Month: July 2021

Value Stocks Now Lucrative: Nifty 50 Value 20 Index Performed Better Than Nifty Stocks

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Investment

oi-Roshni Agarwal

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Stock market veterans have been advocating value investing which works on choosing stocks basis some of the parameters such as low price to earnings ratio, low price to book value, low prices to cash flow etc. In fact in the last one year, Nifty 50 Value 20 index has gained and provided higher returns than the Nifty index.

Value Stocks Now Lucrative: Nifty 50 Value 20 Index Performed Better Than Nifty

Value Stocks Now Lucrative: Nifty 50 Value 20 Index Performed Better Than Nifty Stocks

Nifty 50 Value 20 index and its performance

The Nifty 50 Value 20 index reflects the behavior as well as performance of a diversified group of value companies that are part of the Nifty 50 index. Perhaps it is a mix of the 20 highly liquid companies that forms the part of the NSE. These are typically blue chip companies.

Index Returns (%) QTD YTD 1 Year 5 Years Since Inception
Price Return 8.17 17.89 61.70 17.19 18.17
Total Return 8.85 19.37 65.51 19.57 20.46

Index’ existence

The index calculation was first done in January 2009. At the time of rebalancing of shares/ change in index constituents/ change in investable weight factors (IWFs), the weightage of the index constituent (wherever applicable) is capped at 15%. Weightage of such stock may increase beyond 15% between the rebalancing periods. NIFTY50 Value 20 Index can be used for a variety of purposes such as benchmarking fund portfolios, issuance of index funds, ETFs and structured products.

Company’s Name Weight(%)
Top constituents by weightage
Infosys Ltd. 15.13
Tata Consultancy Services Ltd. 14.91
Hindustan Unilever Ltd. 10.50
Larsen & Toubro Ltd. 8.62
ITC Ltd. 8.43
HCL Technologies Ltd. 5.08
Wipro Ltd. 3.84
Sun Pharmaceutical Industries Ltd. 3.47
Tech Mahindra Ltd. 3.23
JSW Steel Ltd. 3.15

Nifty 500 Value 50 index

Likewise there is another index Nifty 500 Value 50 Index which trades at a P/E of 9.3 with a dividend yield of 2.9% as against Nifty 50 that trades at a P/E of 28.3 with a dividend yield of 1.3 per cent.

Typically this index includes 50 companies from its parent Nifty 500 index that are selected based on their value scores. The value score for each company is determined based on Earnings to Price ratio (E/P), Book Value to Price ratio (B/P), Sales to Price ratio (S/P) and Dividend Yield.

Index Returns (%) QTD YTD 1 Year 5 Years Since Inception
Price Return 17.82 41.76 90.35 8.23 11.11
Total Return 18.20 43.72 94.61 11.13 14.11

Top stocks that form the part of Nifty 500 Value 50 index by weightage

Company’s Name Weight(%)
Top constituents by weightage
NTPC Ltd. 5.02
Tata Steel Ltd. 5.01
Tata Motors Ltd. 5.00
Bharat Petroleum Corporation Ltd. 4.98
Grasim Industries Ltd. 4.98
Hindalco Industries Ltd. 4.95
Coal India Ltd. 4.93
Oil & Natural Gas Corporation Ltd. 4.87
Indian Oil Corporation Ltd. 4.85
Tata Chemicals Ltd. 4.30

Why are value stocks becoming attractive?

Value stocks are currently available at cheaper than their growth counterparts and are perhaps deemed to have predicable business model, earnings which tend to generate moderate earnings over time. Sometimes the companies showing a downward trend in price may be providing value and understanding its future price potential. If we look at the top constituents of the Nifty 500 Value 50 index they typically comprise prominent public sector companies such as IOC, BPCL, Coal India, ONGC, NTPC etc.

Not only the Nifty index, the Nifty 500 Value index has also pipped the quality index Nifty200 Quality 30 index with respect to absolute returns.

So, you as an investor can definitely be considering value stocks such as BPCL i.e. divestment bound and for such value stocks that during last some years were not that appealing they can now give good enough returns to investors over the course of 2-3 years in terms of percentage growth.

Other value stocks that may give reasonable upside to investors are the PSB stock of SBI and HPCL among others.

How to find value stocks India/ underpriced stocks?

