Losses weigh on India Inc Q3 results
India Inc’s aggregate performance in Q3FY22 has been disappointing with revenues growing at just 16.7% year-on-year, the slowest pace in the last four quarters. Moreover, net profits for a sample of 1,685 companies (excluding banks and financials) have fallen by 12% y-o-y thanks to a contraction in operating profit margins of 243 basis points y-o-y and a 24% y-o-y jump in interest costs. Also, more companies have reported losses or a year-on-year drop in profits for the quarter than in December 2021.
Except for banks, IT services and automobiles, corporate earnings growth could remain subdued in FY24 as the economy is poised to decelerate sharply. With a few days to go before the end of earnings season, analysts at Jefferies noted that of the 100 companies they analysed for Q3FY23, 40% had reported numbers that were below estimates. Much like in FY23, earnings growth is expected to be dominated by banks and financials in the coming year too
StanChart launches $1 bln buyback, lifts targets as rising rates buoy income
Standard Chartered raised its performance goals, unveiled a new $1 billion share buyback and produced a 28% rise in annual profit as global interest rate rises bolstered its lending revenues.
StanChart said almost half its 10% overall income growth came from interest, as central bank rate hikes aimed at combating inflation enabled banks to charge borrowers more after a decade of near-zero rates.
The Asia, Africa and Middle East-focused bank, which has been the subject of takeover speculation linked with First Abu Dhabi Bank (FAB) (FAB.AD), said its latest share buyback would start imminently.
Its shares rose 3.5% in Hong Kong after the announcements, while its London-listed stock opened 2% higher.