FY21 | Business Upturn

India’s export witnesses 43% rise in October, jumping to $35.65 billion

Ayisha Farah — Mon, 15 Nov 2021 14:05:41 +0000

Giving credit to solid global orders, India’s merchandise exports increased 43 percent in October 2021 in comparison to the same period the past year. Impressively, exports also grew by almost 40 per cent compared to October 2019, before the onset of the COVID-19 pandemic.

The Commerce and Industry Ministry published on November 15 presented an outbound trade increase to $35.65 billion in October, jumping from $24.92 billion in October 2020. Exports have increased by over 55 per cent in the April-October period of FY22 (2021-22) in comparison to 2020. Compared to 2019, exports have jumped to 26 percent over the same period, the Ministry said.

After a questionable FY21 (2020-21), exports started rising in December. In February, prior to the low base effect generating, growth was a marginal 0.67 percent. Since then, calculated annually (Y-o-Y), exports have witnessed a notable increase because of the low base effect that has faded off, officials say.

In October, imports witnessed an evenly notable increase, jumping to a huge 62.5 percent to $55 billion. This was an ongoing course from the prior month when import growth was above 84 percent. It had been gradually decreasing previously. Specialists state this bodes great for the economy, implying the return of industrial and consumer demand.

Related to exports, as the low base fades off, the hikes in import growth have declined. Imports had increased at 51.5 percent in August, 62.9 percent in July, 98.3 per cent in June, 73.6 percent in May, and 163 percent in April.

Reebok India reports 93% decrease in profits in FY2021

Cheryll Jain — Sat, 23 Oct 2021 13:02:18 +0000

Sportswear retail brand Reebok India has reported a 93 per cent decrease in profits for the financial year 2020-2021. The company reported total net profits of Rs.4.9 crore in the year ending March 31, 2021, as compared to the net profit of Rs. 6.8 crores it posted in the previous financial year.

The sharp decline in profits of the brand has been the consequence of the lower sales rate it witnessed due to COVID-19 related restrictions, business intelligence platform Tofler predicted. In the financial year 2020-2021, Reebok reported a 26 per cent decline YoY in revenue as well, standing at Rs. 321 crores. Meanwhile, the company’s net expenditure amounted to Rs. 315 crores during the fiscal year under review.

In a statement released by Reebok, the reason for the company’s underperformance has been attributed to the impact that the COVID-19 pandemic had on its normal business.

The pandemic resulted in the disruption of the supply chain and obstruction of store operations of the franchise and wholesale partners. Moreover, it also led to the closure of warehousing and storage facilities during the long periods of lockdown, the company stated.

Reebok had thereafter made comprehensive assessments of the prospect of recovery and carrying value of its owned assets which comprise property, plant and equipment, store inventories, among others and inferred that the company was not required to make any material adjustments in its financial statement.

Owing to decreasing profits and inability to resume operations at full capacity, German sportswear retailer Adidas announced earlier this year that it has entered into an agreement to sell Reebok to Authentic Brands Group (ABG) for a total consideration of euro 1 billion.

TVS reports highest quarterly revenue in international markets, operating revenue amounts Rs Rs 3,934 crore in April-June 2021 quarter

Aayushi Singh — Thu, 29 Jul 2021 16:05:46 +0000

The TVS Motor Company in the quarter ended June 2021, had reported sales of 6.58 lakh units against the 2.67 lakh units registered in the quarter ended June 2020. Though the April to June 2020 quarter was in the middle of the pandemic which was followed by a nationwide lockdown. In the quarter ended June 2021, 4.05 lakh units of motorcycle sales were registered, against the 1.19 lakh units in the quarter ended June 2020.

In the quarter ended June 2021, the scooter sales were upto 1.40 lakh units against the sales of 0.82 lakh units in the first quarter of 2020-2021. In the current quarter, the TVS company had recorded the highest two wheeler exports of 2.90 lakh units against the 0.70 lakh units in the quarter ended June 2020.

For the quarter ended June 2021, the operating revenue was reported by the company amounting to Rs 3,934 crore, against the Rs 1,432 crore reported in the first quarter of 2020.

The key markets had suffered damages in the revenue and profits from the domestic market due to the lockdowns, however, TVS seemed to be doing better in the international markets.

The TVS company had said in a statement that the April to June 2021 quarter had recorded the highest quarterly revenue from the international markets. TVS has been one of the biggest exporters of motorcycles in India after Bajaj Auto.

TVS has reported in the current quarter, PAT of Rs 53 crore as against a loss of Rs 139 crore in the first quarter of 2020-2021.

The TVS reported PBT prior to the exceptional item of Rs 102 crore in the first quarter of 2021-2022 as against the loss of Rs 190 crore.