Low Price/Earnings (P/E) ratio: It is typically computed as stock’s current price and earnings per share for a 12-month period. So, undervalued stocks are typically with lower P/E and

Low price/earnings growth (PEG) ratio: Better metric than P/E, it is a valuation parameter that helps to know the relative trade-off between the price of a stock, the earnings generated per share (EPS) and the company’s expected growth.

PEG ratio: P/E ratio/ Earnings growth rate, and in a case if this value is less than 1 preference can be given more to past performance than future prospects of the stock.

Low price to book ratio:

The company’s low price to book value is an important valuation metric i.e. known by the determining the company’s current market value in comparison to its book value. Current market value is based on the pricing of the company’s outstanding shares while the book value is what is left if the company is liquidated. The company with low price to book value also implies a under valued stock.

Another important characteristic of value stocks is that they do not show high fluctuations in both market highs as well as lows. Also, importantly high dividend yield is another integral factor which determines the value stock.

GoodReturns.in



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AU Small Finance Bank may convert to a universal bank

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Jaipur-headquartered AU Small Finance Bank may transition to a universal bank, going by its Chairman Raj Vikash Verma’s letter to shareholders.

If this happens, it will be the second transition for the lender. Before it converted into an SFB in 2017, AU was a non-banking finance company — Au Financiers (India) Ltd.

Verma observed that the bank is looking far and beyond the current status of the bank in the SFB space.

“We are propelling the bank’s journey to the next important milestone in the bigger banking space, with an aspiration to serve all sectors and segments of the economy under the larger agenda of national development and growth,” he said.

SFB

SFBs are niche banks. Their scope of activities is restricted to undertaking basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.

A universal bank’s scope of activities is much wider, spanning retail banking (retail, agriculture and micro, small and medium enterprises), wholesale (corporate) banking and infrastructure/project financing.

As per the Report of the Reserve Bank of India’s “Internal Working Group (IWG) to Review Extant Ownership Guidelines and Corporate Structure for Indian Private Sector Banks”, if an SFB aspires to transit into a universal bank, such transition will not be automatic.

Transition

The transition would be subject to fulfilling minimum paid-up capital/net worth requirement as applicable to universal banks; its satisfactory track record of performance as an SFB and the outcome of the Reserve Bank’s due diligence exercise.

The initial minimum paid-up voting equity capital for starting a universal bank is ₹500 crore, according to RBI’s guidelines for ‘on tap’ licensing of universal banks in the private sector.

The IWG has recommended that the initial paid-up voting equity share capital/net worth required to set up a new universal bank be increased to ₹1,000 crore.

As of March-end 2021, AU SFB had gross advances and deposits aggregating ₹35,356 crore and ₹35,979 crore, respectively.

The Bank’s loan portfolio mainly comprises vehicle loans, secured business loans (SBL) to MSMEs and housing loans.

AU SFB currently has a presence across 15 States and two Union Territories through 552 bank branches, 177 Business Correspondent Banking Outlets, 15 Business Correspondents and 343 ATMs.

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Gold Prices Continue To Dip: Should You Buy?

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Investment

oi-Roshni Agarwal

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Gold prices in India are retreating lower mirroring trend in the international markets. After gold prices in the international markets bounced back to $1800 per ounce there were expectations that gold prices may bounce back going ahead.

Gold Prices Continue To Dip: Should You Buy?

Gold Prices Continue To Dip: Should You Buy?

On the MCX, gold prices for August contract are last trading down by Rs. 108 at Rs. 47,526 per 10 gm. In the retail market too, gold prices in the National market are trading down by a tad at Rs. 47,860 per 10 gm. In the previous day’s trade gold in the NCR region were priced higher against the international trend.

Usually, in the retail market gold price are higher than in the futures market owing to taxes and other charges.

Factors that may support gold run going ahead

– Uncertainty with respect to coronavirus cases:
In some of the economies including Europe, the US and South East Asia there is seen a rise in delta variant infection
– Inflationary concerns

Owing to widespread stimulus measures taken by economies world over there has been inflationary threat. Though economies including the US have iterated that inflation effects shall be transient in nature, we may see gold gaining sheen as it is a hedge against inflation.

Should you buy into yellow metal at current pricing?

