August 2021 – Page 72 – IFSCCodeof.in

For Up To 28% Gains “Buy These 2 Stocks,” Says Motilal Oswal

August 13, 2021 root Personal Finance

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Eicher Motors

Current market price	Rs 2,546
Target price	Rs 3,250
Gain	27.65%

Motilal Oswal has said to buy the stock of Eicher Motors, with a price target of Rs 3,250 on the stock, which is at least 26% higher than the current market price

The first quarter of FY22 saw the best ever exports (+28% QoQ, 83% growth over 1QFY20). According to the Motilal Oswal report, international network expansion continues with the addition of eight exclusive stores (to 140) and 19 new multi-brand outlets (to 650) in the first quarter of FY22. Eicher Motors targets to take the exclusive store count to 175 by FY22-end.

Eicher Motors performance beat was driven by VECV, while Royal Enfield was in line with Motilal Oswal’s estimates. Delayed product launches (first due to the second COVID wave and now due to the semiconductor shortage) have shifted the recovery timelines to 2HFY22.

“Near term uncertainties due to supply-chain issues notwithstanding, the recently launched Meteor and upcoming products would help expand the addressable markets and drive the next phase of growth for Royal Enfield. The stock trades at 33.5x/21.6x FY22E/FY23E consolidated EPS. We maintain our Buy rating,” the brokerage has said.

Coal India

Current market price	Rs 143
Target price	Rs 185
Gain	29.37%

Motilal Oswal Institutional Research is also betting on the stock of Coal India and has a set target price that is almost 26% higher than the current market price. The dividend yield according to Motilal Oswal is a solid 12%, which is double of what banks are offering in terms of interest rates.

The management highlighted that while dispatches and production targets were set at 740 metric tonnes and 670 metric tonnes, respectively, for FY22, it is realistically looking at dispatches of 700mt and production of 630-640 metric tonnes for FY22.

Coal India’s 1QFY22 result highlights the benefit of a recovery in Power demand, leading to improved off-take and profits.

“Adjusted EBITDA (excluding OBR) jumped 64% YoY to Rs 46 billion We expect profitability to recover in FY22E (+24% YoY). Capital expenditure run-rate is likely to increase in the near term, but higher dispatches and some normalization in receivables should aid cash generation and maintain dividends (dividend yield:12%). We reiterate our Buy rating with a target price of Rs 185 per share, based on 4 times FY22E EV/EBITDA,” the brokerage has said.

Disclaimer

Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. The above article is for informational purposes only and is picked from the brokerage report of Motilal Oswal. Be careful while investing as the Sensex has now crossed 55,000 points.

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RRBs asked to focus on financial literacy, credit counselling to boost credit flow

August 13, 2021 root Banking & Finance

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Leave a comment Bagalkot, Belagavi, credit counselling, credit flow, Dakshina Kannada., Dharwad, financial literacy, Gadag, Haveri, priority sector lending, RRB, Udupi, Uttara Kannada, Vijayapura

RBI Makes The Highest Gold Purchases In The First Half Of 2021: Here’s Why?

August 13, 2021 root Personal Finance

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Investment

oi-Kuntala Sarkar

|

Updated: Friday, August 13, 2021, 18:48 [IST]

RBI, the central bank of India keeps a substantial amount of gold reserves as a hedge. Recently a report released confirms that the RBI bought the highest amount of gold on a half-yearly basis this year. The central bank’s gold reserves, in proportion to the Forex (foreign exchange) reserves, has crossed 700 tonnes for the very first time. Importantly, India’s present Forex reserves are also at an all-time high figure at $620 billion.

The RBI has purchased a record of nearly 29 tonnes of gold in proportion to the Forex reserves in the first half of 2021. Now the bank’s total gold reserves is standing at 705.6 tonnes till 30th June 2021. This data saw a 27% hike in the last 2 years. The gold reserve of the RBI was 558.1 tonnes at the start of 2018. However, the report also stated that the gold reserve since then has plunged to 6.55 in the June 2021 quarter than 7% at the end of March.

In June 2021, the bank’s gold reserve among all central banks globally was around 30% – according to the World Gold Council (WGC). The WGC data informs that all of the central banks cumulatively purchased 32 tonnes of gold. At the same time India’s share was around 9.4 tonnes. At the present time, the RBI is standing at the 10th position among all recognised central banks globally in terms of their gold reserves.

