Wiser Investing

Wiser Investing in Association with CDSL and Globe Capital .

SEMINAR ON 'FINANCIAL PLANNING & INVESTMENT AWARENESS PROGRAMME'.

BHARAT MALA PROJECT

Prime Minister Narendra Modi’s ambitious Bharatmala Pariyojana is an umbrella highway development project. The Centre has formally approved the Phase-1 of one of India’s biggest highway development plan – the Bharatmala project. Under the phase-1 of the massive project, a total of around 34,800-km of roads at an investment of over Rs 5.35 lakh crores would be constructed by 2022.

Here are important points you should know about the ambitious project:

1.Bharatmala is a new umbrella program for the highways sector that focuses on optimizing the efficiency of road traffic movement across the country by bridging critical infrastructure gaps.Highways works worth Rs 8 lakh crore will begin before the end of 2018 under the Bharatmala Pariyojana.

2.According to Minister of Road Transport & Highways, Shipping, Water Resources, River Development and Ganga Rejuvenation Nitin Gadkari, Bharatmala will be a major driver for economic growth in the country, and help realize Prime Minister Modi’s vision of a “New India.”

3.Special attention has been paid to fulfill the connectivity needs of backward and tribal areas, areas of economic activity, places of religious and tourist interest, border areas, coastal areas and trade routes with neighbouring countries under the programme.

4.Bharatmala Pariyojana phase –I also includes 10,000 kms of balance road works under NHDP, taking the total to 34,800 kms at an estimated cost of Rs.5,35,000 crore. Bharatmala Phase I – is to be implemented over a five years period of i.e. 2017-18 to 2021-22.

5.About 1,900 km of stretches have been identified for development of green-field expressways of which around 800 kms will be taken up under Phase-I of the programme at an estimated cost of Rs.40,000 crore. The 10,000 km of balance road work under NHDP will be completed at a cost of Rs 1,50,000 crore.

5 GOLDEN RULES OF FINANCIAL PLANNING.

7 things to know before starting to invest through Mutual Fund SIPs

Do you have a Goal in mind :

The usual reasons why investors start investing are because either they need to save taxes or just because they have some surplus in their bank accounts. Most of the investments are made with no particular goal in mind and therefore get redeemed as and when there is a need of money. If you want to start a SIP just because your friends are doing it, then it’s like starting a journey without knowing the destination.

Know the Money Value of the Goal:

You have to attach a money value to the goal by determining what the present cost of the goal is and what is likely to be the future cost of this goal, depending on when you wish the goal to be fulfilled. Therefore, first determine the future cost of the goal.

Is it a Short, Medium or Long Term Goal :

Short term goals are those which should be ideally achieved in a year or two. These goals have a very brief investment horizon and require safe and steady returns during the SIP tenure. Medium terms goals are those which have a minimum investment horizon of three to five years. A portion of investment in Equity Funds could be beneficial in such a scenario along with debt and balanced funds. Here, you need to be careful as you should plan to choose an asset classes which offers long term capital gains. Long term goals are the ones that are five, ten or maybe many more years away. Retirement or higher education planning for a new born child, your retirement home or even a world tour could be a long term goal.

Choose the Right Asset Class to Reach the Goal :

Choosing the right asset class is called asset allocation. Experts have said asset allocation determines your returns rather than individual selection of funds. In Mutual Funds you can select from Liquid Funds, Equity Funds and Debt Funds. The amount of investment you make in every asset class will determine the future value of the corpus. Liquid funds or short term debt funds are ideal for a short term goal as they provide returns in a short investment horizon. Partial investments in debt and or equity funds or balanced funds are crucial for medium term goals. And for a long term goal you can depend more on equity oriented mutual funds. If you are a risk averse investor, whereas for medium or long term goals of just three to five years onwards, you must invest equally or inclined towards debt to balance out the volatility of equity funds.

Which One is the Right Scheme for Your SIP :

You need to find a scheme that does the hard work for your investments. Ideally, you should invest in a diversified equity scheme that has consistent performance for the last three, five or ten years and often having outperformed the category average and benchmark returns. The Asset Management Company should have good standing in the market and the fund manager an impeccable reputation in managing funds. A good track record of the fund manager is essential for choosing the right fund.