It is being viewed by analyst that until the gold prices are above Rs. 46,500 one can buy gold at dips in a staggered manner to diversify as well as safeguard their portfolio.

Price forecast for gold

Analysts at international level said that gold may see some downward slide before running up further. In India, analysts suggest gold prices to hit Rs. 52,500 per 10 gm by Diwali. Sugandha Sachdeva of Religare Broking said, that in the international market gold price is currently trading in the range of $1,758 per ounce to $1,850 and maintained that $1,758 per ounce is a strong support for the gold price and it is expected to remain intact till these triggers exist.

GoodReturns.in

Story first published: Saturday, July 24, 2021, 13:42 [IST]



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Buy These 3 Stocks Says Broking Firm Motilal Oswal

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Mahindra CIE

Motilal Oswal is also betting on the stock of Mahindra CIE and believes it has had a strong all round performance, led by management initiatives. The company is a multi-technology automotive components supplier. It is a subsidiary of the CIE Automotive group of Spain; an industrial group specialised in supplying components and subassemblies for the automotive market, which has presence across the globe and is listed on the stock exchanges in Madrid and Bilbao.

The management recently highlighted it is optimistic about a recovery in India and Europe during 2HCY21, with the semiconductor shortage expected to ease from Sep’21. It has approved a new wholly-owned subsidiary – CIE Hosur – to set up a greenfield plant at Hosur to support its Bill Forge unit and lower corporate tax.

“Mahindra CIE growth story is on track, driven by its organic initiatives (new products/customers). This, coupled with cost-cutting initiatives in both India and the EU, would drive margin expansion. The stock trades at valuations of 15.5x/13.7x CY21E/CY22E consolidated EPS. We maintain our Buy rating with a target price of Rs 295 per share (15x Sep’23E consolidated EPS),” the brokerage has said.

Shares of Mahindra CIE last closed at Rs 244 on the NSE.

HUL: Buy with a 19% upside

HUL: Buy with a 19% upside

Motilal Oswal sees an upside of 19% on the stock of FMCG major Hindustan Unilever. The brokerage says that rural demand has remained resilient, despite a higher incidence of COVID19 cases v/s last year.

“With mobility improving, demand for FMCG products will improve, especially for those which are discretionary in nature, leading to higher operating margin going forward. Rural demand has remained resilient, despite a higher incidence of COVID19 cases v/s last year.

The expectation of a good monsoon also augurs well for demand going forward, with no material downtrading being witnessed. We maintain our buy rating on the stock of Hindustan Unilever, with a price target of Rs 2,840 per share,” the brokerage has said. The shares of HUL were last trading at Rs 2,359 on the NSE.

Buy Ultratech Cement shares for gains of 18%

Buy Ultratech Cement shares for gains of 18%

Motilal Oswal has suggested to buy the shares of Ultratech Cement with a higher price target of 18% from the current market price. According to the broking firm, better realization and lower cost inflation have driven 9% beat on EBITDA margins this quarter.

“For key infrastructure projects, Ultratech Cement is well-suited to tap into expected growth in both retail and institutional (non-trade) cement demand in India. While it is ramping up its underutilized acquired capacities, it also has a strong pipeline of expansion projects that offers strong growth visibility

Market share gains should continue, aided by the ongoing 20mtpa expansion program, which should drive a 13% volume CAGR over FY21/24E. We raise our EPS for FY22E/FY23E by 6%/6%, factoring in a better realization outlook. We estimate a 26% EPS CAGR over FY21-23E,” the broking firm has said.

Disclaimer

Disclaimer

Investing in stocks is risky and investors need to be cautious. Neither Greynium Information Technologies Pvt Ltd nor the author, nor the brokerage would be responsible for any losses incurred based on decisions made from the article. Investors are also advised caution as the markets are now at a record high. Please consult a professional advisor and avoid investing lumpsum amounts.



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4 Stocks That Broking Firms Are Bullish And Have A “Buy” Rating

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CEAT

Broking firm, Motilal Oswal has a “buy” rating on the stock of tyre major, CEAT. The firm believes that cyclical recovery in both OEMs and replacements would enable the faster absorption of new capacities and drive the benefit of operating leverage.

