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Friday, 25 May 2018

Capitalstars news update-IDBI Q4 loss widens on provisioning as NPAs surge to 28%

State-run IDBI Bank on Friday posted a loss of Rs 5,662.76 crore for the fourth quarter ending March, its numbers being pulled down further by its deteriorating bad loans.

IDBI had reported a net loss of Rs 3,199.77 crore in the corresponding quarter of the last fiscal, the bank said in a stock exchange filing. It has now reported losses for the sixth successive quarter.

Its net interest income fell 44 per cent to Rs 915.47 crore during the quarter in consideration, as compared to Rs 1,633.29 crore in the same quarter last year.

The asset quality of the lender dropped further with the percentage of gross non-performing assets (NPAs), or bad loans, shooting up 27.95 per cent in the quarter under review, as against 21.25 per cent in the fourth quarter of 2017-18 and 24.72 per cent in the last quarter.

IDBI's gross NPAs during the fourth quarter went up to Rs 55,588.26 crore against Rs 44,752.59 crore in the same quarter last year.

Provisions and contingencies rose to Rs 10,544.34 crore during the quarter in question, over Rs 5,864.65 crore in the corresponding quarter last year and Rs 4,655.80 crore in the previous quarter ending December.

The divergence as defined by the Reserve Bank of India in IDBI's gross and net NPAs for 2016-17 stood at Rs 10,282 crore and Rs 5,818 crore, respectively.

The IDBI bank stock closed on Friday at Rs 65.10 a share, down Rs 2.10, or by 3.13 per cent on its previous close on the BSE.

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Capitalstars Updates: Dilip Buildcon declared as the lowest bidder for a road construction project worth Rs2,013cr: 28 Feb 2018

21:54 Share Market News, Share Market Tips, Share Market Updated News, Stock Advisory Company, Stock Market News, Trading Tips No comments

The project will be executed on Hybrid Annuity Mode in the state of Andhra Pradesh

Dilip Buildcon Ltd has been declared as the lowest bidder (L1) by the NHAI for a Hybrid Annuity Project in the state of Andhra Pradesh. The scope of the project involves six laning of Anandapuram-Pendurthi-Anakapalli section of NH-5 (new NH-16). The project is part of the Bharatmala Pariyojana programme. The construction period is 30 months and the operation period is 15 years from commercial operation date. The length of the project is 50.8kms.

Dilip Buildcon Ltd’s order book stood at Rs12,357cr as of Q3FY18, which was 2.4x its trailing twelve months revenues. DBL has guided for order inflows of Rs8,000-10,000cr in FY18E, on the back of strong ordering of around Rs1.4lakh cr from NHAI. The company has already received orders worth Rs3,500cr as of Q3FY18 end. We expect the company’s order book to report annual compounded growth of 15% over FY18-20E.

Dilip Buildcon Ltd is currently trading at Rs945.20 up by Rs5 or 0.53% from its previous closing of Rs940.20 on the BSE.

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Capitalstars Updates: Dr Reddy's receives unfavourable EIR for its Srikakulam plant: 26 Feb 2018

21:36 Nifty Future Tips, Share Market Company, Share Market Tips, Share Market Updated News, Stock Advisory Company, Stock Market News, Stock Tips 1 comment

The company has launched gRenvela from this site while gCopaxone has also been filed from this site.

Dr Reddy’s has announced that the company has received an unfavorable Established Inspection Report (EIR) for its API facility in Srikakulam. The EIR mentions of OAI (official action indicated) meaning that company will have to provide more details to the USFDA. This means that the plant will continue to remain under the warning letter and one has to see the next course of the action by USFDA.

The OAI is issued when there are objectionable conditions found at the manufacturing facility.

The company has indicated that the company continues to market drugs in the US markets despite the warning letter, however, it has implications for the future drug approvals. Srikakulam plant has two dosages i.e. oral solid and topicals. The company has launched gRenvela from this site while gCopaxone has also been filed from this site.

The company in November 2015 received a warning letter for its two API facilities located at Miryalaguda and Srikakulam and a formulation facility at Duvvada. Of this, Miryalaguda API plant has been cleared after successful re-inspection, while Duvvada formulations and Srikakulam API facility remain under the warning letter.

In April 2017 re-inspection, API facility in Srikakulam received two observations by the US drug regulator. These observations were in the areas of high-performance liquid chromatography (‘HPLC’) maintenance and the management of soft copies of chromatograms. In the warning letter, USFDA had also found previously undisclosed quality-control lab at the facility.

