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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Vodafone Idea Ltd may be India’s largest telecom company by subscriber base, but it also happens to be the smallest in terms of revenue market share among private sector operators

In the June quarter, Vodafone Idea was the only company to post a sequential decline in revenues, while competitors Bharti Airtel Ltd and Reliance Jio Infocomm Ltd reported notable expansion. This is based on quarterly revenue data from the Telecom Regulatory Authority of India (Trai) compiled by SBICAP Securities Ltd.

Based on adjusted gross revenues, including receipts from long-distance services, Vodafone Idea’s market share dropped from 32.1% in the quarter ended March 2019 to 27.8% last quarter. Two years ago, the combined market share of Vodafone India and Idea Cellular stood at 42.5%.

SBICAP Securities estimates Vodafone Idea’s revenue market share to stabilize at around 20% in the medium term, with Reliance Jio seeing further gains by the end of FY20. At the end of the June quarter, Reliance Jio’s revenue market share stood at 31.5%.

While Bharti Airtel’s market share was similar, according to Trai numbers, analysts said Jio achieved clear market leadership in the June quarter. Airtel’s numbers reported to Trai may need some adjustments, they added.

What’s more, the hit from the reduction in interconnection usage charges to zero in a few months will make things worse for the incumbents.

The drop in Vodafone Idea’s market share and operating performance comes at a time when its balance sheet is fast deteriorating. An analysis of its debt and repayment schedules, based on the latest annual report by Kotak Institutional Equities, shows that the company may fall short of funds in about a year from now.

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Auto stocks were trading mixed in morning trade on August 26, after the Finance Minister Nirmala Sitharaman on August 23 announced a slew of measures to improve investor sentiment and help auto, NBFC and PSB sectors

Around 0930 hours, the BSE Auto index was 0.28 percent up at 15,772 with shares of Ashok Leyland (up 5.73 percent), Mahindra & Mahindra (up 2.64 percent), Bosch (up 1.35 percent), Exide Industries (up 1.24 percent) and Eicher Motors (up 0.87 percent) among the top gainers.

However, Motherson Sumi Systems (down 1.38 percent), Hero MotoCorp (down 1.22 percent), Maruti Suzuki (down 0.60 percent), Bajaj Auto (down 0.57 percent) and TVS Motor (down 0.19 percent) were in the red in the index.

Giving respite to the auto sector, the Finance Minister on August 23 deferred the revision of one-time registration fees till June 2020, which, analysts say, may have a significant impact on short-term demand.

Besides, the rate of depreciation for all vehicles was raised by up to 30 percent for vehicles purchased up to March 2020, which is also expected to give a boost to the CV and PV players.

Global brokerage Macquarie believes the steps will have a small positive impact on the near-term demand and the steps to improve liquidity and lower auto loan rates will benefit all segments.

"Higher depreciation rate and replacement of old vehicles by the government departments will benefit CV and PV," said the brokerage.

However, the two-wheelers will be disappointed by the steps, the brokerage added.

The market benchmarks Sensex and Nifty were in the green however both the key indices pared gains due to weak global sentiment.

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India’s domestic air passenger traffic had slowed down in the June quarter as Jet Airways’ shutdown pulled the beleaguered airline’s capacity out of the system

Even so, last quarter’s financial results of InterGlobe Aviation Ltd and SpiceJet Ltd are nothing to complain about. InterGlobe runs IndiGo, India’s largest airline by market share.

One factor that helped last quarter was that the environment for yields, a measure of pricing, remained stronger. IndiGo surpassed Street expectation by clocking a 12.7% year-on-year improvement in its yields. On the other hand, a smaller rival, SpiceJet’s yield increased by 2%, falling short of estimates.

At the time of announcing results, SpiceJet said, “The airline’s operations remained stressed for a large portion of this quarter due to the continued grounding of its superior B737 MAX aircraft. This limited the airline’s ability to take its yields up, owing to passenger disruptions and re-accommodation; while simultaneously increasing its fixed costs on this category of aircraft."

“While Indigo’s domestic passengers carried grew by about 20%, international jumped by about 50%. Higher yields on international routes vacated by Jet Airways have also led to the divergence in yield growth between Indigo and SpiceJet," said analysts from Edelweiss Securities Ltd in a report on 21 August.

