Pre-Covid growth levels expected in two years
- As per the 2021 Economic Survey, India is expected to grow at 11% in FY22, 6.5% in FY23 and 7% in FY24. However, as the rollout of the vaccines picks up traction, economic activities would get normalised, leaving upside potential to the above estimates.
- What is also encouraging is that the Indian government may continue its expansionary fiscal stance in order to sustain the recovery in demand.
Dr Reddy’s Q3 underperforms expectations
- The shares of Dr Reddy’s Laboratories fell 5.3% today as the company reported a consolidated net profit of ₹20 crore for Q3 versus street expectations of ₹709 crore. The profits were impacted by an impairment charge of around ₹600 crore.
- Its revenues grew 12% YoY to ₹4,941 crore, driven by new product launches and volume increase in the European and Indian businesses which grew 34% YoY and 26% YoY, respectively.
Shriram Transport soars on improved asset quality
- The used-vehicle and fleet financer’s net interest income for Q3 rose by 2% to ₹2,202 crore, beating street estimates of ₹2,076 crore. However, net profit declined 17% to ₹727.7 crore, owing to a nearly 52% YoY increase in loan provisioning, which stood at ₹674 crore.
- Its asset quality showed sharp improvement with net NPA at 3.22% as compared to 6.09% last year. The disbursements rose 9.9% YoY. The stock surged 16.2% today.
Tata Motors’ Q3 earnings rise on JLR bounce back
- The automaker posted an impressive rise of 67.5% YoY in consolidated net profit to ₹2,941 crore. The numbers beat the street estimates of ₹1,173 crore by a wide margin. Meanwhile, revenue from operations rose 5.5% to ₹75,654 crore.
- The major driving factor was Jaguar Land Rover, which delivered an impressive 38.1% YoY rise in its profit before tax.
- On the domestic front, passenger vehicles and commercial vehicles showed marked improvement with 78% and 21% YoY rise in revenues, respectively. The stock has risen over 40% this month ahead of the results but was down 1.5% today.
Sun Pharma’s Q3 beats street estimates
- The pharma major reported Q3 net profit of ₹1,853 crore, beating street estimates of ₹1,379 crore. Crucially, net profit more than doubled from ₹914 crore recorded during the same period last year. The consolidated revenue rose by a more modest 8% to ₹8,837 crore.
- The surge in profits is a result of an increase in other income and improvement in global speciality sales owing to recovery from the pandemic. The company also announced an interim dividend of ₹5.5 per share. The stock closed 4.2% higher today.