q1 versus a loss of Rs 54 crore.

3. The watches and wearables business recorded sales of Rs 292 crore as against Rs 75 crore earlier.

4. Eyewear business generated Rs 67 crore in Q1, compared with Rs 30 crore in the same period last year.

5. Titan added 13 stores in Q1 and now operates 1,922 outlets across 297 towns.

 

Management Commentary: 


The company said higher revenue in the first quarter of the current fiscal year was due mainly to the base effect of zero sales in April last year, when India was under a strict lockdown.

It also said its jewellery division, which accounts for more than four-fifths of its revenue, is gaining good traction in new customers and its mix in total buyers has reached the pre-pandemic levels.

Titan managing director CK Venkataraman said the company started the quarter with strong business momentum but the second wave of the pandemic severely disrupted it.

“The learnings and experience of the past year helped us navigate this quarter’s turbulence much more efficiently. As the lockdowns started getting relaxed in different parts of the country in June, and with the rising vaccination level, we saw demand coming back steadily,” he said.

 

 

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Berger Paints and Hindalco Ltd – Quarterly Results

Berger Paints
09/08/2021

Berger Paints reported 93.23% growth in sales revenues for the Jun-21 quarter at Rs.1,799 crore. Net profits for the Jun-21 quarter was up 9-fold at Rs.141 crore. While COVID 2.0 has had an impact on sequential sales, the YoY growth is extremely strong. Berger’s traction comes from its focus on the decorative paints segment with emphasis on total home solutions, which promises a higher wallet share of the customer.

 

Rs in Crore

Jun-21

Jun-20

YOY

Mar-21

QOQ

Total Income (Rs cr)

₹ 1,798.49

₹ 930.76

93.23%

₹ 2,026.09

-11.23%

Net Profit (Rs cr)

₹ 140.59

₹ 15.42

811.74%

₹ 208.59

-32.60%

Diluted EPS (Rs)

₹ 1.45

₹ 0.16

 

₹ 2.15

 

Net Margins

7.82%

1.66%

 

10.30%

 

 

For the Jun-21 quarter, Berger saw sharp expansion in EBITDA with the standalone EBITDA expanding 94.5% and consolidated EBITDA expanding 159%. Higher sales ensured economies of scale and better absorption of fixed costs overheads, boosting profits. EBITDA margins were 13.3% on a consolidated basis with net margins at 7.28% in the Jun-21 quarter.

Hindalco Ltd reported 63.58% growth in sales for the Jun-21 quarter at Rs.41,358 crore. The onset of COVID 2.0 had an impact on sequential growth, but it was still positive. Net profit for the Jun-21 quarter-turned around to a record level of Rs.2,787 crore against losses of Rs-709 crore in the Jun-20 quarter. Among the verticals, Novelis grew 54% YoY, domestic aluminium showed growth of 41% while copper grew 134%. Novelis total shipments were up 26% at 973KT while Aluminium India output grew 137% at 82KT. EBITDA per ton for Novelis spurted from $327 to $570 on YoY basis.
 

Rs in Crore

Jun-21

Jun-20

YOY

Mar-21

QOQ

Total Income (Rs cr)

₹ 41,358

₹ 25,283

63.58%

₹ 40,507

2.10%

Net Profit (Rs cr)

₹ 2,787

₹ -709

N.A.

₹ 1,928

44.55%

Diluted EPS (Rs)

₹ 12.51

₹ -3.19

 

₹ 8.66

 

Net Margins

6.74%

-2.80%

 

4.76%

 

 

Hindalco EBITDA was up 188% YoY at Rs.6,790 crore, another all-time record. While the Novelis EBITDA was up 119% at $555 million, the India business reported 121% growth in EBITDA at Rs.2,513 crore. Domestic aluminium EBITDA margins stood at 37.50%. The net margins for Jun-21 quarter at 6.74% was also supported by deleveraging which improved the Net debt to EBITDA ratio from 3.83X to 2.36X.