As such, capacity expansion helped both airlines clock handsome revenue growth. IndiGo’s revenues increased by about 45% and SpiceJet’s by 35%. On the profitability front, IndiGo’s Ebitdar, increased by a whopping 233% year-on-year to ₹2656 crore. Ebitdar is earnings before interest, tax, depreciation, amortisation and lease rentals. SpiceJet’s Ebitdar also jumped sharply by 88% to 684 crores.

Going ahead, yields will remain a key monitorable for investors. Here, from a near-term perspective, the scenario doesn’t look hunky-dory.

“The yields have started to normalise in Q2FY20 as the impact of Jet Airways’ grounding has waned off," Centrum Broking Ltd said in a report on 20 August. “While Q2FY20 is anyways a seasonally weak period, there is additional softening of yields due to lower fares in 0-15 day ticket booking window," it added.

Severe disruption due to floods has made Q2FY20 even worse, point out Edelweiss analysts, adding, “We expect nominal yield growth at best, with potential for significant pick up during Q3FY20."

As such, the muted yield environment may well cap sentiment for airline stocks in the near future.

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Trial

The Enforcement Directorate charge sheet against IL&FS and the cabal which ran it gives the full scope and extent of the malfeasance and all-pervasive rot. Pertinently, it refers to the closed user group individually and by name and provides details on their conduct 

The conclusion is that it was pretty much a circus with Ravi Parthasarthy as the ringmaster or even King as the rest of the crew played courtiers.

In what used to be a virtual command performance more or less every day, the courtiers used to play to the gallery and try and please the Emperor. The ED applying PMLA has indicted each and every member of the claque for contravention of the Money Laundering Act. 

The scathing denouement of the modus operandi states The accused named in connivance and collusion with each other, indulged in initially locating and identifying dubious companies which claimed to have been engaged in infrastructure development and later issuing fictitious purchase orders for non-existent works. The forte of such companies lays only in providing accommodation entries in the form of bogus billing including bogus share capital and advancing unsecured loans to the beneficiary in lieu of commission or kickbacks. 

The via media was the use of bogus entities being awarded bogus contracts and thereafter invoices were raised by those companies, layering was done through accounts and cash was taken and handed back. 

This was a common thread in the work orders issued to these bogus companies, as nearly all the work orders were issued to either resettle the shopkeepers or for road repairs or possibly road widening and the accused collectively siphoned off Rs 7,400 crore.

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Coffee Day Enterprises (CDE) owns Café Coffee Day, India's largest cafe chain that operates 1,750 outlets across the country

Shares of Coffee Day Enterprises gained on August 19, the first time in 17 trading sessions, after a media report said that the promoters were likely to resume talks with Coca-Cola for a stake sale in Cafe Coffee Day chain to cut the debt.

In fact, the stock traded high for the first time after the shock death of founder VG Siddhartha, whose body was found on the banks of the Netravati river in Karnataka on July 31, two days after the 60-year-old businessman had gone missing.

The stock was locked in 5 percent upper circuit at Rs 66.05 on the BSE. It was in lower circuit for previous consecutive 12 trading sessions after July 29 and lost 68.5 percent in the previous 16 sessions.

"The promoters of the Coffee Day Group plan to restart talks with Coca-Cola for selling a chunk of their stake in the Café Coffee Day (CCD) chain in a bid to cut the group's debt further," The Economic Times reported on August 19.

Siddhartha had begun talks with the beverage giant, seeking a valuation of Rs 8,000-10,000 crore for the company in June but was reluctant to sell a majority stake, the report said.

Coffee Day Enterprises (CDE) owns Café Coffee Day, India's largest cafe chain that operates 1,750 outlets across the country.

The deal will help Coca-Cola get a foothold in the cafe space as it tries to expand beyond its core carbonated drinks portfolio.

The move will help Coffee Day Group reduce debt obligations significantly. The company's debt as on July 31 was Rs 4,970 crore, with the debt incurred by its logistics arm, Sical, accounting for about Rs 1,488 crore.

The group recently sold Global Village Tech Park, under it is real estate arm Tanglin, in Bengaluru to Blackstone Group for about Rs 2,600-3,000 crore.

The total debt position of Coffee Day Group will reduce by Rs 2,400 crore after the payment for the deal is received.

The debt position of the Coffee Day Group (excluding Sical and Magnasoft) post repayment of debt out of proceeds from the sale of Global Village will be Rs 1,000 crore in the next 45 days.

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