“Coupled with the gradual pass-through of cost inflation, this would support margins over the medium term. Valuations at 11.3x FY23E consolidated EPS do not capture the ramp-up in new capacities in an improving demand environment, which would lead to margin recovery. Maintain Buy, with target price of Rs 1,775 (13x Sep’23 consol EPS),” the broking firm has said.

Shares of CEAT were last trading at Rs 1,372 on the NSE.

Bajaj Auto

Bajaj Auto

Emkay Global has a buy call on the stock of Bajaj Auto. The firm expects strong momentum in exports to continue, while domestic volumes should recover swiftly ahead. The focus on EVs has increased with the incorporation of a separate subsidiary for manufacturing 2Ws, 3Ws and 4Ws. “We expect a strong volume upturn with a 12% CAGR over FY21-24E, led by growth of 12% in 2Ws and 20% in 3Ws. We trim FY22-24 EPS estimates by 4-5%, mainly on lower margin assumptions,” the brokerage has said.

Emkay global has reaffirmed a Buy with SOTP-based target price of Rs 4,420 (Rs 4,340 earlier), based on 18x P/E on Sep’23E (earlier Mar’23E). The target multiple implies a core P/E of 18x and cash/share of Rs722. “KTM is valued at Rs140 per share based on a 12x P/E and a 20% holding company discount. Key downside risks are lower-than-expected demand in key geographies, increase in competitive intensity and adverse currency/commodity prices,” the firm has said.

Bajaj Auto shares were last trading at Rs 3,846.

Mphasis

Mphasis

Broking firm, Motilal Oswal has a buy call on the stock of IT company Mphasis. The stellar growth in the Direct channel (+9.8% QoQ CC; +32.5% YoY CC) was encouraging, the broking firm has said.

“However, the strong momentum was partially offset by an 18.1% QoQ/48.7% YoY decline in the DXC business,” Motilal Oswal has said. We would revisit our estimates post the earnings call. We await further clarity on the near-term outlook, DXC channel, and margin. We maintain our Buy rating,” the broking firm has said.

Polycab

Polycab

Brokerage firm, Emkay Global has a buy call on the stock of Polycab and has recommended buying the stock for a Rs 2060 upside target from current levels. “We remain constructive on Polycab, considering its consistent focus on strengthening balance sheet, as well as potential for margin improvement with the full benefits from ‘Project Udaan’ kicking in,” the brokerage has said.

“Weak Q1 print leads us to cut FY22E earnings by 7%, but we maintain FY23 and FY24 estimates. Revenue growth and margin recovery will be the key monitorables, going forward. Maintain Buy on the stock of Polycab, with a target price of Rs 2,060,” Emkay Global Financials has said.

Disclaimer

Disclaimer

Investing in stocks is risky and investors need to be cautious. Neither Greynium Information Technologies Pvt Ltd nor the author, nor the brokerages would be responsible for any losses incurred based on decisions made from the article.



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2 Stocks To Buy From ICICI Direct For 1-2 Years For Upside Of Up To 24%

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1. Syngene Internatioal:

ICICI Direct has suggested to buy Syngene for a price target of Rs. 780, implying an 25% upside from the last traded price of Rs. 628.15. The price at the time of recommendation of the innovation-led contract research, development and manufacturing organization was Rs. 627.7.

Company profile: The company offer integrated scientific services from early discovery to commercial supply. It is one of the largest listed contract research organisations (CRO) in India

Financials: Revenue breakup: Discovery services (35%), dedicated services (32%),development and manufacturing (33%)

Q1FY22 Results: Syngene reported mixed Q1FY22 results. Revenues grew 41% YoY to Rs. 658.5 crore amid lower base, normalisation of all verticals and manufacturing of Remdesivir. EBITDA margins contracted 178 bps YoY to 27.8%, owing to change in product mix. Consequent PAT was at Rs. 77.3 crore (up 33.3% YoY)

Here’s advice on the Syngene International for investors

ICICI Direct report says Syngene’s share price has grown by ~2.9x over the past five years (from Rs.| 201 in June 2016 to Rs. 583 levels in June 2021). Due to the structural story of outsourcing, we remain positive and retain our BUY rating

Target Price and Valuation: We value Syngene at Rs. 780 i.e. 50x P/E on FY23E EPS.

