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<ul><li>The <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> has proposed 15% capital adequacy as a benchmark and LIC Housing Finance is short of that.</li><li>The new restrictions proposed by the regulator will also limit the amount of dividend paid by other non-banking finance companies.</li><li>Check out the latest news and updates on <a href="https://www.businessinsider.in/" data-type="tilCustomLink" target="_blank">Business Insider</a>. </li></ul>The Reserve Bank of India issued a draft circular that proposed restrictions on non-banking finance companies declaring dividends. And, according to analysis by Emkay, only two companies, LIC Housing Finance and M&amp;M Financial Services, in that space do not meet the conditions, under current circumstances, for paying dividends set by the central bank. However, M&amp;M Finance has clarified that it would be eligible. Not surprisingly, it took a toll on the two stocks. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Stock </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Losses on Dec 10 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">LIC Housing Finance </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-3.11% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Mahindra and Mahindra Financial Services </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-3.35% </td></tr></tbody></table> The RBI has proposed a capital to risk weighted assets ratio (CRAR) of 15%. Simply put, CRAR is a measure of how much capital the company has compared to the riskiness of its loans. If the borrower fails to repay, the capital would be the cushion to absorb the loss. And LIC Housing Finance fails to meet the RBI threshold on this count. The capital adequacy ratio has been 14.4%% for the company in the last two financial years and 14.5% for the first half of the current one, the report said. The way out of this is that the company can raise money from the market to boost this figure past the 15% mark, and then, shareholders can expect a dividend. M&amp;M Financial, on the other hand, doesn’t make the cut on RBI’s benchmark for paying dividend because the amount of bad loans on its books is a little more than what the regulator likes. The circular has set the threshold at 4% while M&amp;M Financial has a net NPA (non-performing assets) of 4.7%. However, if the firm is able to recover enough loans by March 2021 to bring the metric below 4%, dividend may be back on the table. In the year before COVID-struck, the one ending in March 2019, the company paid a handsome 25.7% dividend to shareholders. On the other hand, in a statement to Business Insider, M&amp;M Financial stated “As per the circular, RBI has proposed a twin matrix of CRAR and NNPA and accordingly specified 4 categories based on a combination of both. CRAR of MMFSL has been above 18% for the last 3 years. Hence, the company will fall in Category B as per the matrix. Secondly, MMFSL’s net NPA at the end of September 30 was 4.7%, based on which our permissible dividend payout ratio is ‘up to 20%’,” the company said. This is not the first time the spotlight has fallen on M&amp;M Finance’s chunk of bad loans. The pandemic has only increased the risk of defaults and therefore the company too has been aggressively setting aside money to cover the losses if they occur. “As we progress, the next six months, which is normally the good six months, we would not see a decline in the gross NPA, and we will maintain our stance on aggressive provisions… if we start seeing things are not improving as we think, then we may take higher provision, whichever is necessary,” Vice Chairman and Managing Director Ramesh Iyer told Business Insider <a href="https://www.businessinsider.in/stock-market/news/mahindra-and-mahindra-finance-managing-director-gets-candid-about-the-rights-issue/articleshow/77212386.cms" data-type="tilCustomLink" target="_blank">in an exclusive chat in July 2020</a>. Here’s an excerpt of that interview: <div type="Youtube" id="Qu9KvcNr1iM" title="M&amp;M Financial MD explains how the company is preparing for the worst and hoping for the best" thumbUrl="https://i.ytimg.com/vi/Qu9KvcNr1iM/mqdefault.jpg"></div> For other NBFCs that are eligible to pay dividend, there may be a cap on how much they can dole out based on the benchmarks set by the RBI. These are the likely limits on dividends given the current financial health of the following firms. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Dividend limit </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bajaj Finance </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 45% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Cholamandalam Finance </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 30% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HDFC </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 45% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">L&amp;T Finance Holdings </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 25 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Magma Fincorp </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 25% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Shriram City Union Finance </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 25% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Shriram Transport Finance </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 25% </td></tr></tbody></table>Source: Emkay SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/the-33-billion-itc-one-of-indias-most-trolled-stock-in-recent-weeks-seems-to-have-turned-a-corner/articleshow/79641456.cms">The $33 billion ITC, one of India’s most-trolled stock in recent weeks, seems to have turned a corner</a><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/the-33-billion-itc-one-of-indias-most-trolled-stock-in-recent-weeks-seems-to-have-turned-a-corner/articleshow/79641456.cms"></a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/icertis-helps-google-microsoft-and-apple-manage-their-contracts-is-hiring-for-techies-and-people-in-sales/articleshow/79640659.cms">EXCLUSIVE: This Indian unicorn helping Google, Microsoft and Apple manage their contracts is hiring⁠— it needs techies as well as people in sales</a><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/careers/news/icertis-helps-google-microsoft-and-apple-manage-their-contracts-is-hiring-for-techies-and-people-in-sales/articleshow/79640659.cms"></a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/tata-group-company-voltas-is-telling-analysts-that-it-may-hike-ac-prices-by-3-4-to-cover-rising-input-costs/articleshow/79624340.cms">Voltas is telling analysts that it may hike AC prices by 3-4% to cover rising input costs</a>

