GSTN is a non‐profit organization for facilitating the collection of Goods & Services Tax (GST)

The share price of HDFC Bank rose more than 1 percent intraday on August 30 as the company plans to sell its entire stake in software company Goods & Services Tax Network.

The company has agreed to sell its entire stake of 10 percent in the equity share capital of Goods & Services Tax Network (GSTN) consisting of 10,00,000 equity shares of Rs 10 each, for a total consideration of Rs 1 crore to various State Governments and Union Territories, as per a company release.

The bank’s promoter Housing Development Finance Corporation (HDFC) is also a shareholder in GSTN.

GSTN is a non‐profit organization for facilitating the collection of Goods & Services Tax (GST).

HDFC Bank was quoting at Rs 2,253.50, up to Rs 25.90, or 1.16 percent on the BSE.

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HDFC has been gradually paring stake in Gruh to meet RBI conditions for Bandhan Bank merger

Shares of Gruh Finance jumped nearly 8 percent in early trade on August 30 after media reports suggested that HDFC is planning to sell 9.2 percent stake in Gruh Finance

The Economic Times, quoting sources, reported that "HDFC will raise Rs 1,678 crore by selling 9.2 percent in Gruh Finance and the sale of 67.4 million shares is expected to happen at a floor price of Rs 243 to Rs 249 per share in the open market on August 30."

HDFC has been gradually paring stake in Gruh to meet RBI conditions for Bandhan Bank merger. The housing finance company has sold over 10 percent in Gruh Finance.

The RBI had in March granted its approval for the proposed scheme of amalgamation between Gruh Finance and Bandhan Bank.

shares of Gruh were quoting at Rs 262.30, up 5.11 percent while HDFC was up 0.43 percent at Rs 2,137.60 on BSE.

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The closing of the transaction is subject to customary approvals and conditions

Shares of Adani Green Energy added more than 10 percent in the early trade on August 30 after the company said it is going to acquire 205 MW operating solar assets of Essel Green Energy.

The company in its press release said that it has signed a securities purchase agreement for the acquisition of 205 MW operating solar assets of Essel Green Energy (EGEPL) and Essel Infraprojects (EIL).

All the assets have long term power purchase agreements (PPAs) with various state electricity distribution companies.

The closing of the transaction is subject to customary approvals and conditions.

The acquisition of these assets is at an enterprise valuation of approximately Rs 1,300 crore.

"This is our first brownfield acquisition of operating assets. It expands our footprint in states where we already have a presence, and with our strong operational expertise, will deliver significant value for our shareholders, said Jayant Parimal, CEO of Adani Green Energy.

Adani Green Energy Limited was quoting at Rs 46.95, up to Rs 3.60, or 8.30 percent on the BSE.

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Glenmark’s current portfolio consists of 160 products authorized for distribution in the US marketplace and 55 ANDA’s pending approval with the US FDA

Shares of Glenmark Pharma rose nearly 2 percent in the early trade on August 30 after the company received an approval from the USFDA.

Glenmark Pharmaceuticals, USA has been granted final approval by the United States Food & Drug Administration (USFDA) for Pimecrolimus Cream, 1%, a generic version of Elidel 1 Cream, 1%, of Bausch Health US, LLC, company said in a press release.

According to IQVIATM sales data for the 12 month period ending July 2019, the Elidel Cream, 1% market achieved annual sales of approximately $198.8 million.

Glenmark’s current portfolio consists of 160 products authorized for distribution in the US marketplace and 55 ANDA’s pending approval with the USFDA.

In addition to these internal filings, Glenmark continues to identify and explore external development partnerships to supplement and accelerate the growth of its existing pipeline and portfolio, the company added.

Glenmark Pharma was quoting at Rs 384.45, up to Rs 0.95, or 0.25 percent on the BSE.

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Indian shares slipped on Thursday, led by declines in financials and metals, as fears of an impending global recession and worsening Sino-U.S. trade relations marred investor sentiment

The broader NSE Nifty fell 0.46% to 10,994.55 as of 0354 GMT, while the benchmark BSE Sensex inched down 0.44% to 37,293.80.