Tailwinds for the company

-Guidance of double digit revenues growth for FY22

– Elite clientele including the likes of Amgen, Zoetis, Herbalife, GSK, etc, and• multiple year extension of BMS, Baxter contracts, the company remains well poised to capture opportunities in the global CRO space

– Eight of the top 10 global pharma companies have been availing services

for the last five years The client base has grown from 256 to more than 400 over FY16-21

Stock particulars Amount
M-cap 26112 crore
Total debt (FY21) Rs. 893 crore
Cash and investments FY21 Rs. 643 crore
EV 26362
52 week H/L 700/408
Target price Rs. 780
LTP Rs. 628.15

2. Hindustan Unilever:

2. Hindustan Unilever:

After the earning results of HUL have been out for the Q1Fy 22 period, ICICI Direct has placed the buy call on the stock for a price target of Rs. 2750, from the last ended price of Rs. 2358, implying an upside of 16.62%.

The company is the leading fast moving consumer goods company of the country with as many as 40 brands across segments in its kitty. The company is the market leader in fabric wash, personal wash, cosmetics, shampoos and many other categories. The company has a distribution reach of ~8.0 million (mn) outlets with a direct network of more than 3.5 mn.

Acquisition of GSK Consumer

HUL acquired GSK Consumer Healthcare’s business in 2019 and integrated•Horlicks and Boost brands with the foods & refreshment segment

Q1FY22 Results: HUL reported dismal Q1FY22 results. Sales were up 12.8% YoY with muted 9% volumes growth on a low base. EBITDA was at Rs. 2847 crore, up 7.7% YoY, with margins at 23.9%. Consequent PAT was at Rs. 2061 crore (up 9.6% YoY).

ICICI Direct take on HUL Scrip

HUL’s share price has gone up by ~1.5x over the past five years (from Rs. 922 in July 2016 to Rs.| 2388 levels in July 2021). We roll over FY24 numbers givenCovid-19 related disruptions have temporarily impacted financials & FY23-FY4 would be a normalised year. We continue to remain positive and retain our BUY rating on the stock.

Target Price and Valuation: We value HUL at Rs. 2750 i.e. 55x P/E on FY24E, said the brokerage firm in its report.

Integration of Nutrition business, Visible prospects in Fabric wash-Good Triggers

– Synergistic benefits of integration of nutrition business (Horlicks & Boost) to drive margin expansion.

– Strong visible premiumisation trend, specifically in fabric wash

– Direct distribution reach to get further enhanced, going forward

– Strengthen manufacturing capacity (1.3x of pre-Covid) to tap demand recovery

– Digital initiatives are capturing more than 10% of the business

Stock particulars Amount
M-cap 561036 crore
Total debt (FY21) 0
Cash and investments FY21 7004 crore
EV 554032
52 week H/L 2533/2000
LTP 2358.10
Target price Rs. 2750

Disclaimer:

Disclaimer:

Stock market investment is risky and it is iterated time and again that to reap significant gains you need to remain invested in them and also be prepared for the losses if any. So be mindful the stocks listed here are taken from brokerage report and need not be construed as investment advice.

GoodReturns.in



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PAT surges 355% YoY to Rs 207 cr, highest in 10 quarters, BFSI News, ET BFSI

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MUMBAI: YES Bank today reported a 355.2 per cent year-on-year rise in its net profit to Rs 207 crore for the quarter ended June, the highest quarterly profit since December 2018. Analysts had expected the lender to report a net loss.

The strong bottomline performance of the lender was aided by a 41 per cent on-year fall in provisions during the reported quarter.

The lender’s net interest income in the quarter slumped 26.5 per cent year-on-year to Rs 1,402 crore, which was below Street’s expectations.

YES Bank’s gross non-performing loans ratio rose to 15.6 per cent in the June quarter from 15.41 per cent in the previous quarter. However, net NPA ratio declined sequentially to 5.78 per cent. YES Bank’s provision coverage ratio also saw a sequential improvement to 79.3 per cent in the quarter.

Gross non-performing loans in the quarter stood at Rs 28,506 crore, which was slightly lower than the previous quarter. Cash recoveries continued to show positive momentum at Rs 602 crore in the quarter.

While the overall advances fell 1 per cent in the June quarter, the lender reported 23 per cent growth in its retail and small businesses loan book that was above its full-year guidance of 20 per cent. The current account-savings account ratio improved to 27.4 per cent and remained on-track to meet the lender’s guidance of more than 30 per cent in 2021-22.

