Stock Market Index LIVE on Monday: In the broader market, the BSE MidCap index gained 0.9 per cent, while the SmallCap jumped 1.3 per cent.
Stock Market LIVE on Monday, July 29: Index Benchmarks Nifty50 and Sensex Index were trading at record high levels on Monday led by a strong rally in banking sharess and Larsen &Toubro.
The Index BSE Sensex quoted around 81,750 levels, up 400 points. The Nifty 50 index was up over 100 points at 24,950 levels, merely 50 points shy from the milestone 25,000.
L&T, SBI, ICICI Bank were the top gainers while Titan, Tech Mahindra, Bharti Airtel were the top laggards on BSE.
Similarly, on NSE, L&T, SBI and ICICI Bank were the top gainers while Tata Consumer, Cipla, and Titan were the top laggards.
In the broader market, the BSE MidCap index gained 0.9 per cent, while the SmallCap jumped 1.3 per cent.
The Index Nifty PSU Bank was the top gainer, up over 3 per cent, followed by Realty (up 1.68 per cent).
KFin Technologies hits 52-week high on Index robust Q1FY25; topline grows 31%
The Index surge in the stock price came after the company posted a strong set of June quarter results (Q1FY25).
KFin Technologies stock in focus: Shares of KFin Technologies, a technology-driven financial services platform, rose as much as 7.56 per cent to hit an intraday high of Rs 833 per share.
The Index surge in the stock price came after the company posted a strong set of June quarter results (Q1FY25).
The company’s profit rose over 57 per cent on a year-on-year (Y-o-Y) basis to Rs 68 crore in the June quarter of financial year 2025 (Q1FY25), as opposed to Rs 43.3 crore in the June quarter of financial year 2024 (Q1FY24). Index
KFin Technologies’ revenue from the operation climbed approximately 31 per cent Y-o-Y to Rs 237.5 crore in Q1FY25, from Rs 181.5 crore in Q1FY24.
On the operating front, the company’s earnings before interest, tax, depreciation and amortisation climbed 41.3 per cent Y-o-Y to Rs 99.5 crore in Q1FY25, from Rs 70.4 crore in Q1FY24.
The Ebitda margin rose 310 basis points (bps) to 41.9 per cent in the June quarter of the current fiscal year, from 38.8 per cent in the same quarter last year. Index
“We are pleased to report a strong start to fiscal year 2025. Throughout the quarter, we achieved significant milestones across our diverse business segments, marked by substantial new client wins, growth, and enhanced profitability. Notably, we gained significant traction in new contract sign ups in the fast-growing business lines of global fund services (international), alternatives and wealth solutions, fund administration solutions, and technology solutions. Our deep domain expertise, combined with tailored product solutions and proactive sales strategies, consistently bolster our market position in India while accelerating our growth in international markets.
We stay committed in our pursuit to establish KFintech as a leading global fund administrator. Our strong operational execution, ongoing investment in cutting-edge solutions, and proactive client engagement initiatives underscore our commitment to this goal,” said Sreekanth Nadella, managing director and CEO, KFin Technologies Limited.
KFin Technologies is a technology-driven financial services platform that delivers a wide range of solutions to the capital markets ecosystem. This includes asset managers and corporate issuers across various asset classes in India. Index
KFintech offers comprehensive investor solutions globally, including transfer agency, fund administration, fund accounting, data analytics, digital onboarding, and transaction origination and processing for alternative investments, mutual funds, unit trusts, insurance investments, and private retirement schemes. Its services extend to global asset managers in Malaysia, the Philippines, Singapore, Hong Kong, Thailand, and Canada. Index
At 11:06 AM, shares of KFin Technologies were trading 3.24 per cent higher at Rs 799.55 per share. In comparison, BSE Sensex was trading 0.46 per cent higher at 81,710.23 levels. Index
Budget FY26 may reintroduce concessional corporate tax of 15%
The Centre has set up an internal committee to evaluate the benefits of the 15% concessional tax rate scheme for new domestic manufacturing units, introduced in FY20
The Government of India is evaluating the impact of the 15 per cent concessional corporate tax rate scheme for new manufacturing units, which ended on March 31, 2024, to determine whether it should be reintroduced, according to a report by The Financial Express (FE). The scheme was introduced in 2019 and was aimed at boosting private investment in the manufacturing sector by offering a competitive tax regime, in line with the ‘Make in India’ initiative. Index
What is a concessional corporate tax rate scheme?
The concessional corporate tax rate scheme comes under Section 115BAB of the Income Tax Act. Domestic companies, meeting certain requirements, can opt to pay a lower tax rate of 15 per cent, plus surcharge and cess.
The scheme was introduced via ordinance in September 2019, to be effective from financial year 2019-2020 (FY20), for new domestic manufacturing companies incorporated after October 1, 2019. Index
The scheme also allows companies to enjoy this lower tax rate indefinitely, unless the government rolls back or terminates the scheme.
