Federal Bank Q1 profit up 108% on fall in provisions.

Federal Bank's net interest income, the difference between interest earned and interest expended, grew 10.7 percent year-on-year to Rs 564.2 crore during April-June quarter.

Private sector lender  Federal Bank  reported strong earnings with the first quarter (April-June) net profit surging 108 percent to Rs 220.2 crore compared to Rs 105.7 crore in same quarter last year, aided by sharp fall in provisions and improvement in asset quality performance despite fall in other income. Net interest income, the difference between interest earned and interest expended, grew 10.7 percent year-on-year to Rs 564.2 crore during April-June quarter while other income (non-interest income) fell 27.5 percent to Rs 156.54 crore from Rs 215.79 crore year-on-year. Net interest margin was down to 3.25 percent from 3.6 percent on sequential basis. On the asset quality front, gross non-performing assets (NPA) slipped 24 basis points sequentially and 129 bps on yearly basis to 2.22 percent and net NPA declined 6 bps Q-o-Q and 23 bps Y-o-Y to 0.68 percent in the quarter gone by. In absolute term, gross NPA dropped 6.5 percent Q-o-Q and 31.5 percent Y-o-Y to Rs 1,016.43 crore and net NPA went down 5.5 percent Q-o-Q and 18.7 percent Y-o-Y to Rs 303.9 crore during April-June quarter. Provisions saw a significant fall during the quarter, down to Rs 22 crore compared to Rs 55 crore in previous quarter and Rs 235 crore in same quarter last year. In Q1FY14, provisions of the bank spiked 290 percent Y-o-Y to Rs 245 crore that resulted in PAT falling 44 percent Y-o-Y to Rs 106 crore.

Introduction of export subsidy and hike in import duty of raw sugar from 15% to 40%: CARE

Sugar industry was partially decontrolled in April 2013 by dispensing levy sugar obligation and dismantling the monthly release mechanism of non-levy sugar.

Sugar industry is the second-largest agro-based industry in India and plays a pivotal role in the socio-economic development of the rural India. The industry is cyclical in nature and the entire value chain is regulated leaving very little scope to the industry to play under free market forces. The excessive control mechanism led the Indian Sugar Industry to grapple under several challenges including mounting debt, squeeze on profitability because of high sugarcane prices fixed by various State Governments, sole dependence on the farmers of allotted area for sugar cane procurement and loss on account of meeting levy obligation at a subsidized price. Based on the recommendation made by Rangarajan Committee, the industry was partially decontrolled in April 2013 by dispensing levy sugar obligation and dismantling the monthly release mechanism of non-levy sugar. Despite that, rising inventory levels, lower exports and slow implementation of the ethanol blending program continued to be the overriding factors affecting the industry. Goverment of India has taken several initiatives for reviving the industry like introduction of export subsidy of Rs.3.3/kg and hike in import duty of raw sugar from 15% to 40%. Though these measures may provide some respite to the ailing sugar industry in the short-term, the real turnaround of the Indian Sugar industry will depend much on the full implementation of the Rangarajan Committee’s recommendation especially implementation of sugarcane price-sugar price linkage formula.

South Indian Bank Q1 net profit up 9.7% at Rs 126 cr

South Indian Bank has made an exceptional gain of Rs 43 crore on change in depreciation policy during April-June quarter.

South Indian Bank  's first quarter (April-June) net profit was up by 9.75 percent to Rs 126 crore compared to Rs 114.8 crore in same quarter last year. Net interest income rose to Rs 341 crore versus Rs 328 crore, Y-o-Y. The bank's Q1 net NPA was up at Rs 310 crore versus Rs 281.6 crore and gross NPA was up at Rs 517 crore versus Rs 432 crore on sequential basis. The bank has made an exceptional gain of Rs 43 crore on change in depreciation policy. Its Q1 provisions stood at Rs 94.6 crore as against Rs 28.3 crore Q-o-Q and Rs 105.3 crore Y-o-Y.

Crude oil falls below $100 for first time since May

The price of oil fell below $100 a barrel for the first time since May even as the deteriorating security situation in Libya has raised questions about whether the country can soon increase crude exports. 

Benchmark U.S. crude for August delivery fell 95 cents to close at $99.96 a barrel on the New York Mercantile Exchange. Oil is down 5 per cent since the beginning of the month. 
Brent crude, a benchmark for international oils used by many U.S. refineries, fell 92 cents to close at $106.02 on the ICE Futures exchange in London. 

