(Markets were shut on Monday for the occasion of Diwali Balipratipada)
1. Infosys Ltd: Ratings major Crisil has put long-term ratings on Infosys on 'rating watch with developing implications'. Currently, the rating is at AAA, which is the highest rating assigned to any company. The move comes in as the saga of whistleblowers continues to unfold. The rating agency has taken note of the developments and the steps taken by Infosys' board and audit committee with respect to the whistleblower complaints. The Indian arm of Standard & Poor in the statement added that it will continue to monitor the situation and any additional developments by the firm. Crisil said that the rating will be removed from watch once there is adequate clarity on the outcome of the investigation, along with updates provided by Infosys' management.
2. ICICI Bank: Mumbai-based lender ICICI Bank reported a 28% decline in its net profit for the September quarter of FY19-20. The bank posted a net profit of Rs 655cr, as compared to Rs909cr in the corresponding quarter last fiscal. Net interest margin stood at 3.64% in Q2FY20. ICICI Bank saw its asset quality improve in the second quarter of the current fiscal as net non-performing asset (NPA) ratio declined to 1.6% from 3.65% in the year-ago period. Meanwhile, provisions (excluding taxes) declined by 37% yoy to Rs2,507cr on September 30, 2019.
3. Bharti Airtel Ltd: The company’s head Sunil Bharti Mittal on Monday met with top government officials, including Telecom Minister Ravi Shankar Prasad, over billions of dollars in statutory dues like spectrum and license fee liability that his and other telcos had not fully provisioned in their accounts. Media reports suggested that the telecom operators are looking to the government for a possible relief such as waiver of penalties and interest though the Supreme Court had categorically stated that companies must pay many years’ worth of charges plus interest and penalties. The liability that arises from the Supreme Court upholding the government's view on how revenues should be calculated for sharing of statutory dues.
4. Bharat Petroleum Corporation Ltd: The government is looking into state-owned Bharat Petroleum Corp Ltd's (BPCL) investments in a gas block in Mozambique and has not yet formally given its approval to the firm for further spending, media reports suggested. Bharat PetroResources Ltd (BPRL), an exploration and production subsidiary of BPCL, had in August 2008 bought a 10% stake in Area-1 Offshore of the Rovuma Block from the US energy major Anadarko Petroleum Corp for $75mn. That same month, Videocon through its subsidiary acquired a 10% stake in the same block for an equivalent block. Reports suggest that Anadarko had originally offered a 20% stake in Area-1 to BPCL but the state-owned firm bought only half of it and the rest was picked up by Videocon. Videocon in 2013 sold the same stake to ONGC Videsh Ltd for $2.475bn. Government is looking into reasons why BPCL did not buy the entire 20% stake offered to it by Anadarko.
5. Tata Motors Ltd: Tata Sons will infuse Rs6,500cr into Tata Motors in a move aimed to boost investor confidence in the company. This infusion is part of an Rs10,000cr fundraising process by Tata Motors that has seen an erosion of its market value as well as rating downgrades from global firms. Tata Sons will receive preferential shares and warrants at Rs150 each. Rest of the Rs3,500cr will be raised through external commercial borrowings. The proceeds will be used to reduce debt and refinance some loans, as mentioned in the company in its statement to the stock exchanges. On Friday, Tata Motors reported a standalone net loss of Rs1,281.97cr during the second quarter ended September 30, 2019, compared to a net profit of Rs109.14cr in the year-ago period.
6. Tata Power Ltd: Tata Power said its joint venture Industrial Energy Ltd has signed pacts with Tata Steel to acquire a captive gas-based power plant and a diesel project in Kalinganagar, Odisha for around Rs920cr. Industrial Energy Ltd (IEL) is a joint venture between Tata Power and Tata Steel in the ratio of 74:26, respectively. According to the statement, while the 120MW plant is under construction and will be operational by 2021-22, the 40MW DGS is already operational. The combined value of the transactions is about Rs920cr, subject to minor adjustments on closing and applicable taxes and duties. IEL has also signed tolling agreements with Tata Steel for the supply of power for a period of 30 years from 120MW plant and 15 years from the 40MW DGS.
7. Marico Ltd: Marico on Friday reported 17% yoy growth in its consolidated net profit at Rs253cr for the second quarter ended September 30, 2019, aided by improvement in operating margin and growth in international business. Consolidated revenue from operations fell marginally to Rs1,829cr in Q2FY20 as against Rs1,837cr in Q2FY19, with underlying domestic volume growth of 1% and constant currency growth of 9% in the international business.
8. Jubilant Lifesciences Ltd: The board of Jubilant Life Sciences Ltd announced the restructuring of the company into two separate entities--one handling pharmaceuticals operations and the other its life science ingredient business. The decision follows recommendations of a committee set up by the board in July, which advised that the company demerge its life science ingredients business into a separate firm while keeping the pharmaceutical operations within the current firm. Jubilant Life plans to also list the life science ingredients entity on the National Stock Exchange and the BSE. The life science ingredients segment manufactures speciality intermediates, which are used to make bulk drugs, as well as nutritional products and life science chemicals through five manufacturing facilities in India. Additionally, the company also reported an 18.88% rise in consolidated net profit at Rs249.39cr for the quarter ended September 30, 2019. Consolidated total revenue from operations stood at Rs 2,265.93cr for the quarter under consideration as against Rs2,269.49cr in the same period a year ago.
9. GVK group: The airport arms of GVK Power and Infrastructure Ltd (GVK Group) has signed agreements to raise an investment of Rs7,614cr from Abu Dhabi Investment Authority (ADIA), Canada's Public Sector Pension Investment Board, (PSP Investments), and the government-backed National Investment & Infrastructure Fund (NIIF), the company said in a statement on Sunday. The proceeds from the investment will be used to retire debt obligations of its holding companies and fund the purchase of additional shares in MIAL (Mumbai International Airport Limited) from partners Bidvest and ACSA, the company said in a statement. The GVK Group is currently locked in a legal battle with the Adani Group on stake sale in its flagship Mumbai International Airport Limited (MIAL), the country's second busiest airport.
10. Earnings this week: In the week ahead, over 180 companies will announce their September quarter earnings including Bharti Airtel, Yes Bank, Dr Reddy's Labs, Indian Oil Corporation, Bank of India, Petronet LNG, Hindustan Zinc, Tata Global Beverages, GIC Housing Finance, JSW Energy, Escorts, etc.
Developments on the global front:
The US stocks markets jumped in morning trade on Monday after rising optimism over a trade deal with China. The S&P 500 rallied to an all-time high after President Donald Trump said the US is ahead of schedule to sign part of the trade deal. President Trump said that the US and China will probably be ahead of schedule to sign a very big portion of the China deal. He called this Phase One. The Dow Jones Industrial Average was trading at 27,094.81, up 0.5% or 136.75 points while the S&P 500 index was trading at 3,040.70, up 0.6% or 18.35 points. The Nasdaq Composite index was trading at 8,328, up 1% or 138.50 points.