Choose SIP Date and Bank Carefully :

Choose a monthly SIP date according to the credits you are getting in your bank account, For example – your salary credit, monthly interest or rental income or any kind of credit which is of fixed nature and hits your account on a particular date every month. Your SIP ECS mandate or post dated cheques should be dated after theses credit dates. Again for example, if you are getting salary credit on 1st of every month, you can choose any date on or after 2nd of every month. Also, it is advisable to maintain a bank balance of at least one month of your SIP instalment value. This is just to avoid any default in SIP in case your credits are delayed for few days etc.

New India Assurance IPO

The New India Assurance Co. Ltd. (NIA) is the largest general insurance company in India in terms of net worth, domestic gross direct premium, profit after tax and number of branches as of and for the fiscal year ended March 31, 2017 (Source: CRISIL Report). Company has been in operation for almost a century. In Fiscal 2017, it had the largest market share of gross direct premium among general insurers in India (Source: CRISIL Report). As of March 31, 2017, NIA had issued 27.10 million policies across all product segments, the highest among all general insurance companies in India (Source: CRISIL Report). As of June 30, 2017, its operations were spread across 29 States and seven Union Territories in India and across 28 other countries globally through a number of international branches, agency offices and Subsidiaries including a desk at Lloyd’s, London.

NIA’s insurance products can be broadly categorized into the following product verticals: fire insurance; marine insurance, motor insurance, crop insurance, health insurance and other insurance products. In Fiscal 2013, 2014, 2015, 2016 and 2017, despite increasing competition from private players, it has maintained market leadership in the general insurance industry in India and were leaders in all segments except crop insurance (Source: CRISIL Report). In Fiscal 2017, company’s gross direct premium from fire, engineering, aviation, liability, marine, motor and health insurance represented a market share of 19.1%, 21.9%, 29.6%, 18.2%, 21.0%, 15.1% and 18.4%, respectively, of total gross direct premium in these segments in India, and were the market leader in each such product segment (Source: CRISIL Report).

NIA has developed an expansive multi-channel distribution network that includes individual and corporate agents, brokers, bancassurance partners and other intermediaries, as well as direct sales and sales through online channels. As of June 30, 2017, its distribution network in India included 68,389 individual agents and 16 corporate agents, bancassurance arrangements with 25 banks in India, and a large number of OEM and automotive dealer arrangements through agent and broker network. It has developed a pan-India branch network. As of June 30, 2017, NIA had 2,452 offices in India across 29 States and seven Union Territories.

Company’s net worth (excluding fair value change account) increased at a CAGR of 7.01% from Rs. 9605.03 crore as of March 31, 2013 to Rs. 12596.45 crore as of March 31, 2017 and was Rs. 13123.52 crore as of June 30, 2017, while its net worth (including fair value change account) increased at a CAGR of 9.26% from Rs. 25469.81 crore as of March 31, 2013 to Rs. 36298.09 crore as of March 31, 2017, and was Rs. 38283.60 crore as of June 30, 2017.

As of March 31, 2017 and as of June 30, 2017, it had an investment portfolio including cash and bank balances of Rs. 60056.41 crore and Rs. 63112.07 crore, respectively. NIA’s solvency ratio as of March 31, 2017 and as of June 30, 2017 was 2.22 and 2.27, respectively, compared to the IRDAI specified control level of 1.5. The book value of its investment portfolio increased at a CAGR of 11.84% from Rs. 23238.56 crore as of March 31, 2013 to Rs. 36354.77 crore as of March 31, 2017, and was Rs. 37952.00 crore as of June 30, 2017.

To part finance its future capital requirements and listing purpose, NIA is coming out with a maiden IPO of 120000000 equity shares of Rs. 5 each via book building route with a price band of Rs. 770-800 per share to mobilize Rs. 9240 – Rs. 9600 crore based on lower and upper price bands. Issue opens for subscription on 01.11.17 and will close on 03.11.17. Minimum application is to be made for 18 shares and in multiples thereon, thereafter. Issue consists of fresh equity issue of 24000000 shares and offer for sale of 96000000 shares. Post allotment, shares will be listed on BSE and NSE. NIA has reserved 3600000 equity shares for eligible employees. It is offering a discount of Rs. 30 per share to retail investors and employees. Issue constitutes 14.56% of the post issue paid up capital of the company. BRLMs to this issue are Kotak Mahindra Capital Co. Ltd., Axis Capital Ltd., IDFC Bank Ltd., Nomura Financial Advisory and Securities (India) Pvt. Ltd., Yes Securities (India) Ltd. Link Intime India Pvt. Ltd. is the registrar to the issue. Having issued initial equity at par, it issued bonus shares in the ratio of 1 for 1 in March 1976, 1 for 2.33 shares in May 1979, 2.045 shares for every 3 shares in December 1982, 4 for 10 in October 1986, 2.72 for 5 in November 1990, 3 for 2 in 2000, 1 for 2 in 2004, 1 for 3 in 2005 and 1 for 1 in August 2017. Post issue, its current paid up equity capital of Rs. 400 crore will stand enhanced to Rs. 412 crore.