The incurred Rs 30 crore by the TVS Motor Company towards the COVID-19 related expenses in the first quarter were reported as an exceptional item, and with the opening of the markets, the company has said that they were positive about coming back to normalcy of the domestic and international demand.

CEO of Union Bank of India: restructures loans worth Rs 13,000 crore, follows resolution framework by RBI

Aayushi Singh — Thu, 29 Jul 2021 15:15:15 +0000

On July 29, the Union Bank of India, which is the fourth-largest public sector bank in the country, had said that it had so far restructured the loans worth Rs 15,927 crore under the two resolution frameworks announced by the Reserve Bank of India.

Rajkiran Rai G, MD, and CEO of the Union Bank said that a large piece of the restructured accounts was from the retail segment. He added on saying that under the resolution framework 1.0, the lender had restructured accounts worth Rs 11,965 crores, out of which Rs 3,702 crore were from the personal loans segment, Rs 2,427 crore were from the micro, small and medium enterprises segment and Rs 5,836 crore were from the large corporates.

Till June 30, 2021, the total recast amount was Rs 3,962 crore under the resolution framework. The scheme would be open for three more months. In the second round of the recast, the personal loans accounted for Rs 2,855 crore, and from the MSME’s over Rs 954 crore came, the rest came from agriculture. Under the resolution framework, 2.0 announced on May 5, 2021, large corporates were not eligible for the recast.

Rajkiran Rai said that they have expected that retail and MSME would be put together, and restructuring worth Rs 2,000 crore might occur in the second quarter.

On August 6, 2020, the first resolution framework was issued and was applied to all the categories of borrowers affected by the COVID-related stress.

Slippages worth Rs 7,049 crore were reported by Union Bank in Q1FY22, out of which 45 per cent was from the MSME segment. 15 per cent of the total slippages were from Retail which was worth Rs 1,078 crores. Mr. Rai said that the stress was mainly due to COVID-19 as the EMI payments had been affected, and the stress in retail was already covered in the June quarter and there was not much in the September quarter.

The CEO had mentioned that the bank was confident that stress would get lower with the aid of restructuring and the facilities extended under the emergency credit line guarantee scheme (ECLGS). In FY22, the Union Bank has expected recoveries and upgrades worth Rs 13,000 crore. The recoveries and upgrades in Q1 were over Rs 4,300 crore.

Airports suffer a total of Rs 2,948.97 crore loss due to pandemic

Aayushi Singh — Mon, 26 Jul 2021 07:11:13 +0000

In the Financial Year 2021, over 107 of the 136 airports operated by the AAI went through losses, a total of Rs 2,948.97 crore due to the COVID-19 as the passengers stopped using their services.

According to VK Singh, a Minister of State for Civil Aviation in Lok Sabha, in a data submitted mentioned that in the previous year, the losses were of double in amount and 91 of the airports had reported total losses of Rs 1,368.82 crore.

In the FY19, almost 101 of the AAI operated airports had gone through losses equalling to Rs 1,668.69 crore.

The 136 airports operated by the state-run AAI, in FY19 18 of those were not operational, while in the FY 20-21 19 of those airports were not operational.

Most of these airports are fully owned by AAI while the airport operator owned a stake in a small number of airports in Mumbai, New Delhi, Chandigarh, Nagpur, Bengaluru, Nagpur, Kannur, and Hyderabad through a joint venture.

In FY19, FY20 and FY21, losses were reported in the popular tier-II airports like Delhi, Imphal, Gaya, Bhopal, Aurangabad, Belgaum, Chandigarh, Dehradun, Dimapur, Dibrugarh and Hubli. As per the figured submitted by Mr. Singh, in the past three years, losses were reported in most airports of tier-I and tier-II cities.

In FY19, New Delhi’s Indira Gandhi International Airport (IGIA), the country’s busiest airport, had reported a loss of Rs 111.77 crore. In FY20, the IGIA reported a profit of Rs 13.15 crore and a loss of Rs 317.41 crore in FY21.

In FY19, the Chhatrapati Shivaji Maharaj International Airport, Mumbai, the second busiest airport, reported a profit of Rs 96.1 crore and, in FY20 the airport made a profit of Rs 2.54 crore. In the FY21, the CSMIA made a loss of Ra 384.81 crore.

In Kolkata, the Netaji Subhash Chandra Bose International Airport had reported a profit of Rs 461.19 crore in the year 2018-2019, and a profit of Rs 545.07 crore in the year 2019-2020, and a loss of Rs 31.04 crore in the year 2020-2021.

Since 2018-2019, the airports in most regions had been loss making even after the government’s push to connect the smaller airports through the regional connectivity scheme.

Furlenco raised $140 million in Series D funding, claims to raise $300 million in next five years

Aayushi Singh — Mon, 05 Jul 2021 12:37:46 +0000

On Monday, Furlenco, furniture rental startup, announced that it had raised $140 million in a series D funding round led by Zinnia Global Fund, the amount had been raised by a mix of debt and equity.