How RBI's proposed restrictions may affect your dividends

<ul class="summary-list"><li>Eat Just is running an full-page ad for its plant-based egg scramble in The New York Times.</li><li>The ad, slated to run on Sunday, positions the product as an alternative to chicken eggs.</li></ul>Plant-based egg brand Just Egg is letting consumers frustrated with rising eggs prices know they have another option.The brand plans to run a full-page ad in the upcoming Sunday edition of the New York Times, <a href="https://adage.com/article/marketing-news-strategy/just-egg-run-ads-amid-bird-flu-related-egg-shortage/2463291" target="_blank" rel="noopener">AdAge previously reported.</a>Just Egg's ad includes bottles of Just Egg plant-based eggs on a refrigerator rack and the phrase "Plants don't get the flu." The brand will also advertise its products on screens at roughly 800 Volta Charging stations for electric vehicles starting this weekend. The stations are located in grocery store parking lots.The ad comes as avian flu decimates flocks of egg-laying chickens, leading to some shortages and making <a href="https://www.businessinsider.com/avian-flu-has-made-organic-eggs-cheaper-than-conventional-ones-2022-12">normal eggs more expensive than </a>organic eggs<a href="https://www.businessinsider.com/avian-flu-has-made-organic-eggs-cheaper-than-conventional-ones-2022-12">.</a> As many as 58 million chickens have been affected by the disease, according to the <a href="https://www.aphis.usda.gov/aphis/ourfocus/animalhealth/animal-disease-information/avian/avian-influenza/hpai-2022/2022-hpai-commercial-backyard-flocks" target="_blank" rel="noopener">US Department of Agriculture.</a>The product featured in Just Egg's ad is the brand's 12-ounce bottle of plant-based egg scramble, which is derived from Mung beans. One bottle is the equivalent of about eight eggs and has an average retail price of $4.30. The company noted that its unit velocity in retail is higher than it has ever been, and it has expanded distribution. The average price for a dozen <a href="https://fred.stlouisfed.org/series/APU0000708111" target="_blank" rel="noopener">large, Grade A eggs</a> in December was $4.25, according to the US Bureau of Labor Statistics.<div type="image" title="Just Egg ad" height="3150" width="1733" msid="96978168" hostid="261"></div>Just Egg is one of the products made by Eat Just, the company formerly known as Hampton Creek, which are sold at specialty food stores and major retailers like Walmart, Kroger, and Target. In addition to eggs, Eat Just is developing meat that can be grown in a lab instead of by raising animals. Eat Just's lab-grown chicken became the first lab-grown meat to win regulatory approval in the world in late 2020 when Singapore signed off on the product.The company is private and does not disclose details of its finances. But an <a href="https://www.businessinsider.com/eat-just-slashed-its-2021-revenue-forecast-leaked-presentation-shows-2022-4">Eat Just investor presentation</a> obtained by Insider last year showed that the company had slashed its 2021 revenue forecast by almost 50%. Before it dropped the Hampton Creek name in favor of Eat Just in 2017, the company reportedly bought its own products to hike sales figures, <a href="https://www.bloomberg.com/news/articles/2016-08-04/food-startup-ran-undercover-project-to-buy-up-its-own-products?sref=p7zS9UoY" target="_blank" rel="noopener">Bloomberg reported.</a> A federal investigation never assigned any wrongdoing to Hampton Creek, and CEO Josh Tetrick said at the time that the purchases were quality checks.

