WHEN TO LOWER INTEREST RATES - IF NOT NOW, WHEN? - CALL TO RBI !

WHEN TO LOWER INTEREST RATES

IF NOT NOW, WHEN?

Mr.Arun Jaitley has also felt now that RBI’s Interest Rates need to come down. He is very right on this issue. Interest Rates must come down now. They have remained too high, too long. This Blog has said so several times in the past.

In fact, High Interest Rates have never worked in India to control Inflation, as seen from last 4 years of RBI experience itself. Even as Interest Rates were being enhanced by RBI, Inflation was also going up, making the Rate increases meaningless.

Now, Inflation is coming down only because of supply side measures by Government and also market conditions, but not due to RBI Rate Policy. Interest Rate increases and decreases never impacted Inflation in last 4 years. But, they did impact Growth.

Today, Banks have liquidity but there are NO TAKERS. This evidently means, Interest Rates are TOO HIGH in India, for manufacturers to take loans for Growth/Expansion Purposes.

It is ridiculous in a developing economy, that Banks must be concentrating only on retail demand and working capital needs as they are ALL doing at present.

But, Companies are borrowing from foreign institutions and Foreign Banks, but not from Indian Banks for development / expansion purposes. They are even preferring to build companies outside India.  This trend is not good at all for India. While Government is asking everyone to come and MAKE IN INDIA, the interest rates in India are so sky high that it by itself becomes a big deterrent for MAKE IN INDIA.

RBI’s Rate Policy is one cause, though not the only cause, for this trend. The other major cause, was the sickening delays and corruption in India at least under UPA II.

RBI's other policies are very good, effective and Praise-worthy. But, its interest rate policy has become meaningless. RBI must introspect and bring down Rates with no further delay, without waiting for Inflation to come down further and further. My simple reason for this is – there is no visible correlation between interest rates and Inflation in India, but correlation exists between Interest rates and Growth and is HIGHLY VISIBLE.

And, therefore, RBI must leave Inflation control to Government and give its total help in promoting growth with the catalyst of lower interest rates.

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HDFC Bank Limited QUARTERLY RESULTS - SECOND QUARTER - SEPTEMBER,2014 - NET REVENUES UP 19.6% YoY - NIM 4.5% - NET NPA 0.28%

HDFC Bank Limited

 

DEEPAK PAREKH CHAIRMAN

 

ADITYA PURI MD

FINANCIAL RESULTS

SECOND QUARTER

SEPTEMBER 30,2014

HDFC Bank has declared the financial results for the second quarter ended September30, 2014.

FINANCIAL RESULTS

Total income for Q2 FY 15 was Rs.13,894.7 crore ,as against Rs.11,937.7 crore for Q2 FY 14.

Net revenues (net interest income plus other income) were at Rs.7,558.1 crore , an increase of 19.6% for Q2 FY 15 over Rs.6,320.9 crore for Q2 FY 14.

Interest earned increased from Rs.10,093.3 crore in Q2 FY 14 to  Rs.11,847.6 crore in Q2 FY 15 , up by 17.4%.

With interest expense increasing by 12.8% to Rs.6,336.6 crore for Q2 FY 15, the net interest income (interest earned less interest expended) grew by 23.1% to Rs.5,511.0 crore from Rs.4,476.5 crore for Q2 FY 14.

Net interest margin for Q2 FY 15 was at 4.5% as against 4.3% for Q2 FY 14.

Other income (non-interest revenue) at Rs.2,047.1 crore was 27.1% of the net revenues for Q2 FY 15 and grew by 11.0% over Rs.1,844.4 crore in Q2 FY 14.

The four components of other income for Q2 FY 15 were fees & commissions of Rs.1,536.5 crore (Rs.1,354.4 crore in Q2 FY 14), foreign exchange & derivatives revenue of Rs.221.7 crore (Rs.501.4 crore for Q2 FY 14) , profit on revaluation / sale of investments of Rs.95.1 crore (loss of Rs.173.3 crore for Q2 FY 14) and miscellaneous income including recoveries of Rs.193.8 crore (Rs.161.9 crore for Q2 FY 14).