Meanwhile, stocks in regional markets across Asia struggled to recover with MSCI's broadest index of Asia-Pacific shares outside Japan trading flat.

Domestic investors also remained cautious ahead of GDP data for the April-June quarter due on Friday.

"Sentiment is a fair worry, consumer and business sentiment has to change," said Sunil Sharma, chief investment officer at Sanctum Wealth Management in Mumbai.

"The outcome of the trade war is also uncertain."

The weather office on Wednesday said monsoon rains in India were below average for the first time in five weeks in the week through Wednesday, further dampening spirits.

Monsoon rains are key to farm output and economic growth as the agricultural sector accounts for about 15% of India's $2.5 trillion economies.

Indian markets are likely to see some volatility ahead of August derivative contracts' expiry.

Shares of Indiabulls Housing Finance Ltd slipped as much as 7.97%, the stock will not be included on the Nifty 50 NSE Nifty from Sept. 27.

The Nifty metals index inched 0.82% lower, with all 14 constituents trading in the red.

Only 10 of the 50 stocks on the NSE blue-chip index were trading in positive territory.

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The share price down 31 percent in last 1 year

Shares of Sun Pharmaceutical Industries rose 4 percent on August 29, a day after reports of the Securities and Exchange Board of India (SEBI) clearing the company of charges of irregularities emerged.

A preliminary probe by the market regulator found no merit in allegations of violation of securities laws, levelled by a whistleblower, against the pharmaceutical major, Business Standard quoted two persons as saying.

SEBI had sought answers to alleged diversion of Rs 42,000 crore through the company’s key distributor and subsidiary, Aditya Medisales and the pharma major’s 2004 fundraising through foreign currency convertible bonds, the report said.

Sun Pharmaceutical Industries was quoting at Rs 422.80, up to Rs 10.05, or 2.43 percent, on the BSE.

The share touched its 52-week high of Rs 678.80 on September 6, 2018, and a 52-week low of Rs 350.40 on May 13, 2019.

It is trading 37.61 percent below its 52-week high and 20.86 percent above its 52-week low.

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The share touched its 52-week high Rs 3,302.55 and 52-week low Rs 1,651.80 on 31 August 2018 and 07 August 2019, respectively

Shares of Piramal Enterprises slipped more than 3 percent intraday on August 29 after the company deferred the issue of non-convertible debentures (NCDs).

The administrative committee has decided to defer the issue of privately placed NCDs aggregating up to Rs 3,000 crore (including an option to retain over-subscription of up to Rs 2,500 crore), to a future date, the company said in a release.

Piramal Enterprises was quoting at Rs 1,855.00, down Rs 40.35, or 2.13 percent on the BSE.

The share touched its 52-week high Rs 3,302.55 and its 52-week low Rs 1,651.80 on 31 August 2018 and 07 August 2019, respectively.

Currently, it is trading 43.18 percent below its 52-week high and 13.61 percent above its 52-week low.

The share price declined 39 percent in the last year.

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Nestle's revenues have grown 22 percent and net profit increased by 73 percent

Shares of Nestle India, the food and beverages company well-known in the Indian market for its Maggi brand of instant noodles, jumped nearly 23-fold in the last 10 years due to its consistent performance and market share in key products.

Despite a six-month ban on Maggi in 2015 for high monosodium glutamate (MSG) and lead content, Nestle India regained strength and rallied 149 percent from lows of Rs 5,011 per share hit in March 2016.

Over the last two years, from CY2016 to CY2018, Nestle's revenues have grown 22 percent and net profit has jumped 73 percent.

In 2015, Nestle's profit and topline declined 52 percent and 17 percent year-on-year (YoY), respectively following the Maggi ban. Albeit on a low base, the company's profit has grown a whopping 185 percent on a 38 percent rise in revenue from 2015 to 2018. Nestle follows the January-December financial year.

In the recent quarter ended June 2019, its profit and revenue grew around 11 percent each compared to the same period last year while the bottom line and topline growth in the first half of current year was 10 percent each YoY.

