The benchmark stock indices are witnessing a significant correction this morning, with losses of close to 1%
Eyes are now set on the month-end GDP figure release that is expected to show the India economy contracted by over 20% in Q1.
Join us as we follow the top business news through the day.
Stocks are re-rating at record levels
Ruchi Soya shares plunge 5% after Q1 earnings
The controversial stock plunged after results but has recovered since.
PTI reports: "Shares of Ruchi Soya on Thursday plunged 5 per cent after the company reported a 13 per cent decline in its net profit for the first quarter ended June 30.
The stock declined 4.99 per cent to Rs 683.90 on the BSE.
It tanked 4.99 per cent to Rs 683.25 on the NSE.
Patanjali Group firm Ruchi Soya on Wednesday reported a 13 per cent decline in its net profit to Rs 12.25 crore for the first quarter ended June 30, and announced the resignation of Acharya Balkrishna as managing director of the company.
Its net profit stood at Rs 14.01 crore in the year-ago period.
The total income fell to Rs 3,057.15 crore during the first quarter this fiscal, from Rs 3,125.65 crore in the corresponding period previous year.
“Acharya Balkrishna has resigned from the office of Managing Director of the company with effect from August 18, 2020, due to his pre-occupation. The Board of Directors has accepted his resignation,” the filing said.
Balkrishna has been designated as Non-Executive Non-Independent Director, liable to retire by rotation with effect from August 19, 2020, subject to approval of members of the company.
He will continue to be the Chairman of the Board.
Ram Bharat, whole-time director of the company, has been designated as Managing Director of the company with effect from August 19, 2020, till December."
Harley-Davidson may exit India
Barely a decade after its entry, Harley-Davidson Inc. is looking to wind down its assembly operations in the country as a result of weak sales and a lack of visibility for future demand, industry executives said.
The iconic U.S. motorcycle maker has sent out feelers to a few automakers through consultants for a possible outsourcing arrangement using its leased assembly facility at Bawal in Haryana, a person privy to the preliminary talks said.
The decision is in keeping with its latest ‘rewire’ strategy to focus on about 50 markets, mainly in North America, Europe and parts of Asia Pacific that represent the “majority of the company’s volume and growth potential”. In a statement accompanying its second-quarter results last month, Harley- Davidson said: “The company is evaluating plans to exit international markets, where volumes and profitability do not support continued investment in line with the future strategy.”
India faces protracted slowdown as virus clouds rural revival
Gloomy prospects may await the economy even as greenshoots begin to show.
Reuters reports: "India is staring at a protracted slowdown as coronavirus cases reach its countryside, with signs of recovery in the rural economy hailed by Prime Minister Narendra Modi “at best a mitigating factor”, government officials and analysts said.
The world's No.5 economy reports first-quarter GDP data on Aug. 31 and, according to a Reuters poll, it is likely to have contracted 20% over April-June. It is forecast to shrink 5.1% in the year to March 2021, the weakest since 1979.
Nearly half of India's 1.38 billion population rely on agriculture to survive, with the sector accounting for 15% of its economic output.
Modi has been citing higher fertiliser demand and sowing of monsoon crops, both key signs of rural activity, to show there are “green shoots” in the economy.
But four government officials said the uptick in activity may not be as large as believed given a spike in virus cases in rural areas that were initially isolated from the pandemic.
“The economic situation has in fact worsened since April and May, and we are likely moving towards a longer economic slowdown than earlier expected,” a finance ministry official said.
The official pointed to sluggish consumer demand and a slowdown in rural lending as causes for concern.
“The situation on the economy front is very serious and the government's hands are tied on the fiscal front,” a government adviser with direct knowledge of India's budget plans said.
Both declined to be named as they were not authorised to speak to media. A ministry spokesman declined to comment."
MSMEs facing existential crisis says KASSIA
The small scale industry, which is vulnerable to shocks, has the least capacity to absorb them, and the pandemic has caused irreparable damage in a large number of cases, said KASSIA (Karnataka Small Scale Industries Association).
“It is our rough estimate that about 20% may never be able to restart as a result of the disruptions caused by the pandemic,” said K. Arasappa, president, KASSIA.
He added that this is mainly due to the compounding of the already existent economic slowdown by the COVID-19 pandemic which has uprooted workers and production systems in factories.