The scheme saw significant adoption, with the number of companies opting for the concessional rate doubling from 1,244 in FY20 to 3,508 in FY21. Total income taxed under the scheme also increased from Rs 770 crore in FY21 to Rs 2,361 crore in FY22, according to data shared by FE. Index
One of the requirements of the scheme was that companies had to commence production by March 31, 2023, to avail the 15 per cent tax rate. This was later extended to March 31, 2024, due to pandemic-related delays.
Ahead of the Interim Budget 2024, EY suggested further extending the sunset date to March 31, 2025 in its Budget expectations document. However, the Interim Budget did not include any extension.
Review meeting for concessional corporate tax
Latest media reports indicate that an internal review is being set up to focus on how the scheme benefited companies and stimulated manufacturing activity. The scheme’s reintroduction might be considered in the next Budget if it is deemed successful.
Without the scheme in place, new manufacturing units will be liable to pay corporate tax of 22 per cent.
Tax scheme could help India become global mfg hub
Experts believe reintroducing the concessional tax scheme could help India become a global manufacturing hub, by reducing reliance on imports and promoting self-sufficiency. Such a scheme would attract foreign investment by providing a more competitive landscape than countries like China, Japan, Malaysia, and Vietnam.
The Budget FY25, presented on July 23, announced a reduction in the corporate tax rates for foreign companies to 35 per cent from 40 per cent to attract fresh investments from foreign-owned foreign-controlled companies (FOCC). This proposal by the Centre aims to simplify taxation, narrow the disparity between the taxes paid by domestic and foreign companies in the country, and improve foreign investments in India.
The government’s review of the 15 per cent concessional corporate tax rate scheme will likely inform future policy decisions to enhance India’s manufacturing sector and overall economic growth.
Why is China abandoning gold jewellery?
In dollar terms, gold prices hit $2,331/oz at the end of H1-CY24, according to WGC data, rising 12.1 per cent during this period
Gold price today India, China: China, one of Asia’s biggest consumer of gold besides India, seems to be turning its back to the yellow metal, suggests Christopher Wood, global head of equity strategy at Jefferies.
A near-term negative, Wood wrote in his weekly note to investors, GREED & fear, has been evidence of weakening Chinese demand as reflected in gold recently moving to a discount in Shanghai for the first time since June 2023, which has dropped from a $63/ounce (oz) premium to international prices in mid-June to a $12/oz discount last week. This was the biggest discount since early May 2023, though it rose again to a $13/oz premium thereafter, data showed.
Another bottom-up evidence of weakening demand in China, Wood said, also came with the release of quarterly data by Hong Kong-quoted Chow Tai Fook on Tuesday, a retailer of gold and jewellery. It reported a 20 per cent YoY decline in retail sales value in Q1-FY25 ended June 2024, with same store sales (SSS) declining by 26 per cent YoY in Mainland China, and by 31 per cent YoY in Hong Kong/Macau.
“The latest data shows weakening Chinese consumer demand for gold. According to the National Bureau of Statistics, retail sales value of gold, silver and jewellery at enterprises above a designated size declined by 3.7 per cent YoY in June following 11 per cent YoY decline in May. It was up only 0.2 per cent YoY to Rmb172.5 billion in H1-CY24, compared with a 13.3 per cent YoY increase in 2013. China gold imports plunged 58 per cent MoM and 40 per cent YoY to 58.9 tonnes in June, the lowest level since May 2022. Such data presumably reflects Chinese consumers’ resistance to rising gold prices in renminbi terms,” Wood wrote.
Meanwhile, in the January – March 2024 quarter (Q1-CY24), gold demand for jewellery in Mainland China dropped 6 per cent YoY to 184.2 tonnes, according to World Gold Council (WGC), from 195.6 tonnes.
Central bank demand for gold remains firm
The sharp upward trend in the gold prices over the last 12 – 18 months, analysts said, has cast its shadow on the overall gold jewellery demand. The rise in gold prices in the above period, according to WCG estimates, has been due to firm demand from global central banks that contributed at least 10 per cent to gold’s performance in 2023 and potentially around 5 per cent in 2024.
 "Gold imports, gold prices")
The gold bullion price in renminbi terms has risen by 37 per cent since the beginning of 2023. In dollar terms, gold prices hit $2,331/oz at the end of H1-CY24, according to WGC data, rising 12.1 per cent during this period. In rupee terms, prices surged 12.3 per cent during this period to hit Rs 62,440 per 10 grams, with an average price of Rs 58,944 per 10 grams in H1-CY24, WGC said.
In 2023, central banks added 1,037 tonnes of gold – the second highest annual purchase in history – following a record high of 1,082 tonnes in 2022, WGC said.