On performance front, NIA has posted net profits of Rs. 1377.32 crore, Rs. 930.35 crore, Rs. 839.86 crore for Fiscal 2015, 2016 and 2017. It suffered decline in bottom lines due to higher out go on account of wage revisions and claims in health and motor segments. For Q1 of current fiscal, it has posted net profit of Rs. 513.35 with better product mix and revision in health and motor premiums. If we annualize latest earnings and attribute on fully diluted post issue equity then asking price is at a P/E of 32 plus. Issue is priced at a P/BV of 2.4. Thus issue appears justifiably priced against listed private sector peer ICICI Lombard which is quoting at a P/E of 47 plus. For last three fiscals, it has posted an average EPS of Rs. 12.32 and RoNW of 8.07 on an equity base of Rs. 200 crore. Although NIA has strong fundamentals compared to its peer, considering the fate of recently listed insurance sector IPOs, investors may shy away from this offer.

On BRLM’s front, 5 merchant bankers associated with the offer have handled 48 public offers in the past three years, out of which 12 offers closed below the offer price on listing date.

Conclusion: Risk savvy cash surplus investors may consider moderate Investment for long term (Other)

Mahindra Logistics IPO

Mahindra Logistics Ltd. (MLL) - a Mahindra group company is one of India’s largest 3PL solutions providers in the Indian logistics industry which was estimated at Rs. 6.40 trillion in fiscal 2017 according to CRISIL report. MLL’s competitive advantage is its “asset-light” business model pursuant to which assets necessary for operations such as vehicles and warehouses are owned or provided by a large network of business partners. Technology enabled, “asset-light” business model allows for scalability of services as well as the flexibility to develop and offer customized logistics solutions across a diverse set of industries. Company operates in two distinct business segments, supply chain management (“SCM”) and corporate people transport solutions (“PTS”).

Under SCM business it offers customized and end-to-end logistics solutions and services including transportation and distribution, warehousing, in-factory logistics and value added services to clients through a pan-India network comprising 24 city offices and over 350 client and operating locations as at August 31, 2017. It has a large network of over 1,000 business partners providing vehicles, warehouses and other assets and services for SCM business. As at August 31, 2017, MLL managed over 10.0 million square feet of warehousing space spread across pan-India network of multi-user warehouses, built-to-suit warehouses, stockyards, network hubs and cross-docks. As at August 31, 2017, it operated in-factory stores and line-feed at over 35 manufacturing locations. Such model of its operations enables company to serve over 200 domestic and multinational companies operating in several industry verticals in India, including automotive, engineering, consumer goods, pharmaceuticals, e-commerce and bulk. Its client list includes Volkswagen India Private Limited, Vodafone India Limited, Thermax Limited, JSW Steel Limited, Ashok Leyland Limited, Siemens Limited, Bosch Limited, BMW IndiaPrivate Limited, 3M India Limited, and Mercedes-Benz India Private Limited.

MLL provides technology-enabled people transportation solutions and services across India to over 100 domestic and multinational companies operating in the IT, ITeS, business process outsourcing, financial services, consulting and manufacturing industries. As at August 31, 2017, it operated PTS business in 12 cities and over 120 client and operating locations across India. Certain key clients in India for PTS business include Tech Mahindra Limited, AXISCADES Engineering Technologies Limited and ANZ Support Services India Private Limited. Company’s subsidiary, 2X2 Logistics, provides logistics and transportation services to OEMs to carry finished automobiles from the manufacturing locations to stockyards or directly to the distributors through specially designed vehicles. MLL’s other subsidiary, Lords, provides international freight forwarding services for exports and imports, customs brokerage operations, project cargo services and charters.

An “asset-light” business model helps MLL to reduce capital expenditure requirements, mitigate the effects of operational risks relating to direct fuel costs, maintenance costs and depreciation in addition to reducing the effect of any risks emanating from changes in laws and regulations. This also enables it to deploy and utilize capital more efficiently, as reflected in company’s adjusted ROE (excluding Surplus Funds) which was 29.26%, 33.77%, 39.95% and 89.55% in the three month period ended June 30, 2017 and in Fiscals 2017, 2016 and 2015, respectively.

