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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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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Beverage major Coca-Cola has entered India's niche but potentially high-volume non-alcoholic malt drinks market in a big way with its global brand Barbican

The company, which launched a pilot project six months back, focuses on the youth. "We introduced Barbican, non-alcoholic malt-based beverages, in select Indian markets," a senior company official told IANS. 

As part of the pilot, Barbican is imported and available at around 3,000 select outlets across metropolitan cities.

The recent foray is part of Coca-Cola's plan to introduce more healthier options in the F&B segment in India.

The launch became possible after Coca-Cola acquired 50 per cent stake in Middle East-based Aujan Industries' beverages division. 

At present, the company offers a range of beverages, including Coca-Cola, Diet Coke, Thums Up, Fanta, Limca and Sprite.

Anheuser-Busch InBev, Heineken and Kingfisher have already entered this market segment to target the vast untapped market of non-alcohol drinkers in India.

A non-alcoholic malt drink is a high energy beverage, brewed in the same fashion as beer or ale.

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Global brokerage HSBC upgraded stock to buyShares of Bharat Heavy Electricals (BHEL) rallied 10 percent intraday on August 27 after it won orders worth Rs 2,500 crore

"Valued at around Rs 2,500 crore, the orders have been placed on BHEL by NTPC," the company said, adding the orders involve supply and installation of flue gas desulphurization (FGD) systems for 13 coal-based units at 2,600 MW Korba STPS Stage I, II & Ill in Chhattisgarh and 2,100 MW Ramagundam STPS Stage I & II in Telangana.

The stock was quoting at Rs 54.65, up to Rs 4.70, or 9.41 percent on the BSE at 1005 hours IST.

Global brokerage HSBC upgraded stock to buy. It sees near-term weakness in business fundamentals of state-owned power equipment maker BHEL, but it upgraded the stock to buy due to steep correction, and balance sheet strength and long-term growth potential.

However, the global brokerage house slashed price target to Rs 60 from Rs 62 per share after lowering earnings estimate by 1-5 percent on lowered order inflow expectations.

"Downside risks include a continued increase in receivables & lower margins," it said.

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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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The khadi industry in India is expected to cross Rs 10,000 crore turnover in the next five years, Khadi and Village Industries Commission (KVIC) Chairman Vinai Kumar Saxena said on Thursday

The target for this year is set at Rs 5,000 crore, he told IANS.

"In a time when the world is moving towards automation, khadi is one of the few handcrafted products. In the future, the only khadi will survive and nothing else," Saxena said at the Lakme Fashion Week Winter/Festive edition being held here.

The Day 3 of the week-long fashion event was dedicated to sustainable fashion where designers showcased their collection made out of sustainable fabrics. Three designers namely Anuj Bhutani, Pallavi Dhyani and Gaurav Khanijo collaborated with KVIC to create sustainable fashion wears that were showcased on the ramp.

Saxena said that the khadi industry has seen an average growth of 28 per cent in the last four years as compared to the growth rate of 6.18 per cent in 2004-2014.

"Cloth mills are producing 12,000 metres in a day but khadi which is handspun is produced only 12 metres. Despite that, from Rs 889 crore turnover in 2004-2014, we have reached Rs 3,215 crore turnover in just four years. There has also been a change in the production pattern. Till 2014, the total production of khadi was 103. 66 million square metres but in four years we have jumped 70 per cent," he told IANS.

To protect khadi which is a "heritage" of India, many designers have come on board and joined the movement, he said, which will make the industry thrive in future. Expanding the colour palette, westernizing the cuts, and creating new trends in itself, the Khadi fabric has transcended itself as a sustainable fabric of the Future, he said.

"Khadi has become a stylish narrative that is now popularly embraced by designers. A versatile fashion fabric, khadi has been used as a tool to navigate India through its hard-won independence.

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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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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 results did not meet analyst estimates. An analysts’ poll of Reuters estimated the net profit at Rs 492.9 crore and revenues at Rs.4461.6 crore

Shares of Cipla fell 3 percent intraday on August 8, a day after the pharma major reported muted numbers for the June quarter as revenues declined in India and South Africa, which account for nearly half of the company's sales.

The company’s net profit grew 0.4 percent at Rs 447.2 crore in Q1FY20 against Rs 445.6 crore in the year-ago period.

Revenue declined 1 percent to Rs 4,067.39 crore in Q1, compared to Rs 4,109.10 in June 2018.

The results did not meet analyst estimates. An analysts’ poll of Reuters estimated the net profit at Rs 492.9 crore and revenues at Rs 4461.6 crore.

The Indian business, which accounts for one-third of Cipla's sales, declined 12.2 percent year on year (YoY) to Rs 1,355 crore due to the realignment of distributors in the trade generics, a company report has said.

