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Manappuram Finance share price rallies 42% in less than two months as Q4 results surprise

Manappuram Finance share price surged as high as 7.23 per cent to hit a day’s high of Rs 131.90 apiece on BSE in Friday’s weak session. Manappuram Finance on Thursday posted a nearly 44 per cent rise in net profit at Rs 398.20 crore for the quarter ended on March 31. The company had posted a net profit of Rs 277.39 crore in the corresponding period of preceding fiscal. Manappuram Finance share price has risen over 42 per cent in less than two months from Rs 75.60. However, the stock is still 32 per cent off from its 52-week high of Rs 194.60 touch in the first month of the calendar year 2020. “In the lockdown period, the company has been disbursing gold loans worth Rs 7-8 billion daily through the online channel,” Manappuram Finance concall highlighted.

Manappuram Finance shares were trading 3.25 per cent higher at 127 apiece on BSE. It also added that hardly any customers have taken moratorium. “Interest collections not impacted as the level of interest accrued pre and post Covid remains similar,” it said. Research and brokerage firm YES Securities has given a ‘buy’ rating to the stock with a 12 months target price of Rs 165, which translates to an upside of over 25 per cent. the brokerage further added that robust profitability in gold loan business will mitigate COVID-19 impact on other loan segments.

Manappuram also raised Rs 100 crore through TLTRO scheme and additional bank lines worth Rs 200 crore got sanctioned since March 31. “It expects bank sanctions to open-up in the coming months,” Concall highlighted. The company’s gold holding went up to 72.4 tonne from 67.5 tonne, a surge of 7.2 per cent over the year. Similarly, during the year, aggregate gold loan disbursements increased up to Rs 168,909 crore from Rs 89,649 crore in the last year. As of March 31, 2020, the number of live gold loan customers stood at 26.2 lakh.

Manappuram Finance also reappointed Madhu Mohan, General Manager as the Chief Risk Officer (CRO) of the company for a period of one year, with effect from July 17, 2020. The company said it has offered its customers to opt for a three-month moratorium as per Reserve Bank of India’s (RBI) directions.

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REC share price, PFC stock fall even as power stocks rally on liquidity push from Modi’s package

Power stocks rallied up to 13 per cent on BSE in otherwise weak trade on Thursday after Finance Minister Nirmala Sitharaman announced a much-awaited relief package for ailing power distributing companies. A part of Rs 20 lakh crore Atma Nirbhar Bharat Abhiyan package will provide a fresh loan of Rs 90,000 crore through PFC-REC to state-run power distribution companies (discoms) which will reduce receivables of electricity generation companies. In today’s trade REC share price fell 2.33 per cent to Rs 98.15, while Power Finance Corporation (PFC) shares dropped 2.17 per cent to Rs 87,65 apiece. However, other power stocks Adani Power share price rallied up to 13 per cent to Rs 36 apiece on BSE, Tata Power shares jumped 9.5 per cent to Rs 33.20 apiece, Reliance Infrastructure shares gained 5 per cent to Rs 18.15.

Similarly, shares of Jaiprakash Power Ventures, Reliance Power, K.P. Energy were up in the range of 3-5 per cent. While JSW Energy, Torrent Power, CESC, Green Power gained up to 3 per cent in the morning trade. However, Power Finance Corporation and PEC shares slipped over 2 per cent each to Rs 87.65 and Rs 98.15, respectively. In comparison, BSE Sensex was down 509 points or 1.59 per cent at 31,499.22. “Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) will infuse liquidity in the discoms to the extent of Rs 90,000 crore in two equal instalments. This amount will be used by discoms to pay their dues to transmission and generation firms,” FM Sitharaman said.

The government has also announced to give loans against state guarantees for the exclusive purpose of discharging liabilities of discoms to gencos. Also, discoms will provide the facility of digital payments to consumers. “For the DISCOMS, the amount may be small but useful for them as they can use the funds to pay the generators and transmission companies. The Rs 90,000 cr will be paid from reserves or alternatively borrowed from the market,” CARE Ratings said.

The loans will be secured against receivables and guaranteed by respective state governments. “However, since it comes with additional riders and conditions on digitization, reducing AT&C losses, etc., it is to be seen how much of this will be actually disbursed,” Emkay Global Financial Services said in its recent report. “Given the adequate capitalization levels of PFC/REC, the fiscal impact should be negligible,” it added.

“We welcome the reforms announced by the government around discoms as it ensures a steady flow of income. However, it just puts the burden on REC and PFC,” Amar Ambani, Senior President and Head of Research, YES Securities, said.

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Jubilant Life Sciences share price up 83% since March, inks pact with Gilead for potential coronavirus cure

The rally that pharmaceutical companies have witnessed on Dalal Street in the past few months has seen a lot of the stocks jump manifold, among these, Jubilant Life Sciences has recorded the second-best performance, up 83% from its recent low. The scrip traded at a 52-week-low value of Rs 234 per share on the last day of March and since then has been galloping northward, to now trade at Rs 482 apiece. What could further help Jubilant Life Sciences stock is the firm’s new deal with Gilead Sciences, which will see the pharma major register, manufacture and sell Gilead’s investigational drug, remdesivir, a potential therapy for coronavirus in 127 countries including India.