Plant-based brand Just Egg is running an ad declaring 'Plants don't get the flu' as chicken egg shortage continues

<ul><li>According to a report by BNP Paribas, 8% Indian households had an ACs in fiscal year 2020.</li><li>The cost of ACs and the energy they consume is the main reason why ACs are considered luxury items.</li><li>The increase in commodity inflation and high competition has been limiting the <keyword id="13221674" type="General" weightage="20" keywordseo="ac-companies" source="Orion">AC companies</keyword>’ ability to increase their margins.</li></ul>The business of selling air conditioners has still not reached its full potential as it continues to be a luxury item for most Indian households. Even though several large brands like Voltas, LG, Daikin, Hitachi, Blue Star and Lloyd have been selling ACs for the past five to seven decades, they have still not been able to enjoy higher margins from this about-to-boom segment. This year however may be a good one. The demand for air conditioners is expected to increase due to scorching heat across several parts of India, according to a report by international financial services company BNP Paribas. The mercury has crossed 45 degree celsius in several places and<a href="https://www.businessinsider.in/science/environment/news/what-happens-to-the-human-body-when-the-temperature-reaches-50-degree-celsius/articleshow/91589906.cms"> touched 49 degrees in Delhi</a>, so people have been rushing to buy ACs in order to keep themselves cool. “We estimate the Indian AC industry market size at ₹180 billion (₹18,000 crore) with a potential CAGR [compound annual growth rate] of 15% over FY21-25,” the report said. BNP Paribas noted that 8% of Indian households had an AC in 2020, with 7 million units being sold in the same year. This is quite low when compared with the fact that four in ten — or 42% — households across the world have an AC. <div type="image" title="Heatwave has turned ACs from a luxury to a necessity — but margins remain muted for the players" msid="91655539" hostid="261"></div> The cost of ACs and the energy they consume is the main reason why ACs are considered a luxury item — making it unaffordable for many Indian households. The increase in commodity prices is hurting the manufacturers even further. <cmsannotation type="cmsannotation" annotationid="High competition is limiting ACs companies in India" comment="subhead" text="High competition is limiting ACs companies in India">High competition is limiting ACs companies in India</cmsannotation> Covid-19, the resultant lockdown and the Russia-Ukraine conflict that followed have had a major impact on commodity prices. Even a bag of detergent now costs <a href="https://economictimes.indiatimes.com/news/economy/indicators/how-a-detergent-could-have-helped-rbi-act-swiftly-on-inflation/articleshow/91587940.cms">20% more </a>than last year, but FMCG companies have the option of increasing the price of their products and passing it on to the customers. <div type="image" title="Heatwave has turned ACs from a luxury to a necessity — but margins remain muted for the players" msid="91655586" hostid="261"></div> However, the same price increase has not been possible in the whitegoods space like ACs, refrigerators or washing machines because they are already expensive compared to other fans or coolers, and competition in the industry is extremely high. “Moreover, the Indian whitegoods industry is highly competitive, given the presence of large MNCs like Samsung, LG, Whirlpool, Haier, Daikin, Hitachi, etc. as well as strong Indian brands like Voltas, Lloyd (Havells brand), Blue Star, IFB to name a few. Such high competitive intensity also limits the ability to hike prices,” BNP Paribas said in its latest report. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Change in gross margins (bps) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY2018 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY2019 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY2020 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY2021 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Blue Star </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(361) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(62) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">13 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(177) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Voltas </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(110) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(255) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">133 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(129) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Whirlpool </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(344) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(46) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">161 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(255) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Johnson Controls-Hitachi Air </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(10) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(70) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">83 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">94 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IFB Industries </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">178 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">(247) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">187 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">74 </td></tr></tbody></table>Source: BNP Paribas, Company Data Note: BPS stands for Basis Points, which is a unit of measure to describe the percentage change in value. The top six companies in the whitegoods space include Voltas, LG, Daikin, Hitachi, Blue Star and Lloyd, which cumulatively controlled 70-75% of the market share by volume in the fiscal year 2020. “Over the long run, we expect the market to consolidate in favour of the top 4-5 companies,” BNP Paribas noted, citing the Production Linked Incentive Scheme (PLI) as one of the major reasons for this expected consolidation. <cmsannotation type="cmsannotation" annotationid="High price is not the only thing muting demand" comment="subhead" text="High price is not the only thing muting demand">High price is not the only thing muting demand</cmsannotation> The industry size of air conditioners in India is almost double that of fans, which have made a mark on 80% households in India, but still the margins continue to be low on this white commodity. One of the main reasons is that AC is a seasonal item and has higher inventory costs due to the volume of the product. <div type="image" title="Heatwave has turned ACs from a luxury to a necessity — but margins remain muted for the players" msid="91655604" hostid="261"></div> Secondly, the market has been affected since 2016 due to the disruptions such as demonetisation and introduction of goods and services tax (GST). The Covid-19 wave, which compelled people to stay at home for almost two years, also hindered the demand. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/stock-market/news/itc-aditya-birla-fashion-lic-housing-finance-among-stocks-to-watch-out-for-on-may-19/slidelist/91653552.cms">ITC, Aditya Birla Fashion, LIC Housing Finance among stocks to watch out for on May 19</a> <a href="https://www.businessinsider.in/stock-market/news/delhivery-ipo-heres-how-you-can-check-the-allotment-status/articleshow/91650014.cms">Delhivery IPO: Here’s how you can check the allotment status</a> <a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-vs-bharti-airtel-four-charts-to-showcase-how-indian-telecom-giants-faired-in-2022/slidelist/91640306.cms" data-type="tilCustomLink">Reliance Jio Vs Bharti Airtel — Four Charts That Showcase How The Indian Telecom Giants Faired In 2022 </a>