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Nuvoco Vistas - IPO Research Note

Nuvoco
09/08/2021

Nuvoco Vistas, the cement company promoted by Karsanbhai Patel of Nirma fame, has a pedigree of 22 years in the cement business. It began by acquiring the cement businesses of Tata Steel, L&T and Raymond and recently added cement plants of Lafarge India and Emami to emerge as the fifth largest cement company in India. With an installed capacity of 22.32 MTPA, Nuvoco ranks after Ultratech, Lafarge Holcim, Shree Cements and Dalmia Cements in terms of installed cement capacity. 

However, Nuvoco is the largest cement company in the East and has 17% of the total capacity in the East and 5% capacity in the North. It ranks among the top-4 ready mix concrete manufacturers in India. Its 11 cement plants are distributed, 8 in the East and 3 in the North while it has 49 RMX plants across India. Nuvoco has seen its installed capacity double in the last 5 years. 

Nuvoco Vistas IPO Details

 

Key IPO Details

Particulars

Key IPO Dates

Particulars

Nature of issue

Book Building

Issue Opens on

09-Aug-2021

Face value of share

Rs.10 per share

Issue Closes on

11-Aug-2021

IPO Price Band

Rs.560 - Rs.570

Basis of Allotment date

17-Aug-2021

Market Lot

26 shares

Refund Initiation date

18-Aug-2021

Retail Investment limit

13 Lots (338 shares)

Credit to Demat

20-Aug-2021

Retail limit - Value

Rs.192,660

IPO Listing date

23-Aug-2021

Fresh Issue Size

Rs.1,500 crore

Pre issue promoter stake

95.24%

Offer for Sale Size

Rs.3,500 crore

Post issue promoters

71.03%

Total IPO Size

Rs.5,000 crore

Indicative valuation

Rs.20,360 crore

Listing on

BSE, NSE

HNI Quota

15%

QIB Quota

50%

Retail Quota

35%

Data Source: IPO Filings

Some of the advantages in the business model of Nuvoco Vistas are as under.
•    It is the largest cement producer in the fast-growing East India market
•    Most cement plants are located in close proximity to key markets
•    Wide distribution network of over 16,000 dealers pan India
•    Excluding the COVID months, Nuvoco had capacity utilization of above 90%
•    Its cement enjoys EBITDA/tonne of Rs.966 with a net debt/EBITDA ratio of 4.50

A quick look at the financials of Nuvoco Vistas

Over the last 3 years, Nuvoco Vistas has shown steady revenues while the EBITDA is up more than 50% over last 2 years, improving EBITDA margins by 619 bps. 
 

 

Particulars

Fiscal 2020-21

Fiscal 2019-20

Fiscal 2018-19

Net Worth

Rs.6,959.45 cr

Rs.5,414.95 cr

Rs.5,126.94 cr

Revenues

Rs.7,488.84 cr

Rs.6,793.24 cr

Rs.7,052.13 cr

EBITDA

Rs.1,494.35 cr

Rs.1,333.85 cr

Rs.971.44 cr

Net Profit / loss

Rs.(25.92) cr

Rs.249.26 cr

Rs.(26.49) cr

ROCE

4.21%

7.66%

4.30%

Data Source: Company RHP

We have considered ROCE instead of ROE as Nuvoco Vistas has made losses in FY21 and FY19. Revenues have been more or less static over the last 3 years, but the impact of increased capacities should show up in the post-COVID scenario. Also, the book value at over Rs.230 acts as a buffer for the value of the stock.

Out of the Rs.1,500 crore raised by way of fresh issue, Rs,1,350 crore will be used for pre-payment of loans and other borrowings. With net debt at Rs.6,730 crore, this debt repayment will help the company reduce leverage and also improve the net debt/EBITDA ratio and ROCE.

