Road to Credit Guarantee CorporationThe government formed a working group comprising custodians of the nationalised banks. In its report, the group said while the objective of giving loans to neglected areas was noteworthy, it will also lead to risks for the banking system. The best way would be to pool these risks and cover them under a common guarantee scheme. To avoid moral hazard, guarantees would be capped at 75 percent of the losses so that banks do proper loan appraisal. The guarantee fee was pegged at 0.25 percent of the loans, open to review. Interestingly, the government credit guarantee scheme had a fee of 0.1 percent for SSIs. … [Read more...] about Credit guarantees of 1970s make a comeback
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Q) Any rate-sensitive stocks which could benefit the most from the RBI surprise rate cut and why?A) The demand for the invention of the vaccines has been high and the whole world is trying to invent vaccine or drugs which can cure the pandemic. So companies like United Phosphorus Limited, Tata Chemicals may have a bullish front. … [Read more...] about ‘Rate cut could benefit auto companies, watch out for Hero, Maruti Suzuki & Eicher Motor’
Some sectors (such as real estate) were facing difficult times even before COVID-19 hit us. I think government and/or banks should provide relief to businesses that were profitable before the pandemic. For restructuring, we need to know the full impact of lockdown on certain businesses. Since that situation is still evolving, it's too early to chalk out restructuring plans. As of now, we need temporary measures to keep businesses functioning (such as moratorium extension, easing access to working capital etc). … [Read more...] about ‘Need more stimulus with focus on GST cut, wage support, higher MNREGA spend’
Simply Save podcast | Can debt funds really assess credit risk? Coronavirus Essential podcast | Kerala see another wave of infections; MHA refutes lockdown 5.0 claims; SC takes note of migrant issue Taking Stock | Market rises for second day in a row; investors richer by nearly Rs 2 lakh cr in a day … [Read more...] about Coronavirus Essential podcast | RBI’s push to revive economy, does COVID-19 spread through corpses?
Dabur India Q4FY20 earnings were below our projections with a miss in Revenue, EBITDA and PAT front. The company has reported a lower net profit at Rs 281 crore for the quarter under review as compared to Rs 370 crore for the same quarter in the previous year, impacted on account of lockdown during the second half of March 2020. Net sales dropped by 12.3% at Rs 1,865 crore for Q4 FY20 as compared to Rs 2,128 cr for the Q4FY19, EBITDA declined 23% YoY to Rs 352 crore for the Q4FY20 from Rs 457 crore for the Q3FY19 and EBITDA margin contracted 260 bps to 18.9%.The company recommended a final dividend of Rs 1.60 per share for the financial year 2019-20. … [Read more...] about Hold Dabur India; target of Rs 492: Arihant Capital