Heatwave has turned ACs from a luxury to a necessity — but margins remain muted for the players

The <keyword id="6355014" type="UNKNOWN" weightage="20" keywordseo="delhi-high-court">Delhi High Court</keyword> Wednesday sought response of the Centre, <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>, <keyword id="35210" type="ORGANIZATION" weightage="20" keywordseo="sebi">SEBI</keyword>, IRDAI and National Payments Corporation of India (<keyword id="193629" type="CITY" weightage="20" keywordseo="NPCI">NPCI</keyword>) on a PIL seeking a detailed legal framework for regulating operations of techfin companies such as <keyword id="6354576" type="UNKNOWN" weightage="20" keywordseo="facebook">Facebook</keyword>, Google and Amazon in India's financial sector space. According to the petition filed by an economist, techfin entities are technology, telecommunications or e-commerce companies which have entered the financial sector to provide financial services and need to be regulated. A bench of Chief Justice D N Patel and Justice Prateek Jalan issued notice to the ministries of finance and law as also Reserve Bank of India (RBI), NPCI, Insurance Regulatory and Development Authority of India (IRDAI), Securities and Exchange Board of India (SEBI) and the Pension Fund Regulatory and Development Authority (PFRDA) seeking their stand on the plea by Resmi P Bhaskaran Bhaskaran, in her plea filed through advocate Deepak Prakash, has alleged that the "lackadaisical approach" of Indian financial regulators permits unregulated operation of techfin firms and claims that this could adversely affect the financial stability of the country. SEE ALSO: <a href="https://www.businessinsider.in/careers/news/icertis-helps-google-microsoft-and-apple-manage-their-contracts-is-hiring-for-techies-and-people-in-sales/articleshow/79640659.cms">EXCLUSIVE: This Indian unicorn helping Google, Microsoft and Apple manage their contracts is hiring⁠— it needs techies as well as people in sales</a> <a href="https://www.businessinsider.in/business/corporates/news/tata-group-company-voltas-is-telling-analysts-that-it-may-hike-ac-prices-by-3-4-to-cover-rising-input-costs/articleshow/79624340.cms">Voltas is telling analysts that it may hike AC prices by 3-4% to cover rising input costs</a> <a href="https://www.businessinsider.in/science/environment/news/mount-everest-taller-by-2-8-feet-as-nepal-and-china-set-aside-their-differences/articleshow/79622601.cms">Mount Everest is 2.8 feet taller as China and Nepal finally agree on the height of the world's highest peak</a>

