Annus horribilis for L&T

The Larsen and Tourbo Ltd (L&T) stock has fallen by 25% since April. Worse, it has underperformed benchmark indices like the S&P BSE Sensex and S&P BSE Capital Goods, especially after the second quarter results. Obviously, all is not well at the country’s largest infrastructure firm. Since April, Bloomberg has drastically cut analyst consensus estimates of earnings per share (EPS) ... Read More »

The risks for the current account

While the current account deficit (CAD) for the July-September quarter, at 1.6% of gross domestic product (GDP), is well within control, could higher growth lead to a sharp rise in the deficit? First, there’s little doubt about the importance of oil prices. For example, the current account deficit for July-September was $8.2 billion, $2.7 billion less than the deficit during ... Read More »

R-Com investors may benefit if it merges with Aircel

Reliance Communications Ltd (R-Com) has had so many non-binding discussions and agreements in recent years that it’s easy to dismiss them as immaterial. Earlier this month, when the company said it had entered a non-binding agreement for the sale of its tower and optic fibre assets, one analyst said, “We’ll wait till the deal actually materializes.” But on Tuesday, when ... Read More »

Ramp-up of new production facilities key for PI Industries

PI Industries Ltd lost 3% after the promoters pared their stake in the company by 6% to 51.7%. With the recent loss, the stock is down 8% since the September quarter results announcement. In comparison, the S&P BSE 500 index lost 4% during the period. Note that the stock fell despite the company’s reiteration that its outlook remains robust. To ... Read More »

Debt quality deteriorates in November

CARE Ratings has constructed an index, the Debt Quality Index, which “captures, on a scale of 100 (index value for the base year FY12), whether the quality of debt is improving or declining. Intuitively an upward movement indicates improvement in quality of debt benchmarked against the base year. As it is contemporary with minimum time lags, the health of the ... Read More »

How should one interpret the acquisition of Indulekha by HUL?

How should one interpret the acquisition of a small regional brand by Hindustan Unilever Ltd (HUL)? Last week, it said it will pay Rs.330 crore to acquire the Indulekha and Vayodha ayurvedic personal care brands from the Mosons Group. This amount will be supplemented with a payment of 10% of annual revenues annually for five years starting FY18. At an ... Read More »

Will banks cut loan rates now?

New borrowers are likely to benefit from the Reserve Bank of India’s (RBI’s) policy rate cuts from April when Indian lenders start calculating their minimum loan rate or base rate on the marginal cost of deposits. The base rate replaced the seven-year-old system of prime lending rate in July 2010 to bring in more transparency. However, the purpose does not ... Read More »

E-commerce trends | Survival of the fittest

E-commerce may have other benefits—less traffic on the roads, convenience, a wider range of products—but in India, there is no denying that people throng online marketplaces because of the discounts on offer. Photo: Bloomberg For almost two years now, shoppers on e-commerce sites in India have had it good. Flush with funds from venture capital firms, these e-tailers have offered ... Read More »

Coffee blues: outlook on prices is weak

  The current season’s coffee crop in India is forecast to be 7% higher than last year’s level. This post-monsoon estimate is slightly lower than the post-blossom estimate by 1.6% but the shortfall is not a deal breaker. Higher output is good news for growers but only if prices are stable or higher. The news on that front is not ... Read More »

Inox Wind shares lose altitude despite rapid growth

There is a buzz in the wind energy sector, with the government aiming to double capacity by 2022. But none of the excitement is visible in the Inox Wind Ltd’s stock. Its shares have fallen more than 20% since listing in April. The S&P BSE 500 index lost 8.6% during the period. This is despite the company’s strong performance in ... Read More »