LIC reports 5 per cent increase in Q1FY26 net profit at Rs 10,987 crore

by Hansraj Agrawal | Aug 7, 2025 | Business

India’s largest life insurer had reported a net profit of ₹10,461 crore in the year ago period.
| Photo Credit:
AMAN RAJ

Life Insurance Corporation of India (LIC) reported a 5 per cent increase in first quarter (Q1FY26) standalone net profit at ₹10,987 crore, with the bottomline supported by healthy growth in income from investments and decline in operating expenses related to insurance business.

India’s largest life insurer had reported a net profit of ₹10,461 crore in the year ago period.

Net premium income (including first year premium, renewal premium and single premium net of reinsurance) rose about 5 per cent year-on-year (y-o-y) to ₹1,19,200 crore (₹1,13,770 crore in Q1FY25).

Net income from investments was up 7 per cent y-o-y at ₹1,02,930 crore (₹96,183 crore).

Operating expenses related to insurance business declined 10 per cent y-o-y to ₹7,549 crore (₹8,431 crore).

Referring to the strong 34 per cent increase in Annualized Premium Equivalent (APE) in the case of non-participatory products and Net VNB (value of new business) margin going up to 15.4 per cent from 13.9 per cent, a senior official attributed this to many interventions by the Corporation in the past year, including modifications in products on account of regulatory provisions and also the fact that it keeps modifying products on the margins.

LIC’s 13^th month persistency ratio (on number of policy basis) declined to 64.35 per cent from 67.81 per cent. In the regard, R Doraiswamy, CEO & MD, said, “We normally find that the policies with lower ticket size policies are the ones which we tend to have a lower persistency. So, since the cohort of policies that is being measured for the current quarter belong to the earlier regime of policies, the persistency of 13th month has come down a bit.

“So, we’ll be making all out efforts to see that they (policyholders) are also contacted and revived so that we increase the persistency as the policy term goes ahead.”

Published on August 7, 2025

Source link

As monsoon showers 2% surplus, storage in India’s key reservoirs tops 70%

by Hansraj Agrawal | Aug 7, 2025 | Business

HOSAPETE (KARNATAKA) 29-07-2025: Water gushes out of Tungabhadra Dam as discharge continues amid heavy inflows from upstream reservoirs and persistent rainfall in the catchment area on Tuesday.PHOTO: SPECIAL ARRANGEMENT
| Photo Credit:
SPECIAL ARRANGEMENT

The storage in India’s 161 major reservoirs topped 70 per cent this week with the South-West monsoon continuing to shower surplus rain, particularly in the southern and north-western region.

Data from the Central Water Commission (CWC) in its weekly bulletin on the 161 reservoirs showed that the level was 72.55 per cent of the 182.496 billion cubic metres (BCM) capacity at 132.398 BCM. “The overall storage position is better than the corresponding period of last year in the country as a whole and is also better than the normal storage (last 10 years) during the corresponding period,” the CWC said in its bulletin.

According to the India Meteorological Department (IMD), the monsoon is two per cent surplus so far, though east and north-eastern and southern peninsula are 20 per cent 4 per cent deficient, respectively. The spatial distribution has also been uneven with 30 per cent of the 728 districts being either deficient or large deficient. However, there is no region that has not received rain so far.

North up sharply

The storage in all the regions increased this week, with the rise being significant in the northern region, which has been witnessing lower storage since last year. Overall, seven reservoirs continued to be filled to capacity this week too. Among the States, the lone reservoirs in Goa and Mizoram are full, while Tamil Nadu and Tripura boasted of over 95 per cent storage.

In the northern region, the level in the 11 reservoirs surged to nearly 72 per cent this week of the 19.836 BCM capacity at 14.290 BCM. The storage in Rajasthan was unchanged at 85 per cent, but it increased to 64 per cent in Punjab and 68 per cent in Himachal.

The storage in 27 reservoirs of the eastern region was 55 per cent of the 21.724 BCM capacity at 11.941 BCM. Besides Mizoram and Tripura, the level in Bihar was 77 per cent and in Bengal 68 per cent. Except for Odisha, the storage in the rest of the States in the region was above 50 per cent.

In the 50 reservoirs of the western region, the level was 75.45 or 28.286 BCM of the 37.357 BCM capacity. Apart from Goa, Maharashtra dams were filled over 85 per cent, while those in Gujarat were filled to nearly 65 per cent.

In the central region, the storage increased to 72.62 per cent of the 48.588 BCM at 35.284 BCM. The storage in Uttarakhand at 57 per cent continued to be lower than Madhya Pradesh (75.8 per cent), Uttar Pradesh (about 70 per cent) and Chhattisgarh (73 per cent).

IOD may delay monsoon withdrawal

Tamil Nadu continued to benefit from the south-west monsoon, though Telangana (52.14 per cent) continued to lag. The level in the 45 reservoirs of the southern region was 77.7 per cent of the 54.939 BCM capacity at 42.697 BCM . The storage in Andhra was 75.49 per cent. In Kerala and Karnataka, the level was 73 per cent and 81 per cent, respectively.

The storage situation augurs good not only for the kharif crops, but also for the rabi season that will begin in October. The IMD has projected normal rainfall this month, while it has predicted surplus rain in September.

Meanwhile, Jason Nicholls, lead international forecaster of AccuWeather, said a negative Indian Ocean Dipole (IOD) has developed and it could delay the withdrawal of the south-west monsoon, while putting off the onset of north-east monsoon in October.

(With inputs from Srikrishnan PC, Chennai)

Published on August 7, 2025

Source link

Broker’s call: VA Tech Wabag (Buy)

by Hansraj Agrawal | Aug 7, 2025 | Business

Target: ₹1,950

CMP: ₹1,510.65

VA Tech Wabag is a leading Indian multinational focused exclusively on water technology, delivering solutions in municipal and industrial water treatment, including desalination, wastewater treatment, and water reuse.

