Latest news with #BSE500
Mint
9 hours ago
- Business
- Mint
The week in charts: GST revamp, Oil Plan B, Wegovy launch, India tops again
A revamp of the goods and services tax (GST) regime is on the cards, with the compensation cess likely to be merged into the main GST rates. Separately, India has activated a Plan B to secure oil supplies amid continued tensions in West Asia. Despite global headwinds, India retained its top spot among emerging market peers in May. GST revamp The finance ministry may merge the compensation cess on sin and luxury goods into the goods and services tax (GST) rates, Mint reported. The decision won't impact consumers as overall tax outgo would remain unchanged. Compensation cess, which makes up about 7% of the total collections, was levied on top of the GST rate to compensate states for potential revenue loss due to the transition to GST regime. This arrangement is set to expire in March 2026. The shift may become a part of recommendations on the tax-sharing formula for five years starting FY27 by the Sixteenth Finance Commission. Hefty bounty Indian companies doled out a record dividend of ₹4.9 trillion in FY25, despite the lacklustre earnings. Promoters, led by those in private firms, pocketed 51.5% of total dividends declared. A Mint analysis of 370 consistent dividend-payers from the BSE 500 shows that promoters with over 70% stake saw their dividend receipts surge by 45%. Those holding 50-70% and below 50% experienced more modest increases of 8.5% and 8.9% respectively. This trend indicates that higher promoter holdings, in some instances, led to increased dividend payouts. VIP deal 26%: Is the stake domestic private equity (PE) firms such as Multiples Alternatives and 360 One are eyeing in luggage maker VIP Industries, Mint reported. The stake sale could also trigger an open offer. The promoters currently own a little more than 50% of VIP Industries, shows stock exchange data. The sale is part of the promoters' ongoing efforts to exit the business. Last November, the company's talks with PE firm Advent International to sell a controlling stake fell through due to valuation mismatches. Oil Plan B India has devised an emergency plan to secure oil supplies amid the uncertainties in West Asia, Mint reported. It involves bypassing the Strait of Hormuz via two pipelines: Abu Dhabi National Oil Co's Habshan-Fujairah that opens to the Gulf of Oman, and Saudi Aramco's East-West to the Red Sea. India could also boost imports from the US. The recent conflict between Israel and Iran, with threats of closure of Strait of Hormuz had exposed India's vulnerability as the country imports over 40% of its oil from West Asian countries. India tops India, with a score of 67 out of 100, retained top spot among emerging economies in May, showed Mint's emerging markets tracker. However, the win came with a narrow lead. Thailand came a close second with a score of 66.6 due to best export performance. While India's score was driven by India's fastest GDP growth among peers, robust manufacturing activity, and sustained stock market gains, the lead narrowed due to deteriorated export growth and currency fluctuations. In April, India had scored 87.9. Slim deal ₹17,345: That is the starting price in India for Novo Nordisk's weight-loss drug Wegovy, launched earlier this week. The drug is administered as a once-a-week injectable pen and is prescribed for chronic weight management and reducing major adverse cardiovascular events. Available in five dosing strengths—0.25 mg, 0.5 mg, 1 mg, 1.7 mg and 2.4 mg—Wegovy is expected in pharmacies by end of the month. The launch follows rival Eli Lilly's introduction of Mounjaro in March 2025, intensifying competition in India's obesity treatment market. Bumper bonus Indian investment banks awarded record bonuses to their top brass this year as they earned substantial fees in FY25, Mint reported. It was fuelled by a surge in deals and initial public offering activity, and hefty fees earned by investment banks from them. Firms like Kotak Mahindra Capital, Axis Capital, Avendus Capital, and JM Financial reportedly distributed over $1 million bonuses to top executives. Indian investment banks earned over $1.35 billion in fee income in FY25, highest in the post-pandemic period, showed data from London Stock Exchange Group. Chart of the week: Space take-off Shubhanshu Shukla made history by becoming the first Indian astronaut to travel to the International Space Station (ISS). A look at data shows that ISIS visits are dominated by individuals representing the US (169), which is also home to Nasa. This is followed by Russia (63), Japan (11), and Canada (9). Follow our data stories on the'In Charts" and'Plain Facts" pages on the Mint website.
