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He is worried
PM's complete silence on economic package worrying: Marico's Harsh Mariwala
Prime Minister Narendra Modi’s address to the nation on Tuesday, the fourth in a month, has left India Inc captains wondering when the issue of an economic stimulus package will be broached. In an interview with Viveat Susan Pinto, Harsh Mariwala, chairman, Marico, expresses his fears, saying the road ahead for industry will not be easy.
Would you have liked the PM to have touched upon relief measures in his address?
Economic relief measures are normally announced by the finance minister. Having said that, I would have really appreciated it had the PM given some indication of an economic package during his address. He was completely silent on the issue. That to me is worrying. There is urgent need to look into the challenges faced by industry. Demand for discretionary products has come to a standstill. Movement of essential goods and services remains restricted. These issues have to be addressed quickly.
But the PM has said a comprehensive set of guidelines will be released on April 15. Won’t that help?
The guidelines have more to do with helping sectors come out of the lockdown, it does not address the broader issue of economic relief required to help industry get back on its feet. The coronavirus disease (Covid-19) outbreak has disrupted businesses significantly and many have been set back in terms of financial performance. They require support to get going. While extension of the lockdown was imperative, given the rise in cases, I don’t think the issue of an economic package can be overlooked. It is key to recovery.
What will be the impact on manufacturing because of the extension to the lockdown?
A lot will depend on what happens between now and April 20. The PM has said that there will be strict monitoring of districts, regions and zones for Covid-19 cases. Selective relaxation will be given in only those areas where the impact of the outbreak is low. This basically means that manufacturing will not normalise quickly. Clearly, the next few months will be very challenging for industry. But the (coronavirus) curve has to be flattened. There is simply no choice there. The 21-day lockdown has helped slow down the curve slightly, but it hasn't flattened the curve altogether. There is greater discipline needed (from people) when it comes to following lockdown rules.
When do you anticipate recovery of the fast moving consumer goods (FMCG) market and Marico in particular?
If we can maintain even last year's volume growth, it would be enough. We are clearly in a phase, where recovery is a dream. I would be happy if we can simply maintain what we achieved last year in terms of sales growth. That's all.
https://www.business-standard.com/a...g-marico-s-harsh-mariwala-120041401686_1.html
PM's complete silence on economic package worrying: Marico's Harsh Mariwala
Prime Minister Narendra Modi’s address to the nation on Tuesday, the fourth in a month, has left India Inc captains wondering when the issue of an economic stimulus package will be broached. In an interview with Viveat Susan Pinto, Harsh Mariwala, chairman, Marico, expresses his fears, saying the road ahead for industry will not be easy.
Would you have liked the PM to have touched upon relief measures in his address?
Economic relief measures are normally announced by the finance minister. Having said that, I would have really appreciated it had the PM given some indication of an economic package during his address. He was completely silent on the issue. That to me is worrying. There is urgent need to look into the challenges faced by industry. Demand for discretionary products has come to a standstill. Movement of essential goods and services remains restricted. These issues have to be addressed quickly.
But the PM has said a comprehensive set of guidelines will be released on April 15. Won’t that help?
The guidelines have more to do with helping sectors come out of the lockdown, it does not address the broader issue of economic relief required to help industry get back on its feet. The coronavirus disease (Covid-19) outbreak has disrupted businesses significantly and many have been set back in terms of financial performance. They require support to get going. While extension of the lockdown was imperative, given the rise in cases, I don’t think the issue of an economic package can be overlooked. It is key to recovery.
What will be the impact on manufacturing because of the extension to the lockdown?
A lot will depend on what happens between now and April 20. The PM has said that there will be strict monitoring of districts, regions and zones for Covid-19 cases. Selective relaxation will be given in only those areas where the impact of the outbreak is low. This basically means that manufacturing will not normalise quickly. Clearly, the next few months will be very challenging for industry. But the (coronavirus) curve has to be flattened. There is simply no choice there. The 21-day lockdown has helped slow down the curve slightly, but it hasn't flattened the curve altogether. There is greater discipline needed (from people) when it comes to following lockdown rules.
When do you anticipate recovery of the fast moving consumer goods (FMCG) market and Marico in particular?
If we can maintain even last year's volume growth, it would be enough. We are clearly in a phase, where recovery is a dream. I would be happy if we can simply maintain what we achieved last year in terms of sales growth. That's all.
https://www.business-standard.com/a...g-marico-s-harsh-mariwala-120041401686_1.html
Low consumption deepens SBI Cards' woes as Covid-19 lockdown gets extended
Termed as the mother of all IPOs, expectations were high from SBI Cards. Being the first IPO of a credit card company in India, investors were willing to overlook concerns, including its pricey valuation of 46x its FY20 estimated earnings.
