Menu

Uncategorized

Zee -sony merger could change the business trajectory.

Zee -sony merger could change the business trajectory.

Zee -sony merger could change the business trajectory.

The competition commission of India (CCI) granted the Zee and Sony conditional approval.The CCI approved the merger of Zee Entertainment Enterprises Ltd with Sony Pictures Networks India pvt Ltd and Bangla Entertainment Pvt Ltd, both part of the Sony group corporation, accepting the modification proposed by the companies to the deal they had announced.

CCI stated that the proposed combination relates to the amalgamation of each Zee and BEPL with and into CME. and preferential allotment of certain shares by CME to Sun Bright International Holding pvt. Ltd. and Sun Bright Mauritius investments ltd.Further, CCI has said that the merger between Japanese company Sony and Indian company Zee Entertainment could hit India’s domestic market.

In terms of viewership share, Zee and Sony have a combined entity share of less than 40% across genres, with the exception of movies, where the merged company has a share of more than 50%.and zee and Sony have a combined total TV viewership share of around 24 percent, slightly higher than Disney Star’s (20 percent).When it comes to advertising , Zee and Sony as a combined entity will command an ad revenue market share of 27 percent, which is largely on par with the Disney star that has a TV ad market share of 26.5 percent as of FY21.

Conditional Nod:

The conditional nod from CCI comes over a month after it was reported that the anti-trust watchdog have flagged the potential adverse effects arising from the merger. The merger, which would create a $10 billion television conglomerate, has the potential to harm competition by providing unparalleled bargaining power.

The board had said that Sony will hold a 50.86% stake in the merged entity, the promoters of Zee will hold 3.99 % , and the other zee shareholders will hold a 45.150% stake in the combined company. The zee-Sony combined entity linear channel portfolio would comprise a wide array of genres and languages with 75 channels. The companies’ combined revenue was Rs 133bn in FY21. which include network and revenue market share of 27% and 37%, respectively.

Financial highlights:

According to Sony, the merged company will create extraordinary value for Indian consumers and will eventually lead the consumer transition from traditional pay TV to the digital future.Zee and Sony will bring tremendous synergies between the two companies that will exponentially grow the business and the sector. While the OTT entertainment market has grown to nearly Rs 100 billion, with Rs 43.5 billion in subscription revenue derived from 53 million subscriptions and 29 million unique subscriptions,

The zee and Sony OTT apps, while performing modestly individually, have double-digit revenue and subscriber market share on a combined basis. The combined operating cost of Rs 30bn is similar to that of the top OTT platforms . assuming it could match the top entertainment apps in the original content generation space. Zee lacked the strength to compete with the top OTT platforms individually; the combined entity has the potential to create a strong foothold and content slate with a war chest of Rs 113bn capital infusion from Sony post merger and potential cash generation of Rs 50bn from the linear business.The only thing where the company is lacking in sports is the bidding for the next 5 years of broadcasting rights for the IPL.

According to experts, this merger will create a 10bn dollar TV enterprise. this will create the largest entertainment network in India with a 26 percent viewership share and could become a one of the serious competititor to replace market leader star and Disney.

Everest Kanto reported a total revenue of Rs. 380 Cr.

Everest Kanto reported a total revenue of Rs. 380 Cr.

Everest Kanto reported a total revenue of Rs. 380 Cr.

The net sales stood at Rs 380.53 crore in June 2022, up 13.58% from Rs 335.02 crore in June 2021. The quarterly net profit was at Rs. 38.70 crore in June 2022, down 44.1% from Rs. 69.23 crore in June 2021. The EBITDA stands at Rs. 61.23 crore in June 2022, down 32.98% from Rs. 91.36 crore in June 2021. The company incurred a total expense of Rs. 331 Cr as compared to Rs. 257 Cr in June 2021.