Mint
10 hours ago
- General
- Mint
Best of the Week: From Amritsar's aam papad to mango orchards in crisis
Narrow lanes where history lingers, vibrant bazaars, and centuries-old temples—Amritsar has always been a city of stories. As the largest city on the Indian side of Punjab, it's known not just as the spiritual home of Sikhism, but also as a destination for serious food lovers. I was in the city last week and, unsurprisingly, spent a good deal of time eating. One local favourite that stood out was the aam papad. These chewy sheets of sun-dried mango pulp—sometimes sweet, sometimes spiced—are a popular treat across Punjab. While the region doesn't grow many mangoes, it certainly knows how to preserve the fruit and enjoy it year-round. But while the aam papad holds its own, India's mangoes are facing a tough time. Once hailed as the 'king of fruits', the mango is now caught in a perfect storm amid declining orchard health, increasing chemical use, and erratic weather patterns. Over 70% of India's mangoes are now grown using paclobutrazol, a chemical that forces early flowering and ripening at the cost of quality. Traditional practices are being sidelined in favour of short-term gains. Climate change is worsening the situation. In key mango-growing states like Tamil Nadu, Andhra Pradesh, and Uttar Pradesh, unusual rain and heat are disrupting flowering and harvests. Despite producing over 23 million tonnes of mangoes annually, India's average yield remains stagnant at 9.5 tonnes per hectare. Exports? Less than 0.5%, largely due to the fruit's short shelf life and poor supply chain infrastructure. So while Amritsar's aam papad hits all the right notes, the mango story behind it is slowly turning bittersweet. Over the past decade, smartphones have driven India's electronics manufacturing, with 99% of the devices sold in the country now assembled locally. Thanks to the government's ₹ 1.9 trillion productivity-linked incentive (PLI) scheme, mobile phone exports soared from ₹ 1,566 crore in 2014 to ₹ 1.2 trillion in 2024. Yet, 85-90% of the electronic component value is still imported. India's assembly-heavy model adds just 10-15% value, leaving the country's ambitions to become a global manufacturing hub incomplete. To fix this, the government launched a ₹ 22,919 crore component PLI scheme to localise critical inputs like camera modules and printed circuit boards. But making components is far more complex than assembling phones as it demands deep engineering, high-precision manufacturing, and a long-term ecosystem play. Despite sluggish earnings growth, Indian companies handed out a record ₹ 4.9 trillion in dividends in FY25, with more than half going to promoters. A Mint analysis of 496 BSE 500 companies shows promoters took home ₹ 2.5 trillion, led by private-sector owners, who saw a 36% rise in payouts. Those with over 70% ownership reaped the biggest gains—up 45% year-on-year—raising questions about whether boards are prioritising shareholder value or promoter cash-outs. As dividends outpace profits, a key question emerges: are promoters milking cash cows or managing capital wisely? India is ramping up its energy security playbook by planning six new strategic petroleum reserves, aiming to expand emergency crude stockpiles to 90 days of import cover. Engineers India Ltd is conducting feasibility studies, with sites including Mangalore SEZ and Bikaner's salt caverns. This push comes as oil markets face renewed volatility, especially the threat of disruptions at the Strait of Hormuz, a key supply route for India's 5.5 million barrels-per-day crude needs. But with high costs, geopolitical uncertainties, and the ongoing energy transition, the question is: can India build the reserves fast enough to weather the next crisis? India's Aircraft Accident Investigation Bureau is probing the Air India AI-171 crash, having recovered both black boxes, a flight data recorder, and a cockpit voice recorder. These devices hold critical clues, recording flight dynamics and cockpit conversations. However, reports