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Hours after listing on both the <keyword id="20004725" type="General" weightage="20" keywordseo="NSE" source="keywords" meta.keywordsubtype="org" meta.entityname="NSE" meta.hostid="261" meta.entityid="NSE">NSE</keyword> and <keyword id="19895774" type="General" weightage="20" keywordseo="BSE" source="keywords" meta.keywordsubtype="org" meta.entityname="BSE" meta.hostid="261" meta.entityid="BSE">BSE</keyword> at a handsome premium of around 70%, stocks of <keyword id="20668069" type="General" weightage="100" keywordseo="Waaree-Energies" source="keywords" meta.keywordsubtype="org" meta.entityname="Waaree Energies" meta.hostid="261" meta.entityid="Waaree Energies">Waaree Energies</keyword> tumbled by over 5%. As of 2:45 pm today, <keyword id="19895974" type="General" weightage="20" keywordseo="waaree" source="keywords">Waaree</keyword>'s stock was trading at Rs 2,356.20, down by 5.75% on NSE, while on BSE, the stock was trading at Rs 2,358.20, down by as much as 7.76%. Notably, the stock was listed at Rs 2,550 on the BSE today and Rs 2,500 on the NSE. After hitting an intra-day high of Rs 2,624 during the day, Waaree's stocks also slumped to a low of Rs 2,300 on the NSE, where its total <keyword id="19932516" type="General" weightage="20" keywordseo="market-cap" source="keywords">market cap</keyword> stood at Rs 68,660.68 crore. Waaree's offer worth Rs 4,321.44 crore saw a thumping reception from investors across all categories and, overall, was subscribed to around 79.44 times. Retail investors oversubscribed 11.27x times to the issue, bidding for 11,16,95,301 shares, as opposed to 99,11,869 shares reserved for them. The price band for the <keyword id="19898327" type="General" weightage="20" keywordseo="IPO" source="keywords">IPO</keyword> was set between Rs 1,427 and Rs 1,503, with investors required to subscribe to a minimum of 9 shares. However, <keyword id="21713453" type="General" weightage="20" keywordseo="QIBs" source="keywords">QIBs</keyword> (qualified institutional buyers) were the most enthusiastic takers of this offer, oversubscribing 215.03x to the issue. As against 55,38,663 shares earmarked for them, QIBs bid for a staggering 1,21,79,37,402 shares. Data suggests that on BSE, as of 2:30 pm, about 70,893 shares of Waaree had been bought, while a massive 7,26,330 shares had been sold during the day. On NSE, a total of 6,84,826 shares had been bought by investors, while 15,42,515 shares had been sold. Clearly, the stock saw heavy profit booking today, with investors looking to make an exit with substantial listing gains. On the financial front, Waaree has also been posting steady numbers over the past few years. Its PAT (<keyword id="20298212" type="General" weightage="20" keywordseo="profit-after-tax" source="keywords">profit after tax</keyword>) jumped from Rs 79.65 crore in FY22 to Rs 500.28 crore in FY23 and Rs 1,274.38 crore in FY24. The company also boasts a healthy PAT margin of 11.47%. The company exports to almost 68 countries, and as of June 30, 2024, had a capacity of 12 GW for manufacturing solar PV modules. Notably, Waaree is India's largest producer of solar PV (photovoltaic) modules. Shivani Nyati, Head of Wealth, Swastika Investmart Ltd., notes that the company made a strong debut on the bourses, reflecting investor confidence in the company's growth potential and financial stability. "Investors may consider booking part profits here, and those who want to hold it for the long term may keep a stoploss of 2,000", she noted. In a media interaction today, Amit Paithankar, CEO of Waaree Energies, noted that currently, demand is extremely robust, with the policy framework helping the same. "We have been growing our margins, which now stand at 15%. Of course, in the next two years, we see them evolve at a higher level. All of that taken together, we are looking at robust margins going forward of about 200 basis points," he added.

Waaree's stock tumbles over 5%, hours after listing at a premium of 66.33% on the bourses