Operating expenses for Q2 FY 15 were Rs.3,497.9 crore, an increase of 19.2% over Rs.2,934.2 crore during Q2 FY 14.

The cost-to-income ratio for Q2 FY 15 was at 46.3% as against 46.4% for Q2 FY 14.

Provisions and contingencies were Rs.455.9 crore (consisting of specific loan loss and general provisions) for Q2 FY 15  as against Rs.385.9 crore for Q2 FY 14.

After providing Rs.1,222.8 Crore for taxation , the Bank earned a net profit of  Rs.2,381.5 Crore for Q2 FY 15, an increase of 20.1% over Q2 FY 14.

Balance Sheet

Advances as of September 30, 2014 were Rs.327,273 crore , an increase of 21.8% over September30, 2013.

This loan growth was contributed by both segments of the Bank’s loan portfolio, with domestic retail loans and wholesale loans as per the Bank’s internal business classification growing by 17.3% and 21.8% respectively (as per regulatory[Basel 2] segment classification growing by 9.8% and 30.1% respectively).

Retail loan disbursal for the first half of the fiscal grew by 22% over the corresponding period of the previous fiscal.

Total deposits as of September 30, 2014 were  Rs.390,682 crore, an increase of 24.8% over September 30, 2013.

Savings account deposits grew 18.8% over the previous year to reach Rs.110,810 crore and current account deposits at Rs.57,803 grew 21.4% over the previous year.

CASA mix was 43.2% as at September 30, 2014.

Capital Adequacy:

The Bank’s total Capital Adequacy Ratio (CAR) as at September 30, 2014 (computed as per Basel III guidelines) stood at 15.7% as against a regulatory requirement of 9%. Of this, Tier -I CAR was 11.8%.

NETWORK

As of September 30, 2014 , the Bank’s distribution network was at 3,600 branches and 11,515 ATMs in 2,272 cities / towns, an increase of 349 branches and 338 ATMs over 3,251 branches and 11,177 ATMs in 2,022 cities / towns as of September 30, 2013 and an increase of 197 branches and 259 ATMs during this fiscal year so far.

Number of employees increased from 69,662 as of September 30, 2013 to 75,339 as of September 30,2014.

ASSET QUALITY

Gross non-performing assets (NPAs) were at 1.02% of gross advances as on September 30,2014, as against 1.09% as on September 30,2013 and 1.07% as on June 30, 2014. Net non-performing assets were at 0.28% of net advances as on September 30,2014.

Total restructured loans (including applications received and under process for restructuring) were at 0.1% of gross advances as of September 30, 2014 as against 0.2% as of September 30, 2013.

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HERO MOTOCORP LTD - SECOND QUARTER RESULTS - Q2 FY 15 - SEPTEMBER 2014 - NET SALES UP 20.49%; NET PROFITS UP 59% YoY

HERO MOTOCORP LTD

BRIJMOHAN LALL MUNJAL, CHAIRMAN

PAWAN MUNJAL MD & CEO

SECOND QUARTER RESULTS Q2 FY 15

SEPTEMBER 2014

Hero Motocorp has declared excellent results for the second quarter ending September 2014. The results are in the table Below :

Sales Numbers have gone up 19.51% YoY. 

Net Sales in Rupee terms has gone up 20.49% YoY. Since expenses have risen less than proportionately by 16.89% only YoY, the operational profit has zoomed up by 57.54 % YoY.  

Net Profits have gone up by 58.57% YoY.

RESULTS TABLE :

HERO MOTO	Q2 FY15	Q1 FY15	QoQ Dif%	Q2 FY14	YoY Dif%
NO. SOLD	1692523	1715254	-1.33	1416276	19.51
NET SALES	686350	699940	-1.94	569646	20.49
TOTAL INCOME	691534	703684	-1.73	572621	20.77
TOTAL EXP	605548	638116	-5.1	518042	16.89
OPT	85986	65568	31.14	54579	57.54
PBT	104843	76545	36.97	65829	59.27
NPT	76337	56276	35.65	48141	58.57
EPS(FV.Rs.2)	38.23	28.18	35.66	24.11	58.56