suggest that one black box may be sent overseas for deeper analysis, raising questions about the capabilities of India's new ₹ 9 crore black box lab. Though civil aviation minister K. Rammohan Naidu denied shortcomings, experts say India's investigation framework lacks alignment with global standards. For years, stocks of small and medium enterprises were known for one-way doors—easy to buy, hard to sell—thanks to thin liquidity. Many investors preferred betting on private companies over getting stuck in a trade they couldn't exit. But that's changing. A post-pandemic wave of risk-hungry investors and regulatory nudges has breathed fresh life into SME listings. What was once an overlooked niche is now drawing serious interest. But is this a sustainable boom or just another frothy detour in India's equity story? DLF raked in ₹ 21,223 crore in FY25 residential sales, driven by blockbuster Gurugram launches. Yet, it's guiding a cautious ₹ 20,000-22,000 crore for FY26, even as its rivals are more bullish. The company is playing a long game: zero debt in its development arm, ₹ 1 trillion worth of launches over five years, and expansion into Mumbai and Goa. Its rental arm, DCCDL, is also booming with malls, offices, and data centres. While DLF's NCR-heavy bets pose concentration risk, its land bank, pricing power, and delivery record give the company an edge. Liquor stocks are soaring even as the broader FMCG sector struggles. Radico Khaitan and United Spirits lead the rally, riding a cocktail of low input costs, booming premium sales, and favourable policies like the India-UK free trade agreement. India's ₹ 40 billion liquor market is now the fastest-growing globally, with luxury consumption accelerating. Yet, regulatory uncertainty looms large; every Indian state is a market unto itself. High valuations (some over 100x earnings) make these stocks pricey. But analysts remain bullish, betting on brand strength, premiumization, and rising per capita consumption. A 22-year-old family feud at Sun TV has resurfaced, with former Union telecom minister Dayanidhi Maran legally challenging brother Kalanithi Maran's 75% stake in the ₹ 23,000-crore media empire. Dayanidhi alleges Kalanithi acquired control of Sun TV via questionable transactions between 2003 and 2005, including undervalued share allotments. Sun TV calls it a family matter with no business impact. Legal experts say Dayanidhi may face hurdles due to the time lapse, but claims of fraud could keep the case alive. Read this explainer to get the complete picture. Amid a fragile Israel-Iran ceasefire, India is readying a Plan B to protect its oil supply from potential Strait of Hormuz disruptions. State-run refiners are in talks to use Saudi and UAE pipelines while boosting US imports and tapping global reserves. Over 30% of India's import bill comes from crude oil, and supply shocks can impact economic growth. Though supplies seem secured, pricing remains a concern. Freight and insurance costs are rising, but officials say India is prepared to navigate any escalation, thanks to strategic ties and diversified sourcing. India's plan to locally produce rare earth magnets has hit major roadblocks even as China tightens exports. With IREL Ltd operating at half capacity and no domestic magnet manufacturing, automakers are vulnerable. Import duties, raw material shortages, and lack of tech access further delay progress. Though the government is considering subsidies and new sourcing options, officials admit there's no quick fix. For now, India must depend on China or ramp up recycling and strategic imports to secure EV and defence supply chains. That's all for this week, I hope you have a pleasant weekend! If you have feedback, want to talk about food, or have anything else to say about our journalism, write to me at or reply to this mail. You can also write to feedback@ Subscriber Experience Team
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Business Standard
19 hours ago
- Automotive
- Business Standard
Auto component sector: Listed bearings makers have a strong outlook