Reports have been coming since last year that the RBI is thinking of increasing the amount of gold reserve to itself. The RBI was reportedly looking to increase the gold reserves to 10% of its total reserves than the current reserve at 6.5%. So, the bank was quite focussed on the precious metal to have a substantial hold on the economy even when the overall economic situation was trembling in the last year.

Stressing on that matter, WGC added in a report, “Central banks are likely to continue buying gold on a net basis in 2021 at a similar or higher rate than in 2020, driven by a continued focus on diversification and risk management.” It states that the central banks globally bought 333 tonnes of gold in the first half of 2021. It is also 39% more than the average of the first half of the last 5 years.

The available data informs the gold reserves of different countries and how they increased their gold purchases. Thailand, Hungary, and Brazil are the largest buyers of gold in the first half of 2021. They all together bought 207 tonnes of gold. In the first half of 2021, Thailand has purchased 90.19 tonnes of gold, Hungary 62.09 tonnes, Brazil 53.74 tonnes, Uzbekistan 25.50 tonnes, and India has purchased 28.99 tonnes precisely. Thailand’s total gold reserves have now increased to 244.2 tonnes, Turkey’s 408.2 tonnes, Brazil’s 121.1 tonnes, and Poland 231.8 tonnes. These are some countries with the highest gold reserves at the present time.

Central banks around the globe expected that the inflation rates were going to reach far higher in the first half of this year, which has also proved to be true. Even in India, the inflation rate was highest in the last decade in May 2021. As gold is a safe investment against inflation and does not reduce its value during economic crises, central banks focussed on the yellow metal. As the inflation will go down the RBI might decrease the rate of its gold purchase.

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MobiKwik ropes in four independent directors

August 13, 2021 root Banking & Finance

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IPO-bound digital payments firm MobiKwik on Friday said it has strengthened its Board of Directors with the induction of four independent directors.

The four independent directors are former MD of Blackstone and Oppenheimer Punita Kumar Sinha, the former Ambassador of India to Egypt and UAE Navdeep Singh Suri, fintech entrepreneur and Co-founder of PaySense Sayali Karanjkar and Chief Technology Officer of LinkedIn Raghu Ram Hiremagalur .

Bipin Preet Singh, MD, CEO & Co-founder, MobiKwik said in a statement, “I see this as being foundational as we head into our next phase as a publicly listed company. The holistic expertise of our new Board members in our sector, public policy, technology and business will provide an added thrust to MobiKwik’s strategic direction.”

IPO

It maybe recalled that MobiKwik had on July 12 filed its draft red herring prospectus (DRHP) with SEBI for an IPO to raise ₹1,900 crore.

The IPO comprises fresh issue of equity shares of upto ₹1,500 crore and an offer for sale of equity shares by certain shareholders of upto ₹400 crore.

Founded in 2009 by Bipin Preet Singh and Upasana Rupkrishan Taku, MobiKwik is one of India’s leading mobile wallet and Buy Now Pay Later platform.

It was last valued at $700 million when it raised $20 million recently from Abu Dhabi Investment Authority.

The company is profitable at the segment level across all three segments, and has seen a revenue growth (CAGR) of 37 per cent in the last two years (FY19-21).

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SBI’s biz activity index improves significantly in the week ended Aug 9

August 13, 2021 root Banking & Finance

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State Bank of India’s business activity index has shown significant improvement in activity since May-end 2021, with the latest reading for the week ended August 9, 2021 of 101.6.

The index reading for May 22, 2021 was 61.4 and for July 21, 2021, was 94.2.

“Recovery is visible in labour participation rate, electricity demand, Google mobility and Apple mobility index. However, there is slight dip in RTO revenue collection and vegetables arrival from last week,” said Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India (SBI).

Also read: Public sector banks report sharp slippages in MSME loans in Q1

Agri production

In a report titled “Covid-19: Vaccinate, Vaccinate & Vaccinate!”, Ghosh observed that the month-on-month (m-o-m) rural recovery in July (as per key leading indicators) is expected to be steady, if not exceptional, as compared to June.

Rural indicators continue to be steady though patchy at times, as per the report.

“The rural recovery is far better than the pre-second wave. Looking ahead, agricultural production and rural demand are expected to remain resilient,” he said.

Covid vaccination

The report assessed that going by the present vaccination rate of 45 lakh per day, the critical mass (70 per cent) may be covered with first dose of the Covid-19 vaccination by November-end 2021 and second dose by March 15, 2022.