"Nestle has delivered 10 straight quarters of volume and mix-led growth on the back of consistent innovation and renovation, though environment continued to be challenging with headwinds in commodity prices and softer demand conditions," Suresh Narayanan, Chairman and Managing Director said.

The consistent performance has helped Nestle India grab a spot on the Nifty 50, the benchmark index of National Stock Exchange, with effect from September 27.

After a stupendous rally and addition into the Nifty 50, the question is whether it still deserves investor attention? Analysts Moneycontrol spoke to are optimistic about the company's growth prospects.

"Going forward, we expect Nestle's revenues to remain buoyant owing to the continued focus on innovating and renovating its brands, new launches in nutrition segment and emphasis on expanding penetration through expansion in the distribution cycle," Vineeta Sharma, Head of Research, Narnolia Financial Advisors said.

The change in product mix and judicious pricing is expected to cushion the declining margin in the wake of higher input prices.

"We continue to maintain a positive view of Nestle. After inclusion in Nifty, liquidity too will drive the stock price as the weight of consumer staples will increase from 8.5 percent to around 10 percent. Our 12-month target for the company is Rs 13,742," she added.

Prashanth Tape, AVP Research at Mehta Equities also said overall outlook remains optimistic on Nestle's growth despite a slowdown across various sectors in the economy.

He feels fast-moving consumer goods (FMCG) companies have emerged as a safe haven for investors and stay a safe bet in slowdown season, with steady and stable growth in revenues and profits.

"With respect to including Nestle into Nifty index we shoulder it as a better low volatility counter which can be considered upon fulfilling the eligibility criteria for inclusion of stocks in Nifty indices as per NSE revision Methodology," he said.

He is positive on Nestle's long-term growth prospects and advises investors to add at current levels for long term portfolio because he believes Nestle would continue to strengthen its presence by increasing market share, expanding distribution reach in the rural and urban areas, premiumizing and launching innovative products, steady capacity addition, and improved product mix.

On the technical front also, Romesh Tiwari, Head of Research, CapitalAim said the stock is moving from strength to strength and with this momentum, it is likely to touch 12,950 levels.

"I will advise traders to continue to hold on this stock with a stop-loss of 11,964 but no new buying at this stage. Investors should wait for the 11,500 level to buy in Nestle for the short term," he added.

Initially, in August, Nestle said it would soon commence construction of its newest, and ninth factory in India, at Sanand, Gujarat

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The story at Wipro Ltd in recent years has been a series of false starts

 

Even as revenue growth for its larger peers, Tata Consultancy Services Ltd (TCS) and Infosys Ltd, accelerated, Wipro lagged. But one metric where the company is scoring is cash conversion

The proportion of Ebitda (earnings before interest, tax, depreciation and amortization) that converted into operating cash flow stood at 98% in the fiscal year 2019, the highest among large IT companies. Wipro maintains this lead with cash flows to Ebitda staying at 95% in the 12 months ended June 2019, showed analysis by Nomura Financial Advisory and Securities (India) Pvt. Ltd.

Wipro’s growth in operating cash flow and free cash flow exceeded Ebitda growth in 12 months to June. Free cash flow adjusts for capital expenditure as well, apart from cash operating expenses.

Importantly, this is not a recent phenomenon. Cash flow growth is far superior at the company even using three-year annual average growth rates. “Over the last three years, cash conversion has been stable for Infosys/TCS, deteriorated at HCL Technologies Ltd and improved for Wipro," analysts at Nomura India said in a note.

What explains the variation in performance is better receivables management. Comparatively, the receivables position increased at other large IT companies, with Infosys seeing material deterioration in recent quarters.

The variation in growth rates may be part of the reason. Constant currency revenue growth year-on-year remains in mid-single digits at Wipro, while its larger peers are growing in double digits. “Typically, a growth-focused company may give some leeway to customers on payment terms," said an analyst on condition of anonymity. Even so, as the analyst added, Wipro is doing a decent job in getting money quickly from customers.

Of course, all of this is but a silver lining on the dark cloud of poor growth. Most analysts remain sceptical about Wipro’s growth outlook. The September quarter revenue growth guidance indicates no major improvement. The pressure on legacy business is more pronounced at Wipro than at other large companies, showed analysis by HDFC Securities Institutional Research.