Increasing CNG and Hydrogen Consumption To Drive Cylinder Demand:

Everest Kanto Cylinders Ltd. is a major player in High Pressure Seamless Steel Gas Cylinders. It generated its major revenue from India, which was around 270 Cr with a profit of Rs. 44 Cr. while the USA contributed 57 Cr. with  profit of Rs.2 Cr. The UAE reported total revenue of Rs. 51 Cr. and a net profit of Rs. 8 Cr. They manufacture a wide range of cylinders for industrial gases, medical gases, fire fighting equipment, beverage industry accumulator shells, aerospace scientific research, and CNG-NGV cylinders.

The auto OEMs have significantly reduced diesel vehicle production due to rising costs and lower demand. The Vehicle Scrappage Policy is expect to drive new vehicle sales and CNG adoption. The STCs continue to convert diesel bus fleets to CNG. CNG prices in India are link to key international benchmarks and are at  significant discount to other liquid fuels. The CNG vehicles operate at a much lower cost per km.India is a participant in the global commitment to set net zero emission targets.

Over 30 countries have released hydrogen roadmaps, committed more than USD 70 billion in public funding, and total investments are expected to exceed USD 300 billion in hydrogen spending through 2030. The government of India notified its Green Hydrogen Policy with the aim of making India a Green Hydrogen Hub. This involves scaling up the use of domestically produced hydrogen to significantly reduce energy imports. The policy is in line with the country’s pledge to be carbon neutral by 2070. India’s hydrogen demand is expected to increase five-fold by 2050, from 6 MPTA in 2020. 80% of the demand in 2050 is expected to be green in nature.

Valuations:

Everest Kanto EPS has decreased to Rs. 3.45 in June 2022 from Rs. 6.17 in June 2021. The debt to equity ratio was 0.14x, whereas the asset turnover ratio was at 0.8x. The interest coverage ratio was at 33.6x compared to 6.3 in June 2021. This was due to a reduction in debt. The scrip is trading at Rs. 123, up by 5% on Monday.

 

 

 

HUL Q1 FY23 Result Update: HUL beats estimates with Rs 2,381-cr net profit in Q1; revenue up 19.6%

Dalmia Bharat posted a net profit of Rs. 280 Cr. in the June quarter.

dalmia-bharat-posted-a-net-profit-of-rs-280-cr-in-the-june-quarter

Dalmia Bharat posted a net profit of Rs. 280 Cr. in the June quarter.

Dalmia Bharat’s revenue from operations increased 27.44 percent to Rs 3,302 crore during the quarter under review, as against Rs 2,591 crore in the corresponding period of the previous fiscal. The company had posted a net profit of Rs 280 crore during the April-June quarter a year ago, Dalmia Bharat said in a regulatory filing. Dalmia Bharat’s total expenses rose 37.7 percent to Rs 3,072 crore in Q1 FY 2022–23 from Rs 2,231 crore a year ago.

In the April-June quarter, sales volume increased by 26.53 percent to 6.2 million tonnes, up from 4.9 million tonnes in Q1 FY2021-22.The net debt/EBITDA stood at 0.59x. The cost of borrowing was 5.7% for the current quarter compared to 5.3% in June 2021.

Key highlights for the quarter:

The continuous efforts and resilience of teams have enabled them to deliver good performance again on the back of strong volume growth and continuous cost leadership. The company did capacity additions and commenced commercial production of a 2.9 Mn Tonnes Murli Cement plant in Maharashtra. The firms’ total cement capacity increased to 35.9 MNT and their total clinker capacity stood at 18.9 MNT. In FY22, CO2 emissions were reduced further to 489kg/ton of cement, with a water positivity of 12.5x. They doubled renewable power capacity to 62.6 MW and signed an MoU with FLSmidth A/S, a leading supplier of technology for the cement industry, to develop a breakthrough innovation to support sustainability in the cement industry and a completed restructuring of the refractory business. The company will divest its IEX investment as and when it requires additional funds for CAPEX.

The management aims to save power and fuel costs as it commissions 41MW/69MW of WHRS/solar power units in FY23, taking the total renewable capacity to 173MW in FY23 from 105MW in FY22. The management is optimistic about demand and expects it to rise in FY23, led by government spending on infrastructure and housing. The major risks for the company to watch are lower demand and higher costs.