Revenues from South Africa, Sub-Saharan Africa and Global Access (SAGA) declined 17 percent YoY to Rs 691 crore on the softness of tender business. However, sales from the private market in South Africa continued to grow.

Post Q1 results, the global brokerage firm CLSA downgraded the stock from Outperform to Sell on dismal Indian sales, slashing the target price to Rs 460 from Rs 600.

CLSA also cut EPS (earning per share) estimates over FY20-22 by 9-14 percent, citing the absence of a near-term catalyst.

"No big launches in the US in the near-term should keep growth outlook muted," the brokerage said.

Financial services company Citi also cut the target price to Rs 580 from Rs 600, maintaining a neutral call on India's fourth-largest drugmaker.

According to Citi, the company has beaten expectations on EBITDA and net income.

"Moving parts make it difficult to gauge the underlying strength of numbers. The company believes trade generics could take one more quarter to normalise. Other businesses should be back to normal from Q2," said Citi.

The brokerage revised FY20-21 EPS estimates by 4-5 percent, citing uncertainty over the pace of recovery in the trade generics business.

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Revenue of the company rose 4.1 percent to Rs 3,198.4 crore versus Rs 3,073 crore

Shares of Siemens added 5 percent in the early trade on August 8 as the company posted better numbers for the quarter ended June 2019.

The company's Q3FY20 profit jumped 21.4 percent to Rs 248.1 crore versus Rs 204.4 crore in the same quarter last fiscal.

Revenue of the company rose 4.1 percent to Rs 3,198.4 crore versus Rs 3,073 crore.

The company's new orders stood at Rs 3,023, registering a 6.4 percent increase over the same quarter last year. 

Sunil Mathur, Managing Director and Chief Executive Officer, Siemens said, “We have delivered very solid results in the third quarter although we see a slowdown in capex related ordering by our customers, both public and private, and across our market verticals."

"Liquidity is becoming a concern in the industry, with payments being delayed and inventory offtake slowing down. In this scenario, our focus continues on driving our short term and digitalization businesses with a clear focus on profitable growth and working capital management,” he added.

Siemens was quoting at Rs 1,154.25, up to Rs 53.50, or 4.86 percent on the BSE.

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Lupin Ltd got the much-needed stimulus from the domestic market for its June quarter profitability. Shares of the company perked up 4% on Wednesday, as investors seemed relieved with the largely in-line performance

The company’s revenues for the first quarter were up 15.4% year-on-year, but little changed compared to the March quarter. Sales growth in the domestic market stood at 9.6% year-on-year. This market is gaining stature and now accounts for about 30% of global sales. On a sequential basis, revenues have increased by 24%, which is commendable. The same, however, cannot be said for its US sales, which accounts for about 35% of its global revenues. North American sales dipped by 11.4% quarter-on-quarter due to lower sales of key drugs and rising competition.

Thankfully, cost-control measures backed up domestic performance. Material and other costs were lower than the year-ago period. Needless to say, this bolstered its operating performance. As a result, Ebitda (earnings before interest, tax, depreciation and amortization) margins came in at 19.47%, as against 13.67% in the year-ago period. Analysts said this was along expected lines. However, the measure was lower on a sequential basis due to its poor performance in the US market. As such, Ebitda margins were 33 basis points lower compared to Q4 FY19.

Lupin still faces tough competition overseas. Of late, some of its new product launches, such as Solosec, have been gaining traction in the US. A positive is that it launched five products in the US market during the quarter. Besides, it has about 175 products in the US generics market. Nevertheless, growth in most of its overseas markets has been slower this quarter compared to Q4 FY19, and that does not bode well.

Besides, there are several overhangs on the Lupin stock. Pending US regulatory issues will continue to weigh as delays in resolving these issues are impacting sales and profitability. Another key development to watch out for is the number of new approvals it can get in the US market.

That apart, the Lupin stock appears expensive at a price-earnings multiple of about 25.4 times FY20 earnings estimates. A pickup in the US and overseas markets holds key to a long-term revival.

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Indian shares reversed early losses to trade higher on Tuesday, a day after the government scrapped the special status of long-disputed Kashmir, while investors awaited the central bank's monetary policy decision scheduled on Wednesday

The broader NSE Nifty rose 0.62% to 10,930.40 as of 0409 GMT, while the benchmark BSE Sensex was up 0.57% at 36,909.50.

India on Monday revoked a constitutional provision giving Kashmir the authority to make its own laws, potentially stoking tension in the Himalayan region, which has been a flashpoint in ties with neighbouring Pakistan.

The move further raised investor uncertainty at a time when they are already grappling with slowing economic growth and a credit squeeze.

