Apple unveils new iPhone and other products at its annual event. Paytm's net losses jump by a whooping 165%. Equity mutual funds witness 12.8% rise in inflows inspite of economic slowdown. UK Parliament suspension kicks off.
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Red Arrow, Pointing Up: Paytm has reported a net loss of INR3,959cr for the FY ending in March, which is a 165% jump from the same period last year. Meanwhile, the payments company’s debt has also surged to INR695cr while its revenue jumped by less than 6% to INR3,232cr.
These numbers aren’t particularly flattering given that the firm will be beginning work on its IPO in the next two years or so. Moreover, the payments landscape in India has changed. Paytm no longer has the luxury of being up against financially weaker local rivals. Today, firms like PhonePe and Google Pay (and soon, even WhatsApp Pay) pose stiff competition to Paytm, and they are also heavily backed.
Meanwhile: Paytm owner One97 Communications is reportedly in preliminary discussions to pick up a stake in Yes Bank. The talks are at a preliminary stage and any deal will require the RBI’s approval.
An Apple a Day...: It’s September – or, as tech nerds call it, iPhone time. Apple hosted its annual event today to announce the new iPhone lineup. The company unveiled three new iPhone models – iPhone 11, iPhone11 Pro and iPhone 11 Pro Max. These will replace iPhone XR, XS and XS Max respectively.
Also announced were new models of Apple Watch and the iPad in addition to announcements of the launch date of Apple TV and Apple Arcade. More details here.
That’s Pharma-tastic: If the June quarter numbers are any indication, Indian pharmaceutical firms are getting back on their feet. Q1 FY20 revenues of the top 10 pharma firms rose 13.3% from the same period last year. EBITDA margins climbed by 98bp YoY to 20.7% and net profit by 22.7%.
This uptick is due to easing headwinds in the US generics market and new drug application products by pharma companies in the US. Additionally, some pharma companies have been bagging one-off sales and distribution partners in the US have been consolidating.
Turn A New Leaf: While numbers in green are always a welcome sign, the country’s pharma industry has a lot of caching up to do when it comes to winning back people’s trust. Lax regulations and a shady past have contributed to a serious trust deficit, and the industry needs to act now and reform.
Mutual Fund Surge: While stock market returns have been lukewarm in August, equity mutual funds saw a 12.8% rise in inflows in the same period (also, the second-highest level of net inflows in ten months). Moreover, the SIP book has remained above INR8,200cr, indicating that retail investment has been patient.
Smart Work: Economic slowdowns – like the one India is undergoing presently – are particularly brutal on companies with high debt. In times like this, investing in companies by analysing only their share price and market capitalisation can cost you dearly. What should also be perused are parameters like enterprise value, market cap/sales ratio, EV/EBITDA score and Debt/EBIDTA value. More here.
Brexit Update: Britain’s MPs are being sent back home. Parliament’s five-week suspension kicks off today and MPs aren’t due to reconvene until October 14 – or, a little more than two weeks before the UK is scheduled to leave the EU.
PM Boris Johnson orchestrated the move in a bid to relieve himself of any Parliamentary opposition to a deal with Brussels or a no-deal Brexit. That has more or less backfired as MPs rallied across party lines in the past week inflicting a series of losses (six, in particular) on Johnson’s government. Not only did they deny Johnson’s call for a general election, they also instructed the Prime Minister to seek an extension of the deadline should a deal not be signed before the end of October.
It’s been an eventful – and tiring – week for British politics. Now that Parliament has been prorogued, it is anyone’s guess what Johnson will do. While he is expected to abide by MPs’ wishes, he had previously indicated he might ignore or find a way around the same
Big Tech Blues: Meanwhile, across the Atlantic another coalition of opposition has strengthened: in a rare show of unity, attorneys general from nearly every US state have come together to announce investigations into the power, reach and practices of Google and Facebook.
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