For providing exit route to P/Es and listing gains, MLL is coming out with a maiden IPO of 19332346 equity shares of Rs. 10 each via book building route with a price band of Rs. 425 - Rs. 429 to mobilize Rs. 821.62 to Rs. 829.36 core (based on lower and upper price bands. This being secondary offers (i.e. Offer for Sale), no money is coming to company and post issue paid up equity capital remains same at Rs. 71.14 crore. Issue opens for subscription on 31.10.17 and will close on 02.11.17. Minimum application is to be made for 34 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. MLL has reserved 125000 equity shares for eligible employees and is offering a discount of Rs. 42 per share to them. BRLMs to this offer are Kotak Mahindra Capital Co. Ltd., Axis Capital Ltd. and registrar to the issue is Link Intime India Pvt. Ltd. Having issued initial equity at par between Sept. 2007 and March 2011, it raised further equity in the price range of Rs. 13.90 to Rs. 122.29 per share from February 2014 to August 2017. The average cost of acquisition of Equity Shares by Promoter is Rs. 10 per equity share and by Investor Selling Shareholders is Rs. 122.29 per equity share. Issue constitutes 27.17% of post issue paid up equity capital of the company. Mahindra & Mahindra Group Company Mahindra Logistics Ltd.’s IPO will be the first public offering from the USD 19 bn Group after a decade.

On performance front, MLL has (on a consolidated basis) reported revenue/net profits of Rs. 1939.56 cr. / Rs. 38.52 cr. (FY15), Rs. 2077.13 cr. / Rs. 35.97 cr. (FY16), Rs. 2676.25 cr. / Rs. 46.07 cr. (FY17). For Q1 of current fiscal it has posted net profit of Rs. 15.13 crore on total revenue of Rs. 854.46 crore. Thus it has shown constant surge in top and bottom lines. It has reported average EPS of Rs. 6.18 and average RoNW of 13.07% for last three fiscals on an equity base of Rs. 68 crore. It has no listed peers to compare with. It we annualize latest earnings and attribute on fully diluted post issue equity then asking price is at a P/E of around 29.6 and at P/BV of 4.8 plus. However since this company is having an asset light model of operation and has provided onetime expenses for multi years, on restated basis its net profit has been at Rs. 40.17 cr., Rs. 39.93 cr. and Rs. 60.04 cr. for FY 15, FY16 and FY17. For first quarter of current fiscal too its net profit stands at Rs. 17.63 crore. Restated profits results in restated adjusted RoE as shown in 4th Para last two lines here above. If we annualize these and attribute to post issue equity, then asking price is at a P/E of 25.4 plus. From fiscal 15 to fiscal 17 its non-Mahindra group clients grew at a CAGR of 64.45% and adjusted PAT grew at a CAGR of 22.26%.

On BRLM’s front, the two merchant bankers associated with the offer have handled 42 public issues in the past three financial years out of which 11 issues closed below the issue price on listing date.

SICAL LOGISTICS

Sical Logistics Ltd., founded in 1955 and with revenues in excess of Rs. 800 Cr., is India’s leading integrated logistics solutions provider with over 5 decades of experience in providing end to end logistics solutions. In 2011 Sical was acquired by Coffee Day group, with interests ranging from coffee Retail Business, stakeholdings in leading IT and embedded technology companies, to technology parks and SEZs and hospitality.
While traditionally known for its stevedoring, customs handling, trucking and steamer agency businesses, Sical today has made significant investments in logistics related infrastructure and operates mechanized Port terminals (container and bulk), container freight stations, container rakes, rail and road terminals. In addition to above Sical also provides offshore support services to the oil and gas industry and owns and operates a 2006 built cutter suction dredger.

At Sical every aspect of logistics namely port handling, road and rail transport, warehousing, shipping etc. are combined as an integrated logistics solutions and tailored to meet individual client needs. This is aided by investments in infrastructure, equipments and handling facilities to provide Cargo handling efficiency. Sical also offers custom made and cost effective solutions depending on specific needs enhancing flexibility, safety and reliability norms. Handling more than 25 million tons of bulk and over 0.5 million TEUS of container cargo annually. Sical is one of the few ‘Made in India’ organizations with a strong network having independent operations countrywide.
The success mantra is based on creating right process, investing in right infrastructure, recruiting and nourishing capability of employees, constant training and business ethics. The domain leadership is derived from the singular aspect of total in-house infrastructure enabling cost optimization benefiting the patrons directly.