Bearings outperformed other segments in the auto component sector in the fourth quarter of 2024-25 (Q4FY25). Three major listed bearing biggies — Schaeffler India, SKF India, and Timken India (Timken) — saw their earnings get upgraded for FY26 and FY27 given the Q4 show, and the prospects for the sector going ahead. The three stocks have generated higher returns than their peer/broader indices over the last three months, with Timken leading the chart, registering gains of 23.5 per cent. The average returns for the bearing companies over this period has been 20 per cent, which is twice that of BSE 200 and BSE 500. The BSE Auto index, too, has lagged behind with returns of 12.7 per cent. Aggregate revenues of bearing companies grew 9 per cent year-on-year (Y-o-Y), driven by strong growth in the railway segment (Timken), an uptick in the aftermarket division (Schaeffler and Timken), robust growth in two-wheeler production volumes (SKF), and a recovery in export revenue (Schaeffler), says Kotak Research. Revenue growth for the bearing majors was led by Schaeffler, which posted an uptick of 16 per cent Y-o-Y. While SKF put up a flattish performance, Timken's sales were up 5 per cent over the year-ago quarter. Schaeffler's growth was driven by a 13 per cent increase in the automotive technologies business. Other growth contributors for the company were exports, which grew 23 per cent on a low base, vehicle lifetime solutions (up 12 per cent), and a 12 per cent increase in the bearing business. SKF disappointed on the revenue front with a 2 per cent growth in the industrial segment, and 1 per cent growth in the automotive segment. What dragged the overall show was a 13 per cent decline in the export segment due to weak demand trends in the European Union (EU) and the Americas. In addition to one-time gains, Timken's revenue growth was on account of a high single-digit increase in the railway and process industries segment while replacement, commercial vehicles, and export segments saw a low single-digit growth. Centrum Research highlights that domestic bearing demand remained strong across companies, driven by healthy momentum in railways, automotive (especially tractors, small commercial vehicles, and sports utility vehicles), and industrial segments like food & beverage, and infrastructure. While Timken and Schaeffler saw strong domestic traction, export demand stayed weak for Timken and SKF due to global macro headwinds, though Schaeffler saw a rebound led by the Asian markets, says Amit Dhameja of the brokerage. The operating performance of the bearing majors was also healthy. The operating profit of the trio was up 20 per cent Y-o-Y due to favourable transfer pricing, and a richer product mix, points out Rishi Vora of Kotak Research. As a result, net profit grew 20 per cent Y-o-Y. Centrum Research points out that bearing companies saw stable-to-improving margins despite input cost pressures and an unfavourable product mix. Margin resilience was driven by localisation, backward integration, operating leverage, and pricing actions while select one-offs and disciplined cost control further supported profitability. While operating profit margin of SKF was up 573 basis points (bps) Y-o-Y to 23.5 per cent, it expanded 89 bps for Schaeffler to 19 per cent, and 19 bps to 22.3 per cent for Timken. Underlying sector growth, strong order book, and localisation are expected to help bearing companies grow and improve margins going ahead. The top picks for Centrum Research are Timken and Schaeffler led by growth in sectors like railways, wind, and steel, in addition to focus on localisation. For Kotak Research, Timken and SKF are top picks. For SKF, growth in the medium term should be driven by an increase in bearing content in the railway segment, a pickup in the industrial segment, and a steady performance in the automotive segment. For Timken, the triggers are domestic railways market, exports, and the upcoming new manufacturing plant for spherical and cylindrical roller bearings.