Investors were also awaiting the Reserve Bank of India's (RBI) policy decision on Wednesday. A Reuters poll last month showed the central bank was set to cut interest rates further as the country looks to stimulate growth and spending.

Finance minister Nirmala Sitharaman also said her department would hold talks with foreign portfolio investors (FPIs) about the tax surcharge on certain high-value investments, Mint reported.

"Domestically, the negative news flow may be behind us for the time being. There is hope in markets that the government may revive the economy and they are rallying on that hope," said Neeraj Dewan, a director at Quantum Securities.

"People are expecting the RBI to cut rates and the finance minister's statements about FPIs are also giving hope."

Banks and auto indexes led gains. The Nifty public sector banks index rose 1.5%, while the auto index was up 1%.

The IT index was flat in early trade as the rupee firmed after touching a five-month low on Monday.

Indiabulls Housing Finance led the gains among NSE stocks, rising 1.8%, while Yes Bank and IndusInd Bank rose about 1.5% each.

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The rupee on August 5 crashed by 113 paise - the biggest single-day drop in the past six years - to close at a five-month low of 70.73

The Indian rupee is trading higher by 8 paise at 70.65 per dollar versus previous close 70.73.

It opened lower by 7 paise at 70.80 per dollar.

The rupee on August 5 crashed by 113 paise - the biggest single-day drop in the past six years - to close at a five-month low of 70.73 due to heavy capital outflows by investors anxious over the US-China trade tension, a sharp devaluation in yuan and uncertainty over Kashmir issue. This was the third straight session of fall for the rupee, during which it lost a massive 194 paise.

Rahul Gupta, Currency Research Head, Emkay Global Financial Services said, "The global trade turmoil between US-China and political imbalance in Kashmir led USD/INR spot open at the 11-week high. Over the day, USD/INR violated the major resistance of 70.20 from its 200 SMA."

The dollar-rupee August contract on the NSE was at 70.85 in the previous session. Open interest increased 35.88% in the previous session, said ICICIdirect."If the pair closes above 70.20 then the view will continue to be bullish and we can see 71.30 before the month-end. While on the downside 69.85 will continue to act as strong support. Meanwhile, this week is the RBI policy. Widely, RBI is expected to cut rates further by 25bps and continue to hold the accommodative stance which will weigh on rupee," he added. We expect the USD-INR to find supports at lower levels. Utilise downsides in the pair to initiate long positions, it added.

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The company reported a standalone net profit of Rs 15.20 crore for the quarter ended June 30, 2019, as compared to Rs 5.95 crore in the same period last year, registering a year-on-year growth of 155.46 per cent. Net revenue of the company rose marginally by 1.09 per cent at Rs 118.31 crore in the April-June quarter of this fiscal as against Rs 117.03 crore in the corresponding period last year. During the April-June quarter, operating expenses dropped by 12.35 per cent to Rs 89.67 crore from Rs 102.31 crore in the year-ago period.

Other Income grew by 61.11 per cent at Rs 2.03 crore versus (Jun'18 Rs 1.26 crore). Operating Profit surged by 94.57 per cent to Rs 28.64 crore as against Rs 14.72 crore in the year-ago period, while Operating Profit Margin (OPM) expanded year-on-year to 92.45 per cent in June quarter. Interest grew by 54.55 per cent y-o-y to Rs 1.19 crore, while Taxation increased by 150.30 per cent at Rs 8.21 crore (Jun'18 Rs 3.28 crore).

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Cigarette-to-soap maker, ITC’s June quarter results were not particularly encouraging. The cigarette business, which is ITC’s mainstay, disappointed

Varun Lohchab, an analyst at Jefferies India Pvt. Ltd points out that “ITC’s Q1FY20 missed slightly operationally as cigarette volumes grew 3% year-on-year (versus our 4% expectation)." Note that cigarettes form a big chunk of ITC’s profit contribution. For the June quarter, cigarettes accounted for as much as 86% of the company’s overall earnings before interest and tax, or Ebit. The cigarette business’ Ebit increased by 8% year-on-year during April-June. To put it in perspective, the growth was 1% below Jefferies’ estimates.

ITC’s fast-moving consumer goods (FMCG) business saw revenue growth of 6% which is not extraordinary and is largely in line with broader consumption trends, given the slowdown in the economy. Revenue growth from other businesses--hotels, farm, and paperboards, paper and packaging--was in double digits, which is nothing to complain about. However, the contribution from these segments to profits is relatively low at the moment. As such then, these segments don’t move the needle dramatically for ITC.

Overall, the company’s net profit of  3,174 crores was marginally better than a Bloomberg consensus estimate of  3,153.70 crores. Note that a whopping 54% growth in other income to  620 crores helped ITC’s June quarter net profit growth substantially.