OUR VIEW : Buy at 220 with a stoploss at 200 with a view of 1 year plus.

DISCLAIMER : Our view is just a representation of our study. Any decision made on the on the view are to be made at individual risk.

Earnings will be better in Q3 due to base effect of demonetisation, says UTI MF's Vetri Subramaniam

Equity markets have done well globally and India is no different. However, the bigger challenge is rebound in earnings growth, Vetri Subramaniam, group president and head - equity, UTI Mutual Fund said in an interview with CNBC-TV18.

“Markets do not really care about Samvat or quarters. Markets have done pretty well globally, but the run has not been that spectacular for Indian markets,” he said.

Vetri further added that investors need to watch out for these two things as we move forward – a) What recovery we get in terms of economic data, and b) at what point of time we see earnings start to move higher because we need that to support the rise seen in stock prices.

Commenting on the September quarter earnings, Vetri said numbers have been pretty much in-line with estimates, but it is still early days. The asking price will get slightly easier in next quarter i.e. December quarter due to demonetisation.

“The base effect will certainly look much better and when you look through the earnings we see a wide divergence between the numbers and when we break down the aggregate numbers we see strong growth in some sectors which essentially belong to commodities space,” said Vetri.

Also read: Too much pessimism over IT; pharma still not cheap: UTI MF’s Subramaniam

Sectors which are underpinning strong earnings growth include oil & gas, metals, and refining. Whereas, a lot of the traditional domestic areas which held up earnings growth in the past are experiencing stress on profitability.

Commenting on the troubled companies, Vetri said investors should stay away from companies which are referred to the NCLT. “These stocks are not on our list because we don’t know what form and fashion they will exit the NCLT process and equity holders will have to take a significant haircut,” he said.

Gujarat Borosil zooms 100% in two weeks

Gujarat Borosil is locked in upper circuit for the third straight day, up 5% at Rs 166, also its fresh 52-week high on the BSE.

In past two weeks, the stock has been nearly doubled from Rs 83.20 on October 5, 2017, as compared to 3% rise in the S&P BSE Sensex.

Till 07:07 PM; around 159,000 shares changed hands and there were pending buy orders for 102,853 shares on the BSE.

Gujarat Borosil last week opened its new glass melting and production facility for 2mm fully tempered solar glass. The new technology, innovated by Gujarat Borosil, was launched by R Chidambaram, Principal Scientific Advisor to the Government of India, on October 10 inaugurated the new tempered glass production facility of the company, at Bharuch, Gujarat.

“This 2mm fully tempered glass truly is the next level evolution for solar power. The 2mm glass to glass modules using bi-facial solar cells will make the power output rise by a staggering 30%. Plus the life of the module itself will increase to 40 years. Both these new features will result in a further drop in the levelised cost of solar power,” Gujarat Borosil said in a statement.

HT Media Ltd

HT Media was incorporated in 2002 and is one of the leading media company in India. The company is engaged in print media, electronic media and also conducts several marketing events. It owns one of the leading newspaper Hindustan Times printed in Hindi and English languages and has a combined circulation of 2.25 million copies daily. It has a readership base of 12.4 million readers. The company operates 19 manufacturing facilities that has an installed capacity of printing 1.5 million copies per hour.
In an exclusive agreement with Wall Street Journal, it publishes Mint with a presence in the key markets of Delhi, Mumbai and Bangalore. Mint is the second-largest business newspaper in India.

Business

Newspaper- It publishes newspapers namely Hindustan Times and Mint. The company has entered in joint venture with Times of India to publish newspaper Metro Now. It also publishes HT Next a newspaper focused on youth readers.
Internet- It owns subsidiary named Firefly e-Ventures that focus on internet space businesses. It has created various portals namely Shine.com, Livemint.com, Desimartini.com and Hindustantimes.com.
Radio- Company’s subsidiary HT Music and Entertainment Company in a consulting partnership with Virgin Radio, has launched the FM radio channel - Fever 104.
Events and marketing solutions- HT media hosts various events such as HT City Delhi Shopping Fest, Fever 104 A. R. Rahman Concert, Miss India Worldwide, HT Polo, HT I Love Delhi and Mint HT Luxury Conference.