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Capitalstars Updates: PSU Banks – heading towards a collapse?: 17 Feb 2018

23:19 Nifty Future Tips, Share Market Company, Share Market Tips, Share Market Updated News, Stock Advisory Company, Stock Market News, Stock Tips, Trading Tips No comments

The Indian PSU Bank Index witnessed positive momentum from January 1, 2018 to January 24, 2018. Nifty PSU Bank Index gained 7.8% in the aforementioned period. However, with the announcement of recapitalization reforms followed by NPA reforms, the dark days of PSU banks began. Moreover, the nail in the coffin was the emergence of PNB’s ~Rs11,600cr fraud. The sector witnessed a significant slump of 15.1% (between January 25-February 16, 2018).

Story in numbers

Exhibit 1: Performance of PSU Stocks over January 1 – 24, 2018

Stock	Price as on Jan 1 2018	Price as on Jan 24 2018	Gain/(Loss) %
Punjab National Bank	169.8	194.7	14.7
Bank Of Baroda	161.5	178.4	10.4
IDBI Bank Ltd.	60.4	65.4	8.3
State Bank Of India	307.1	329.9	7.4
Indian Bank	377.2	403.1	6.9
Oriental Bank Of Commerce	121.9	129.5	6.2
Canara Bank	360.7	379.3	5.1
Syndicate Bank	79.8	82.3	3.2
Union Bank Of India	144.9	148.9	2.8
Bank Of India	169.9	172.5	1.5
Andhra Bank	58.4	58.8	0.7
Allahabad Bank	73.8	73.1	(0.9)

The government announced on January 24, 2018 about the recapitalization plans i.e. of infusing Rs88,139cr capital in 20 public sector banks before March 31, 2018. Under the recapitalization plan Rs52,300cr will be given to the weaker banks and the remaining amount will be received by healthier banks. This move was, however, in contrast to market expectations, as per the media reports. Hence, the PSU Bank Index witnessed a fall the very next day of this announcement. The icing on the cake was the RBI’s announcement of new rules for recognition of stressed assets by commercial banks.

RBI has also withdrawn the existing mechanism which included Strategic Debt Restructuring Scheme (SDR) and Scheme for Sustainable Structuring of Stressed Assets (S4A) and Corporate Debt Restructuring Scheme, The Joint Lenders’ Forum (JLF), as an institutional mechanism for resolution of stressed accounts also stands discontinued.

PNB’s declaration of ~Rs11,600cr fraud against jeweller Nirav Modi dragged the performance of Nifty PSU Bank index. Nifty PSU Bank Index was down 15.1% over January 25, 2018 - February 16, 2018.

Exhibit 2: Performance of PSU Stocks over January 25, 2018- February 16, 2018.

Company Name	Price as on Jan 25, 2018	Price as on Feb 16, 2018	(Loss) %
Punjab National Bank	180.9	125.6	(30.6)
Bank Of India	169.4	130.5	(23.0)
Syndicate Bank	76.7	59.6	(22.3)
Allahabad Bank	70.1	54.9	(21.8)
Andhra Bank	55.9	46.6	(16.6)
Union Bank Of India	141.8	118.4	(16.5)
Canara Bank	361.4	307.5	(14.9)
Oriental Bank Of Commerce	123.2	105.6	(14.3)
State Bank Of India	313.2	271.7	(13.3)
Indian Bank	377.8	337.0	(10.8)
Bank Of Baroda	167.2	152.4	(8.8)
IDBI Bank Ltd.	65.1	61.8	(5.1)

Exhibit 3: Performance of PSU Stocks over January 01, 2018- February 16, 2018.

Stock	Price as on Jan 1 2018	Price as on Feb 16, 2018	Gain/ (Loss) %
Punjab National Bank	169.8	125.6	(26.0)
Allahabad Bank	73.8	54.9	(25.6)
Syndicate Bank	79.8	59.6	(25.3)
Bank Of India	169.9	130.5	(23.2)
Andhra Bank	58.4	46.6	(20.2)
Union Bank Of India	144.9	118.4	(18.3)
Canara Bank	360.7	307.5	(14.7)
Oriental Bank Of Commerce	121.9	105.6	(13.4)
State Bank Of India	307.1	271.7	(11.5)
Indian Bank	377.2	337	(10.6)
Bank Of Baroda	161.5	152.4	(5.6)
IDBI Bank Ltd.	60.4	61.8	2.4

New norms on bad loans are likely to result in an increase in credit provisioning. In addition, it is expected to have a detrimental impact on balance sheet of the PSU banks in the coming quarters. Further, PNB’s fraud has entangled various other PSU banks leading to a significant down trend in the stocks under PSU Bank Index. The magnanimity of the PNB scam has put creditability of the PSU banks at stake.