Also read: 10 top banks create secondary market for corporate loans

“India’s cumulative Covid-19 vaccination coverage has crossed the 52 crore mark and till now more than 54.04 crore vaccine doses provided to States/Union Territories,” it added.

In the last one month, speed of vaccination accelerated with the 7-day moving average currently at about 45 lakhs, and 43 per cent of eligible population vaccinated with first dose and 12 per cent with second dose.

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Leave a comment business activity index, coronavirus, covid, economy, pandemic, state bank of india

Stocks To Buy: 1 Smallcap Stock & 1 Midcap Stock From Sharekhan For 22% Returns

August 13, 2021 root Personal Finance

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Buy Century Plyboards says Sharekhan

Current market price Rs 505

Target price Rs 413

Gain% 22.00%

According to Sharekhan, among the key positives for the stock is the strong performance in revenues and operating profit margins in MDF and particle board.

In July 2021, the company reported revenues, which reached July 2019 levels, showing robust demand. According to Sharekhan the company has also affected a price hike across products to counter rise in raw material price rise.

“Century Plyboards is expected to witness a revival in demand and operating profit margins from Q2FY2022 onwards as it remains upbeat on demand emanating from residential segment.

The company has been able to generate strong operating cash flows increasing treasury surplus which should aid in capacity expansions going ahead. The stock is currently trading at a P/E of 30 times and 24 times its FY2023E and FY2024E earnings, which we believe provides further room for upside, considering its strong growth outlook and healthy balance sheet. Hence, we have maintained a Buy rating on the stock with an unchanged price target of Rs. 505,” the brokerage has said.

Buy the stock of Bata India, says Sharekhan

Current market price Rs 1705

Target price Rs 1905

Gain% 11.19%

Sharekhan has placed a buy on the stock of Bata India, though it is not as upbeat on the stock for gains as it is with Century Plyboards.

According to the brokerage revenue contribution from the online platform has increased to 15% in Q1FY2022. The Gross margin improved by 307 bps q-o-q to 56.2% due to better mix, Sharekhan has said.

Bata India posted resilient performance with revenue at Rs 267 crore and operating losses declining by 60.5% y-o-y to Rs. 34 crore, led by stringent cost-saving measures and better gross margins.

“We have broadly maintained our earnings estimates for FY2022 and FY2023. Post the easing of lockdown, the company has started witnessing growth in footfalls in its stores. Improvement in mobility in the coming quarter augurs well for faster recovery. Bata is focusing on expanding its presence through e-commerce/omni-channels and innovated its product portfolio with new relevant variants to drive growth in the medium to long term. Under the new leadership, growth is expected to improve with revamped strategies, backed by strong liquidity position. The stock is currently trading at 47.2 times its FY2023E EPS and EV/EBIDTA of 20.2x FY2023E,” the brokerage has said.

Disclaimer

Investors should certainly not take any trading and investment decision based only on information discussed in this article. We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature, which is taken from the brokerage report of Sharekhan. Please do consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and authors do not accept culpability for losses and/or damages arising based on information in the article.

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Central Bank of India identifies 350 branches in coastal areas for aqua financing, BFSI News, ET BFSI

August 13, 2021 root Banking & Finance

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Central Bank of India will expand its agri-loan portfolio through aqua financing and has identified around 350 branches in coastal areas to cater to such loans in the rural areas.

“We are now moving onto the agri related industries like processing. In coastal areas, we have identified around 350 branches where we are bringing only aqua financing from the rural centres,” M V Rao, MD & CEO, Central Bank of India, said in earnings call with analysts post June 2021 quarter results of the bank.

Rao said the bank is segregating how to diversify the agri portfolio.

Central Bank will use its own financing for this kind of diversification on the agri and agri processing industries, horticulture industries and aqua based industry, he said.

On the mandated priority sector loans, the loans to the targeted sector were higher than the stipulated, the bank said.

Regarding total priority sector lending of 40 per cent, the bank was at 43.76 per cent, he said.

Agriculture sector was 19.74 per cent against a target of 18 per cent, while for lending to small and marginal farmers, the bank was at 10.70 per cent against a target of 8 per cent, Rao added.

The state-owned lender will also rebalance its credit book with 70 per cent of the overall lending to the RAM segment (retail, agri and MSME).

“Going forward, we will be rebalancing our credit book with 70/30 that is 70 per cent (of the loan book) will be RAM and 30 per cent will be corporate.

