Category: Business & Economy

On January 11, 2025, banks will be closed because it’s a second Saturday of the month. According to the Reserve Bank of India (RBI) rules, banks are open on the first, third, and fifth Saturdays, but they’re closed on the second and fourth Saturdays, as well as all Sundays.

January 11 is also special for two reasons. First, it’s the day of Missionary Day in Mizoram, celebrating the arrival of two Welsh missionaries who brought Christianity to the state. Second, it’s the day of Imoinu Iratpa, a festival of lights celebrated by the Meitei people in the North-Eastern states of India like Manipur. This festival honors the goddess Imoinu Ahongbi, who represents wealth and prosperity, and includes prayers, sacrifices, and cultural events.

In addition to January 11, banks will be closed on several other days in January due to festivals and observances like Makar Sankranti, Thiruvalluvar Day, and the birthday of legendary leaders. However, these holidays can differ depending on the state you live in.

Remember, even though banks will not open their doors on these holidays, you can still use online banking services, like bank websites, apps, UPI, and ATMs. Just be aware that these services might be temporarily unavailable during maintenance.

If you’re unsure about specific holidays or services, it’s a good idea to check with your nearest bank branch.

BNP Paribas Securities has a mixed view on MphasiS, a company in the IT Software sector, with a target price of Rs 2,900. Currently, MphasiS shares are priced at Rs 2,927.05. The company, started in 1992, is a mid-sized firm worth Rs 54,917.92 crore.

For the quarter ending September 30, 2024, MphasiS made Rs 3,594.90 crore in total income. This is an increase of 2.83% from the previous quarter and 8.10% more than the same time last year, when total income was Rs 3,325.54 crore. The company’s net profit after tax for this latest quarter was Rs 423.33 crore.

The management team includes notable members like Nitin Rakesh and others. B S R & Co. LLP audits the company. As of September 30, 2024, there are 19 crore shares of MphasiS available.

Reason for Caution:
MphasiS has been significantly affected by rising interest rates due to its involvement in the mortgage business. While the management has managed to limit the negative impact on revenue growth, MphasiS hasn’t performed as well as its mid-sized competitors in this area. Recovery in tech spending by U.S. banking and financial services customers is crucial for the company’s growth.

BNP Paribas is cautious because the mortgage business isn’t showing signs of recovery in the near future. They believe MphasiS may be overvalued compared to the CNX IT Index without strong growth from the U.S. mortgage sector.

Valuation Insights:
BNP Paribas uses a Discounted Cash Flow (DCF) method to value MphasiS. They expect a 10% revenue growth by 2024, a Weighted Average Cost of Capital (WACC) of 11%, and a terminal growth rate of 5%.

Ownership Details:
As of September 30, 2024, the promoters own 40.32% of MphasiS, foreign institutional investors (FIIs) hold 18.25%, and domestic institutional investors (DIIs) possess 36.54%.

The Indian Renewable Energy Development Agency (IREDA) is in the spotlight after announcing a 27% increase in its profit for the December quarter. The profit reached ₹425.38 crore, compared to ₹335.53 crore from the same time last year.

In the third quarter of FY25 (Q3FY25), IREDA’s total revenue from its operations jumped by 35.6% from a year ago, reaching ₹1,698.45 crore, up from ₹1,252.85 crore in Q3FY24. Compared to the previous quarter, the profit (PAT) grew by 10%, going from ₹387.75 crore in Q2FY25 to the current ₹425.38 crore. The total revenue also saw a 4.2% increase from ₹1,629.56 crore in the prior quarter.

Revenue Breakdown for Q3FY25

In the October-December quarter, IREDA earned ₹1,654.45 crore from interest income, up from ₹1,577.05 crore in Q2FY25 and ₹1,208.10 crore in Q3FY24. However, it earned ₹16.46 crore from fees and commissions, which was lower than previous quarters.

Other notable income grew significantly, with total other income in Q3FY25 at ₹30.93 crore, a rise from ₹9.53 crore in Q2FY25 and ₹16.69 crore in Q3FY24.

IREDA’s Expenses

The company spent ₹1,160.78 crore in the December quarter, which is lower than the previous quarter (₹1,170.48 crore) but higher than last year’s ₹867.06 crore. This amount includes costs for loan interest, employee salaries, and other expenses.

Debt and Asset Quality

As of December 31, 2024, IREDA’s debt-to-equity ratio increased to 5.89 from 5.13 a year earlier. Its asset quality is also worth noting; the Gross Non-Performing Assets (NPAs) rose to ₹1,845 crore but dropped as a percentage of total advances to 2.68%, down from 2.90% last year.

