Axis Bank reported 19% drop in YOY profits at Rs.1112 crore for the Jun-20 quarter but the lower profits were largely accounted for by change in accounting practices. Its fee income fell almost by a third to Rs.2587 crore for the Jun-20 quarter. However, the core net interest income or NII actually grew by 20% to Rs.6985 crore in the June quarter, which shows good traction in its core lending business. Even the gross NPAs of the bank were lower at 4.72% compared to 5.25% a year ago. However, the full impact of the EMI moratorium and the subsequent impact on NPAs is still an uncertain factor.
Hindustan Unilever reported 5.7% growth in net profits to Rs.1897 crore in the midst of an extremely quarter. Net sales were up 3.7% at Rs.10,570 crore. While the top line has been lower than expected, the Jun-20 quarter was a tough quarter due to the COVID-19 related lockdowns and the impact on off take of FMCG products. The CEO, Sanjiv Mehta admitted that the company was positioned to drive profitable growth in the coming quarters even if the macro situation remained uncertain. HUL has been seeing good traction in its foods and its hygiene products division in the last 6 months.
The chairman and the senior directors of Larsen & Toubro have voluntarily taken a pay cut of over 50% to see the company through the tough financial situation prevailing today. L&T CEO, S N Subrahmanyam, took home Rs.27.17 crore for FY20 after accepting a 43% pay cut for the year. Other non-managerial personnel saw an average hike of 4.5% in their salaries. Even the CFO, Shankar Raman, took a 47% pay cut in FY20 at Rs.13.20 crore. This was the average pay cut taken by all the directors and senior vice presidents of the company. L&T has seen a sharp compression in its business.
In the midst of the pandemic, Tata Elxsi has reported stellar results with its net profits up by 41% to Rs.68.80 crore for the Jun-20 quarter. Even its revenues from operations were up by 10.7% to Rs.401 crore for the Jun-20 quarter. Tata Elxsi top managed admitted that while there was sluggishness across most of the verticals, the healthcare, media and communication verticals did extremely well. More than 95% of the revenues for the quarter came from software development and services with less than 5% coming from system integration and support services. EPD continued to be its growth engine.
Nomura has projected that the Indian GDP for FY21 could contract by around 6.1%. Nomura also expects the RBI to pause on the rate cuts front in the August MPC meet. Instead, Nomura expects that the RBI may choose to cut rates by 25 basis points either in the October meet or in the December meets. The COVID pandemic has impacted the demand and the supply side of the economy and hence the structural impact, as per Nomura, could be quite sticky and long lasting. Official data also suggest that the inflation could also perk up in the coming months which could put further pressure on the real GDP of the economy. However, Nomura expects the June quarter to be the worst quarter with 15.2% negative growth and is expected to recover after that. A lot will depend on government policy.
Biocon Biologics and Voluntis have entered into an agreement digital therapeutics for insulin. This insulia digital companion will be offered to people suffering from Type-2 diabetes. Insulia globally offers automated insulin dose recommendations enabling people with diabetes to self-manage their condition with remote healthcare monitoring. Insulia is the first digital therapeutic solution with regulatory approval. Biocon Biologicals believes that pairing its product with a digital therapeutic solution will improve patient outcomes and also substantially reduce the cost of healthcare for patients.