The <keyword id="19898327" type="General" weightage="20" keywordseo="ipo" source="keywords">IPO</keyword> of <keyword id="14070439" type="General" weightage="100" keywordseo="Waaree-energies-limited" source="Orion">Waaree Energies Limited</keyword> (WEL), India's biggest manufacturer and exporter of solar PV (photovoltaic) modules, opens for subscription today and is set to close on October 23, 2024. The IPO worth Rs 4,321.44 crore is a combination of a fresh issue worth Rs 3,600 crore and OFS (offer for sale) worth Rs 721.44 crore. Retail investors, who are being offered about 35% of the total issue pie, can bid for a minimum of 1 lot, which includes 9 shares, taking the minimum investment amount to Rs 13,527. With the listing set for Monday, October 28, 2024, the company has set a price band of Rs 1,427 to Rs 1,503 per share. However, prior to the stock's debut on the bourses, the company's <keyword id="19931032" type="General" weightage="20" keywordseo="gmp" source="keywords">GMP</keyword> (grey market premium) has been scaling fresh highs. As of today, <keyword id="1415709" type="General" weightage="20" keywordseo="Waaree" source="Orion">Waaree</keyword> Energies GMP was Rs 1,475, taking the potential listing price to Rs 2,978. This means that the expected gain per share from the stock's listing is a whopping 98.14%. The company's GMP has been on a steady rise, inching up from Rs 1,280 on October 15, 2024, to Rs 1,475 today. However, today's GMP was a tad bit down from the Rs 1,510 levels it was trading at yesterday. <h2>About the company</h2>The company, which operates 4 manufacturing facilities in Gujarat, India, commenced operations in 2007. As of FY24, it commands a 21% share in India's domestic solar module manufacturing space and a healthy 44% share in its exports from the country. In just 3 years, the company has exponentially increased its manufacturing capacity, from 2 GW in FY21 to 13.3 GW in FY24. Waaree will be utilizing the proceeds from the issue to set up a 11.4 GW integrated manufacturing facility. Out of this, a 5.4 GW solar cell manufacturing facility will be operational in Chikhli next year. Another 6 GW establishment in Odisha, which is expected to be functional by FY27, will produce ingots, wafers, and solar cells. The company has recently also been awarded orders worth Rs 19 billion under the government's PLI (Production-Linked Incentive Scheme). The company's bottom line, i.e., financials, have also been going from strength to strength over the past few years. Waaree's revenue from operations stood at Rs 1,13,976.09 million as of FY24, up from Rs 28,542.65 million in FY22. Its PAT (<keyword id="142274" type="General" weightage="20" keywordseo="Profit-after-tax" source="Orion">profit after tax</keyword>) also took a massive jump, from Rs 796.5 million in FY22 to Rs 12,743.67 million in FY24. The company also reported PAT margins of 2.70% in FY22, 7.29% in FY23, 10.96% in FY24, and 11.47% in the first quarter of FY25. During these years, WEL's basic EPS (earnings per share), a measure of the company's profitability, also inched up 3.84 in FY22 to 48.05 in FY24. However, the company is not without its share of risks. The most prominent of them is its heavy reliance on its top 10 customers and export revenue. As of FY24, they contributed 56.77% and 57.64% to the total revenue, respectively. <h2>Subscribe for the long-term</h2>Experts are largely recommending subscribing to this IPO for the long term. Per InCred Equities' IPO note, "In 1QFY25, the company’s revenue was at Rs 34 billion (+2% YoY), while EBITDA and PAT stood at Rs 5.5 billion (+18% YoY) and ~Rs 4 billion (+19% YoY), respectively. Based on FY25F annualized financials, the IPO’s higher band implies an EV/EBITDA of~18x and a P/E of~27x, which is at a discount to its peers, in our view. We recommend subscription to the IPO, given the strong financials, strong industry tailwinds with long-term opportunities in the solar industry, robust order backlog, and further expansion plans." Bajaj Broking also shares these views, albeit it notes that the issue appears to be fully priced rather than being on discount. "If we attribute FY25 annualized super earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a P/E of 26.91, and based on FY24 earnings, the P/E stands at 44.36. The issue relatively appears fully priced. We recommend subscribing to this IPO for the long term," it continued. Per Anand Rathi Research, the company's offer is reasonably priced with a PE of 26x (per FY25 earnings) and a market cap of Rs 4,31,786 million. "We believe that, with solar energy emerging as a key global theme in the transition to renewable energy, WEL is well placed to capitalize on the growing opportunity given its leading market share, strong financials, and continued focus on innovation and sustainability with capacity expansion through backward integration. We recommend "subscribing” to this IPO issue," it explained.

Waaree Energies Limited opens for subscription today. Should you invest?

