Innholdsfortegnelse for 13-Jun-21 i Business Today

The fatal second wave of coronavirus is ravaging the nation. But unlike in last year’s wave, domestic stock markets have been resilient this time. After rising in February and March, the Sensex fell just 1.5 per cent last month, amid extreme panic. The reasons — hope that immunisation will pick up pace over the next few months, optimism about corporate earnings growth and expectations that government and the central bank will come out with expansionary policies if the economy gets into serious trouble like last year. The benchmark index has delivered a 1.7 per cent return year-to-date (YTD). “The market has discounted a sharp rise in cases. A further spike in coming days cannot be ruled out. The market is factoring in that cases under the second wave will peak…

Volatility is often considered the hallmark of equity investment. The stock market has had its share of yo-yos in the past as well, but the current phase seems to be prolonged like never before. A large number of stocks are expected to decline in value once the correction occurs. The economic downturn mirrors the fear and recession concerns due to business slowdowns (or shutdowns in many cases) and loss of jobs amidst the second wave of Covid-19. So much so that even regular investors with a penchant for equity and equity oriented securities and high-risk mutual fund portfolios are now changing their focus as well — from capital appreciation to capital protection. Managing Finances Experts say the resulting panic should not influence one’s financial decisions. Instead, they advise portfolio reshuffling…

Focus on premiumisation; now 65 per cent of Diageo's portfolio is premium brands Strong focus on profitability Halved factories from 94 to 47 Investment in quality manufacturing, addition of automatic lines Reduced people costs Switching from volume to value mindset Franchising of mass brands such as Bagpiper, Director's Special, Hayward's Whisky…

Development Finance Banks In India 1948 IFCI 1955 ICICI 1964 IDBI 1981 NABARD 1989 SIDBI 1996 IDFC 2006 IIFCL 2021 NBFID On March 25, the last day of the Covid-19 curtailed Budget Session of Parliament, the government passed a Bill that turned the clock 30 years back to India’s pre-economic-liberalisation era in terms of infrastructure financing. The proposed law that the Rajya Sabha cleared that day (the Lok Sabha had passed it two days earlier) was the National Bank for Financing Infrastructure and Development (NBFID) Bill, 2021. It called for the establishment of a development finance institution (DFI), a tried and tested concept that had led to the birth of institutions, including IFCI (Industrial Finance Corporation of India), IDBI (Industrial Development Bank of India), SIDBI (Small Industries Development Bank of…

HIGH VALUATIONS Sensex P/E multiple is among the highest in the world. BSE Small-cap index is at 62 times trailing earnings per share INPUT COSTS Commodity prices have risen sharply over past few months. This will hit financials of a large chunk of companies, especially those in the manufacturing business EARNINGS Analysts have lowered earnings forecasts as majority of non-essential services and manufacturing activities have come to a halt in most parts of the country GDP DIP Global agencies have lowered GDP growth forecasts due to Covid-19 second wave. This means performance of India Inc. will also be impacted INFLATION In April, wholesale price index-based inflation surged to 10.49 per cent. This increases the risk of rise in interest rates…

IT: Signing of big deals and doubledigit revenue guidance augur well for the sector Pharma/Healthcare: Outlook for formulations, API and contract manufacturing for developed and emerging markets remains robust Infrastructure: Lots of opportunities due to government’s capex push and grand infrastructure plans Metals: Margins of steel companies to remain strong on the back of better spreads in the near term Auto: Forthcoming kharif sowing and a bumper rabi harvest expected to drive sale of passenger vehicles and tractors METAL AND COMMODITY STOCKS HAVE BEEN KEEPING MARKETS STEADY IN 2021 YTD change%*…

Do not exit investments yet; continue with SIPs in MFs If you are a pro who foresees market movements, consider investing in lump sum to benefit from the low net asset values (NAVs). A lower NAV would help you accumulate more units If you had bought a ULIP before January 2021, stay invested to benefit from the EEE feature (exempt under income tax at all stages); if it’s a recent buy, stay invested to gain from the compounding effect of regular investments (you get a fixed rate of interest that is compunding in nature) Don’t underestimate your fixed-income schemes, these hold in good stead even during volatility Create an emergency fund like putting aside a fixed sum in your savings account or creating a recurring deposit with a bank…

From an era when alcoholic beverages were taboo and consumed mostly by men outside homes, recent years have seen increasing permissibility for alco-bev consumption Indians want to “drink better”, experiment with their favourite tipple; Rise in millennial and mixed-gender consumption occasions too The Covid-induced lockdown has further unlocked social permission and at-home consumption, with homestayers starting to drink less and better at home Covid also saw the industry behave like a semi-essential category, with consumers stocking up Across consumers, the trend has been to drink less, but not downtrade from the drink of choice Consumers have diverted “duty free” travel retail spending to experimenting with premium spirit brands, triggering strong growth in Scotch segment Explosion of “craft” brands particularly in gin…