Outstanding Loans and Stock Performance

IREDA’s outstanding loans reached ₹68,960 crore, up by 36% from ₹50,580 crore last year.

For stock market fans, IREDA’s share price closed at ₹215.9, down 3.3%. Although the stock has dipped 10% over the past six months, it gained a whopping 109% over the last year. The average target price for IREDA shares is ₹205, which suggests it might drop by about 5% from where it currently stands. The consensus from analysts is to ‘Hold’ on to the stocks.

In January 2022, Dunzo seemed unstoppable after raising $240 million, mostly from Reliance Retail. They promised to deliver groceries to many people in India in just 15 minutes. Fast forward to now, and the last founder, Kabeer Biswas, has left Dunzo, marking a big change for a company that led India’s fast delivery movement.

The Trouble Starts

After raising a lot of money in 2022, Dunzo expanded quickly, focusing on their 15-20 minute grocery delivery service called Dunzo Daily. Unfortunately, this led to high expenses of over Rs 100 crore every month. They spent heavily on marketing and IPL sponsorships, which increased business but burned a lot of cash. Despite trying to grow, people still saw Dunzo mostly as a delivery service and not as a quick grocery provider.

As their money ran low and getting new funds became hard, they changed their delivery time promise from 15 minutes to 60 minutes to save costs. By mid-2023, the investment environment in India had worsened, and things got tough for Dunzo.

Failed Deals and Mergers

A potential investment from PhonePe in Dunzo’s business didn’t happen because other investors were worried. An offer from Flipkart to buy Dunzo also fell through because investors didn’t want to lose the Dunzo brand. Even Reliance, which owned a part of Dunzo, didn’t want to invest more money. Dunzo tried to raise funds by offering shares at a much lower price, showing their financial struggles.

Trying to expand from seven cities to 15-16 cities was a critical mistake. They were already having problems in their current markets, but they chose to grow even more.

The Company Falls Apart

A late decision to focus more on Bengaluru and Pune came too late. Companies like Swiggy Instamart and Zepto had already taken over the market. Dunzo also lost five board members, including two of the founders. Employees faced delayed salaries, leading to layoffs as financial pressure grew.

In FY23, Dunzo’s losses tripled to over Rs 1,800 crore, while revenue increased to Rs 226 crore. Their B2B efforts and partnerships didn’t solve their cash flow problems. Even an attempt to secure $20 million from existing investors failed.

What’s Next?

Over its 10 years, Dunzo focused too much on rapid growth to impress investors, often ignoring sustainable business practices. They raised a total of $450 million but were valued at just $745 million, with big names like Google and Reliance among their investors.

Dunzo spent a lot on marketing and growth strategies that didn’t provide long-lasting value, which became a big problem when it was hard to find new investments. With rising debts of around $60 million and several ongoing legal cases, Dunzo lost the trust of investors.

Kabeer Biswas’s departure marks a tough end for a company that once showed great promise in India’s delivery market.

As government reports suggest that the economy might slow down, we need to think about what this means for the real estate sector. Real estate usually goes hand-in-hand with how well the economy is doing. So, if the economy cools off, will real estate follow suit? It’s looking like the answer is yes. Given this, it might be smart to think about taking some profits now. However, if you really want to stick with real estate, you might want to consider making it a more cautious bet.

The top beer company in India, United Breweries, has stopped sending beer to Telangana state. They made this decision because the price they are allowed to charge for their beer hasn’t changed since 2019-20, even though their costs have gone up.

Vinod Giri, the Director General of the Brewers Association of India (BAI), said that the prices set by the state government are much too low. They are actually lower than what it costs the companies to make the beer. This means that the companies are losing money.

United Breweries, known for popular brands like Kingfisher and Heineken, said they started losing money when prices stayed the same despite higher costs. They also mentioned that the state owes them a lot of money—around Rs 3,900 crore—for beer supplied earlier this year, which is making things even worse.

BAI, which represents big beer brands like United Breweries and ABInBev, wrote to the Telangana government last year to highlight these problems. They pointed out that the costs of making beer have gone up by 40% due to rising expenses. Even though a committee was formed last year to decide new prices, they have not acted on it yet.

Giri believes the Telangana government will help solve this problem quickly because the state is usually friendly to businesses. He hopes they will step in soon to fix this situation, as the beer industry is struggling to survive.

Larsen & Toubro (L&T) Chairman, SN Subrahmanyan, said something that has caused a lot of discussions. He suggested that employees should work 90 hours a week, which is even more than what Infosys co-founder Narayana Murthy suggested earlier this year—70 hours a week. This comment was made during a chat and later shared on social media, sparking many different reactions from employees and the public.