<keyword id="20079495" type="General" weightage="100" keywordseo="HDFC-Life" source="keywords" meta.keywordsubtype="org" meta.entityname="HDFC Life" meta.hostid="261" meta.entityid="HDFC Life">HDFC Life</keyword> released its Q1FY25 results today, witnessing a 31% year-on-year (YoY) growth in <keyword id="22418232" type="General" weightage="20" keywordseo="individual-APE" source="keywords">individual APE</keyword> (Annualized Premium Equivalent), while the total assets managed by the insurer crossed Rs 3 lakh crore. Notably, APE is a common indicator of sales undertaken in the life insurance industry and is the sum of regular annualized premiums from new businesses, along with 10% of the first single premium received within a specific period. The company's <keyword id="20019621" type="General" weightage="20" keywordseo="AUM" source="keywords">AUM</keyword> (asset under management) saw a 22% <keyword id="21782807" type="General" weightage="20" keywordseo="YoY-growth" source="keywords">YoY growth</keyword>, jumping from Rs 2,53,301 crore in Q1FY24 to Rs 3,10,244 crore in Q1FY25. HDFC Life also saw a 15% YoY increase in its <keyword id="20298212" type="General" weightage="20" keywordseo="profit-after-tax" source="keywords">profit after tax</keyword> (PAT), inching up from Rs 415 crore in Q1FY24 to Rs 478 crore during April-June 2025. The <keyword id="21440628" type="General" weightage="20" keywordseo="value-of-new-business" source="keywords">value of new business</keyword> (VNB), which is calculated as the present value of the future profits that the firm is expected to earn in the future, thanks to the business that the company earns during the current year, also grew 18% from Rs 6.1 billion in Q1FY24 to Rs 7.2 billion in Q1FY25. The insurer also declared a staggering bonus of Rs 3,722 crore to more than 22 lakh of its shareholders. As per its report, the company covered around 13.9 million lives in Q1 FY25 The company also managed to retain its number 1 ranking in the industry, in terms of overall <keyword id="22418233" type="General" weightage="20" keywordseo="sum-assured" source="keywords">sum assured</keyword>. In Q1FY25, the company's overall sum assured stood at Rs 3,365 billion, up from Rs 3,340 billion in Q1FY24. <h2>Increasing need for life insurance and retirement planning </h2>The scope of insurance penetration in India remains immense, given that India's insurable population is set to burgeon to around 1 billion by 2035, and at 85%, India's sum assured (SA) as a % of its GDP remains the lowest amongst its peers, which include Singapore (332%), Thailand (143%), US (251%). Moreover, India's retirement savings gap is only set to grow annually at 10% to touch $96 trillion by 2050. At 3% of the GDP, India's pension market remains largely under penetrated, as compared to 98.3% of GDP in <keyword id="19916592" type="General" weightage="20" keywordseo="usa" source="keywords">USA</keyword> and 146.2% of the GDP in Australia.

HDFC Life Q1 results: Profit after tax surges to Rs 478 crore, AUM crosses Rs 3 lakh crore

The <keyword id="20086142" type="General" weightage="20" keywordseo="Indian-Renewable-Energy-Development-Agency" source="keywords">Indian Renewable Energy Development Agency</keyword> (IREDA) declared its Q1 FY25 results. For the April-June quarter, the company's <keyword id="20066400" type="General" weightage="20" keywordseo="revenue-from-operations" source="keywords">revenue from operations</keyword> stood at Rs 1,510.71 crore, up from Rs 1,391.64 crore as of March 31, 2024. The company's net <keyword id="20298212" type="General" weightage="20" keywordseo="profit-after-tax" source="keywords">profit after tax</keyword> also inched up from Rs 337.38 crore in the previous quarter to Rs 383.69 crore as of June 30th, 2024. The company's <keyword id="19985211" type="General" weightage="20" keywordseo="net-worth" source="keywords">net worth</keyword> also saw a significant jump from Rs 8,599.43 crore as of March 31st, 2024, to Rs 9,110.49 crore as of June 2024. For the quarter ended June 2023, IREDA's net worth was Rs 6,290.40 crore. On a year-on-year basis, the company also managed to bring down its <keyword id="21183774" type="General" weightage="20" keywordseo="debt-equity-ratio" source="keywords">debt-equity ratio</keyword> from 6.35 as of June 2023 to 5.83 as of June 2024. Notably, a lower debt-equity ratio indicates that the company does not have high debts commensurate with its equities and is relatively debt-free. On a year-to-year basis, the company also succeeded in bringing down its net <keyword id="21671151" type="General" weightage="20" keywordseo="non-performing-asset-ratio" source="keywords">non-performing asset ratio</keyword> from 1.61% during the same period last year to 0.95% during April–June 2024. At a little over 25%, the company largely kept its net profit margins steady. At the close of day's trade today, IREDA was trading at Rs 284.00, up by 0.11%.The stock has had an impressive year so far, generating a YTD (yield-to-date) of about 171%. However, the last quarter saw IREDA's operating margins shrink slightly on a YoY basis, from 38.42% as of June, 23 to 31.47% as of June 2024. The company's EPS (earning per share) also inched up from 1.29 in June 2023 to 1.43 as of June 30th, 2024. Recently, the company raised Rs 2,500 crore via private placement in June 2024, for general corporate purposes and funding renewable energy projects.