Cosmo Films Q1 net profit up 69% to Rs 47 crore
After Uflex, another packaging company has reported benefits from the pandemic.
PTI reports: "Cosmo Films Ltd on Wednesday reported a 69.15 per cent increase in consolidated net profit at Rs 46.99 crore for the first quarter ended June, 2020, helped by improved operating margins.
The company, which manufactures speciality films for packaging, lamination, labeling and synthetic paper, had posted a consolidated net profit of Rs 27.78 crore in April-June quarter a year ago, Cosmo Films said in a BSE filing.
However, its revenue from operations declined 11.04 per cent to Rs 481.29 crore during the quarter under review as against Rs 541.02 crore in the corresponding quarter of previous fiscal.
“The company posted an EBITDA of Rs 93 crore during Q1 FY21 on the back of higher speciality sales (up by 20 per cent) and improved operating margins,” Cosmo Films said in a post earning statement.
“Pent-up demand from previous quarter and supplies opening up in phased manner led to a favourable demand supply scenario and improved margins,” it added.
The company’s total expenses in Q1 FY21 declined 17.16 per cent to Rs 420.64 crore as against Rs 507.83 crore a year ago.
In a separate filing, Cosmo Films said the company is foraying into pet care business.
“The board has given in-principle approval for company’s foray in pet care business. Pilot launch is expected by early next year,” it said.
Commenting on the development, Cosmo Films CEO Pankaj Poddar said the company is going ahead with the pilot launch in National Capital Region (NCR), investing about Rs 15 crore over the next 18 months to ascertain the viability of pet care business to launch it at a larger scale.
“The overall investment is expected to remain marginal vis-୶is size of the existing business. Pet care business has been growing in India at 22 per cent CAGR.
“With smaller families, rising income levels and limited social lives (especially post Covid), pet adoption has increased and expected to grow many folds,” Poddar said.
The business scenario is highly fragmented and there are no organized players in India offering end-to-end comprehensive solution to the customers, and Cosmo expects to fill up this void.
Pet care is a low capex business, while brand building will require some investments in the initial years, he said.
“The company believes the business will deliver high returns, high valuation and add significant value to shareholders,” Poddar added.
Shares of Cosmo Films on Wednesday closed 6.75 per cent higher at Rs 480.20 on the BSE."
Indian shares fall on doubts over economic recovery path
A significant correction witnessed in stocks at open.
PTI reports: "Indian shares tracked their global counterparts to edge lower on Thursday on rising concerns about the long and difficult path to economic recovery from the coronavirus pandemic.
The country is staring at a prolonged slowdown as the health crisis grips rural areas, according to government and analysts. Meanwhile, the U.S. Federal Reserve minutes showed policymakers remained doubtful about a swift rebound in economic growth.
The blue-chip NSE Nifty 50 index fell 0.73% to 11,325.80 by 0348 GMT and the S&P BSE Sensex slipped 0.77% to 38,320.26.
Both indexes were on track to snap three straight sessions of gains and the Nifty has risen over 2% this week.
Other Asian markets slipped and MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.24%.
Coronavirus cases continued to rise in India, reporting a record daily jump of 69,672 infections on Thursday morning, taking the total cases to 2.84 million and deaths to 53,866.
In Mumbai trading, 48 of the 50 stocks on the Nifty 50 index and nine of the 11 major sectoral indexes were trading lower.
The Nifty metal index slipped 1.35% and the Nifty realty index, which tracks real estate firms, was down 1.13%.
Bucking the trend, the Nifty pharma index was up in early trade."
Apple's stock market value tops $2 trillion
Just two years after Apple became the first publicly listed U.S. company with a $1 trillion stock market value, the iPhone maker has now topped $2 trillion.
The Cupertino, California-based company's shares briefly rose to as high as $468.65 on Wednesday, equivalent to a market capitalization of $2.004 trillion. The stock was last up 1.2% at $467.62, giving Apple a market capitalization of $1.999 trillion.
Buoyed by bets on the long-term success of the country's biggest tech names in a post-coronavirus world, Apple's shares have surged since blowout quarterly results in July that saw the iPhone maker eclipse Saudi Aramco as the world's most valuable listed company. Apple's stock is up about 57% so far in 2020.