According to the 2024 Central Bank Gold Reserves (CBGR) survey conducted between February 19 and April 30, 2024 with a total of 70 responses, 29 per cent of central banks, WGC said, intend to increase their gold reserves in the next 12 months, the highest level they have observed since WGC began this survey in 2018.
“The planned purchases are chiefly motivated by a desire to rebalance to a more preferred strategic level of gold holdings, domestic gold production, and financial market concerns including higher crisis risks and rising inflation,” the WGC note said.
The stock should re-rate after Q1, say analysts for ICICI Bank
ICICI Bank share price today: Shares of ICICI Bank rose 2.4 per cent to an intraday high of Rs 1,237 per share
ICICI Bank share price target after Q1 2024 results: Driven by steady quarterly results in the June quarter of financial year 2024-25 (Q1FY25), analysts expect ICICI Bank stock to re-rate in months ahead with up to 20 per cent returns likely over the next 12 months.
On Saturday, July 27, ICICI Bank reported a standalone net profit of Rs 11,059 crore in the June quarter of FY25, clocking a gain of 14.6 per cent year-on-year (Y-o-Y).
“ICICI Bank continues to deliver consistent performance even in seasonally weak quarters even as earnings volatility of its peers is rising. Given the increasing quarterly earnings volatility and high loan-to-deposit ratio (LDR) of most peer banks, we argue ICICI Bank’s premium to peers should expand further and the stock should re-rate,” said analysts at Nuvama Institutional Equities.
The brokerage retained its ‘Buy’ rating on the stock with a target price of Rs 1,450 as ICICI Bank, it said, turned in strong earnings and outperformed on three key concerns plaguing its peers in Q1FY25: asset quality, LDR and net interest margin (NIM).
Meanwhile, its net interest income (NII) rose by 7.3 per cent Y-o-Y to Rs 19,553 crore with NIM down 4 basis points quarter-on-quarter (Q-o-Q) at 4.36 per cent in Q1FY25.
On the asset quality front, ICICI Bank reported gross non-performing assets (NPAs) ratio at 2.15 per cent in Q1FY25 as compared to 2.16 per cent in Q4FY24. It reported a steady net NPA ratio of 0.43 per cent.
While slippages increased 11 per cent Y-o-Y and 14 per cent Q-o-Q, these were slower than peers. The Q-o-Q uptick, too, was driven by seasonal slippage in Kisan Credit Card (KCC), but lower than Street estimates.
While core credit cost inched higher to 60bps, opex growth remained in check at 11 per cent Y-o-Y (vs 19 per cent Y-o-Y growth in FY24).
“ICICI Bank increased its LDR in Q1FY25 to 86 per cent from 84 per cent in Q4 – but this remains among the lowest for large private banks. We lower FY25-26F earnings per share (EPS) estimate by 3 per cent but expect ICICI Bank to deliver sector-leading 2.2 per cent return on asset (RoA) and 17-18 per cent return on equity (RoE) over FY25-26,” said those at Nomura.
The Japan-based brokerage reiterated its ‘Buy’ rating on ICICI Bank stock with an upwardly revised target price of Rs 1,420 (from Rs 1,335).
On the bourses, shares of ICICI Bank rose 2.4 per cent to an intraday high of Rs 1,237 per share. By comparison, the benchmark BSE Sensex was up 0.4 per cent at 9:35 AM.
ICICI Bank share hit a record high of Rs 1,257.6 per share on July 11, 2024 and trades at a price-to-earnings (P/E) multiple of 20.78 times.
Unsecured loans in focus
In Q1FY25, ICICI Bank’s total deposit surged 15.1 per cent Y-o-Y (flat Q-o-Q), with most of the growth coming from term deposits (up 19.8 per cent Y-o-Y and 3.1 per cent Q-o-Q).
On the asset side, loan growth came at 16 per cent Y-o-Y with retail segment rising 17 per cent, business banking 36 per cent, and rural loans 17 per cent on year. Corporate loans, meanwhile, grew at a slower pace of 10 per cent Y-o-Y.
Within loans, ICICI Bank, according to analysts, has grown its portfolio of unsecured loans at a faster pace with the share of these loans at around 13 per cent of total loans.
As several lenders raised concerns about the performance of this portfolio in Q1FY25 quarter, ICICI Bank’s underwriting strength may be put to test, they added.
“Nonetheless, in a scenario where the bank’s credit costs are lower-than-peers at the end of this period, we could see the bank building enough confidence to put the debate on pro-cyclicality of the franchise to rest,” said analysts at Kotak Institutional Equities.
They, too, have retained their ‘Buy’ rating on ICICI Bank stock with a higher target price of Rs 1,400 (from Rs 1,300).
“Though the stock’s valuation premium is high compared to peers, a business-as-usual performance amid low headwinds should enable the bank to deliver a strong performance,” the brokerage said.
Source: Business Standard
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