IREDA Q1 results: Profit after tax jumps to Rs 38,369.34 lakh

<keyword id="19898109" type="General" weightage="100" keywordseo="Paytm" source="keywords" meta.keywordsubtype="org" meta.entityname="Paytm" meta.hostid="261" meta.entityid="Paytm">Paytm</keyword>'s parent company, <keyword id="20253123" type="General" weightage="20" keywordseo="One97-Communications" source="keywords" meta.keywordsubtype="org" meta.entityname="One97 Communications" meta.hostid="261" meta.entityid="One97 Communications">One97 Communications</keyword>, declared its Q2FY25 results today, announcing a one-time, exceptional profit of Rs 1,345 crore during the quarter, thanks to the sale of its entertainment ticketing business. The company's PAT (profit after tax) stood at Rs 930 crore. Notably, without this windfall gain, Paytm's finances would still be in red, with the company racking up losses worth Rs 415 crore. Paytm was in red in the year-ago period as well, incurring losses worth Rs 290.5 crore. This windfall profit also improved Paytm's EBITDA by Rs 388 crore on a QoQ basis. The company's revenue also saw a slight uptick of 10.5% quarterly to Rs 1,659 crore, as opposed to Rs 1,501 crore in the previous quarter. But on a year-on-year basis, Paytm's revenue dipped significantly by 34%. The company also announced that it has entered into a DLG (<keyword id="23641220" type="General" weightage="20" keywordseo="Default-Loss-Guarantee" source="keywords">default loss guarantee</keyword>) model for its merchant loans of about Rs 225 crore with SMFG India Credit. Under this arrangement, Paytm will be first in line to take a hit in case of a loss that emerges from borrowers defaulting or skipping their payments. "Following the regulatory framework and the emerging market practice, we see increased willingness from lenders to partner and allocate more capital in the default loss. The DLG model will help to increase disbursements with the existing partners and expand partnerships with new lenders for the loan distribution,” said the company in its earnings release today. The company's revenue from its payment business also inched up 9% on a quarterly basis, along with its revenue from <keyword id="19976433" type="General" weightage="20" keywordseo="financial-services" source="keywords">financial services</keyword>, which also grew by 34% QoQ. At present, Paytm's total merchant subscriptions stand at 1.12 crore, with the company garnering 3 lakh new merchants during the quarter. During the previous quarter, Paytm's <keyword id="20253122" type="General" weightage="20" keywordseo="gross-merchandise-value" source="keywords">gross merchandise value</keyword> (GMV) also inched up by 5% on a sequential basis, which experts anticipate will continue in the coming quarters, just as India braces for the festive season. Per its release, Paytm aims to achieve <keyword id="23641219" type="General" weightage="20" keywordseo="EBITDA-profitability" source="keywords">EBITDA profitability</keyword> (before ESOPs) by the fourth quarter of this financial year. However, investors remained unimpressed with Paytm's performance, with its share slipping by around 3.96% during the day to trade at Rs 697.20. The stock has a YTD (yield-to-date) of 7.91% during the year.

Paytm declares Q2 results, earns Rs 930 crore as windfall gains by way of sale of ticketing business to Zomato