QUARTER-WISE PERFORMANCE in 2013-14

(from Annual Report)

Q1 (APRIL 2013 – June 2013)

Entered Africa and Central America with the launch of Brand Hero in these markets

First-ever equity investment in an overseas firm; to buy 49.2% equity at Erik Buell Racing (EBR) for US$ 25 Million

Launched India’s first-ever warranty of five years on all its two-wheelers (5 years or 70,000 km on motorcycles)

Launched the retail finance arm, Hero FinCorp, with a phase-wise expansion plan

Q2 (July 2013 – September 2013)

Became the first Indian two-wheeler company to reach the historic milestone of 50 million units production

Introduced an innovative campaign titled ‘Hero Mileage’, capturing Hero’s best-in-class fuel-efficiency across its product range; and the tagline – ‘Thoda Extra Kilometre Per Litre’ - has gone on to become part of the youth lingo 

Initiated project ‘Leap 20’ to bring very high levels of innovation across our supply chain, and partnering with our suppliers to drive 

significant improvements in our cost structure, even as we raise the bar even higher on product quality and reliability

Q3 (October 2013-Dec 2013)

Appointed Head of Strategy & Performance Transformation and Head of the newly-created division of Engine Design & Development

Commenced construction of our ‘Hero Centre of Global Innovation and Research & Design (R&D)’ at Kukas, near Jaipur in Rajasthan,  investing Rs.450 crores

Forms new joint venture in partnership with Magneti Marelli to develop next-gen two-wheeler fuelling systems

Unveils 15 new offerings, with new-gen features including the all-new Splendor iSmart, Karizma R, ZMR, Xtreme and Pleasure

Registered 6.25 lakh sales in October 2013, first-ever manufacturer to cross the landmark 6 lakh unit sales in a month

Launched Splendor iSmart with ‘i3S Technology, Pleasure with Integrated Braking System, Xtreme with ‘Electronic Immobiliser’ and Karizma & Karizma ZMR

Series of refreshes and variants of existing platforms, include HF Dawn & HF Deluxe, Splendor Pro, Super Splendor, Passion Pro, HF Deluxe Eco, Glamour and Glamour F

Q4 (January  2014 – March  2014)

Showcased an exciting range of products for the future at 2014 Auto Expo

Entered Bangladesh and Turkey with an array of popular Hero motorcycles and scooter

EXCERPTS FROM AR 2014

Fresh capacities have been planned accordingly. As I write this, our fourth facility at Neemrana is ready to start production, and our global parts centre will be functional before the end of the calendar year. We have also started the land development work at our Halol plant in Gujarat.

In fact, I am convinced that our most challenging phase is now behind us. Hero has moved beyond the legacy of its past, and is progressing steadily towards its destiny of becoming a global and independent bike and scooter powerhouse.

Our footprint now spans South Asia, Africa, Central and Latin America, with a presence in Europe via Turkey. To serve customers in select markets faster, Hero MotoCorp has also sewn up joint ventures in critical markets and has kick-started overseas assembly operations. The first such operation has come up in Kenya.

Separate equity ventures with local firms in Bangladesh and Columbia are also in place. We will build on these exciting forays. Hero began developing an R&D ecosystem from ground up eighteen months ago. This has flowered remarkably.


OTHER LATEST NEWS : 


Hero MotoCorp wants to invest Rs 5,000 crore over 2-3 years in capacity building. 

"We are aiming to be in the European markets towards the end of 2015. Leap will make its debut first in Europe," Vice Chairman and MD Pawan Munjal said. "For the US market, our products are currently undergoing homologation."
 
Hero Motocorp has also unveiled its 4th manufacturing facility and global parts centre at Neemrana in Rajasthan. Mr.Munjal said the Rs 5,000 crore investment plan covers its "factory at Neemrana, the new plants coming up at Halol in Gujarat and in Colombia and Bangladesh, the Hero Global Centre for Innovation and R&D at Kukas in Rajasthan and the proposed plant in Andhra Pradesh".

2 new scooters will be launched in the next eight to 12 months with its own Technology. The company so far depended on erstwhile joint-venture partner Honda Motor for technology.
 

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