“ITC’s 1Q performance was soft versus its financial year 2019 show but in-line with FMCG peers," said HDFC Securities Institutional Research in a report on 5 August.

What’s more, the outlook isn’t inspiring. “We expect 1Q growth trajectory to replicate over FY20, led by the higher base of cig (cigarette) volume growth and consumption slowdown," said analysts from HDFC Securities.

On Monday, shares of ITC traded nearly 2% lower, in line with the broader markets, with the Nifty 50 index down 1.6%.

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Sterling and Wilson Solar Ltd’s initial public offering (IPO) will test investor appetite for large issues

After receiving an approval to raise 4,500 crores, the promoters of the company have decided to sell shares worth 3,125 crores.

At the higher end of the price band of 780, the price-to-earnings ratio works out to about 20 times FY19 earnings. As such, there are no direct listed peers for Sterling and Wilson in India. Nonetheless, these valuations are similar to Larsen and Toubro Ltd (L&T), and significantly higher than KEC International Ltd, both of which derive sizeable overseas revenues from EPC (engineering procurement and construction) work, although from different sectors.

Even so, Sterling and Wilson’s shorter execution cycles limit the working capital requirement, thereby offering superior returns. Furthermore, sizeable revenues come from overseas, where execution risks are comparatively lower. The promoters’ presence in a number of markets, industry relationships and project management expertise helps Sterling and Wilson Solar, which partly explains the IPO valuations.

“It is not easy for a normal EPC company to build such capability," says Deepak Agrawala, executive director (investment banking) at Elara Capital (India) Pvt. Ltd.

Revenue and profit, on average, have grown 44-72% per annum in the last three fiscal years. The robust growth and steady profitability underscore Sterling and Wilson’s competitive advantage in utility-scale projects.

That said, given the short execution cycles of solar power projects, it is crucial that the order book is replenished quickly. Note that excluding other income, the company’s profitability has remained stable despite the steady decline in tariffs across the globe. This was helped by high exposure to overseas projects, which are more remunerative than projects in India.

Even so, Sterling and Wilson’s Ebitda margin (excluding other income) of 7.8% is lower than 11.6% clocked by L&T and 10.5% by KEC for FY19. Ebitda is short for earnings before interest, tax, depreciation and amortization.

Further, as projects in the overseas markets are increasingly being awarded through competitive bidding, suppressing tariffs, analysts fear the profitability of the industry stakeholders will be compressed or capped.

According to one domestic market observer, the pressure ultimately comes on EPC. “We are living through a revolution in the costs of renewable power technology. Lower costs will boost wind and solar generation’s share of the power mix from the current 6% to a much higher level in the coming years. This will create both opportunities and disruption in the industry," Alex Whitworth, research director at Wood Mackenzie, said in a recent note on renewables in Asia-Pacific

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At a time when investors are edgy about fast-moving consumer goods’ (FMCG) outlook given the consumption slowdown, Marico Ltd’s June quarter results are comforting

The company, popular for its Parachute coconut hair oil brand, has clocked 6% domestic volume growth in the last quarter. Considering that volume growth in the base June 2018 quarter was relatively high at 12%, the current year’s performance doesn’t look that bad.

Marico’s volume performance in the June quarter was helped by good growth in Parachute rigid packs (blue bottles), which saw volume market share gain. That’s nothing to sneeze at especially when copra, a key raw material, is in a downcycle. On the other hand, Saffola edible oil’s performance continues to be an area of pain.

Meanwhile, copra prices fell sharply by 25% year-on-year during the June quarter. This has helped the company benefit on the profit margin front. On a consolidated basis, Marico’s Ebitda (earnings before interest, taxes, depreciation and amortization) margin for the June quarter expanded 323 basis points year-on-year to 21.3%. This is despite a sharp increase in advertisement and sales promotion expenses.

“The company has not passed on lower copra prices through price cuts in this downcycle given much stronger brand franchise and relative competitive position versus local and regional brands in wake of liquidity crunch and wholesale channel disruption since GST," said Varun Lohchab of Jefferies India Pvt. Ltd in a report on 2 August.

Marico has told analysts that there might be an increase in copra prices in the second half of the fiscal year. As such, analysts don’t seem perturbed as of now and, in general, margins are broadly expected to improve in FY20. “We model Ebitda margin expansion in the financial year 2020 (+160 basis point year-on-year) driven by benign input cost environment said ICICI Securities Ltd.

At a time when demand woes are clouding sentiments for FMCG stocks, Marico appears to be enjoying a cushy spot. Currently, the stock trades at about 43 times FY20 estimated earnings, not as expensive as some of its peers.

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