<ul class="summary-list"><li><a target="_blank" class="" href="https://www.businessinsider.com/tesla">Tesla</a> stands to benefit from any removal of consumer tax credits on electric vehicle purchases.</li><li>The move could hurt competitors more, CEO Elon Musk said.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/elon-musk">Elon Musk</a> supports a Trump plan to end tax credits of up to $7,500 for electric vehicle purchases.That might sound confusing: Why would the CEO of Tesla want to end a program that makes it cheaper for people to buy EVs?Well, according to Musk, it would devastate Tesla's rivals. And Tesla wants to keep its strong lead in the US EV market, which recently slipped under 50% for the first time."I think it would be devastating for our competitors and for Tesla slightly," Musk said in a July earnings call, predicting the impact of the tax credits ending. "But long term probably actually helps Tesla, would be my guess."On Thursday, Reuters reported that Trump plans to end the EV tax credit, with support from Tesla representatives. In a related post on X, Musk called for an "end all government subsidies, including those for EVs, oil and gas."Tesla has had a longer time than some of its rivals to <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-list-government-subsidies-tesla-billions-spacex-solarcity-2021-12">benefit from government subsidies</a>. Its market lead is well established, and it has led an EV pricing war that has squeezed its rivals, making it harder for them to survive if consumer demand falls even further.Put simply: Tesla wins if ending the tax credit pressures smaller rivals enough to stall their growth or even fold.<h2 id="91842e59-2373-4c08-abdd-17185b0bea0d">Tesla sells more EVs than anyone else, and more profitably</h2>In the third quarter of 2024, Tesla <a target="_blank" class="" href="https://digitalassets.tesla.com/tesla-contents/image/upload/IR/TSLA-Q3-2024-Update.pdf">reported</a> a pre-tax profit margin of 18%, well above the industry average of around 9%. Ford, the only competitor to break out its EV-specific finances, <a target="_blank" class="" href="https://s201.q4cdn.com/693218008/files/doc_financials/2024/q3/Press-Release-Ford-2024-Q3-Earnings.pdf">reported</a> a -104% margin for its Model e unit.Yet many of Tesla's vehicles are also priced well below many competitors. The Model 3 starts at $42,490 (after a cheaper option disappeared earlier this year). That's well below the average EV price in the US, which held steady at nearly $57,000 in October, according to Kelley Blue Book data.In an effort to juice sales, <a target="_blank" class="" href="https://www.businessinsider.com/tesla-can-make-cars-cheaper-than-competitors-2024-6">Tesla has drastically cut prices</a> on many of its cars over the past year, instigating an industry-wide price war that has cut into its own margin in pursuit of maintaining its industry-leading market share. Of the nearly 600,000 EVs sold in the US in the first half of 2023, <a target="_blank" class="" href="https://www.coxautoinc.com/wp-content/uploads/2024/07/Q2-2024-Kelley-Blue-Book-Electric-Vehicle-Sales-Report.pdf">half</a> were made by Tesla. Ford, in second place, accounted for just over 7% of EVs sold in the same period."While losing the EV tax credit could also hurt some demand on the margins in the US, this will enable Tesla to further fend off competition from Detroit as pricing/scale/scope is an apples to oranges when compared to the rest of the auto industry once the EV tax credit disappears," Dan Ives, a longtime bullish analyst at Wedbush, told clients in a note on Thursday.<h2 id="c6cefac7-9186-47f8-8f0a-f2fb65808785">Tesla is ahead of the curve in building a US manufacturing presence</h2>Eliminating the <a target="_blank" class="" href="https://www.businessinsider.com/federal-state-electric-car-vehicle-tax-credits-rebates-qualify">consumer tax credit</a>, part of President Joe Biden's Inflation Reduction Act, would need congressional approval. It's not yet clear if Trump and the incoming Republican-controlled Congress would also target other IRA tax incentives, like those supporting domestic manufacturing of cars, batteries, and other components. Competitors like BMW, Honda, and Hyundai have <a target="_blank" href="https://techcrunch.com/2024/07/20/tracking-the-ev-battery-factory-construction-boom-across-north-america/">raced</a> to scale up factories state-side to take advantage of those credits.Tesla has been ahead of this curve in manufacturing, too, with six US factories churning out cars and batteries. That work has paid off, and many Tesla models are regularly named as the most "<a target="_blank" href="https://www.cars.com/american-made-index/">American-made</a>" compared to competitors, many of which rely on factories in Mexico. In fact, only one other American automaker even cracked the top 10 in 2024.Tesla CFO Vaibhav Taneja said in a July earnings call that the company has taken advantage of manufacturing credits, but "we always drive ourselves to say, OK, what if there is no IRA benefit? And how do we operate in that kind of an environment? Like Elon said, we definitely have a big advantage as compared to our competition on that front."In October, the Alliance for Automotive Innovation, an industry group representing Ford, GM, Honda, Toyota, and others, <a target="_blank" href="https://subscriber.politicopro.com/article/2024/11/auto-trade-group-to-gop-tax-writers-keep-bidens-ev-credits-00189430">urged</a> Congress to keep the tax credits.The tax credits, including those for commercial leasing and manufacturing, are "critical to cementing the US as a global leader in the future of automotive technology and manufacturing," they said in an October letter to Congress published by <a target="_blank" href="https://subscriber.politicopro.com/f/?id=00000193-277d-dea7-afbb-b77f708f0000">Politico</a>.The group, which does not include Tesla, did not respond to a request for comment. A spokesperson for the Trump transition team did not respond to a request for comment.While Musk supports cutting the EV tax credit, reports of its potential demise appear to have spooked investors. Tesla shares fell about 5% following the Reuters report, while Rivian shares fell 11%.Musk and other Tesla leaders have long said autonomous vehicles are the future of Tesla, not just EVs, and encouraged potential investors to think much more long-term.Additional reporting by Benjamin Zhang.

Why Musk supports Trump getting rid of EV tax credits

New Delhi: As the earnings season for the second quarter of FY25 unfolds, <keyword id="19959986" type="General" weightage="20" keywordseo="public-sector-banks" source="keywords">public sector banks</keyword> (PSBs) are expected to see a slight dip in profits compared to the previous quarter, according to a report by <keyword id="19896146" type="General" weightage="100" keywordseo="Motilal-Oswal" source="keywords" meta.keywordsubtype="org" meta.entityname="Motilal Oswal" meta.hostid="153" meta.entityid="Motilal Oswal">Motilal Oswal</keyword>. The report estimates that PSBs' Profit After Tax (PAT) will decline by 0.6 per cent quarter-on-quarter (QoQ), while showing a stronger year-on-year (YoY) growth of 17.2 per cent. "We estimate PSBs to report moderate <keyword id="19899597" type="General" weightage="20" keywordseo="earnings-growth" source="keywords">earnings growth</keyword> of 17.2 pc YoY/ a decline of 0.6 pc QoQ in 2QFY25," the report stated. The slower pace of growth can be attributed to flat net interest margins (NIMs) and a slight increase in loan loss provisions (LLP). The <keyword id="20171160" type="General" weightage="20" keywordseo="Net-Interest-Income" source="keywords">Net Interest Income</keyword> (NII) for PSBs is expected to grow by around 6 per cent YoY, although interest margins are likely to remain under pressure. Despite these near-term challenges, the report suggests that public sector banks are on track to post a compound annual growth rate (CAGR) of 15 per cent between FY24 and FY26, pointing to sustained long-term growth. In the private sector banking space, the report forecasts mixed results for the same quarter. For private banks under the coverage, Pre-Provision Operating Profit (PPoP) is expected to grow by 12 per cent YoY and 1 per cent QoQ. However, PAT growth is predicted to be more modest, increasing by 5 per cent YoY and 0.6 per cent QoQ. "For our private bank coverage universe, we estimate a PPoP growth of 12 pc YoY/1 pc QoQ and a PAT growth of 5 pc YoY/0.6 pc QoQ in 2QFY25," the report added. Looking ahead, private sector banks are expected to experience steady profitability growth, with earnings projected to grow at a CAGR of 12.4 per cent over FY24-FY26. Overall, while both public and private sector banks may face moderate growth in the second quarter due to margin pressures and higher provisions, their long-term earnings prospects remain positive. (ANI)