An Indian Court wants response from authorities on Facebook, Google and Amazon Pay's allegedly unregulated financial ops

<ul><li><keyword id="1836134" type="COMPANY" weightage="20" keywordseo="Icertis">Icertis</keyword>, which caters to the likes of <keyword id="6354427" type="ORGANIZATION" weightage="20" keywordseo="apple">Apple</keyword>, Airbus, <keyword id="10387" type="CITY" weightage="20" keywordseo="Microsoft">Microsoft</keyword> and Best Buy, plans to increase its headcount by 30% to 40% in 2021. </li><li>Most of this hiring will be done for engineering and sales. </li><li>The uptake of employees comes as Icertis’ looks to move beyond its enterprise clients and focus on the mid-market segment. </li></ul>Icertis, the billion-dollar unicorn based out of Pune in India, which manages contracts for bigwigs like Apple, Airbus, Microsoft and Best Buy has plans to increase its headcount by at least 30% in 2021. Over the last year, the company has added over 300 employees globally, with at least 50 being hired from Indian campuses. Before 2020 comes to an end, Icertis intends to add another 200 employees to its <a href="https://www.owler.com/company/icertis#:~:text=Icertis%20has%201%2C300%20employees%20and,among%20it's%20top%2010%20competitors.">1,300-strong</a> headcount. “We’ll continue to hire aggressively to support our growth and expect to increase our headcount 30% to 40% in the next year,” co-founder and chief technology officer (CTO) of Icertis, Monish Darda, told Business Insider in an exclusive interview. This means onboarding at least 450 new faces in 2021. The development at a time when the startup has plan to shift its focus on bringing more mid-market customers. The challenge there is that it takes at least 10 to 15 clients from that segment to bring the same amount of revenue as an enterprise client. Software companies need to sell For those who aren’t familiar with Icertis, the startup used artificial intelligence (AI) and machine learning (ML) to manage contracts on the cloud. Rather than keep track of compliance or payments on paper, everything is managed automatically by the company’s <keyword id="10399864" type="UNKNOWN" weightage="20" keywordseo="contract-intelligence">contract intelligence</keyword> software-as-a-service (SaaS). And, as a SaaS company, Darda believes being able to sell your product is a necessity for growth. “If you cannot sell, that’s the end of the company when you’re smaller… The ability to sell is critical for any company especially for an enterprise Saas company which is dependent on companies renewing every year — it’s not a perpetual license,” he explained. On the hunt for hunters and farmers According to Darda, there are two types of salespeople — hunters and farmers. Hunters go out and convince the customer to buy new software like Icertis. Farmers, on the other hand, reach out to clients that already have Icertis and grow the business by uncovering new ways and new value for the customer. “When we hire, we hire at different levels. Experienced people for large accounts and people who may be capable of doing that a mid-level. This allows you to expand that pyramid and sell better,” explained Darda. Former Airbus and BMW procurement honcho <a href="https://www.prnewswire.com/news-releases/icertis-adds-former-airbus-and-bmw-chief-procurement-officer-dr-klaus-richter-to-board-of-advisors-301178658.html">Klaus Richter</a>, for instance, has recently joined Icertis’ advisory board and can be profiled as a hunter. “He brings in a lot of raw experience into the company in how to cater to large deals,” according to Darda. The freshers come in on the analytics side of sales. Their role is to rummage through raw data to figure out how sales are performing and what lies ahead to improve the efficiency of sales. Cloud development is a skill that you have or don’t Sales can help you expand your business but you need engineers to stay ahead of the competition. When Darda first joined Icertis, the first line of code he wrote was on Azure. And, the entire company is built on the cloud. According to him, cloud development is a skill that people have or don’t have. Candidates need to be able to think ten steps ahead and be proficient at what’s called ‘defensive programming’. “How do you think about a problem and how do you solve a problem? Do you take care of what will happen under five different scenarios,” he explained. And, since Icertis is a contract ‘intelligence’ company the value of having the basic computer skills to navigate the Microsoft Stack and the AI/ML stack, which consists of languages like R and Python, is a bare necessity. Icertis was among the <a href="https://economictimes.indiatimes.com/jobs/iit-roorkee-receives-7-international-offers-until-day-3-of-placement/articleshow/79547532.cms">seven international companies</a> to dole out a placement offer at IIT Roorkee. And, the secret sauce to getting selected — more than the clout of being good at coding — is ‘elasticity’. “The most important aspect that we look for is elasticity — how can people learn, especially when we’re hiring young people fresh out of college with very little industry experience,” said Darda. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/tata-group-company-voltas-is-telling-analysts-that-it-may-hike-ac-prices-by-3-4-to-cover-rising-input-costs/articleshow/79624340.cms">Voltas is telling analysts that it may hike AC prices by 3-4% to cover rising input costs</a> <a href="https://www.businessinsider.in/science/environment/news/mount-everest-taller-by-2-8-feet-as-nepal-and-china-set-aside-their-differences/articleshow/79622601.cms">Mount Everest is 2.8 feet taller as China and Nepal finally agree on the height of the world's highest peak</a>