Prices have been falling in recent weeks as worries about supply disruptions from Iraq eased and on the prospect of more supplies from Libya. Weaker than expected economic data for the first half of the year prompted the International Energy Agency and other experts to trim their forecasts for short and medium term dOn Tuesday, Fed Chair Janet Yellen's remarks to Congress on the U.S. economy strengthened the value of the U.S. dollar, also helping to push oil lower. Because oil is priced in dollars, a stronger dollar makes oil look comparatively more expensive _ and therefore less desirable _ to holders of other currencies. 

Kotak Mahindra Bank Q1 net up 11%, asset quality improves

Kotak Mahindra Bank's consolidated net interest income, the difference between interest earned and interest expended, rose 9.9 percent to Rs 1,510.07 crore compared to Rs 1,374.04 crore year-on-year

Private sector lender  Kotak Mahindra Bank  reported stable earnings with the consolidated net profit rising 11.3 percent on yearly basis to Rs 698.3 crore during April-June quarter on account of lower provisions and higher other income but higher operating expenses limited profitability of the bank. Consolidated net interest income, the difference between interest earned and interest expended, rose 9.9 percent to Rs 1,510.07 crore compared to Rs 1,374.04 crore year-on-year while other income (non-interest income) jumped 38 percent to Rs 1,871.27 crore during June quarter aided by profit on sale of investments including revaluation (insurance business). Operating expenses during the quarter shot up 42.9 percent to Rs 2,322.82 crore compared to Rs 1,625.72 crore in same quarter last year due to policy holders’ reserves, surrender expenses and claims. Asset quality of the bank improved in the quarter gone by on sequential basis. Gross non-performing assets (NPA) declined to 1.56 percent versus 1.63 percent quarter-on-quarter and 1.58 percent year-on-year while net NPAs slipped to 0.81 percent in June quarter from 0.88 percent in year-ago period Q-o-Q (0.80 percent in Q1FY14). Provisions and contingencies stood at Rs 27.24 crore during first quarter as against writebank of Rs 0.6 crore in previous quarter. In Q1FY14, provisions were Rs 159.55 crore.

Tomato at Rs 60/kg as vegetable prices surge in Delhi

Last week it was onions, now it's tomatoes that are making Delhiites see red. In the last fortnight, vegetable prices have skyrocketed in the national capital and almost doubled in some cases in the retail market. Tomatoes have seen the sharpest hike in prices, touching Rs 60/kg in some parts of the city, followed by onions, capsicum and cauliflowers. Potato prices have also surged. 

The overall rise in vegetable prices has sent households in a tizzy as they struggle to meet their daily expenses 

Tomatoes in particular have taken a hit lately. Delhi gets tomato produce from Himachal, Karnataka and Maharashtra. Each state has been badly hit by delayed rainfall and a large percentage of the crops have failed.

NIIT Tech falls over 5% as June quarter results disappoints

Shares of NIIT TechnologiesBSE -7.15 % fell over 5 per cent in trade after the company disappointed the street with its June quarter results. 

NIIT Tech reported a net profit of Rs 43.2 crore for the quarter ended June 2014, down 18.7 per cent, against a net profit of Rs 53.2 crore in the corresponding quarter last fiscal. 

Revenues grew to Rs 577.6 crore, up 6.6 per cent in June 2014 quarter as compared to Rs 541.9 crore in the same period last fiscal. 

The results were below expectations, say analysts at Prabhudas Lilladher. The brokerage has lowered its target price to Rs 440 from Rs 510 earlier. 

"Growing fresh order intake and improved deal pipeline gives revenue visibility; however, clients' specific issues marred growth at topline and bottomline over the last two quarters. We expect stock to remain under pressure in the near term. But, we are factoring in improved revenue momentum in H2FY15 along with margin uptick," the report said. 

June trade deficit touches 11-month high at $11.76 bn.

For the first three months of the year (April-June), the trade deficit stood at USD 33.08 billion against USD 48.33 billion, exports rose 9.3 percent to USD 80.11 billion, while the imports declined 6.9 percent to USD 113.20 billion on a year on year basis.