Profit of public sector banks expected to decline by 0.6 percent QoQ : Motilala Oswal

Over the past few months, there’s been a lot of brouhaha about the lagging pace of bank deposits in India. Simply put, the rate at which Indians are depositing their hard-earned money in banks has been falling constantly, and some blame the increasing financialization of household savings in the country, or the rising preference of Indians towards mutual funds and shares. So, the hypothesis is that people are choosing to invest more in mutual funds and the Indian equity markets through direct investments, IPOs, or NFOs, the money flowing into Indian banks in the form of deposits is slowing down. But is that really the case? <h2>A crisis or a phase?</h2><keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> data suggested that for the quarter ended June 2024, bank deposits grew at 11.7%. On the other hand, credit growth has outpaced this at 15%. This means that the outflow from banks as loans is far greater than the inflow into them in the form of deposits in Q1 of FY 2024-25. The situation largely saw cut-copy-paste in the first week of September as well, with loans registering a 13.3% YoY growth during the period, while deposits rose only 11.1%. This gap has only been widening for the last 3 years. Since deposits are how banks gather assets to further lend and earn interest income as a consequence, even a slight dip could set the alarm bells ringing for banks, and rightfully so. And truth be told, mutual funds are indeed taking on bank deposits in a big way. Per a report by <keyword id="20250971" type="General" weightage="20" keywordseo="franklin-templeton" source="keywords">Franklin Templeton</keyword>, in August 2024, the AUM (assets under management) of Indian mutual funds, or the total funds managed by them, stood at 31.3% of total bank deposits in the country, up from 24.20% during the year-ago period. As of August 2024, the AUM of mutual funds stood at Rs 66.17 lakh crore, an all-time high. But all said and done, is this really the reason why the rate of bank deposits is falling behind? SBI has dismissed this to be a “statistical myth”, and experts point out that since equity and fund houses also keep the cash in their respective bank accounts, there’s no cause for concern. So, is financialization really to be blamed for the trailing tempo of deposits? Or is something else happening behind the scenes? We take a closer look: <h2>First, are <keyword id="4000333" type="General" weightage="100" keywordseo="household-deposits" source="Orion">household deposits</keyword> really slowing down? And is that a cause of concern?</h2>Data from Motilal Oswal suggests the contrary. Deposits grew by around 10.4% between March 2020 and August 2024. Data from RBI also highlights that as of August 9, 2024, bank deposits witnessed a YoY growth of 10.8%. The loan-to-deposit ratio for the retail segment, which indicates what percentage of its total deposits the banks lend out as loans, has stayed at 77.5%, above the 77% mark for the tenth straight month. Also, we can’t forego the fact that the share of Indian <keyword id="20319599" type="General" weightage="20" keywordseo="households" source="keywords">households</keyword> in bank deposits has indeed slowed down. However, data from Axis AMC shows that the dip is marginal—from 63% in 2022 to 62% in 2023 and 61% in 2024. What has slowed down even more considerably is the share of government deposits in the aggregate bank deposits, which has dipped from 14% in 2018 to 9% in 2024. So, it's not just household deposits, you see. Moreover, as of March 2024, the collective CASA ratio (current and savings account deposits) of all commercial banks in India stood at 41.00%, down from 43.1% in March 2023 and 45.2% in March 2022, marking a nearly 5% point decline over the past year, while still staying over the 10-year average of 39.2%. This implies that Indian banks are relying more on higher-cost funds (savings accounts), which can limit their profitability. <h2>What is this financialisation of savings we are talking about?</h2>Then again, there is no doubt about the growing affinity of Indians towards mutual funds and stock markets. Recent data from CBDT (<keyword id="19942037" type="General" weightage="20" keywordseo="central-board-of-direct-taxes" source="keywords">Central Board of Direct Taxes</keyword>) highlights that India’s net direct tax collection surged by around 22%, driven exclusively by the significant uptick in the collection of <keyword id="20930760" type="General" weightage="20" keywordseo="securities-transaction-tax" source="keywords">Securities Transaction Tax</keyword> (STT), which doubled to Rs 26,154 crore, from Rs 13,352 crore in the year-ago period. Why does this matter? STT is levied when you buy or sell equity shares on stock exchanges, sell equity mutual funds, and trade in futures and options in the equity segment. Such taxes, including the multiple other taxes in equity market investments, are considered as leakages as the money moves out of the economy into government coffers. Data from a ValueQuest report explains that over the last 20 years, the markets have handsomely rewarded the investors, generating over $900 billion in incremental value for them. This is the major driver behind the dramatic rise in investment flowing towards the equity markets. There’s further proof of this budding romance, if you check the demat pudding. The number of demat accounts, which are a primary requisite for participating in the stock markets, also burgeoned by 42.3 lakh in August 2024, taking India’s total tally of demat accounts beyond 17 crore. To put this in perspective, this is almost equivalent to the population of just 8 nations in the world, including China, the US, Brazil and more. Vivek Iyer, Partner, Grant Thornton Bharat thinks it's rather important, as well. “Financialisation of household savings in India is an indication of deepening capital markets in the market, especially from a retail investor standpoint. Bank deposits with a modest rate of return are no longer the only option for savings for investors. Investors today have more avenues for wealth creation in the form of public capital markets, which have democratized wealth creation and provided equality of opportunity to retail investors”, he says. Yes, Indians are investing more and more in the markets, and in mutual funds. But is it a sin to look out for inflation-beating returns, which the stock markets offer, and vanilla bank deposits don't? After all, the allure of 12-13% annual returns offered by equities can certainly pale the stability offered by good old deposits, which generally do not go beyond 9% when it comes to annual returns. But all of this is not what is behind the slowdown. India is still a toddler in the school of savings financialization, with less than 10% of the population holding a demat account, and less than 5% of us saving in equities. That's a drop in the ocean of deposits, far inadequate to trigger a tsunami. <h2>Tell me why lagging deposits have nothing to do with Indians investing more in mutual funds!</h2>Says Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, “Households' equity holdings composition grew from 11.1% in FY 23 to 14.7% in FY 24. This trend reflects a growing awareness of investment options, empowering individuals to take control of their financial futures. Despite this transition towards equities, banks still hold a significant share of household financial savings—33.5% in FY24 compared to 34.9% in FY23”. Also, household savings and their subsequent financialization do not have much to do with deposit creation, which is entirely made by banks. What actually drives increased deposits is credit growth or increased lending. When interest rates are eased, people tend to borrow more and spend more, which circulates more money in the economy. For the past 4 years, RBI has been tightening the screws on interest rates, which raises the cost of borrowings, and makes it more expensive to take loans, putting a dampener on credit growth, but effectively curbing inflationary pressures. The last time RBI cut the repo rate by 40 basis points was back in May 2020, 4 years ago. The lag in deposit growth we’re witnessing is almost 3 years old. Coincidence much, or just good old economics at work? But with the <keyword id="19900043" type="General" weightage="20" keywordseo="fed" source="keywords">Fed</keyword> recently setting a rate cut precedent by slashing 50 bps off its interest rate, RBI is expected to follow suit in the next <keyword id="19918491" type="General" weightage="20" keywordseo="mpc" source="keywords">MPC</keyword> (Monetary Policy Committee) meeting, scheduled for November 2024. A rate cut would ease the aforementioned high cost of borrowing, and increase loan-taking for corporates and institutional investors, thereby stoking consumption in the economy. And then, deposit creation in banks is likely to return to its former glory. If not, then that would be a curious case to unravel! But that worry is for another day.