In a video, Subrahmanyan answered a question about L&T’s six-day workweek. He shared that he wished employees could work on Sundays too because he believes hard work is necessary for success. “I regret I can’t make you work on Sundays. If I could, I would feel happier because I work on Sundays,” he said, challenging the idea of taking breaks. He questioned, “What do you do at home? How long can you just look at your family? Come to work!”

He also mentioned a conversation with a Chinese worker to back up his point. He said people in China work 90 hours a week, while Americans work just 50 hours. To be the best in the world, he believes one must work long hours.

Company Support for Chairman’s Views
After the controversy began, L&T stood by its Chairman. A spokesperson explained that L&T’s goal is to help build the nation, which needs “extraordinary effort.” They believe that with their mission to shape India’s infrastructure and technology, everyone needs to work hard during this important time for the country.

Mixed Reactions from Public
While the company supports Subrahmanyan, many people online criticized the idea. Some questioned why longer hours are being pushed when younger generations prefer having a good work-life balance. There were also reminders of Narayana Murthy suggesting a 70-hour workweek earlier this year for young workers in India.

Some voices, like billionaire Harsh Mariwala, stated that working longer hours doesn’t always mean working better. It shouldn’t just be about the number of hours but the quality of work during that time.

Concerns About Work-Life Balance
This discussion about long work hours also raises concerns about how it can affect people’s mental health. Critics worry that working so much could lead to stress and unhappiness, impacting overall well-being.

While Subrahmanyan and L&T defend longer working hours, it’s still unclear how this will affect their employees and how the argument between work-life balance and long hours will unfold.

On Thursday, the Nifty Auto index had a mixed day. While some auto companies saw their stock prices rise, others faced declines.

Bajaj Auto Ltd. led the way with a 2.25% increase, followed by Mahindra & Mahindra Ltd. at 1.31%. Other gainers included Balkrishna Industries Ltd. which rose by 0.19%, and Hero MotoCorp Ltd., which was up by 0.08%.

However, not all companies were so lucky. Ashok Leyland Ltd. dropped by 3.74%, Exide Industries Ltd. went down by 1.98%, Tata Motors Ltd. decreased by 1.87%, and Samvardhana Motherson International Ltd. fell by 1.78%. Bharat Forge Ltd. also saw a loss of 1.71%.

In the end, the Nifty Auto index closed at 23,305.20, a slight dip of 0.28%. The main Nifty50 index saw a decrease of 162.46 points, settling at 23,526.50. The BSE Sensex lowered by 528.28 points, closing at 77,620.21.

Among the 50 stocks in the Nifty index, only 16 gained, while 34 lost ground.

In trading activity, Vodafone Idea, YES Bank, Zomato, Manappuram Finance, and Vishal Mega Mart were some of the most traded shares on the NSE. Notable performances included shares of SRF, Navin Fluorine, and Kalyani Forge, which hit new 52-week highs, while Pritish Nandy and other companies fell to fresh 52-week lows.

On Thursday, some companies saw their stock prices reach new highs. SRF, Navin Fluorine, Mangalam Global Enterprises, Power & Instrument, and Kalyani Forge all did well on the NSE (National Stock Exchange).

However, many big companies faced selling pressure, causing the Nifty index to drop 162.46 points, closing at 23,526.5. This shows mixed feelings among traders, as some stocks like Pritish Nandy, K P Energy, Odigma Consultancy, Mamata Machinery, and Lorenzini Apparels hit their lowest prices in a year.

In the Nifty 50 index, 16 stocks gained value, while 34 lost value. Notable gainers included Bajaj Auto, Nestle India, HUL, Britannia, and M&M. On the other hand, stocks like Shriram Finance, ONGC, BPCL, Coal India, and Tata Steel saw declines.

The BSE Sensex also fell, closing down by 528.28 points at 77,620.21. In short, while some companies thrived, others struggled as traders made moves in different sectors throughout the day.

Today in New Delhi, several stocks saw big changes. Some stocks, like Pritish Nandy, K P Energy Ltd., and Mamata Machinery, hit their lowest prices in a year. The main stock index, NSE Nifty, dropped by 162.46 points to 23,526.5, while the BSE Sensex fell by 528.28 points, ending at 77,620.21.

On a brighter note, stocks like SRF, Navin Fluorine, and Kalyani Forge reached their highest prices in a year. In the Nifty 50 index, top gainers included Bajaj Auto, Nestle India, HUL, and Britannia, which showed impressive performance today.

However, some companies faced challenges, with Shriram Finance, ONGC, and Tata Steel among the biggest losers of the day.