However, between the time of floating the issue and listing, market conditions started worsening, thus leading to the stock closing at Rs 683 on the BSE, below its IPO price of Rs 755, on listing day. The situation has worsened since then.
The 30-day lock-in for anchor investors ended on Monday.
Experts said that the pulling out of nearly Rs 500 crore of shares (1 per cent of m-cap) by anchor investors led to the 15 per cent fall.
In contrast, going by the shareholding for the March quarter, foreign institutional investors (FIIs) and domestic institutional investors (DIIs) have been lapping up shares following the IPO. FIIs had increased their stake from 3.53 per cent (at the time of listing) to 4.03 per cent (at the end of March), and DIIs to 3.04 per cent from 1.6 per cent.
Investors’ dilemma
So, should retail investors follow their institutional peers?
Not unless they are prepared to see near-term (3-4 quarters including Q4FY20) financials coming under severe pressure. As consumption across categories may take a backseat in the near term — even if the lockdown were to be lifted on May 3 — some critical revenue streams and asset quality may be impaired.
In the long term, however, the stock will bounce back when the overall market and consumer sentiment improve, says Nilesh Shah, MD of Envision Capital. This is because the business fundamentals of SBI Cards remain intact, he said.
At 14 per cent net interest margin and 29 per cent return on equity based on 9MFY20 results, the numbers look attractive. SBI Cards is the market leader on parameters such as open market sourcing and co-branding cards, despite being second to HDFC Bank in terms of issuances.
Being a subsidiary of SBI, it has access to the latter’s 400 million-plus customer base. The decision to refrain from issuing free cards also helps maintain profitability, said analysts at PhillipCapital. A possible regulatory intervention on fee and pricing is an overhang on the stock.
In addition, Shah says that if SBI Cards decided to tighten its underwriting norms, it could alter its growth trajectory. “Considering how core banking stocks are available at a discount, SBI Cards seems to be trading at a premium,” Shah adds. At Rs 505.6, it is trading at 35x its FY20 estimated earnings.
https://www.business-standard.com/a...19-lockdown-gets-extended-120041401410_1.html
Termed as the mother of all IPOs, expectations were high from SBI Cards. Being the first IPO of a credit card company in India, investors were willing to overlook concerns, including its pricey valuation of 46x its FY20 estimated earnings.
However, between the time of floating the issue and listing, market conditions started worsening, thus leading to the stock closing at Rs 683 on the BSE, below its IPO price of Rs 755, on listing day. The situation has worsened since then.
The 30-day lock-in for anchor investors ended on Monday.
Experts said that the pulling out of nearly Rs 500 crore of shares (1 per cent of m-cap) by anchor investors led to the 15 per cent fall.
In contrast, going by the shareholding for the March quarter, foreign institutional investors (FIIs) and domestic institutional investors (DIIs) have been lapping up shares following the IPO. FIIs had increased their stake from 3.53 per cent (at the time of listing) to 4.03 per cent (at the end of March), and DIIs to 3.04 per cent from 1.6 per cent.
Investors’ dilemma
So, should retail investors follow their institutional peers?
Not unless they are prepared to see near-term (3-4 quarters including Q4FY20) financials coming under severe pressure. As consumption across categories may take a backseat in the near term — even if the lockdown were to be lifted on May 3 — some critical revenue streams and asset quality may be impaired.
In the long term, however, the stock will bounce back when the overall market and consumer sentiment improve, says Nilesh Shah, MD of Envision Capital. This is because the business fundamentals of SBI Cards remain intact, he said.
At 14 per cent net interest margin and 29 per cent return on equity based on 9MFY20 results, the numbers look attractive. SBI Cards is the market leader on parameters such as open market sourcing and co-branding cards, despite being second to HDFC Bank in terms of issuances.
Being a subsidiary of SBI, it has access to the latter’s 400 million-plus customer base. The decision to refrain from issuing free cards also helps maintain profitability, said analysts at PhillipCapital. A possible regulatory intervention on fee and pricing is an overhang on the stock.
In addition, Shah says that if SBI Cards decided to tighten its underwriting norms, it could alter its growth trajectory. “Considering how core banking stocks are available at a discount, SBI Cards seems to be trading at a premium,” Shah adds. At Rs 505.6, it is trading at 35x its FY20 estimated earnings.
https://www.business-standard.com/a...19-lockdown-gets-extended-120041401410_1.html
Named this as HUMAN ECONOMIC FINANCIAL (HEF CRISIS),completely different from 2008 finanical crisis which will take atleast 9 months time to recover.. very informative..
sources :https://threadreaderapp.com/thread/1249011595885154305.html
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