This is reflected in the valuation discount vis-à-vis other large peers. “TCS and Infosys trade at premium valuations due to revenue predictability and stable performance," Kotak Institutional Equities said in the June quarter results review note, referring to the valuation gap in IT stocks. For Wipro’s returns to pick up, revenue growth will have to inch up as well.

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The share touched its 52-week high Rs 206.54 and 52-week low Rs 101 on 24 August 2018 and 22 July 2019, respectively

Shares of Cupid gained 6.6 percent in the early trade on August 26 after the company won order worth Rs 4.95 crore. The company got an order worth Rs 4.95 crore from UNFPA to supply male condoms to Angola, as per a BSE release.

"We are excited to receive this valuable order," said Omprakash Garg, CMD, Cupid. Cupid was quoting at Rs 131.15, up to Rs 4.65, or 3.68 percent.

The share touched its 52-week high Rs 206.54 and 52-week low Rs 101 on 24 August 2018 and 22 July 2019, respectively.

Currently, it is trading 36.38 percent below its 52-week high and 30.1 percent above its 52-week low.

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With JioFibre set to be launched on September 05, 2019, telecom players are revising their plans in a bid to maintain their share in the industry

With JioFibre set to be launched on September 05, 2019, telecom players are revising their plans in a bid to maintain their share in the industry and hence increase their revenue despite continually losing their subscribers to the Reliance juggernaut.

And it is not just telecom companies who are doing this, DTH service Tata Sky too made an announcement this week offering free additional months of usage to its subscribers. However, the offer will only be valid only for those who have the annual payment plans. Subscribers must note that the latest offer by DTH has only been made available in a few select cities whereas the extra validity is only valid on unlimited plans. Besides this, other cities too will get extra validity on fixed data plans.

Meanwhile, BSNL announced on Friday that the annual broadband plans which are set over Rs 399 will now bundle Amazon Prime membership which is worth Rs 999 for free, Telecom Talk reported. Previously, the State-run telco had offered Amazon Prime subscription for free with broadband plans priced over Rs 499, however now, the internet service provider has added the Rs 399 affordable broadband plan in the mix too.

However, the big players still remain Reliance Jio, Airtel and Vodafone-Idea. In view of the latest offers, companies have launched long term plans on broadband fibre.

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A South African high court judge on Friday refused Zambia's state mining company ZCCM leave to appeal a previous ruling halting the sale of Vedanta Resources' majority-owned Konkola Copper Mines (KCM) pending arbitration

Vedanta has been locked in a dispute with the Zambian government since May when Lusaka appointed a liquidator to run KCM, which is 20% owned by ZCCM and the rest by Vedanta.

Zambia had accused KCM of breaching the terms of its licence, which Mumbai-listed Vedanta denies.

In July, a South African judge said wind-up proceedings must be immediately withdrawn until a final decision is made following arbitration. Zambia appealed and said it was proceeding with the liquidation.

Judge Leicester Adams said his main reasons for refusing leave to appeal were that ZCCM had raised nothing new and that leave would only be granted when a judge believed it could succeed.

The South African high court is recognised as a court in the context of the International Arbitration Act.

"There are no reasonable prospects of another court coming to different conclusions, be they on aspects of facts or law, to the ones reached by me. The appeal does not, in my judgement, have a reasonable prospect of success," the judge said in his ruling.

Vedanta said it remained committed to engaging with the Zambian government to find an amicable solution.

No-one from the Zambian government could immediately be reached for comment.

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The transaction is subject to customary closing conditions and has been approved by the board of directors of Lupin

Shares of Lupin gained after the drugmaker announced an agreement to sell its Japanese injectables business to neo-ALA Co. Ltd, a wholly-owned subsidiary of Abu Dhabi-based Neopharma group.

Through its Japanese subsidiary, Kyowa, the company had entered into a definitive agreement for the sale of its injectables business and related assets in Japan to neo ALA Co. Ltd, the drug major said in a press release.