Mint
a day ago
- Business
- Mint
PSUs show dividend fatigue as payout ratios hit decade's low in FY25
India Inc. may have celebrated a record ₹4.9 trillion dividend bonanza in FY25, but the party was noticeably quieter in one corner: the public sector. Behind the headline numbers, state-run enterprises showed clear signs of dividend fatigue, both in payout ratios and growth. Dividends, which had seen strong double-digit gains in previous years, contracted, while payout ratios plunged to multi-year lows. The shift points to a change in priorities: public sector firms are increasingly favouring reinvestment, capital discipline, and long-term value creation over generous near-term distributions. Earnings pain A Mint analysis of 496 BSE 500 companies, based on Capitaline data covering audited, unaudited, and proposed dividends, shows that public sector undertakings (PSUs) accounted for just 30% of total dividends in FY25—down from 35% in the previous year. Their dividend payout ratio also dropped to 29.8%, the lowest since FY15 and well below the historical average of around 50%. In fact, these government-owned companies have seen a secular decline in their payout ratios over the past five years. 'This appears more like a cyclical pause than a fundamental reset," said Harshal Dasani, research analyst at Invasset PMS. 'FY25 earnings were weighed down by volatile commodity prices, oil under-recoveries, and heavy capex commitments. Many PSUs have opted to reinvest profits internally, especially in strategic sectors such as energy, infrastructure, and defence." The data corroborates his claims: The aggregate net profits of the PSUs saw a pale growth of 1.3% in FY25 after witnessing a 43% jump last year. Also read Dividends grew faster than profits in FY25. Is that a good or bad thing? Echoing this sentiment, Anil Rego, founder and fund manager at Right Horizons PMS, said, 'The sharp decline in PSU payout ratios in FY25, down from the historical average of around 50%, appears more cyclical than structural at this stage." Shifting focus The decline in payout ratios also reflects a broader push among state-run firms to deploy capital for future growth. 'This steep fall in outflow in the form of dividends is mainly due to a larger focus on capital expenditures by PSUs, ' said G. Chokkalingam, Equinomics Research founder and managing director. 'A vast majority of manufacturing PSUs have announced several major capital expenditure plans—some aimed at expanding existing operations and others exploring new businesses or geographies." Companies like Coal India exemplify this shift. The company not only plans to expand its coal mining operations but has also proposed ventures into non-coal minerals such as graphite and acquisitions abroad. 'Many PSUs have good medium- to long-term business prospects, and they are prioritizing reinvestment over short-term distributions," he added. The changing priorities of these traditional dividend payers is also reflected in their lower giveaways. PSUs distributed 6% lower dividends in FY25 after a sharp 43% surge in FY24. and consistent gains ranging from 27% to 62% in the preceding years. 'Multiple PSUs faced earnings pressures amid sector-specific challenges, particularly in energy combined with elevated capex requirements in infrastructure, defence and energy transition initiatives. This likely influenced the decision to retain a higher share of profits to fund growth internally. This can be viewed as a pivot toward fiscal prudence or a prelude to privatisation readiness," Rego said. Also read Promoters pocket half of India Inc's massive dividend payouts despite sluggish earnings Revenue buffer Dividends from public sector enterprises and the Reserve Bank of India provide the government with a crucial revenue buffer. However, against the backdrop of slowing dividend payouts, its budget target might seem optimistic. The Union Budget has pegged a revenue target of ₹3.25 trillion from dividends in 2025-26, a 12.4% increase compared to the revised estimates of ₹2.89 trillion in 2024-25. 'The FY26 Budget's projection of a 12.4% rise in PSU dividend revenue to ₹3.25 trillion may seem optimistic after FY25's softness, but underlying fundamentals support this outlook," noted Dasani. 'Key sectors like power, coal and oil show improved cash positions, setting the stage for a rebound in profitability. The Budget's optimism likely reflects a catch-up from under-distribution and a strategic push to balance fiscal needs without stifling PSU growth." Rego also acknowledged the projection may appear ambitious amid weaker FY25 trends but noted, 'Several PSUs maintained or enhanced their dividend payouts, reinforcing the fiscal importance of these state-run enterprises." However, with a substantial dividend from RBI ( ₹2.7 trillion) and strong payouts from public sector banks, the government is set to benefit from a solid revenue buffer in FY26. 'Some rebound in profitability is anticipated across oil and gas and utilities," Rego added. 'The estimates reflect a growing reliance on dividends as stable revenue. While care is needed to avoid straining PSU growth capital, improved profitability and efficient capital use can support fiscal consolidation—if backed by sustained earnings recovery," he added further. This is the third part of a four-part series of data stories on the dividends declared by India Inc. Read the first part here and the second part here.