The existing CE Ventures and lightbox Ventures also took participation in the round.

Advisors on the transaction were Industrial and Commercial Bank of China (ICBC) and Dewan PN Chopra & Co. (DPNC).

Furlenco was registered as Kieraya Furnishing Solutions Pvt Ltd, and was founded by Ajith Mohan Karimpana in 2012. It is an online subscription based furniture rental platform that currently operates in 13 cities including Mumbai, Delhi/NCR, Pune, Mysuru, Jaipur, Hyderabad, Bengaluru, and more. Ever since its launch, 1.70 lakh homes had been furnished.

Till date, Furlenco had raised over $221 million to date from marquee investors like BlackSoil, Dabur’s Aditya Burman, Rangoli Resorts, Chowdry Associates, Beeline, Bollywood Actor Aamir Khan, Double Prime’s Gautham Radhakrishnan and Infosys’ Kris Gopalakrishnan, among others.

Karimpana said that the funds raised would play a critical role in the journey and would fuel their growth with the investments and design, they know that there was immense strength and scope of innovation in the B2C commerce space and the sectors they operated in, they were tapping into the potential and would definitely disrupt the market with what they had planned.

Compound annual growth rate (CAGR) of the company was 120 per cent between the financial year 2015 to 2020, and the company has claimed that it was able to retain 95 per cent of their revenue in the financial year 2021 despite the pandemic. In the next five years, the company is looking to scale it’s annual revenue to Rs 2,200 crore and to generate Rs 650 crore in fee by the financial year 2026.

Infosys Q4 profits up by 17% to Rs 5,076 crore; approves share buyback program worth up to Rs 9,200 crore

Shreejit Shelar — Wed, 14 Apr 2021 19:24:47 +0000

India’s second-largest IT services company – Infosys, has reported a 17.47 per cent year-on-year growth in net profit at Rs 5,076 crore for the quarter ended March 2021 (Q4 FY21) against Rs 4,321 crore in the year-ago period, reported ANI.

The consolidated revenue from operations grew by 1.5 percent sequentially to Rs 26,311 crore, up 13.08 per cent against Rs 23,267 crore in Q4 FY20.

According to the ANI report, the company’s board approved a share buyback program worth up to Rs 9,200 crore priced at Rs 1,750 per share. It also recommended a final dividend of Rs 15 per share for FY21.

It recommended the capital return of Rs 15,600 crore including a final dividend of Rs 6,400 crore and open market buyback of shares of Rs 9,200 crore.

Infosys maintained its revenue growth guidance in constant currency at 12 to 14 per cent for the financial year 2021-22.

The ANI report quoted the CEO and Managing Director, Salil Parekh said, “I am very pleased with our performance this year and incredibly proud of our employees for the passion and commitment they displayed despite a very tough environment. We have crossed a milestone of Rs 100,000 crore in revenue in FY21.”

“Our intense focus on client relevance, growing our digital portfolio with differentiated capabilities like Infosys Cobalt, and empowering employees have helped us emerge as a preferred ‘partner-of-choice’ for our global clients. Our record large deal wins stand testimony to the effectiveness of this approach,” he said.

The Chief Operating Officer of Infosys, Pravin Rao emphasized that despite the disruptions, the company continues to execute seamlessly with broad-based momentum across verticals.

“This has led to healthy volume growth and record utilisation in a seasonally soft quarter”, said Rao, quoted by ANI.
Meanwhile, Chief Financial Officer Nilanjan Roy added that FY21 was a landmark year backed by robust operating metrics and strong growth across revenue, margins and free cash flows.

“Executing on our capital allocation policy, the company proposes to increase the total dividend per share by 54 per cent over the previous year and buyback of equity shares of up to Rs 9,200 crore,” he added.

Coal India aims to substitute imported dry fuel with domestic supplies in FY21

Divya Joyce — Thu, 17 Dec 2020 08:40:56 +0000

State-run Coal India is planning to substitute imported dry fuel of 80-85 million tonne with more domestic supplies in the current fiscal and the miner has asked power plants in the coastal areas to submit proposals for a gradual increase of its supplies to these units to reduce foreign exchange outgo, the Coal India official said on Thursday.

“We are expecting to substitute 80-85 million tonne of imported coal this year and have asked the coastal power plants to submit proposals to us and the Railways for domestic supplies,” Coal India director marketing S N Tiwari said at an event organized by Mjunction.

The country had imported 248 million tonnes of coal in 2019-20, resulting in an outflow of around Rs 1 lakh crore of foreign exchange, the official said.

The government will consider offering concessions on various counts such as quality and freight to make domestic coal attractive over the imported fuel, Tiwari said.