"The divestiture of our injectables business in Japan is a step towards streamlining our Japan operations and bringing a sharper focus on building a hybrid (Brand/ generics) pharma model in Japan," Fabrice Egros, president Lupin APAC and representative director of Kyowa, said.

The plant, which is in Atsugi, has been engaged in sales and contract manufacturing of injectable products, the release said.

Lupin has agreed to sell all the issued and outstanding share capital in Kyowa Criticare Co. Ltd to neo-ALA Co.

The transaction is subject to customary closing conditions and has been approved by Lupin’s board of directors.

Lupin was quoting at Rs 738.75, up to Rs 3.55, or 0.48 percent on the BSE.

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The next immediate support for Nifty50 is placed at around 10,750 and then towards 10,600 levels, while resistance is observed at 11,110 and then towards 11,200 levels.

The benchmark index, Nifty50 breached its previous four-day consolidation pattern on the downside on August 21 to close below 11,000 levels. On the daily time frame, the index witnessed a breakdown from the bearish flag pole pattern which can further sink prices towards its next immediate support which is placed at 10,600 levels.

Previous three days’ candle formation suggests that the immediate pullback got capped at 11,200 levels, and the index has now opened the gate for further downside.

The NSE-NIFTY reversed before visiting its short-term moving average placed at the 20-day EMA the daily interval.

On the Options front, maximum Put open interest is placed at 10,850 followed by 10,500 strikes while the maximum Call open interest is seen at 11,000 followed by 11,500 strikes.

The next immediate support for Nifty50 is placed at around 10,750 and then towards 10,600 levels, while resistance is observed at 11,110 and then towards 11,200 levels.

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Technology major Siemens will upgrade Hindustan Zinc's power assets and manufacture six 80 MW steam turbines for the mining major

"Siemens will modernise and commission 80 MW steam turbines to Hindustan Zinc. The modernisation of the power assets of Hindustan Zinc includes state-of-the-art design steam turbine components and digital technologies. Siemens will also provide on-site project services on a turnkey basis," Siemens said in a statement here on Tuesday.

The turbines would be manufactured at Vadodara factory, it said.

Commenting on the development, V. Jayaraman, Head of Power Plants at Hindustan Zinc, said: "We are aiming at higher efficiencies of power generation from steam turbines along with higher generation. Further, the modular project execution will ensure lower outage. Operations will be more economical and using latest technologies help reduce carbon footprint, which is in sync with our group's philosophy."

Gerd Deusser, Head, Gas and Power, Siemens, said: "The upgraded 80 MW steam turbines is the best-in-industry and ensures high flexibility, reduces emissions and maintains high reliability. By leveraging our experiences and technological leadership, we will continue to provide highly efficient steam turbines to customers."

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Halol is a crucial facility for Sun Pharma as it contributes around 15 percent of total US sales

Shares of Sun Pharmaceutical Industries rallied 4.7 percent intraday on August 19 after the US health regulator classified the company's Halol plant as 'No Action Indicated'.

No Action Indicated means no objectionable conditions or practices were found during the inspection (or the significance of the documented objectionable conditions found does not justify further action).

The Halol unit was inspected by the US Food and Drug Administration during June 3-11, 2019 and the regulator issued four observations.

Halol is a crucial facility for Sun Pharma as it contributes around 15 percent of total US sales.

The unit was under USFDA warning letter since December 2015 and the same was lifted in 2018. The health regulator has issued an Establishment Inspection Report to plant in June last year.

The stock was quoting at Rs 430.85, up to Rs 16.10, or 3.88 percent on the BSE.

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Investors will find Britannia Industries Ltd’s June quarter results unappetizing. True, consumer staples firms are facing a demand slowdown and, as such, expectations from the company were not running high. Still, Britannia’s Q1 performance is disappointing, with growth being much lower than peers. To add to that, the management’s commentary on demand outlook was discouraging

“Britannia management all but ruled out a quick recovery in demand, with its commentary being sharply weaker than we have heard from other consumer packaged goods (CPG) managements," said analysts from Kotak Institutional Equities in a review report.