Investment Perspective for Nuvoco Vistas

While the company made profits in FY20, it has made small net losses in FY21 and FY19. However, if you look at Nuvoco Vistas as a macro play on cement demand, especially in East India, then the story looks a lot more compelling.

a)    The overall capacity utilization of 77.6% for cement and 83.3% for clinker is almost back to pre-COVID levels. This should facilitate better absorption of fixed costs and higher profits going ahead.

b)    Apart from being best positioned to serve markets in the East and the North, Nuvoco plants in Chhattisgarh and Rajasthan allows the company to easily serve the markets of Uttar Pradesh, Madhya Pradesh and Maharashtra.

c)    The company is gradually moving from cement manufacturing to building solutions. This is evident from their diverse product mix consisting of chemicals, adhesives, wall putty, dry plaster, cover blocks and dry concrete. This also de-risks their portfolio.

d)    Since 1999, when it took over the cement operations of Tata Steel, Nuvoco has a track record of completing and integrating cement acquisitions seamlessly into its model. That is key to future inorganic growth plans.

e)    The ready-mix-concrete business contributes Rs.1,088 crore to the top line which puts Nuvoco in the same league as leaders like Ultratech, ACC and India Cements. 

The issue price values Nuvoco at 50X FY20 earnings. That places the valuation even higher than Shree and Ultratech, the two leaders in India. However, that may not be very representative since the model of Nuvoco is still work-in-progress. Also, the gains of premium products will be evident in the coming years. Investors can look at Nuvoco IPO for its East India domination and as a macro play in infrastructure in India.

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Exxaro Tiles IPO Allotment - How to check the allotment status?

Exxaro
09/08/2021

The Rs.161.09 crore IPO of Exxaro Tiles, consisting of Rs.134.23 crore fresh issue and Rs26.86 crore OFS, was subscribed 22.58X overall at the close of bidding on 06 August. The basis of allotment will be finalized on 11 August. If you have applied for the IPO, you can check your allotment status online.

Allotment status of an IPO - What is it?
Allotment status means the number of shares allocated against number of shares applied for in an IPO. Allotment is categorised as:
IPO Allotted: when full shares allotted against applied.
IPO Partly/ partially allotted: This means less number of shares allotted against applied.
IPO Non- Allotment: No shares allotted.

What could be the reason for non-allotment are?

•    The issue price is more i.e. higher than the bid price
•    The application was not selected in the lottery process
•    Error in some of the details like pan card number, Demat Account number
•    More than one application has been submitted via the same pan card number

Also Read: How to increase the chances of IPO allotment

 

You can either check your allotment status on the BSE website or the IPO registrar, Link Intime. Here are the steps.

Checking the allotment status of Exxaro Tiles IPO on BSE website

Visit the BSE link for the IPO allotment by clicking on the link below

https://www.bseindia.com/investors/appli_check.aspx 

Once you reach the page, here are the steps to follow - 

• Under Issue Type – Select Equity Option

• Under Issue Name – Select Exxaro Tiles IPO from the drop down box

• Enter the Application Number exactly as in the acknowledge slip

• Enter the PAN (10-digit alphanumeric) number

• Once this is done, you need to click on the Captcha to verity that you are not a robot

• Finally click on the Search Button

 

The allotment status will be displayed on the screen in front of you informing about the number of stocks of Exxaro Tiles allotted to you.

Checking the allotment status of Exxaro Tiles IPO on Link Intime (Registrar to IPO)

Visit the Link Intime registrar website for IPO status by clicking on the link below:

https://linkintime.co.in/MIPO/Ipoallotment.html

This dropdown will only show the active IPOs, so once the allotment status is finalized, you can select Exxaro tiles from the drop down box.
• There are 3 options. You can either access the allotment status based on PAN, Application Number or DPID-Client ID combination.

• Select the appropriate option you want to use and enter the details (PAN / Application Number / DPID-Client ID)

• Finally, click on the Search button

 

The IPO status with number of shares allotted will be displayed on the screen.

 

Must Read: Know About IPO Application Process

 

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