Morning Alerts, Stock in Action, Corporate Action
Morning Alert..
At Rs 14.71 trn, direct tax collection hits 86.6% of FY23 target by Jan 10
The Centre’s net direct tax collections, after adjusting for refunds, grew 19.55 per cent during the current fiscal year up to January 10, touching 86.68 per cent of the FY23 Budget Estimates (BE). Data released by the finance ministry on Wednesday showed that gross direct taxes grew 24.58 per cent to Rs 14.71 trillion up to 10 January. Net tax collections during the same period stood at Rs 12.31 trillion compared to the Rs 14-trillion target in the FY23 Budget. Aditi Nayar, chief economist at ICRA Ratings, said she expects direct taxes to exceed the BE by Rs 2.2 trillion on a gross basis. “We expect a healthy overshoot in direct taxes and CGST (central goods and services tax) to absorb a considerable part of the additional expenditure. The fiscal deficit may exceed the budgeted level by Rs 80,000 crore but a higher nominal gross domestic product (GDP) will restrict it to 6.4 per cent of GDP,” she added.
India may exempt 30 GW of solar plants from equipment duty: Report
India may exempt some solar projects from paying duties on equipment imports, according to government and industry sources, to bring renewable-energy capacity additions back on schedule and lower consumer power tariffs. Projects with 30 gigawatts of capacity will benefit, the sources said. In March 2021, the government announced 25% basic customs duties on solar photovoltaic cells and 40% on solar photovoltaic modules with effect from April 1, 2022 in order to block Chinese imports and encourage indigenous manufacturing. Exemption is being considered for projects that were awarded under tariff-based bidding by central agencies before the announcement was made on March 9, 2021, according to a government official and two company executives privy to the matter. They asked not to be named.
Central govt tweaking compressed biogas scheme for better results
From bundling the bio manure created during Compressed Bio Gas (CBG) production with fertilizers like urea, and mandating higher rates for CBG, the Sustainable Alternative Towards Affordable Transport (SATAT) scheme is now being tweaked to generate more interest from entrepreneurs, officials said. Launched in 2018, SATAT aims to incentivise the production of compressed biogas (CBG) from various biomass sources. Given the abundance of biomass in the country, CBG has major potential to support the development of alternate clean fuel for automotive, industrial, and commercial uses in the coming years. The government had proposed that CBG plants be primarily set up through independent entrepreneurs. But the initial target of having 5,000 CBG plants over the next five years has faltered and the government was refocusing its approach to the scheme, officials had told Business Standard in October 2022.
Commodity play
Gold – Rs 55885/10gm, Silver – Rs 68117/kg, Brcrude – Rs 6130/barrel, Degumsyoil – Rs 1296/10kg, Copper – Rs 762/kg.
Corporate News
Adani Group to invest Rs 60,000 crore in MP over the next few years.
JSW Paints expects its revenue to touch Rs 5,000-crore mark by FY26.
L&T Finance to increase retail loan portfolio to 75% of total loan book.
SGX Nifty indicates positive start to Indian markets trading at 18005 levels up by 55 points or 0.31%. Dow Jones also ended yesterday`s session in green up by 0.80% at close.
Sector in focus – Banks, IT, Pharma & Metals.
Stock in Action
Sona BLW Precision Forgings: Sona BLW Precision Forgings announced that it has signed an agreement to acquire a 54% equity stake in NOVELIC, a Serbia-based company founded in 2012, that is a leading provider of mmWave radar sensors, perception solutions and full-stack embedded systems. ADAS (advanced driver assistance system) sensors are a fast-growing category in the automotive industry, with a potential market size of around US$ 43 billion in 2030. It is one of the very few profitable, high-tech, and fast-growing companies in the ADAS Sensor space. The acquisition is expected to be EPS accretive for Sona Comstar from 1st year and offers strong growth opportunities over the medium term. NOVELIC’s CY22 Revenue and PAT is estimated at Euro 9.3 million and Euro 2.5 million respectively, and it has been profitable every year since its inception. The company highlighted that the acquisition with its full vertical integration from chip and sensor design to signal processing software allows partnerships across the value chain of original equipment manufacturers, audio-visual makers, tier-1 suppliers and chip manufacturers. Positive on Sona BLW Precision Forgings as this acquisition will give the company to enter into third business vertical of ADAS Sensors and Software to address the megatrends of increasing vehicle autonomy and automation. Further, the acquisition is also EPS accretive.
Tata Motors: The recovery in JLR Sales volume, along with improvement in margin profile, will aid the company’s free cash flow (FCF) in FY24. The domestic CV and PV business is going strong and thus is expected to improve margins in FY24. Further, the benefits from lower commodity prices, price hikes, and its cost reduction efforts are likely to reflect in 3QFY23 margins. JLR reported higher wholesale volumes in the 3QFY23 amid gradual improvement in chip supplies. Wholesale volume were 79,591 units in 3QFY23 which was up by 5.7% QoQ and 15% YoY. The company continues to see strong demand for its vehicles. As of Q3FY23, the total order book increased to 215,000 client orders, up to around 10,000 orders from Q2FY23. Demand for the New Range Rover, New Range Rover Sport, and Defender remained strong and represented 74% of the order book. JLR is witnessing cyclical recovery, supported by a favourable product mix. Further, the share of models with better profit margins increased to 65% at the end of the quarter versus 45% in the first half of FY23. After correction in stock price in last one year, the valuation also looks compelling. Positive on Tata Motors given the compelling valuation, recovery in JLR Sales volume and lower commodity prices.
Corporate Action
Dividend
16-Jan-23
TCS: Interim Dividend – Rs. – 75.00
Buyback
Softsol India: Ex-Date: 13-Jan-23
Bonus
KPI Green Energy: Bonus Issue 1:1; Ex-Date: 18-Jan-23
Stock Split
Vishnu Chemicals: Stock Split From Rs. 10/- to Rs. 2/-; Ex-Date: 13-Jan-23
Deep Diamond India: Stock Split From Rs. 10/- to Rs. 1/-; Ex-Date: 20-Jan-23
Rights Issue
Indowind Energy: Ex-Date: 13-Jan-23
Anjani Portland Cement: Open: 30-Dec-22; Close: 19-Jan-23
Pacific Industries: Open: 19-Jan-23; Close: 02-Feb-23
Indowind Energy: Open: 27-Jan-23; Close: 10-Feb-23