In a post-earnings conference call, the management said: “If the consumer is thinking twice before buying even a 5 product, then obviously there is some serious issue in the economy." In that backdrop, it’s hardly surprising that Britannia’s shares have fallen by 3% since it announced its Q1 results on 9 August.

Perhaps, the most disappointing aspect is the subdued domestic volume growth of 3%, a marked deterioration from the past few quarters. Consolidated revenue growth of about 6% appears discouraging, missing Street expectations.

“We are surprised by the growing divergence between Britannia (biscuits) and other players (categories). It is worth noting that (1) Nestle (F&B play akin to Britannia but much more urban-centric) reported strong 12%+ growth driven by chocolates and noodles, and (2) Dabur (rural play) reported 10% volume growth despite rural weakness," said Kotak’s analysts.

On the profitability front, growth slowed further with earnings before interest, taxes, depreciation and amortization declining by 69 basis points year-on-year to 14.6%. Even though revenue growth rates fell, some costs, such as employee and other operating expenses, rose as much as 11%.

Additionally, the consumption slowdown woes are likely to continue. Analysts from Jefferies India Pvt. Ltd said: “Britannia’s earnings trajectory is witnessing a sharp slowdown from the past given the low hanging fruits of market share gain in biscuits and overall cost savings are captured in the base." In a report on 12 August, it added: “While we like attempts to build categories for future, they would remain margin and ROCE dilutive in short term. Consensus expectations and valuations remain rich relative to actual delivery." ROCE is a return on capital employed.

So far in FY20, Britannia’s shares have shed nearly 19% of their value, underperforming the Nifty 200 index. Still, with valuations at about 47 times estimated earnings for FY20, investors may not be tempted to bite the stock.

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The top Nifty50 gainers include Indiabulls Housing Finance which zoomed 12 percent followed by Vedanta, Grasim Industries, UltraTech Cement and HDFC while the top losers are YES Bank, Coal India, Mahindra & Mahindra, Indian Oil Corporation and ITC

The benchmark indices including the Nifty and Sensex added 1 percent each. Nifty spiked 113 points to 11,145 while the Sensex rallied 371 points to 37,699.

Nifty Midcap50 Index gained over 1.5 percent led by DHFL, M&M Financial Services, PFC, Ramco Cements, Balkrishna Industries, Century Textiles, Cholamandalam Investments, Tata Chemicals and Voltas among others.

Banking stocks are also buzzing, the top gainers include RBL Bank which jumped over 7 percent followed by Federal Bank, IDFC First Bank, HDFC Bank, ICICI Bank and Kotak Mahindra Bank.

The S&P BSE Capital Goods index is up over a percent, the top gainers being Suzlon Energy, Lakshmi Machine Works, BEML, GE T&D, Siemens and Sadbhav Engineering.

From the infra space, the top gainers are Bharti Infratel, Engineers India, Larsen & Toubro, IRB Infra, Reliance Infra and Vodafone Idea.

Nifty Realty gained a percent led by Indiabulls Real Estate which spiked 6 percent followed by DLF, Oberoi Realty, Prestige Estates and Godrej Properties.

India VIX is down 0.44 percent and is trading at 16.02.

The top Nifty50 gainers include Indiabulls Housing Finance which zoomed 12 percent followed by Vedanta, Grasim Industries, UltraTech Cement and HDFC while the top losers are YES Bank, Coal India, Mahindra & Mahindra, Indian Oil Corporation and ITC.

The most active stocks are Indiabulls Housing Finance, Reliance Industries, HDFC, YES Bank and HDFC Bank.

Pidilite Industries and Asian Paints have hit a new 52-week high on BSE.

147 stocks have hit a 52-week low on BSE including NBCC, Thomas Cook and PAGE Industries among others.

1250 stocks advanced and 416 declined while 418 remained unchanged on the NSE. On the BSE, 1474 stocks advanced, 595 declined and 111 remained unchanged.

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Seltos, the first car manufactured for India by South Korean auto major Kia Motors, rolled out of its plant in Andhra Pradesh's Anantapur district on Thursday

The world's eighth-largest automaker rolled out the production version of the sports utility vehicle (SUV), which will be launched on August 22.