“So our RAM, which was 62.03 per cent in June 2020, now it has gone up to 65.41 per cent. Further reduction in the corporate (loan) happened because of the technical write-off done in the month of March,” he said.

The lender said it also entered into co-lending agreements last month with three NBFCs to expand lending in the housing and MSME sectors.

The bank also sees opportunity in lending to the trader community, which was recently brought under priority sector by the government.

In July, MSME minister Nitin Gadkari had announced to bring retail and wholesale traders under the priority sector lending.

“So with the ministry recently announcing to bring traders under priority sector, we feel that opportunity is there in the trading (segment),” Rao said.

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Leave a comment agri portfolio, aqua financing, central bank, central bank of India, central of, marginal farmers, MSME, Nitin gadkari, priority sector

Analysts, BFSI News, ET BFSI

August 13, 2021 root Banking & Finance

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The Reserve Bank may be hitting the end of its tolerance for high inflation and will most likely hike interest rates in the first half of 2022, analysts said on Friday.

The central bank will also start rolling back its accommodative policies which have led to easy liquidity conditions, they said.

The view from analysts came even as inflation cooled down to 5.6 per cent for July, after two months of breaching the upper end of the RBI‘s tolerance band of 6 per cent.

The central bank has been keeping the status quo on policy and continuing with the accommodative stance to help revive GDP growth.

Finance Minister Nirmala Sitharaman had on Thursday opined that the current conditions do not warrant withdrawal of the accommodative measures.

“The RBI has been tolerant of inflation and has stayed accommodative to support growth given the deep hit suffered by the economy. But it appears to be reaching the end of tether as inflation remains elevated,” rating agency Crisil said.

“If this pressure (on inflation) continues and systemically important central banks, especially the (US) Fed, begin normalising, the RBI will start to roll back accommodation. We expect the RBI to make a more definitive statement by this fiscal end, and raise rates by 0.25 per cent,” it added.

Its peer Acuite said it expects policy normalisation to begin in a gradual fashion with comfort on vaccination, clarity on fiscal stance, and global rates setting and called the increase in the quantum of variable reverse repo auctions as the first small step towards the same objective.

Next, the central bank can look at increasing the reverse repo rate by 0.40 per cent to narrow the difference between repo and reverse repo rate to 0.25 per cent by February 2022, it said, adding that the repo will be unchanged at 4 per cent.

In parallel, the vaccination drive is expected to lead to herd immunity and thereafter, the RBI will follow up with a 0.25 per cent rate hike in April 2022, it said.

Analysts at Japanese brokerage Nomura said last week’s review had signs of RBI policy pivoting towards normalization, pointing out to one of the members of the monetary policy committee also dissented against the “accommodative stance” and the increase in FY22 headline inflation target to 5.7 per cent.

“The August policy meeting already bore initial signs of a policy pivot via calibrated liquidity normalisation. We believe this will be followed by the phasing out of durable injectors of liquidity, a 0.40 per cent reverse repo rate hike (in December quarter) and 0.75 per cent of repo/reverse repo rate hikes in 2022,” it said.

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Leave a comment central bank, Crisil, inflation, monetary policy committee, Nirmala Sitharaman, Nomura, RBI, Repo, US Fed

SBI Vs ICICI Vs HDFC Vs Axis Vs PNB: Know All About Cash Withdrawal Limits

August 13, 2021 root Personal Finance

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State Bank India (SBI) Cash Withdrawal Limit

Customers’ cash withdrawal limits at non-home branches have recently been raised by SBI. SBI customers can now withdraw Rs 25,000 cash per day for self at non-home branches using a withdrawal form accompanied by a savings bank passbook. The cash withdrawal limit for self using cheque was capped up to Rs 1 lakh per day at branches by the bank. SBI has also raised the amount of cash that can be withdrawn by a third party using only a cheque up to Rs 50,000. SBI has also stated via its Twitter account that the revised ceilings are valid up to 30.09.2021. SBI has also said that no cash payments to third parties by withdrawal limit will be allowed and KYC of the third party to be submitted. For the benefit of the customers during the pandemic, SBI on May 29, 2021 has increased the non-home cash withdrawal limits through cheque and withdrawal forms.