Objectives Co-ordinate with the Centre and state governments, regulators, financial institutions, institutional investors and other stakeholders in India and outside Facilitate building of institutions to support the development of long-term non-recourse infrastructure financing, including bonds and derivatives Lend or invest, and attract investments from the private sector and institutional investors for infrastructure projects in India and abroad Structure The Centre will hold 100 per cent stake in the beginning, which could be diluted up to 26 per cent through equity participation by multilateral institutions, sovereign wealth funds, pension funds, insurers, financial institutions, banks and others Chairperson of the Board to be appointed by the Central government in consultation with the RBI Functions Can form subsidiaries or joint ventures or branches, in India or outside, for carrying out its functions Co-ordinate…

What was the problem you were grappling with? I was in two minds about starting up. I started my career with New India Assurance and resigned as CEO from Allianz Group. Had someone told me eight years ago that I will have a start-up, it would have sounded ridiculous to me since insurance is very capital-intensive. I wanted to simplify the jargon-heavy industry. But taking the call to leave a well-paying and secure job was difficult. Who did you approach? I approached my mother. Her advice has often helped me in personal and professional life. What was the best advice you ever received? She always says that tomorrow’s aspirations are not slave to today’s situation; it should not be a constraint to what one can do tomorrow. How effective was…

↘ After factoring in recent developments and new restrictions, the economic cost of the latest shutdowns is $1.25 billion per week, down from around $3.5 billion in the 2020 (strict partial) lockdown, according to a Barclays India estimate ↘ In a full lockdown scenario, losses will rise to $5.3 billion per week (in bearish case). ↘ The costs of the lockdown reflect the widening geographical spread of the second wave, which will have an impact on growth through end June, says the report LOCKDOWN COSTS PER WEEK ($billion)…

A peg of Johnnie Walker Black Label with soda has been his favourite after a hard day’s work. Anand K ripalu, Managing Director and CEO, Diageo India, proudly calls himself a Black Label loya list. “If you go to a bar any where in the world and you hear someone ordering a Black Label and soda, it has to be an Indian. I am a proud Indian who is a diehard Black Label and soda fan.” At his sprawling apartment in South Mumbai, he effortlessly puts together a colour ful whisky-based cocktail, Manhattan. “Earlier, if someone suggested a whisky cocktail, I would tell them not to spoil the whisky by adding other ingredients. The last seven years has enabled me to look at the world of spirits through a new lens,”…

The corridors of the Ministry of Steel at New Delhi’s Udyog Bhawan are buzzing once again. After a prolonged slump, investors are lining up to exploit the sector’s vast untapped potential. The biggest statement of intent was made by South Korean Ambassador to India Shin Bongkil on April 20 at a virtual roundtable conference organised by the Indian Chamber of Commerce. Bongkil said South Korean steel giant POSCO was again looking at setting up an integrated steel plant in Odisha at an investment of $12 billion, which would make it the country’s biggest FDI project. While Posco is yet to officially confirm it, Bongkil’s statement comes barely four years after the company scrapped plans to set up a similar steel plant in Odisha that it had been chasing since 2005.…

“I strongly believe that real assets of Borosil are not reflected on our balance sheet at all. We need to protect these assets in whatever way we can.” Borosil Ltd Managing Director Shreevar Kheruka wrote this on his LinkedIn page on April 30. Mourning the death of four employees due to Covid-19, he announced payment of two year's salary to families of employees who lose their life to the deadly disease. The company will also fund their children's education till graduation. Last month, Britannia Industries’ MD Varun Berry made it clear after the declaration of the company's annual financial results that lives of employees are more important than bottom line. Berry said the company is asking sales staff to avoid stepping out even if distribution is affected in the short…

You don’t want your parents to age. But aging is inevitable. What you can do is provide them the best possible healthcare. With health expenses rising, especially due to Covid-19, medical expenses of parents can pinch your pocket hard. That is why you must buy a suitable health insurance policy for them. However, health insurance plans turn expensive with age. If your parents are 60-plus, covering both in a comprehensive plan (₹10 lakh cover) may cost you up to ₹50,000-60,000 a year. The other option is senior citizen-specific policies, with lower premium but some limitations. As you do your research to zero in on the best health insurance for your parents, note that the premium should not be the only parameter. The policy should provide decent coverage in case of…