The company announced the commencement of mass production of Seltos after testing the vehicle over 20 lakh km in different climatic conditions and some of the most challenging terrains in India.

The first Kia Seltos was rolled off the assembly line by South Korea's ambassador to India, Shin Bong-Kil, and Managing Director and Chief Executive Officer (CEO) at Kia Motors India, Kookhyun Shim.

"The roll-out of the first Seltos is an emotional moment for all of us, especially for the people at the plant as we worked together relentlessly to build the future of Kia Motors in India. The invaluable contribution made by the government of Andhra Pradesh has enabled us to achieve our target of manufacturing the Seltos in record time. The first Seltos is the symbol of our promise and commitment to the Indian market," said Kookhyun Shim.

"The Seltos will be BS-VI compliant right from its launch. It will be available in a highly efficient, brand new smart stream engine that will come in three variants: 1.5 Petrol, 1.5 Diesel and first in segment 1.4 Turbo Petrol, offering the perfect balance of performance and efficiency," the company said.

The Seltos will be launched on August 22 and bookings are being accepted across all Kia dealerships along with the Kia official website.

Since the commencement of pre-booking on July 16, Kia Seltos has already gathered 23,311 bookings.

The Seltos is available for test drives across all Kia dealerships. 

Kia's manufacturing facility in Anantapur is spread over 536 acres and has an annual capacity of 300,000 vehicles. The plant will also be capable of producing hybrid and electric vehicles.

The plant in Anantapur is equipped with the most advanced global technologies such as robotics and artificial intelligence and is remarkably environment-friendly with capabilities like 100 per cent water recycling within the plant, the company said.

The plant also houses a five-acre training facility offering the basic technical course (BTC) in automobiles for skill development to provide all skills necessary for an entry-level job on the factory floor.

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Capital goods maker Thermax Ltd has proved it can be resilient during tough times in the economy. The firm’s execution skills were reflected in the strong revenue growth during the June quarter, though macroeconomic issues weighed on profitability and order flows

Net consolidated revenue of 1,392 crores zoomed past the 17-broker average forecast on Bloomberg by about 17%. It was 34% higher on a year-on-year (y-o-y) basis. Even the stand-alone revenue of 1,167.7 crores was up 37.5% y-o-y, for which analysts said the credit goes to the company’s better-than-expected execution.

Strong revenue and stringent cost-control in spite of higher raw material costs translated into 43.5% y-o-y growth in Ebitda (earnings before interest, tax, depreciation and amortization).

“The key takeaway was the consistency in execution trend, which led to revenue growth, giving some green shoots for the company to return back to the growth path," said analysts at ICICI Securities Ltd. This also explains why the stock rose 3.8% to 1,087.75 on the National Stock Exchange on Thursday.

Yet, there were pressures on operating cost due to the liquidity crunch and delays in projects from the customer’s end, at times. This, along with provisions made towards its Chinese subsidiary, in which operations were discontinued, weighed on profitability. Ebitda margin widened by 40 basis points to 7.1% but was lower than what the Street had pencilled.

That’s not all. Challenges are mounting in the economy, particularly for the capital goods sector. A few quarters ago, there was an increase in order flows that brought in optimism for this universe, especially for front-rung companies, such as Thermax, and well-managed global firms including Cummins India Ltd, Siemens Ltd and ABB India Ltd. However, the situation has turned grim since the general election, with core sector growth falling and weakness in almost all sectors of the economy.

For Thermax, consolidated order flows fell 26.3%, while the order book at the end of the June quarter was 18% lower from a year ago. M.S. Unnikrishnan, managing director and chief executive of Thermax, said: “Even after elections, we did not see many pick-ups in orders. With capacity utilization in most sectors below the optimal level, most companies are deferring capex plans. Even short-cycle orders are slow as most managements are cautious."

To be sure, Thermax’s resilience is the key reason for the stock’s outperformance compared with benchmark indices, such as the Nifty Midcap 100. However, analysts reckoned that the pain will continue for several quarters.

Given the inertia even in private sector capex, Thermax’s shares may be range-bound, as its price-to-earnings ratio of 28 times estimated FY21 earnings factors in all positives.

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