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India Today
7 days ago
- Business
- India Today
Are your savings at risk? Government may slash PPF, NSC rates next week
The government may lower interest rates on small savings schemes like the Public Provident Fund (PPF), National Savings Certificate (NSC), and others during its upcoming quarterly review on June 30, 2025, reported The Economic Times (ET).If rates are revised, the changes will come into effect from July 1 for the July–September quarter of far this year, interest rates for schemes such as Sukanya Samriddhi Yojana (SSY), Senior Citizens Savings Scheme (SCSS), and Post Office term deposits have remained unchanged. However, this may not continue in the next A RATE CUT IS BEING CONSIDEREDOne of the key reasons behind this expected change is the Reserve Bank of India's decision to cut the repo rate by a total of 1% so far in 2025. The central bank reduced the repo rate in February and April by 25 basis points each, followed by a larger 50 basis points cut in have already responded by lowering interest rates on fixed deposits. Some have even discontinued special FDs that offered higher returns for limited yields, which influence the interest rates of small savings, have also fallen. According to the 10-year government bond yield dropped from 6.779% on January 1 to 6.247% by June 24 — a decline of 0.532%. Lower bond yields are usually a sign that small savings rates may be THESE RATES ARE CALCULATEDInterest rates for small savings are set based on the Shyamala Gopinath Committee's recommendations. The formula uses the average yield of government securities in the secondary market and adds a 25-basis-point instance, the average 10-year G-sec yield between March 24 and June 24, 2025, is 6.325%. Adding 25 basis points brings it to 6.575%. Currently, PPF offers 7.10%, which is much higher than the formula suggests. This difference is why a cut is being considered, though the government may still choose to hold rates to ET, Rajani Tandale, Senior Vice President – Mutual Fund at 1 Finance, said the RBI's 50-basis-point cut in June, along with earlier reductions, brings the total repo rate cut in 2025 to 1%. She said this aligns with the central bank's aim to support growth by lowering borrowing costs.'As a result, interest rates for small savings schemes are likely to be lowered,' she said, while noting the final call will depend on the government's review and current market Shinghal, Founder and CEO of Scripbox, also told ET, 'SSS rates, while administratively set, are typically aligned with prevailing interest rate trends and yields on government securities.'He added that several banks have already reduced fixed deposit rates, and this shows broader rate transmission is happening. According to him, it is likely that PPF, SSY, and NSC interest rates could be cut by 25 to 50 basis Sarkar, Co-Founder of Wealth Redefine, shared a slightly different explained that while a 1% cut in repo rate points towards lower returns on small savings, the decision isn't automatic.'These schemes are lifelines for pensioners, retirees and middle-class households. A big cut could hurt them, especially when inflation is low and FD rates are already falling,' he told added that while a small cut of 0.1% to 0.3% is possible, a sharp drop seems unlikely. The government, he noted, may even choose to keep rates steady to protect INVESTORS SHOULD DO NOWThose planning to invest in small savings schemes should consider doing so before June 30. If they invest before the new rates take effect on July 1, their returns, especially for time-bound schemes like NSC, SCSS, and time deposits, will remain locked at the current rates until and SSY, however, are not fixed-rate investments. Their interest rates change over time and are calculated monthly. So, even if you invest now, future interest payments could be affected by a rate said 'Investors may consider locking into current Small Savings Scheme rates before the revision.' He also suggested that in a falling interest rate environment, long-term debt funds and target maturity bonds might become attractive alternatives for those looking to preserve real returns.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- EndsMust Watch advertisement
Economic Times
11-06-2025
- Business
- Economic Times
Buy Mahanagar Gas, target price Rs 1,705: ICICI Securities
ICICI Securities has a buy call on Mahanagar Gas with a target price of Rs 1,705. The current market price of Mahanagar Gas is Rs 1407.8. Mahanagar Gas, incorporated in 1995, is a Mid Cap company with a market cap of Rs 12947.30 crore, operating in Gas & Petroleum sector. ADVERTISEMENT Mahanagar Gas' key products/revenue segments include Gas Natural, Other Operating Revenue and Pipes & Fittings for the year ending 31-Mar-2024. Financials For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 2006.40 crore, up 6.19 % from last quarter Total Income of Rs 1889.40 crore and up 21.11 % from last year same quarter Total Income of Rs 1656.74 crore. The company has reported net profit after tax of Rs 247.87 crore in the latest quarter. The company's top management includes Kumar Gupta, Shinghal, Shende, Bhaskar Sahi, Sinha, S Hussain, Srinivasan, Kamble. Company has Deloitte Haskins & Sells LLP as its auditors. As on 31-03-2025, the company has a total of 10 crore shares outstanding. Investment Rationale ICICI Securities remains optimistic on MGL?s prospects over the next five years, with clear long-term visibility on volumes, still peer-leading margins, RoE/RoCE of 15%, dividend yield of 3% and very attractive valuation of ~11.4x FY27E PER and EV/EBITDA of 6.0x. Our target price of Rs 1,705 (unchanged) implies a material 28% upside from CMP. The brokerage notes current multiple of 11.4x on FY27E is still well below ~17.6x FY27E PER for IGL, which we believe should narrow, given the parity in earnings performance that we estimate for FY26?28E. Even at our target price, PER for FY27E rises to ~14.6x, at a substantial discount to peers, which leaves sufficient buffer for negative surprises. Downside risks: 1) Higher-than-expected spike in gas cost. 2) Inability to pass on gas cost increases. 3) Sharper fall in alternate fuel prices for CNG (petrol/diesel). Upside risks: 1) Softer LNG prices. 2) Faster execution of new area development and delta from Unison. 3) Aggressive regulatory support in MMR region Promoter/FII Holdings Promoters held 32.5 per cent stake in the company as of 31-Mar-2025, while FIIs owned 23.76 per cent, DIIs 23.82 per cent. (You can now subscribe to our ETMarkets WhatsApp channel) Disclaimer: Views and recommendations given in this section are the analysts' own and do not represent those of Please consult your financial adviser before taking any position in the stock/s mentioned.