EXCLUSIVE: This Indian unicorn helping Google, Microsoft and Apple manage their contracts is hiring⁠— it needs techies as well as people in sales

NEW DELHI: As we inch closer to the Budget 2014, Dalal Street is abuzz with expectations of strong pro-growth reforms from Finance Minister Arun Jaitley. 
 
Given high expectations from the government, all attempts are expected to be made to present a comprehensive Union budget. However, the residual period until the next Budget to be presented is relatively small. 
 
Experts feel that the focus of the new government would be more on creating opportunities for retail investors in financial markets. But it is definitely not going to be a cakewalk for them. 
 
“The budget itself is not going to be a cakewalk. In fact, it is going to be a tight rope walk for the government,” said Killol Pandya, Senior Fund Manager-Debt, LIC Nomura MF. 
 
“The economy has certain structural and macro issues which it is facing and the government will be at pains to balance putting our growth story back on track while battling the inflation bugbear,” he added. 
 
The fact is that most of the steps which the government can take to promote growth and kick start the economy will have short-term inflationary ramifications. However, in terms of market performance, analysts see the markets rallying nearly 5-6 per cent in the run-up to the event. 
 
 
 
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Traders carried forward bullish futures bets to the July series on the expiry of the June contracts on Monday on expectations the market could rebound in the run-up to the Union Budget on July 10. 
 
Fresh build-up of positions in Nifty options suggests the benchmark index could gain about 5-6% by the Budget day from the current levels, said an ET report. 
 