YES Bank’s operating performance in the quarter was disappointing as operating profit sank 20 per cent on-year to Rs 920 crore, which was the highest in several quarters. The net interest margin in the quarter was at 2.1 per cent as against 3 per cent in the year-ago quarter.

Shares of YES Bank ended 0.8 per cent higher at Rs 13.1 on the National Stock Exchange.



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Twitter CEO, BFSI News, ET BFSI

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San Francisco: The online world needs a global currency, and our focus is on Bitcoin because with this cryptocurrency, we can reach every single person on the planet, Twitter CEO Jack Dorsey has stressed.

A staunch supporter of Bitcoin, Dorsey said that the world of cryptocurrency allows speed, a lot more innovation and opens up entirely new use cases.

“If the Internet has a native currency, a global currency, we are able to move faster with products such as Super Follows, e-commerce, Subscription, Tip Jar and we can reach every single person on the planet,” Dorsey said during the Q2 investors’ call on Thursday.

“There are three trends relevant to Twitter and our shareholders. AI, decentralisation and the Internet, finally having access to a global native currency in Bitcoin. All these will help us do our jobs better and we intend to lead the way in each,” he emphasised.

In Q2 2021, Twitter saw its revenue reached $1.19 billion, an increase of 74 per cent (year-over-year).

The micro-blogging platform now has 206 million average monetisable DAU (mDAU) in Q2, up 11 per cent.

“As we enter the second half of 2021, we are shipping more, learning faster, and hiring remarkable talent. There’s a tremendous opportunity to get the whole world to use Twitter,” said Dorsey.

Dorsey and rap artist Jay-Z recently announced to invest 500 Bitcoins (approximately Rs 174 crore) in an endowment to fund Bitcoin development with a focus on India and Africa.

For Dorsey, Bitcoin is like poetry and that he sees ample opportunity for Bitcoin to bring about a sea change in the world.

“Most people access the internet on mobile. Any solution we build must provide an excellent experience when using mobile, despite its shortcomings and liabilities. An uncompromising focus on mobile interaction is likely to include the most people,” he had said.

He has announced plans to consider making a hardware wallet for Bitcoin for the customers of its digital payments services company Square.



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Federal Bank records highest ever operating profit, BFSI News, ET BFSI

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Federal Bank recently announced the Unaudited Financial Results for the quarter ended 30th June 2021. Its operating profit has grown 21.75% to reach Rs. 1135.18 Cr with net total income growing 15.90% to reach Rs.2068.58 Cr.

Gold loans have registered growth of 53.90% to reach Rs. 15764 Cr and retail advances have grown 15.15% to reach Rs.43599.03 Cr.

Shyam Srinivasan, Managing Director & CEO, Federal Bank said “The external environment continues to be challenging however we have managed to keep our operating momentum intact by delivering our highest ever operating profit, for the quarter. Our CASA ratio is at an all-time high and we continue to build a granular liability franchise with more than 90% of our deposits being retail in nature.”

The total business of the Bank reached Rs. 299158.36 Cr registering Y-o-Y growth of 8.30% as on 30th June 2021. Total Deposits reached Rs. 169393.30 Cr registering Y-o-Y growth of 9.33%. Net advances grew by 6.98% Y-o-Y to reach Rs. 129765.06 Cr as on 30th June 2021.

The total Savings Bank deposit registered a growth of 18.71% to reach Rs. 49018.24 Cr as on 30th June 2021. CASA Deposits of the Bank stood at Rs. 58958.79 Cr registering a Y-o-Y growth of 18.83%. NRE Deposits of the Bank reached Rs. 66018.73 Cr registering a Y-o-Y growth of 9.53% as on 30th June 2021. NRE SB grew to reach Rs. 20010.09 Cr registering a Y-o-Y growth of 14.92%.

The Operating Profit of the Bank as on 30th June 2021 stood at Rs. 1135.18 Cr up from Rs. 932.38 Cr. with total income reaching Rs.4005.86 Cr. Net Profit of the Bank for the quarter ended June 2021 stood at Rs. 367.29 Cr.

