SBI net profit rises 30% in Q2. Tata Motors losses narrow in Q2 results. Amazon Q3 profits fall 26%. Facebook News Tab feature to be unveiled tomorrow. Google to roll out change in algorithm that could affect search results.
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3 Times 3: India’s largest lender, State Bank of India (SBI) reported a standalone net profit of INR3,011.73cr in Q2 vs net profit of INR2,312.20cr crore posted in the previous quarter.
Asset quality of the lender improved with gross non-performing assets (NPA) declining to 7.19% of the gross advances as on September 30, 2019, from 9.95% a year ago. Net NPA ratio was at 2.79%, down 205 bps YoY and 28 bps QoQ.
SBI share price surged as much as 8.11% during the day before closing at INR282.35 (7.56%). NDTV Profit
It’s Time To Go: KKR’s India NBFC Head, B.V. Krishnan, is leaving the organisation after a decade of heading the business following a spate of corporate lending exposures coming under stress.
KKR India’s CEO Sanjay Nayar is set to take over.
Fun Fact: KKR is one of the first global PE firms to set up lending operations in India. Deal Street Asia
Not The Worst That Could Have Happened: Indian auto major Tata Motors today posted a consolidated loss of INR216.56cr in Q2 against a loss of INR1,048.80cr in the same period last year.
The owner of Jaguar Land Rover reported a smaller-than-expected loss as sales of the luxury car picked up in China, even amid slowing demand for passenger and commercial vehicles in India.
Tata Motors revenue declined 44% to INR9,913cr in July-September period. BS
Pay Up: Private telecom operators in India, Airtel and Vodafone are likely to get hit hard as the government recently ordered telcos to pay up as much as INR92,642cr as it upheld the definition of Adjusted Gross Revenue (AGR) calculation as stipulated by the Department of Telecommunications (DoT).
This is a huge blow to the private telcos who have been running losses for the past many quarters, and show no signs of making money in the near future.
Interestingly, however, the government recently announced a revival plan for loss-making telecom PSUs BSNL-MTNL. The revival plan involves a merger of the two firms, a fund infusion of INR20,000cr by the government, a further INR30,000cr burden for a voluntary retirement scheme for employees, besides other measures such as asset monetisation and allotment of 4G spectrum. Livemint
Big Brother is Watching: Audit firm of debt-ridden Dewan Housing Finance Limited (DHFL) TP Ostwal & Associates is likely to come under regulatory scanner after it gave a clean chit to the company. DHFL board had appointed TP Ostwal & Associates soon after Cobrapost unearthed alleged fund diversion by DHFL promoters to the tune of about INR20,000cr from the company. BS
Twist in the Tale: Meanwhile, a special audit by KPMG found that DHFL had disbursed loans and advances to inter-connected entities seemingly linked to its promoters, and repayments to the tune of INR12,541cr by 28 such entities are untraceable. Moreover, loans and advances totalling INR24,594cr were disbursed with inadequate loan documentation to 65 entities that had minimal operations. Moneycontrol
Searching for Change: Google is reportedly rolling out an amendment to its search algorithm that could affect the rankings of results for about 10% of all search queries.
Till today, Google’s algorithm essentially treated a sentence as a “bag of words”, determining the meaning of the entire query through the meaning of each individual word. The tweak that Google has been working on now will allow the search engine to understand a sentence based on context by reading words in groups and together rather than separately. The Verge
Zuckerberg News Network: Facebook is unveiling its News Tab tomorrow. About 200 mainstream publishers are already onboard. But if Facebook’s previous content experiments are any indication, News Tab does not bode well for publishers and journalists. “To the aggregator, the suppliers are interchangeable and disposable. Publishers are essentially ghostwriters for the Facebook News destination. Becoming dependent upon the aggregator means forfeiting control of your destiny.” TechCrunch
Down and Downer: Marking its first profit decline since 2017 and blotting two years of surging growth, Amazon reported that Q3 profit fell 26% from a year ago to $2.1bn. This translates to $4.23 a share, missing analysts’ estimate of $4.59/share.
The third quarter included Amazon’s Prime Day, the mega shopping event that for the company involves increased spending and steep discounts. As Amazon amps up its shipping empire and focuses on one-day deliveries to Prime customers, its global shipping costs have jumped 46% from last year. In the coming quarter, shipping costs are expected to continue rising given that Q4 includes the holiday season. WSJ
Not Richest, But Still Extremely Rich: The lackluster earnings report sent Amazon’s shares tumbling by 7% in after-hours trading. This knocked off $103.9bn of Jeff Bezos’s fortune. Following this, he was relegated to second position on the list of world’s richest people, with Bill Gates reclaiming the throne with his $105.7bn. Forbes
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