Most analysts are of the view that despite escalating tensions in Iraq and depreciating rupee, Indian markets should be able to scale higher from the current levels, supported by strong FII flows and as most of the oil, which is imported, comes from the southern region, which remains unaffected. 
 
“The overweight by international investors in India will be highest in the whole emerging market space and we think it will continue. We think there is a re-rating going on in India,” said Hans Goetti, Head of Investment Asia, BIL. 
 
“We think if there is a new earning cycle start on the back of a stronger economy, then it can grow at about 6.5 per cent for several years, accompanied by higher prices in the equity markets,” he added. 
 
History suggests that the Union Budget’s influence on the market’s short-term performance is declining, but the next budget could still leave a trail of impact. 
 
The upcoming budget could be important because of where India is placed cyclically, what the mandate for the government implies and because this is the first non-Congress government in a decade, say experts. 
 
“Though history suggests that the budget’s influence on short-term performance is declining, expectations (measured by pre-budget performance) are still important in deciding what the market does after the budget,” said Ridham Desai, India Strategist at Morgan Stanley, in a report. 
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“If the pre-budget returns are positive, there is a 90% chance that the post-budget returns are negative,” he added. 
 
We have collated a list of ten stocks which investors can look at ‘buying’ ahead of the Budget 2014, for the next 12 months: 
 
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	Brokerage Firm: BofA-ML 
 
 
Titan Company Ltd: Target price set at Rs 406 
 <keyword id="10899" type="CITY" weightage="40" keywordseo="Titan-Industries">Titan Industries</keyword>, a Tata Group company, is India’s leading watch and jewelry retailer. Titan’s growth can pick up in FY15/16E as SSSG in jewelry bottoms out. This can be led by a favorable macro: easing inflation, possible pick-up in the urban job scenario and wage hikes. 
 While resumption of the sale of <keyword id="18712" type="ENTERTAINMENT" weightage="40" keywordseo="Gold">gold</keyword> coins can improve operating leverage, possible margin benefits due to focus on premiumization in jewelry as well as watches can boost earnings. 
 
ICICI Bank Ltd: Target price set at Rs 1,850 
 
The global investment bank is bullish on ICICI Bank as it has built a strong retail franchise to complement its corporate banking activities and capitalize on the fast-growing retail market. ICICI Bank has expanded distribution to 3,500 branches, allowing it to acquire customers at a very rapid pace and also gain share. 
 
The bank enjoys a strong capital position (Tier 1 at 12.8%), and is well placed to manage credit cycle/regulatory changes and deliver earnings growth of 16-22% through FY15/16. Outperformance should be driven by: 1) Op. efficiency (CI ratio improving to lesser than 38-39% in FY15/16 vs 41% in FY13); and 2) Credit cost at 80bps. 
 
Maruti Suzuki Ltd: Target price set at Rs 2900 
 Maruti Suzuki (MSIL) is a subsidiary of <keyword id="111052" type="CITY" weightage="40" keywordseo="Suzuki-Motor">Suzuki Motor</keyword> Corp, Japan. Set up in 1983, MSIL is presently India’s largest passenger car company which primarily sells compact hatchbacks (65% of volumes), vans and upper sedans. 
 
MSIL is our top pick in the Indian autos space, being best positioned to ride the country’s consumption recovery theme due to its rich product pipeline over the next three years. 
 
The stock deserves a valuation premium due to superior growth prospects (31% EPS CAGR over the forecast period) and also because it is the sole listed proxy in the domestic car industry. 
 
<keyword id="111992" type="CITY" weightage="40" keywordseo="Oil-India-Ltd">Oil India Ltd</keyword>: Target price set at Rs 694 
 
Oil India (OIL) is a state-owned (67.6% stake) E&amp;P company with only onshore production and exploration mainly in north-east India. This region accounts for its entire crude oil and most of its gas production and reserves. 
 