Jubilant Generics Limited, a subsidiary of Jubilant Life Sciences has entered into a non-exclusive license agreement with Gilead, the company said in a regulatory filing on Tuesday. Jubilant Life Sciences will now be able to register, manufacture and sell the drug, that is being touted as the potential therapy for coronavirus, in 127 countries. “Under the licensing agreement, Jubilant will have the right to receive a technology transfer of the Gilead manufacturing process to scale up production to enable expedited access of the medicine to Covid-19 patients upon approvals by regulatory authorities in respective countries,” it said.

The move, according to analysts, would help the stock. “It will work in favor of Jubilant Life Sciences, as technicals suggest a higher high higher low chart formation is in progress. It is strongly bullish. The next target will be 480-508,” Vishal Wagh, Research Head of Bonanza Portfolio told Financial Express online. Remdesivir, an investigation antiviral by Gilead has received an Emergency Use Authorization by the USFDA, which will help in a broader use of the drug on people suffering from coronavirus. “ The EUA is based on available data from two global clinical trials – US National Institute for Allergy and Infectious Diseases’ placebo-controlled Phase 3 study in patients with moderate to severe symptoms of COVID-19, and Gilead’s global Phase 3 study evaluating remdesivir in patients with severe disease,” Jubilant Life Sciences said.

Jubilant Life Sciences has a board approval to separate the Life Sciences Ingredients business. “The separate listing of Jubilant’s two business segments is expected to unlock value even as an NCLT approval and the demerger could now be delayed. With the pharma business expected to deliver steady growth and the LSI business expected to recover aided by an improved demand & pricing scenario for key products, the medium-term outlook remains positive,” said analysts at JM Financial with a buy rating on the stock and a target price of Rs 705 per share.

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Facebook, Apple, Google stocks on wish list: Indian investors’ interest soars in US stock market

More and more Indian investors have begun investing directly in the United States stock markets this year, in the hunt for overseas equities exposure and geographical diversification of portfolios amid a freefall in domestic share markets. Starting the trading journey in a foreign stock market has always been a fraught task but with new age investing methods making it less taxing, those FAANG stocks that investors always wanted are rapidly becoming a part of their portfolios. Stockal, a platform that enables investments in a diverse set of global assets from a single account, saw over 17,000 retail investors from India register on its platform.

“In September-October last year we saw interest from people who purely wanted to diversify their portfolio. During this time investments worth $2,000-$5,000 were coming; from January though, the median investment went up to $8,000-$9,000. This was what they were sending to their US brokerage accounts,” Sitashwa Srivastava, Founder and CEO, Stockal Inc, told Financial Express Online. January onwards, investors have been more frequent on Stockal’s platforms sending in more and more money to their US brokerage accounts where they invest in various instruments of various sizes.

Crossing the Chasm

Outward remittances under the Liberalised Remittance Scheme (LRS) for Indian residents have also risen, the RBI data shows. LRS remittances in the month of February — the latest month for which the data is available with the RBI — for investments into overseas debt and equity markets rose to nearly $30 million, from $26 million a month ago. A year ago, In February 2019, the amount remitted for investment in equity and debt stood at $24.5 million. In a similar trend, Stockal saw investments worth Rs 22 crore in four months during September-December 2019. This amount rose to as much as Rs 69.75 crore in just two months of March and April of 2020.

Indian asset management company Motilal Oswal has also seen the demand for international investment options. “We have seen high demand for international funds over the last 6-12 months. We have been educating our investor base on the benefits of International diversification – which is relatively new but could be a part of every investor’s portfolio in the long-run,” Pratik Oswal, Head – Passive Funds, Motilal Oswal Asset Management Company, told Financial Express Online. Pratik Oswal said that a good portion of their investor base has been looking to invest 10-15% of their equity corpus into international funds. Motilal Oswal’s recently opened S&P 500 index fund. The NFO saw over 50,000 applicants over a short period.

Why is Uncle Sam so lucrative?

The US equity markets have a wide range of offerings and some items that an Indian consumer depends on are listed in the United States. “A lot of technologies we use as consumers in India don’t have any listed companies from India in which we can invest. For example, we use Amazon for shopping, Android or Apple phones, we use google search, use WhatsApp, Instagram, Facebook for social media, Netflix Youtube and Prime for entertainment but we can’t participate in any of these trends as investors in India because none of these companies are listed here. The US market provides a lot of such unique investment opportunities that represent new consumption trends,” said Raunak Onkar, Fund Manager, PPFAS Mutual Fund. Onkar said that a percentage of an investor’s portfolio can be allocated to take advantage of such opportunities.

More than just diversifying the egg baskets

Investing in foreign stock markets is largely about diversifying investment portfolios, however, the recent trend has more than one justification. “As 2020 started more diversification was on the mind so that one idea, the dollar was also marching up so people wanted to send money out while it was rising,” said Sitashwa Srivastava. The surge in new registrations for Stockal has been aided by these reasons coupled with the firm’s growing customer base. Investing in the big names could also be one of the reasons with half the population investing using Stockal’s platforms hunting the big names.

The low performance of Indian mutual funds has also pushed investors towards exploring other avenues, said Pratik Oswal. “The rupee has fallen 4.5-5% every year over the last decade and is expected to weaken in the future too. As a hedge against this devaluation – international funds offer two advantages – buying some of the best companies out there and buying the dollar. Companies like Facebook, Amazon, Google, Netflix etc. have become household names in India over the last decade,” he added.

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