India Inc's first quarter post GST: Here's a sector-wise review of early results

While still early days, GST implementation challenges and weak consumer sentiment have been the broad themes of India Inc’s second quarter earnings.
Consumption-oriented sectors like media and FMCG testify to the supply chain disruptions and guarded spending on promotions. Others like financials and telecom continue to grapple with structural transitions.
Having said that, corporate honchos are hopeful of a rural recovery and consumption revival during the festive season. Given this context, we analysed the Q2FY18 results so far for the early takeaways.

Auto/Auto ancillary

The feedback is positive for firms supplying components to commercial vehicle (CV) and tractor makers. Tractor sales, in particular, seem to be on the rebound on the back of a good monsoon, agriculture credit schemes by the government, increase in farm profitability, and improved irrigation intensity.
For exports, North America and Europe will be the key markets for tractors given the consistent rise in demand for agro machinery and farming equipment in these continents. Exports to the Middle East and African regions, however, are unlikely to rise much in the near future.
A strong rupee vis-à-vis the US dollar may dent quarterly margins year-on-year.

Banking

Except for IndusInd Bank, where the non-performing assets (NPAs) were stable and slippages declined, bank earnings so far have been disappointing. NPA numbers of Lakshmi Vilas Bank and Axis Bank numbers were higher than what analysts expected. In case of South Indian Bank, slippages were high in absolute terms despite being lower on a sequential basis.

Broadcasting & media

Q2FY18 revenues are expected to be sub-par as businesses struggled with the nuances of GST and manufacturers remained cautious about advertising in an uncertain environment. Start of the festive season, favourable consumer sentiment, and active ad spends (aided by better viewership) will be some of the key drivers that may benefit media companies in Q3FY18. The effectiveness of measures undertaken to promote regional content (news and entertainment) will be another factor to watch out for.

FMCG

In terms of volume growth, FMCG companies reported a mixed set of numbers. While Bajaj Corp witnessed a rebound, Colgate’s volumes dropped. Both companies highlighted that supply chain normalisation is far from over. In light of this, Bajaj Corp is aggressively focusing on enhancing its direct distribution network. Colgate, which has been facing immense competition, is focusing more on ayurvedic variants of toothpaste.

Housing finance

Management commentary suggests that supply of affordable houses is yet to pick-up meaningfully, barring Gujarat. A noticeable increase in housing finance will be visible only when the government’s schemes gain pace in other large states like Maharashtra, Madhya Pradesh, and Rajasthan. Lack of adequate corporate lending prospects have forced public and private sector banks to up their ante in this space, thereby intensifying the competition.

Information Technology

IT results have been a reflection of ongoing changes in the sector. TCS’s margins were positive as the contribution from its digital revenue segment rose to 20 percent of sales. However, growth prospects in the BFSI and retail segments remain muted for the industry in general. Wipro’s numbers weren’t too good either, as the company was impacted by weakness in the healthcare market. Lower guidance for Q3FY18 was a disappointment as well. Cyient looks like an interesting pick, given its near-term margin improvement prospects and performance of the end markets that the company caters to.

Oil & gas/Petrochemicals

Reliance Industries reported an operationally good quarter with mixed surprises. Petrochemical margins of the company were good owing to an uptick in volumes and pricing. The quarter-on-quarter increase in refining margins was not to the extent expected by analysts. While this is a positive takeaway for other petrochemical companies, indications of margin pressure seem apparent for the downstream chemical/plastic processing companies.

Paints

Nerolac reported a healthy 20 percent volume growth in the decorative coatings segment (which constituted 55.5 percent of FY17 sales) on the back of restocking and pre-festive buying. While this augurs well for its peers (Berger Paints and Asian Paints) in the segment too, Nerolac’s high raw material costs (59.8 percent of sales in Q2FY18 vs 57.3 percent in Q2FY17) will remain a cause of concern in the context of a spike in elevated titanium-dioxide prices.

Telecom

Reliance Jio’s posted a profit at the operating income level. Despite the aggressive pricing, Reliance has been able to report an average revenue per user (ARPU) of Rs 156.4, which is comparable to other players in the industry. The telecom industry as a whole is witnessing stiff pricing competition, and high overheads may continue to weigh down profits. The speed and efficiency of integration of multiple revenue streams (such as cellular, home broadband, and entertainment) will also play a pivotal role in determining the breakeven trajectory for telcos in the long-term.