The June trade deficit touched 11-month high to USD 11.76 billion against USD 11.23 billion (MoM) and USD 11.28 billion (Y-o-Y). Though the imports dipped slightly to USD 38.24 billion against USD 39.23 billion on a month on month basis, it grew 8.3 percent on a year on year basis. Even exports rose 10.2 percent to USD 26.48 billion (YoY), but declined from USD 28 billion on a month-on month basis. For the first three months of the year (April-June), the trade deficit stood at USD 33.08 billion against USD 48.33 billion, exports rose 9.3 percent to USD 80.11 billion, while the imports declined 6.9 percent to USD 113.20 billion on a year on year basis. The other data stood as - Oil imports at USD 13.3 billion Vs USD 14.46 billion (MoM) Oil exports at USD 6.14 billion vs USD 5.9 billon (MoM) Non-oil imports at USD 24.9 billion Vs USD 24.76 billion (MoM) Gems, Jewellery exports at USD 3.31 billion vs USD 3.43 billion (MoM) Silver imports at USD 212.8 million Vs USD 410 million (MoM) Gold imports at USD 3.1 billion Vs USD 2.19 billion (MoM)

IndiGo finalises seven banks for Rs 2,000 crore IPO

Report stated that the company plans to sell 25% stake. IndiGo has finalised seven banks to raise up to $400 mn (Rs 2,404 crore) via its Initial Public Offerings, according to reports. Report stated that the company plans to sell 25% stake. The banks include Citigroup, Deutsche Bank, JPMorgan, UBS, Standard Chartered, Morgan Stanley and Kotak Mahindra, added report. The company aims to list towards the end of the current financial year.

IDFC gains as RBI eases infra bond sale norms

IDFC Ltd rallied as much as 4.93 per cent in trade on Wednesday, after the Reserve Bank of India (RBI) allowed banks to raise long-term funds to lend to affordable housing and infrastructure. 

IDFC, which is a leading finance company especially for infrastructure sector obtained a banking license back in April, is seen as one of the main beneficiaries of the measures. 


The seven-year bond with no secondary market trading option can be issued by banks at a fixed or variable rate. Additionally, the bonds will not attract any statutory pre-emption such as cash reserve ratio (CRR) or statutory liquidity ratio (SLR). 

Currently, the funds raised by IDFC are subject to several regulatory requirements. However, with the new proposal, banks will be on par with other infrastructure financing companies in terms of lending to this segment. 

RBI's relaxation on regulatory asset-allocation norms for banks on loans to infrastructure and affordable housing may allow them to lower lending rates for such loans by 150-200bps without compromising on spreads 

It is a big positive as against base case scenario of RoE remaining below 10 per cent, brokerage firm, Edelweiss said in a report. Its RoE can scale up to over 12 % by FY19, added the report. 

Sun Pharma acquires US-based Pharmalucence

Sun Pharmaceutical Industries Ltd BSE 0.85 %, India's third-largest generic drugmaker by sales, said on Wednesday it had acquired US-based Pharmalucence Inc, which has sterile injectable capacity and research capabilities. 

Indian rupee opens at 60.23 per dollar; down 11 paise

The Indian rupee slipped in the opening trade on Wednesday. It has opened lower by 11 paise at 60.23 per dollar against 60.12 Tuesday. The dollar clung to modest gains post comments by the head of the Federal Reserve that rates could rise sooner if employment continued to improve, while strong inflation sent Sterling to a six-year high. Himanshu Arora of Religare said that, "Rupee is expected to trade slightly weaker today reacting to comments of the Fed Chief Yellen, who said increase in Federal Funds rate will likely occur sooner and be more rapid if labour market continues to improve." "Dollar buying by state run banks for oil related demand may also underpin dollar moves in today's session. Range for the rupee is seen between 59.97-60.35/dollar," he added. 

Oil ministry plans to reduce energy imports from Gulf countries, turns to Russia for fuel

The oil ministry has chalked out a strategy to gradually reduce energy sourcing from politically volatile countries in the Gulf region and explore importing natural gas from Russia, Iran and CIS countries, government sources said.

In a recent presentation to the prime minister, the oil ministry also proposed a new regime to manage oil-field contracts. In the current system the contractor recovers costs before sharing profit with the government. In the proposed system, the two sides share revenues from the day production starts. "The matter is under active consideration of the governnt," one source said.

Officials say the simpler new regime should minimize state interference in oil-field affairs and boost private investment, leading to higher output and better energy security.

To improve energy security, oil ministry officials say the country should avoid heavy dependence on oil and look at opportunities to import natural gas from all possible sources.

India has warm relations with Russia, which is the world's second-biggest producer of gas and third-largest producer of crude oil.

According to US Energy Information administration, oil and gas revenues account for over 50 per cent of Russia's budget revenues. 

The oil ministry is also working on oil supply diversity especially after political disturbances in Iraq, India's biggest crude oil supplier after Saudi Arabia. India committed to import about 19 million tonnes of crude oil from Iraq and is concerned about the situation in the region, another government official said.

India is planning to source crude oil from Canada after it has developed Venezuela as one of the major suppliers outside the Gulf countries.