Burger King India shares available at premium of Rs 20-25 in grey market

Divya Joyce — Sat, 28 Nov 2020 08:50:54 +0000

Burger King India, the Indian subsidiary of US-based hamburger fast food restaurants chain shares are available at a premium of Rs 20-25 in the grey market as it traded at more than 40 percent premium over its issue price, ahead of its public offering.

At the lower end of the price band in percentage terms, the premium comes to 33.9 percent and 42.4 percent over IPO price, while the premium at the upper price band comes at 33.3 percent and 41.7 percent.
Burger King is the fastest-growing international QSR (quick-service restaurant) chain in India during the first five years of its operations based on the number of restaurants. Their master franchisee arrangement provides them with the ability to use Burger King’s globally recognized brand name to grow its business in India.

Burger King decided to launch its Rs 810-crore maiden public issue on December 2 and close on December 4.

The issue consists of Rs 450 crore fresh issue (which reduced from Rs 600 crore earlier due to pre-IPO placement) and an offer for sale of 6 crore equity shares by promoter QSR Asia Pte Ltd.

However, the COVID-19 crisis has a significant impact on its results of operations at the end of FY20 and in the six months ended September 2020, resulting in a decrease of revenue from the sale of food and beverages to Rs 134.69 crore in the six months ended September 2020, compared to Rs 419.37 crore in the six months ended September 2019.

In addition, although its same-store sales grew at 29.21 percent in FY19 and 6.11 percent in the nine months ended December 31, 2019, same-store sales decreased by 0.30 percent in FY20 and by 56.9 percent in the six months ended September 2020 primarily due to the impact of the COVID-19 crisis.
The company would utilize fresh issue proceeds for funding roll-out of new company-owned Burger King restaurants and general corporate purposes.

As of November 25, the filing the date for red herring prospectus, Burger King had over 259 restaurants and nine sub-franchised restaurants, of which 249 were operational, including two sub-franchised Burger King restaurants.

Under the Master Franchise and Development Agreement, the company is required to develop and open at least 700 restaurants (including Company-owned Burger King Restaurants and Sub-Franchised Burger King Restaurants) by December 31, 2026, which has recently been extended by one year from December 31, 2025, due to the COVID-19 crisis.

Goldman Sachs revises India’s GDP forecast to 10.3% for FY21

Sarthak Yadav — Wed, 18 Nov 2020 08:36:08 +0000

Goldman Sachs, the global investment bank has revised India’s GDP forecast for the ongoing financial year and expects economic activity in Asia’s third-largest economy to normalize faster than estimated, provided an effective COVID-19 vaccine is available.

According to a report, GDP growth is estimated at 13% in FY22 compared with 15.7% projected earlier. India’s gross domestic product is to contract 10.3% in 2020-21 against a contraction of 14.8% forecast in September.

Jonathan Sequeira and Andrew Tilton, economists at Goldman Sachs said, “We expect that the broad-based availability of an effective vaccine in India could allow containment policies and mobility to normalise by mid-2022.”

“This should allow a meaningful activity rebound in 2021, particularly in consumer-facing services sectors, where activity remains significantly below pre-covid levels,” they further added.

An effective vaccine in India will be able to provide a meaningful activity rebound in 2021 particularly in consumer-facing services sectors, where activity remains significantly below pre-pandemic levels however the pace of the rebound will be restrained by some economic scarring and a number of factors including a weak labour market, the hit to private sector incomes and balance sheets, tighter credit supply conditions and a limited impetus from fiscal policy.

The Purchasing Managers’ Index (PMI) for manufacturing hit a record 13-year high of 58.9 in October, while services PMI touched 54.1 for that month, marking the first month of post-lockdown growth for the sector and taking the composite index to 58.

The Reserve Bank of India (RBI), projected the economy to contract 9.5% in the current fiscal but expects growth to turn positive during the January-March, while finance minister Nirmala Sitharaman had said FY21 growth would be ‘near zero’.

India’s fiscal deficit is estimated at 8% of the GDP in FY21 and is expected to narrow to 6.5% of the GDP in FY22. The central government’s plus states’ fiscal deficit is estimated to narrow from 11.5% to 9.5% of the GDP in the same duration, the report said.

“This suggests that the total fiscal policy contribution to growth will decline further in FY22,” it further stated.

Inflation, as measured by the Consumer Price Index, is estimated at 6.2% in FY21, and is likely to decline to 4.6% in FY22 as food prices fall on easing supply restrictions, a benign monsoon, and favourable base effect, according to the report. Core inflation could also moderate given low manufacturing capacity utilisation and rupee appreciation.

“We expect RBI to cut policy rates by another 35 bp early next year,” said Goldman Sachs.

A sharp rise in the corporate interest burden and the consequent decline in debt servicing capability, potential tightening in credit supply, low manufacturing capacity utilization and the inventory overhang in residential housing could prove to be a drag on private investment seeing a rebound, Goldman Sachs further added.