Mint
3 days ago
- Business
- Mint
Promoters pocket half of India Inc's massive dividend payouts despite sluggish earnings
Despite dismal earnings growth in FY25, Indian companies handed out a record ₹4.9 trillion in dividends—the highest in at least a decade—with promoters pocketing more than half the bounty. According to a Mint analysis of 496 companies from the BSE 500, based on Capitaline data (which includes both audited and unaudited figures, along with proposed dividends), promoters across public, private, and multinational corporations collectively received ₹2.5 trillion, or 51.5% of the total dividends declared. Of this, private-sector promoters took home ₹1.34 trillion (with a 53% share), a sharp 36% rise from the previous year. Foreign parents of MNCs mopped 20% more. The government, as a promoter of public sector undertakings (PSUs), meanwhile, saw its dividend haul from PSUs dip 4%. The trend of promoters claiming a lion's share is not surprising, though. In FY24, they took home ₹2.1 trillion (48.7% of total dividends), while in FY23, their share was even higher at ₹2.2 trillion (53.6%). The latest figures, however, underscore a growing concentration of dividend income in the hands of promoters, raising questions about capital allocation priorities. Dividends outpaced net profit growth of 9.5% in FY25. Also read: Dividends grew faster than profits in FY25. Is that a good or bad thing? A deeper dive into 370 consistent dividend-paying companies from the BSE 500 in FY24 and FY25 reveals that promoters are reaping more by distributing more. Promoters holding more than 70% stake in companies saw their dividend receipts surge by 45% compared to the previous year. In contrast, those with holdings between 50% and 70% registered a modest 8.5% increase, while firms with promoter stakes below 50% saw an 8.9% rise. A rise in promoter stakes in some cases also helped. Sourav Choudhary, managing director of Raghunath Capital, which manages the value-focused Vision Fund, noted, 'The sharp rise in dividend payouts to high-stake promoters, particularly those holding over 70%, indicates their growing influence in capital allocation decisions. While robust payouts reflect financial stability, such skewed distributions raise governance concerns and questions about board independence." 'If capital is being diverted toward promoter cash flows rather than productive reinvestment, it could undermine long-term shareholder value. This trend warrants closer scrutiny from institutional investors and regulators," he added. Also read Companies ring the IPO doorbell, but the reception is cold Growth caution While record dividend payouts might initially appear as a sign of corporate health, analysts caution that they could instead reflect a lack of viable reinvestment opportunities. Anand K. Rathi, co-founder of MIRA Money, argued that the surge in dividends is less about benefiting promoters and more about companies sitting on surplus cash with limited growth avenues. 'From a tax perspective, dividends are no longer the most efficient way for promoters to extract value," Rathi said. 'The real driver is the absence of better reinvestment opportunities. Companies in sectors like technology, telecom, commodities, and PSUs—which dominate the dividend payout list—are flush with cash but face constrained growth prospects." 'This is essentially a signal of a slow-growth environment, which is also reflected in muted earnings. If more lucrative investment opportunities emerge, dividend payouts will likely taper off," he added. However, not all experts view high dividends as a concern. Kranthi Bathini, equity strategist at WealthMills Securities, said, 'Dividends are always rewarding for investors, regardless of the motives behind them. The payout levels and dividend yields can vary significantly from company to company, depending on their future growth plans, capex needs, and expansion strategies. If a company sees strong growth opportunities, it may allocate more capital toward investments and reduce dividends." Promoters across several high-profile firms amassed huge wealth from their liberal payouts in FY25. Tata Consultancy Services (TCS) topped the chart with a 72.6% year-on-year jump in promoter dividends to ₹32,735.7 crore. This was followed by Vedanta with a 40.2% rise in payouts to ₹9,123.4 crore.