Gas price hike drives a 41-59% YoY rise in FY15E EPS at a gas price of US$6.8-9.0/mmbtu. A rise in oil price net of subsidy drives 34-70% YoY growth in FY15E EPS. FY15E EPS would rise by 60-114% YoY if the prices of both oil &amp; gas increase. 
 
Risk-reward ratio is evenly balanced with the worst-case fair value implying around 30% potential downside, and the best-case fair value implying a potential upside of 16-39%. 
 
Voltas Ltd: Target price set at Rs 282 
 
Voltas, a Tata Group company, is India’s leading air conditioning and engineering services company. It operates in India through an extensive dealer and service network. Cyclical recovery in macro will drive stronger consumer discretionary sales, ie AC. 
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There will better construction demand as well. Sharp expansion of margin led by favourable product mix change will be drive 80% of the 27% earnings CAGR in FY14-17. The stock is cheaper relative to peers and is likely to rerate along with stronger growth. 
 
Analyst: S Ranganathan of LKP 
 
Dishman Pharma: Target price set at Rs 160 
 
Dishman Pharma is an integrated global outsourcing partner in CRAMS for innovator drug companies and derives close to 65 percent of its 1400cr revenues from CRAMS with marketable molecules forming the balance 35 percent of its revenues. 
 
With all its capital expenditure behind, the company has forward integrated its Vitamin-D facility and with a 24 percent sustainable EBIDTA margin we believe that it is now focused on de-leveraging its balance sheet having a debt of 850 cr. 
 
We recommend a BUY on the stock trading at 8x the current year's expected earnings with a price objective of 160. 
 
Zensar Technologies Ltd: Target price set at Rs 500 
 
Zensar Technologies is a Rs 2300-cr software company of the RPG group, which derives two-third of its revenues from ETS (enterprise transmission solutions) and one-third of its revenues from IM (infrastructure management). Zensar has the largest Oracle practice business in India and has a strong focus on digital transformation, which is primarily a consulting-oriented business. 
 
The company has consistently grown at a CAGR of more than 20 percent over the past 5 years both on top-line and bottom-line. Zensar (a debt-free entity) with a sustainable EBIDTA margin of more than 30 percent is well on its way to post a net profit of close to Rs 300 cr this fiscal. BUY with a price objective of Rs 500. 
 
ITNL: Target price set at Rs 250 
 
ILFS Transportation Network Ltd is a leading surface transportation infrastructure company belonging to the ILFS group. We believe that ITNL is the best proxy to play this theme not only in India, but also outside India and could be a prime beneficiary of the road development projects. 
 
This business is highly capital intensive and hence the high debt equity of 3x. ITNL with its 6500cr revenues is well placed to capitalize on the large addressable opportunity as it has attractive EBIDTA margins of 30 percent. Buy ITNL with a price objective of Rs 250. 
 
Escorts Ltd: Target price set at Rs 160 
 
Escorts with business interests in agricultural equipment, construction and railway equipment is the third largest player in tractors and is now launching new products in the mid to heavy segment of tractors and is aggressively foraying into the southern parts of the country where it lacks presence. 
 
The monsoon, although delayed, is expected to gather momentum in the next 3 months, which would also act as a positive trigger for the stock in the coming quarter. ESCORTS trading at 6.5x historical earnings should be bought with a price objective of 160. 
 
Federal Bank: Target price set at Rs 160 
 
Federal Bank was punished rather unjustly for its aggressive lending to the SME sector where it has seen fast traction and we believe that the markets have now factoring in the fact that its asset quality continues to be good with net NPA at 0.74% and provision coverage at a very healthy 84%. 
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The bank has a very healthy CASA of more than 30% and net interest margins are at a healthy 3.3% with branch expansion happening at a faster clip ( it now has 1175 branches) 
 
A quality private sector bank with an able leader available at a compelling price to book of 1.5x should be bought for a price objective of Rs 160. 
 
(Views and recommendations expressed in this section are the analysts’ own and do not represent those of EconomicTimes.com. Please consult your financial advisor before taking any position in the stocks mentioned.)

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