A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

<keyword id="19938730" type="General" weightage="20" keywordseo="TVS-Motor" source="keywords">TVS Motor</keyword> Company on Tuesday said its consolidated net profit increased 6 per cent to Rs 461 crore for the first quarter ended June 30, 2024, riding on the back of robust sales. The company had reported a net profit of Rs 434 crore in the April-June quarter of last fiscal. Total income rose to Rs 10,448 crore for the period under review as compared to Rs 9,142 crore in the year-ago period, TVS Motor Company said in a regulatory filing. On a standalone basis, the company posted a profit after tax of Rs 577 crore for the first quarter as compared to Rs 468 crore in the June quarter of the last fiscal, it added. Total income rose to Rs 8,412 crore for the first quarter as against Rs 7,275 crore in the year-ago period. The company said its overall two-wheeler and three-wheeler sales including exports grew 14 per cent year-on-year, registering sales of 10.87 lakh units in the quarter ended June 2024 as against 9.53 lakh units registered in the quarter ended June 2023. Motorcycle sales grew by 11 per cent year on year at 5.14 lakh units in the first quarter as against 4.63 lakh units in the same period last fiscal. Scooter sales grew by 19 per cent year-on-year to 4.18 lakh units in the April-June quarter this year. Three-wheeler sales for the quarter under review stood at 31,000 units as against 35,000 units in the year-ago period, TVS said. Electric scooter sales for the quarter ended June 30, 2024, stood at 52,000 units as compared to 39,000 units in the April-June quarter of last fiscal. Shares of TVS Motor Company on Tuesday ended 0.75 per cent down at Rs 2,474.45 apiece on the BSE. SEE ALSO:<a href="https://www.businessinsider.in/stock-market/webstories/unicommerce-esolutions-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/112307438.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/webstories/unicommerce-esolutions-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/112307438.cms" target="_blank">Unicommerce eSolutions IPO – Price band to risk factors, all you need to know</a> <a href="https://www.businessinsider.in/business/auto/news/electric-two-wheeler-sales-cross-the-1-lakh-mark-after-four-months-ola-electric-leads-the-market/articleshow/112288793.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/news/electric-two-wheeler-sales-cross-the-1-lakh-mark-after-four-months-ola-electric-leads-the-market/articleshow/112288793.cms" target="_blank">Electric two-wheeler sales cross the 1 lakh mark after four months, Ola Electric leads the market</a> <a href="https://www.businessinsider.in/sports/news/neeraj-chopras-paris-olympics-journey-to-begin-with-qualification-round-today-top-rivals-to-look-out-for/articleshow/112311760.cms">Neeraj Chopra qualifies for finals with a first throw of 89.34m – top rivals to look out for</a>