“Our relationship with the NR diaspora continues to blossom with our share in personal inward remittances increasing to 18.20%. We have also managed to keep asset quality in check with only a marginal uptick in GNPA and NNPA. Investors believe in our brand and its operational efficiency which was testified by a reputed investor like IFC with their decision to invest in the Bank to the tune of 4.99%” Shyam Srinivasan added.

Net Interest Income grew 9.41% on a Y-o-Y basis from Rs.1296.44 Cr to Rs.1418.43 Cr, other income grew by 33.13% to reach Rs.650.15 Cr, compared to Rs.488.37 Cr as on 30th June 2020. Net total income of the Bank grew 15.90% to reach Rs.2068.58 Cr.

Gross NPA of the Bank as at the end of the quarter stood at Rs. 4649.33 Cr, which as a percentage of Gross Advances comes to 3.50%. Net NPA as on 30th June 2021 stood at Rs.1593.24 Cr, and Net NPA as a percentage of Net Advances is at 1.23%. The Provision Coverage Ratio (including technical write-offs) was strengthened substantially and stood at 78.66%.

The Bank’s Net worth on a Y-o-Y basis increased from Rs.14922.82 Cr to Rs. 16488.53 Cr from 2020 to 2021. The Capital Adequacy Ratio (CRAR) of the Bank, computed as per Basel III guidelines stood at 14.64% as at the end of the quarter. Book Value per share increased to Rs. 82.60 from Rs. 74.85.

Some key ratios include the ROA & ROE of the Bank for the quarter which stood at 0.76% and 9.03% respectively. The Net Interest Margin as on 30th June 2021 stood at 3.15% and cost to income ratio of the Bank has been contained at 45.12% clocking a reduction of 264 bps Y-o-Y. The EPS of the Bank on an annualized basis stands at Rs 7.38.



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Desi startup starts taking Bitcoin in payments despite govt warnings, BFSI News, ET BFSI

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NEW DELHI: Till now, Bitcoin and other cryptocurrencies are seen largely as an asset class to invest in to gain from price appreciation.

In the US, some businesses have also started accepting them as currencies for payments. Tesla famously started accepting it and then stopped it a few months back, citing environmental concerns. But CEO Elon Musk now says they may accept it again soon.

Microsoft, Coca Cola and AXA Insurance have also shown willingness to accept cryptocurrency as payment for select services and products in some territories.

In India, amid heavy resistance from the government and the Reserve Bank of India, cryptocurrencies are yet to gain a broader acceptance.

But one Indian startup has ventured out to start accepting cryptocurrencies for payments. The Rug Republic – a homegrown décor brand – is one. The Okhla, Delhi-based firm said it would accept top 20 cryptocurrencies for payments, but only from Indian customers.

Cryptocurrencies are neither legal, nor illegal in India. Lately, banks, likely on the insistence of RBI, have started disassociating from cryptocurrency exchanges. Other government agencies have also started tightening their noose against these tokens.

Their major concern is the anonymity that the blockchain network — the technology on which cryptocurrencies are based on — will lead to tax evasion, terror funding or any other nefarious activity. However, businesses are taking additional measures to track where the money is coming from.

“It is a misconception that crypto transactions cannot be tracked. It is easily verifiable on the blockchain, as opposed to the incredibly difficult ways money can be hidden in the real world. As we have seen with so many people during the Panama Papers episodes. Our invoices clearly mention that money was taken in certain currency on this date and at this price. Everything is absolutely above board,” said Raghav Gupta, Director at The Rug Republic.

Some sovereign countries such as Nicaragua and El Salvador have embraced cryptocurrencies, with the latter becoming the first country in the world to adopt Bitcoin as legal tender.

Gupta, who exports his products outside India as well, said his firm will not accept crypto payments outside India, as such transactions could be in violation of the Foreign Exchange Management Act (FEMA), as they constitute cross-border payments in a currency not recognised by RBI.

Is it a publicity stunt? Why else is he taking such a risk when the rules regarding cryptocurrencies are not clear? The promoter says he believes these tokens will eventually gain prominence in India. And, it will form a good asset base for him in some years.

“It is clear that not even 5 per cent of my revenue will come from it. I am extremely bullish on it in a 5-10 year scale. I am very happy to take this risk. Ethereum will be much more valuable by then,” said Gupta.



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