QBiz: US Renews Iran Sanctions; SBI Back in Black & More
Here’s a quick wrap of the top business stories of the day.
1. US Renews Iran Sanctions But India, China Get Oil Waivers
The United States snapped sanctions back in place on Monday, 5 November, to choke Iran’s oil and shipping industries, while temporarily allowing top customers such as India and China to keep buying crude from the Islamic Republic.
Having abandoned a 2015 Iran nuclear deal, US President Donald Trump is trying to cripple Iran’s oil-dependent economy and force Tehran to quash not only its missile and nuclear programmes, but also diminish its influence in the Middle East.
(Source: LiveMint)
2. How GST and Demonetisation Impacted Govt Finances
Widening the tax base and collecting more taxes has been a priority for the current government at the centre. This government’s two major economic disruptions — the introduction of goods and services tax (GST) and demonetisation — were justified in the name of raising tax compliance among other things. However, these moves have not exactly turned out as planned and the government is set to miss its fiscal deficit target for 2018-19.
The Economic Survey released by the finance ministry earlier this year had lauded GST for widening the indirect tax base. The number of indirect tax payers rose by 50% in the first six months of GST implementation, estimated the survey, partly attributable to many small enterprises voluntarily choosing to be part of GST in order to avail input tax credits.
(Source: LiveMint)
3. Fireworks in Axis Bank Q2 Results, PNB Burns Again
Two banks reported markedly divergent performances for the September quarter (Q2).
Axis Bank Ltd surprised investors by reporting a cracker of a performance for the second quarter. The private sector lender’s net profit jumped a stupendous 83 percent because of lower provisioning. Punjab National Bank (PNB), on the other hand, reported a massive loss as its provisions surged by 300 percent.
Axis Bank’s slippages fell to Rs 2,777 crore, the lowest in six quarters. Asset quality metrics improved, with the gross bad loan ratio falling for the third straight quarter to 5.96% of the loan book.
(Source: LiveMint)
4. Cadbury-Maker Wants To Take Bigger Bite Of India’s Biscuits Market
India’s largest maker of chocolates wants to increase focus on biscuits to widen its reach and tap the nation’s rising consumer demand.
Mondelez India Pvt Ltd., the leading player in the near $1.8-billion Indian chocolate market, according to Euromonitor International, forayed into the biscuit market six years ago with two brands — Oreo and Bournvita. “We have the capability and opportunity to develop brands,” said Deepak Iyer, Managing Director of Mondelez India.
(Source: BloombergQuint)
5. Oil Marketing Companies’ Q2 Performance: Hits And Misses
Lower inventory gains and higher foreign exchange losses marred the September-quarter earnings of state-owned oil marketing companies, but there were silver linings.
Operating profits of Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd., and Hindustan Petroleum Corporation Ltd. dropped by at least one-third in the quarter.
"The major reason behind the operational decline of OMCs was lower inventory gains and higher foreign exchange losses. Adjusting for these two items, the core Ebitda of all the three OMCs has not changed much," Nitin Tiwari, an oil and gas analyst at Antique Stock Broking told BloombergQuint.
IOCL's employee cost jumped 56 percent to Rs 3,706 crore in the September quarter, due to a one-time contribution for superannuation benefits.
(Source: BloombergQuint)
6. Essar Steel Operational Creditors to Move NCLT to Seek Rs 50 Billion of Dues
The stage is set for another round of legal battle, with operational creditors of Essar Steel planning to move the National Company Law Tribunal (NCLT) this week, seeking Rs 49.95-billion dues from the company. The operational creditors include several central- and state-owned government entities.
ArcelorMittal, which has emerged the highest bidder for the company, has not included operational creditors in its debt resolution plan submitted to the committee of creditors (CoC), which has made the operational creditors wary about recovering their dues from the company.
(Source: Business Standard)
7. SBI Back in Black; Q2 Net Profit at Rs 9.44 Billion on Higher Interest Income
Country’s largest lender State Bank of India (SBI) moved back in black in the second quarter ended September 2018 (Q2Fy19) after reporting losses for three quarters. Its net profit for Q2Fy19 at Rs 9.44 billion on higher net interest income and lower provisions for bad loans.
Sequentially, it had reported the loss of Rs 48.75 billion in the first quarter ended June 2018 (QFy19).
The Bank had posted a net profit of Rs 15.81 billion in the second quarter ended September 2017 (Q2Fy18).
(Source: Business Standard)
8. Tata Group in Talks to Buy a Majority Stake in Jet Airways: Report
Tata Group is in talks to buy a majority stake in beleaguered carrier Jet Airways and its loyalty programme, television news channel CNBC-TV18 reported on Monday, 5 November, citing sources.
Tata Group aims to buy the 51 percent stake in the airline owned by Jet Airways founder, Naresh Goyal, and Etihad Airways' 24 percent stake, the channel reported.
Tata said in a statement that it would not comment on speculations. Jet Airways did not respond to a request for comment.
(Source: Business Standard)
9. Amazon, Flipkart Stake Claim to be No.1 E-Tailer as Festive Sale Ends
Amazon and Flipkart are at it again. The giants are staking claim to leadership in India’s e-commerce market as the festive sale came to an end on Monday, 5 November.
While the Walmart-backed firm said it cornered 70 percent of sales during the festive period, of about 25 days, Amazon said more than half the country’s online shoppers chose to buy from it during this period. Neither company gave the value of the products, or gross merchandise value, they sold during the festive sales, which started on 10 October. Flipkart says it hit a new record during its five-day-long Big Billion Days (BBD) sale and managed to double that number in the subsequent 20-odd days.
(Source: Business Standard)
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