Valuations:

The EPS stood at Rs. 10.46 for June 2022, which was at Rs. 31.76 in March 2022 and Rs. 12.13 in June 2021. The stock has a ROCE of 7.09% and an ROE of 7.47%. The P/E ratio is now 26.6x, up from 25.1x five years ago. EBITDA is at 12.8x and the return on assets is 4.71%. The interest coverage ratio is 6.54x and the asset turnover ratio is 0.49. The share is trading at a price of Rs.1531, down by 0.37%.

Tarsons Products earned Rs. 29 crores in net profit.

 

 

RIL Q2FY24 results updates

Reliance Industries earned a revenue of Rs. 223,113 cr.

Reliance Industries earned a revenue of Rs. 223,113 cr.

During the June 2022 quarter, Reliance Industries posted a consolidated net profit of 17,955 crore, up from 12,273 crore in June 2021, up by 46.3%. The revenue jumped by 54.5% to 223,113 crore from 144,372 crore in Q1 last year. Meanwhile, EBITDA was at 37,997 crore in Q1 FY23 as against 23,368 crore in Q1 FY22 and 31,366 crore in Q4 FY22. The margin improved to 17.3% compared to 16.7% in Q1 FY22 and 15.1% in Q4 FY22.

Best quarterly performance for Jio and Retail:

This was facilitated by higher contributions from fashion and lifestyle and consumer electronics segment sales. The segment added nearly 792 stores, bringing its total store count to 15,866 stores at the end of Q1FY23. Digital and new commerce increased twofold year on year and now account for 19% of total revenue. The company’s own-brand consumer electronics products portfolio continues to scale up. In Q1 FY23, sales of in-house consumer electronic brands increased by 6.0x year on year. Fashion and lifestyle have experienced strong growth in sales, driven by regional festivities and promotions. The average bill value (ABV) and conversion ratio are at an all-time high in this segment.

With increasing partnerships, Ajio’s online sales platform added nearly 660 brands in the quarter. Ajio Luxe sales rose by 6.0x YoY with the presence of 400 brands and over 38,000 options on the Ajio platform. Its in-house brands contributed 30% of total sales in the category in Q1FY23 vs. 27.0% in Q1FY22. It introduced 14 new in-house brands in Q1FY23. In Q1FY23, urban ladder and pharma retail sales increased 2.0x year on year.The merchant base has increased by 50% YoY and Reliance Retail has ramped up in 2,400 towns.

RIL is a preferred downstream player with a strong growth outlook for consumer-centered businesses, and further value unlocking in digital and retail businesses would add to shareholders’ returns in the coming years. Expecting the 5G network to further skew the telecom market in favour of Jio, Its growth prospects look promising, led by subscriber accumulation post churn and regular tariff surg. The launch of 5G is to be looked forward to. RIL is an ideal pick given its dominant position across business verticals. However, we expect 17% annual growth in EBITDA over FY22-FY25, driven by a 6% CAGR for the cyclical business and a 26% CAGR for the consumer business. The increase in value of energy business will offsets decrease in consumer business.

Jio stands to garner connectivity and IOT revenues along with a significant share of the market. Jio’s growth prospects look promising, led by subscriber additions post churn and regular tariff hikes. The company will include the migration of high-end customers from competitors due to superior user experience and balance from the upgrade to 5G smartphones.

Valuations:

The company has reported an EPS of Rs. 26.54 for the period ended June 30, 2022 as compared to Rs. 19.36 for the period ended June 30, 2021. The ROCE and ROE stood at 9.42% and 8.1%, respectively. The stock is trading at a P/E of 26.9x, which is not expensive, and a 5-year P/E of 17.9x. The EBITDA multiple is 14.6x and has an interest coverage ratio of 7.01x. The price to book ratio is at 2.22x, which has a book value of Rs.1152. The scrip was trading at Rs.2560, down by 2.94% on Thursday.