TVS Motor Q1 profit rises 6% to ₹461 crore; total income at ₹10,448 crore

New Delhi, <keyword id="56368" type="General" weightage="20" keywordseo="Apollo-Hospitals" source="Orion">Apollo Hospitals</keyword> on Friday said its consolidated profit after tax declined by 47 per cent to Rs 167 crore in the first quarter ended June 30, 2023. The healthcare major had reported a PAT (profit after tax) of Rs 317 crore in the April-June quarter of previous fiscal. Revenue grew by 16 per cent to Rs 4,418 crore in the first quarter as against Rs 37,96 crore in the same period a year ago, Apollo Hospitals said in a regulatory filing. As on June 30, 2023, Apollo Hospitals had 7,798 operating beds across the network, out of which 14 hospitals were new with 2,380 operating beds, it said. The new hospitals have a utilisation of 60 per cent and are expected to witness double-digit growth in volumes and improvement in utilisation and profitability going forward, it added. "As we step into the next quarter, our focus remains steadfast - to augment our doctors' expertise and revolutionise the overall patient experience as we continue steering Apollo towards a future where healthcare is proactive, personalised, and accessible to all," Apollo Hospitals Group Chairman Prathap C Reddy noted. Shares of the company were trading 0.32 per cent down at Rs 4,905.05 apiece on the BSE.

Apollo Hospitals Q1 2023-24 net profit dips 47% to Rs 167 crore

Walmart-backed <keyword id="22923802" type="General" weightage="100" keywordseo="PhonePe-Group" source="keywords" meta.keywordsubtype="org" meta.entityname="PhonePe Group" meta.hostid="269" meta.entityid="PhonePe Group">PhonePe Group</keyword> on Monday reported a consolidated <keyword id="19942166" type="General" weightage="20" keywordseo="net-profit" source="keywords">net profit</keyword>, excluding <keyword id="20037952" type="General" weightage="20" keywordseo="esop" source="keywords">ESOP</keyword> costs, of Rs 197 crore for fiscal year 2023-24. It had incurred a loss of Rs 738 crore in the previous fiscal, according to a company statement. The company's revenue in <keyword id="19910780" type="General" weightage="20" keywordseo="FY24" source="keywords">FY24</keyword> was Rs 5,064 crore, 73.7% higher than Rs 2,914 crore in FY23. The group's payment business reported a standalone net profit (excluding ESOP costs) of Rs 710 crore in FY24, against a loss of Rs 194 crore in the preceding fiscal. The group has expanded into <keyword id="19976433" type="General" weightage="20" keywordseo="financial-services" source="keywords">financial services</keyword> (insurance, lending, wealth) as well as new consumer tech businesses (pincode - hyperlocal e-commerce and Indus App Store). The company has not provided the results of these verticals. Recently, the company also launched credit line on <keyword id="19900911" type="General" weightage="20" keywordseo="upi" source="keywords">UPI</keyword>, allowing customers to avail short-term credit effectively. PhonePe has been able to achieve growth and <keyword id="20049278" type="General" weightage="20" keywordseo="diversification" source="keywords">diversification</keyword> of revenue through a combination of market leadership, platform reliability and cross-selling a diverse product portfolio, the statement said. This achievement is a result of PhonePe's focus on driving operating leverage through automation and cost efficiencies, it added. "Our financial strategy is anchored on three key pillars: (1) predictable and sustainable growth in revenue, (2) diversification of revenue streams, and (3) continuing improvements to the bottom line," PhonePe CFO Adarsh Nahata said. These pillars have guided the firm's strategic decisions and enabled it to scale rapidly and a focus on disciplined financial management will help it continue in the progression towards profitability of the payments business, he added. <keyword id="20075850" type="General" weightage="20" keywordseo="sameer-nigam" source="keywords">Sameer Nigam</keyword>, Founder and CEO said the optimisation of investments and capital allocation, in conjunction with building a diversified revenue model, and remaining customer-focused, will provide a solid foundation for sustained future success. The PhonePe group on Monday reported an adjusted profit after tax, excluding ESOP costs, of Rs 197 crore for the financial year 2023-24, compared with a loss of Rs 738 crore a year ago. Its revenue in FY24 jumped 74 % to Rs 5,064 crore, against Rs 2,914 crore in the previous financial year. The company already boasts of 550+ million registered users, along with acceptance across 40+ million merchants. Per its release, the company processes over 270 million transactions on a daily basis, which have an annualised total payment value (TPV) of around $1.5 trillion.

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