ICICI Bank Cash Withdrawal Limit

For cash transactions (deposits and withdrawals) at the base branch (all branches/Cash Recycler Machine (cash deposits) in the same city, ICICI Bank charges zero for the first four transactions in a month; thereafter, Rs.5 per thousand rupees or part thereof, subject to a minimum of Rs.150 in the same month (Maximum limit – self: Any Amount, Third party: Rs. 50,000 per day). ICICI Bank charges zero for the first cash withdrawal of a calendar month; thereafter, Rs.5 per thousand rupees or part thereof, subject to a minimum of Rs.150 (Maximum withdrawal limit – Self: Any Amount, Third party: Rs.15,000 per day). ICICI Bank charges zero for the first five transactions (both financial and non-financial) in a month from ICICI Bank ATMs / Cash Recycler Machines (cash withdrawals), and then Rs.20 per financial transaction and Rs. 8.50 per non-financial transaction after that.

HDFC Bank Cash Withdrawal Limit

Regarding the cash withdrawal limit HDFC Bank has mentioned on its official website that “Get anytime, anywhere cash from our network of over 12,000 ATMs. You can also withdraw cash from any non-HDFC Bank ATM. You can withdraw up to Rs 10,000 a day using an ATM card from an HDFC Bank ATM and Rs 25,000 or more using a debit card (depending on the kind of card you have). During banking hours, you can walk into any HDFC Bank branch and withdraw cash using a withdrawal slip or cheque or deposit cash after filling up a deposit slip.” According to the bank’s official website, non-home branch cash withdrawals are free up to Rs.1,00,000/- per day, after which charges apply at Rs.2/1000, with a minimum of Rs.50/- per transaction; third party cash withdrawals are limited to Rs. 50,000/- per transaction.

Axis Bank Cash Withdrawal Limit

Axis Bank allows a cash withdrawal limit of Rs 40,000 per ay ATM for all Visa Classic/Platinum Debit Cardholders. For the convenience of the customers, Axis Bank has directly mentioned on its official website that “Cash withdrawal limit for use at the ATM of the issuing bank is set by the Bank during the issuance of the card and may depend on the type of account/card. For cash withdrawals at other bank ATMs, banks have decided to maintain a limit of Rs. 10,000 per transaction.”

Punjab National Bank (PNB) Cash Withdrawal Limit

Punjab National Bank (PNB) offers three types of debit cards i.e. Platinum, Classic, and Gold for its customers. For these three variants of cards PNB has set the below-listed limit for cash withdrawals:

Platinum

There are two variants under this. Rupay and Master.

Cash withdrawal limit per day: 50000

Cash withdrawal limit one time: 20000

ECOM/POS Consolidated Limit: 125000

CLASSIC

There are two variants under this Rupay and Master. Personalised and Non Personalised debit cards can be issued with the following usage limits:

Cash withdrawal limit per day: 25000

Cash withdrawal limit one time: 20000

ECOM/POS Consolidated Limit: 60000

GOLD

There is one variant under this, VISA. Personalized and Non Personalised debit cards can be issued:

Cash withdrawal limit per day: 50000

Cash withdrawal limit one time: 20000

ECOM/POS Consolidated Limit: 125000

Source: Punjab National Bank

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RBI slaps ₹1 crore penalty on Coöperatieve Rabobank U.A.

August 13, 2021 root Banking & Finance

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The Reserve Bank of India imposed a monetary penalty of ₹1- crore on Coöperatieve Rabobank UA. Its Mumbai Branch is a part of the Netherlands-based Rabobank Group.

The penalty has been imposed for contravention of Section 11 (2) (b) (ii) of the Banking Regulation Act, 1949, and Reserve Bank directions on Sections 17(1) and 11(2)(b)(ii) of Banking Regulation Act, 1949 – Transfer to Reserve Funds, the Central bank said in a statement.

Also read: Strengthen systems to monitor availability of cash, RBI to banks, White Label ATM operators

The Central bank said, “The statutory inspection for supervisory evaluation (ISE) of the bank was conducted by RBI with reference to its financial position as of March 31, and the examination of the risk assessment report pertaining to the same revealed, inter alia, contravention of the above-mentioned provisions of the Act and the directions issued by the RBI.

“In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for contravention of the provisions of the Act and the RBI directions, as stated therein,” the statement added.

Also read: Data localisation – protection or protectionism?

After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions made by the bank, RBI came to the conclusion that the charge of contravention of aforesaid provisions of the Act and RBI directions was substantiated and warranted imposition of monetary penalty on the bank, the statement said.

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