How Green Bonds Work?

How Green Bonds Work?

 

Stakeholders around the world are worried that the Earth’s biodiversity is being destroyed irreversibly. People have a shared conviction that the natural world on Earth has been irreversibly harmed. This is true that we are all affected by climate change. It’s also true that the planet will soon vanish from dwindling natural resources, such as oil and other fossil fuels. It is therefore imperative that corporations begin to invest in environmentally friendly ventures. Business people all over the world are worried about future returns from investing in green projects. The green bonds idea has thus been implemented to help organizations, without exerting excessive pressure on their budgets, and control their push towards sustainability. After all, businesses prefer to be cost-effective rather than environmentally friendly.

 

What is it?

A green bond is mainly a debt financial instrument. It is not financially very different from other bonds. In this debt financial instrument, there is fixed income and pays as per coupon rate. These bonds are unique as they are used exclusively to finance green projects and green initiatives. This can be a new green project built from scratch or an existing project turned into environmentally friendly standards. In 2007, the European Investment Bank opened the world in issuing green bonds. At first, the major problem was issuance size as these bonds issuance size was very small. More investors and organizations have shown attraction in this financing instrument over a period of time. As a result, these bonds now have a healthy primary and secondary market.

 

Benefits:

Worldwide investors queue to purchase green bonds. All these can be seen by the fact that almost all the green bond issues till today’s date observed an over-subscription. The most obvious benefit of green bonds is that they provide financing at relatively small levels for environmentally friendly projects. Secondly, as part of corporate social responsibility, investors are willing to invest in these ventures. They could even point out that they have invested in improving the environment that gives them excellent goodwill in the local community and local market.

Finally, it is easy to track all the green projects that are carried out worldwide. This makes reporting easier in all global summits and provides data and by this world leaders can make choices rather to invest in these ventures or not. Investment in these ventures is subject to various tax cuts. These tax exemptions vary from country to country. However, almost every country that has signed environmental agreements such as the Paris Agreement tends to get tax benefits.

 

Issuance Process:

The first step in issuing green bonds is to identify the project. It is important that a third party examines and certifies the project. This ensures that the project is based on low emissions of carbon. The bond issuer has to define projects that obtain funds from the issuance of green bonds clearly. Things must also ensure that even activities that are not directly linked to the project and are not in any manner polluting the environment. The projects list must then be forwarded to a third party verifier. These companies are usually world-renowned credit rating agencies.

They test the details provided by the issuer and then confirm that the ventures/projects are indeed environmentally friendly. This certificate is required for bonds to be referred to as green bonds. The developer will keep track of the environmental effects of the project continuously. Even if the project in the middle of its operation is not compliant, the same must be reported to the standard board. In the absence of these details, legal action against the misrepresentation by investors can be undertaken.

 

Challenges:

Firstly, even though the issuer can receive funding at a lower interest rate, it needs to make a substantial investment at an early stage. Issuance of green bonds have long and tedious process. Multiple parties have to participate in the issuance process and all these parties must therefore be paid. This offsets the perks of financial support for smaller projects and small ventures. Green bonds can therefore be used cost effectively only if the project have a massive scope and bond issuance size is very big.

Furthermore, there is no simple grading scheme that determines project is completely green. For these problems, different agencies have multiple interpretations. A series of standard guidelines and terminologies is needed to develop green bonds. Bonds that provide greater environmental benefits will have greater tax benefits and less financing costs. Only then, the big companies and investors can invest funds enormously in these projects and ventures.

In a nutshell, green bonds are a revolutionary concept in order to fund environment friendly ventures and projects. Nevertheless, they are still in an evolving stage and must be further recognized.

Credit risk funds. Should you invest?

 

 

Loan against FD.

Loan against FD.

 

All Non-Banking Financial Company (NBFC’s) and Housing Finance Companies (HFCs) accepting FD’s now offer loans on FD’s under certain terms and conditions. Any individual who has invested in FDs may claim loans against deposits by paying two percent above the FD rate for the loan period, and this can be executed after three months of deposit. The loan against the FD option can be considered over the option of prematurity of fixed deposits.

 

Pre-mature withdrawal theory of FD:

Given the current economic situation where government initiates to bring liquidity into the system, HFC and NBFCs have also re-established their liquidity characteristics in their FD schemes. Organizations offer FD options with premature withdrawal. However, no partial withdrawal option will be offered to the clients. In the event of premature withdrawal, the entire FD will be canceled and the interest on penalties for the period FD will be charged. Let’s suppose, for 5 years from 2017 to 2022, an individual has ₹10 lakh in FD. If he wants to close the FD prematurely in 2020, he must give up 1% to 2% annually in penalty charges for 3 years. You probably only need 50% of the money, but you have to withdraw the entire funds.

 

Brief about availing Loan against the FD’s:

In case of financial crises such as medical bills or marriage payments, people prefer to search for loans from multiple outlets to fulfill their requirements. One such source is a fixed deposit loan. The loan against an FD is a secured loan where your fixed deposit funds can act as a collateral to receive a loan. You will obtain a loan balance of up to 90% of the deposit. You don’t have to pause and take the money from FD for loan whereas you will receive a loan against FD.

 

Who can apply for this scheme?

Anyone with a deposit account can use FD loan irrespective of salary, occupation and credit rating. The following individuals may apply for an FD loan –

• All the fixed deposit holders may apply for a loan from FD, including individual holders or joint accounts.
• If you are minor, then this scheme is not applicable for you.
• Five-year tax saving FD investors can not apply for this type of loan.

 

Pros from this scheme:

The FD loan does not have any obligation and it is impartial of any occupation and can be used by employees or self-employed persons. To get this loan, you don’t need a good credit score. The sum credited to your account can be issued within hours of application.

• FD loans have a lower rate of interest than other unsecured loans, such as personal loans.
• There is no fee for processing to avail this scheme. Most banks don’t charge any kind of processing fee for this scheme. If the banks charge any fee, the processing fee will be negligible as compared to the processing fee for other loans.
• You may not have to interrupt the FDs and chose to withdraw prematurely. In turn, this saves you from losing interest in fixed deposit.
• Loan for both domestic and NRI Fixed deposits are available.
• To avail this scheme, the process is very simple and hassle-free. The process of this scheme is easy and straightforward with least documentation. The form is handled quickly and there is no much involvement of paperwork.
• The loan may be paid in installments or for a lump sum, but it must be paid up to the expiry of your FD term.
• The main benefit of the FD loan is that the financial company does not check the credit score and the past records. Your FD account acts as a security so that banks recover money from the FD account if individual default due to any uncertainties.

 

Cons from this scheme:

• If an individual is unable to pay the amount loan borrowed, the bank is entitled to recover the funds from a fixed deposit in order to recover the borrowed money.
• The holding of the loan against the FD will not exceed the maturity period of the fixed deposit. This means in any circumstances the borrower needs to pay back the loan before the maturity of FD.
• If you do not have a fixed deposit and you require immediate money, a personal loan can be considered as better, cheaper and viable option.

 

The loan limit of various banks for Loan against Fixed deposits:

The SBI Bank, Bank of Baroda, ICICI Bank, Citibank, Punjab National Bank sanctions loan up to 90% of the total funds available in fixed deposits. Bank of Baroda and Axis Bank sanctions loan up to 95% and 85% respectively of the total funds available in fixed deposits.

 

How to avoid emotional investing

 

Hedge investments to protect your capital

  Thinking of investing in options but the risk of the derivative market scares you? Here are tips for the beginners. Option trading is an alternative way for investors to...

Thinking of investing in options? Read this

Thinking of investing in options but the risk of the derivative market scares you? Here are tips for the beginners. Option trading is an alternative way for investors to invest...

Is your portfolio beating the benchmark index

For evaluating the performance of an investment fund or any strategy we compare it with an appropriate benchmark. For example, if you invest in a mutual fund which is a...