FY25 marked a milestone year for VA Tech Wabag, with the company delivering its highest-ever order book, revenue, EBITDA, and PAT. Strong financial discipline led to ₹705 crore in net cash, ₹353 crore in free cash flow, 13% EBITDA margin, 9% PAT margin, and 15% return on equity. Its upgraded AA credit rating reflects the company’s robust execution and low-risk, cash-rich profile.

With an order book of ₹13,667 crore, which is 4.2 times its FY25 revenue, Wabag has strong visibility over the next 3–4 years, especially as it taps into India’s ₹35,800 crore water infrastructure opportunity. The company is also nurturing future growth through its Blue Seed Initiative, which supports innovation in water-tech by partnering with emerging startups. Company Outlook

We initiate a Buy rating on Va Tech Wabag with a target price of ₹1,950 based on 26.5x P/Ex assigned to its FY27E earnings.

Key risks include execution challenges in complex EPC projects, working capital pressures from delayed municipal payments, geopolitical uncertainties in international markets, margin sensitivity to project mix, and high dependence on government-funded orders.

Published on August 7, 2025

Source link

Broker’s call: Lupin (Buy)

by Hansraj Agrawal | Aug 7, 2025 | Business

Target: ₹2,400

CMP: ₹1,946.30

Lupin’s (LPC) Q1FY26 EBITDA stood at ₹1,640 crore (up 28 per cent y-o-y) and was in line with our estimates on the back of higher US sales supported by niche launches (gTolvaptan). Revenues grew 12 per cent y-o-y to ₹6,300 crore, vs our estimate of ₹6,400 crore. Miss was on account of lower India and API sales. US revenues came at $282mn, up 15% QoQ in line with our estimates.

LPC saw a remarkable turnaround in profitability with about a 2x jump in EBITDA over FY23-24, aided by better product mix, continued niche launches in the US, clearance from USFDA for facilities, domestic formulations regaining momentum and cost optimisation measures. Increased contribution from gTolvapton supported margins. GMs continue to remain strong at 71.3 per cent, up 160bps q-o-q, given better product mix in US markets. R&D expenses increased by 38 per cent y-o-y; 7.9 per cent of sales at ₹470 crore. The company booked a forex gain of ₹86 crore while the tax rate came in lower at 14 per cent. Resultant PAT at ₹1,220 crore, above our estimates.

We expect margins to sustain, given a strong pipeline in the US. Our FY26E and FY27E broadly remain unchanged. We maintain a Buy rating with TP of ₹2,400 (25x FY27E EPS). Any competition in gSpiriva and delay in new launches in the US will be key risks to our estimates.

Published on August 7, 2025

Source link

Indian shrimp exporters seek incentives to offset tariff impact

by Hansraj Agrawal | Aug 7, 2025 | Business

With a 50 per cent reciprocal tariff set to hurt the Indian shrimp exports in the largest market — the United States, stakeholders have sought support from the government through interventions such as reinstating of interest equalisation scheme and enhancing of incentives under RoDTEP to tide over the situation.

Voicing concern, the Seafood Exporters Association of India (SEAI) said at this high rate of tariff it will be impossible to supply goods to any market. This move by the US imperils market of approx $3 billion for Indian seafood that exists in that country, said K.N. Raghvan, secretary general of SEAI.

The system of differential tariff adopted by the US, wherein various countries are offered different rates of tariffs, also places Indian seafood at a substantial disadvantage. The main competitors for Indian seafood are Ecuador, which has a tariff rate of 15 per cent, followed by Indonesia (19 per cent) and Vietnam (20 per cent). Thus imports from these countries gain a huge “tariff advantage” over India while exporting seafood to the US, Raghavan said.

Hitting livelihoods

SEAI has sought the support from the government to tide over this difficult situation so that activities continue without interruption in the units and procurement proceeds unhindered, even as it seeks alternate markets for the Indian produce. “We hope that an early solution emerges for this impasse, which will help facilitate continued export of seafood to the US,” he said.

Divya Kumar Gulati, Chairman at Compound Livestock Feed Manufacturers Association (CLFMA) of India, said “The imposition of a 50 per cent tariff by the US on Indian livestock and seafood exports is a major setback for the sector. These duties not only affect price competitiveness but also disrupt livelihoods, especially across coastal and rural economies where aquaculture and animal protein production are vital. To cushion this impact, we urge the government to expand and recalibrate export incentives under schemes like RoDTEP, providing higher WTO-compliant rebates for affected sectors. We suggest reinstating the Interest Equalisation Scheme (IES) to ease credit access and reduce financing costs for exporters, particularly small and medium enterprises.”

Additionally, India must actively promote market diversification—reducing dependency on the US—by facilitating access to emerging regions such as East Asia, the Middle East, and Africa, Gulati said.

Other duties burden

“It is equally important to intensify trade negotiations at multilateral and bilateral levels, using platforms like WTO and G20 to seek relief and address unfair barriers. We also call for sector-specific advocacy backed by data that highlights potential job losses and economic disruption, pressing for exemptions or reduced duties. On the domestic front, it is imperative to build a strong and sustainable market for shrimp consumption within India to reduce over-reliance on exports and support farmer incomes. Lastly, upgrading quality standards and certifications for Indian exporters can boost global acceptance and resilience of our livestock and seafood sectors in a shifting trade environment,” Gulati said.

The increase in tariff rates is in addition to the counter vailing duty of 5.77 per cent and anti-dumping duties imposed on seafood exports from India.

Despite these developments, the Seafood Exporters Association of India has resolved that the burden of increased tariffs will not be borne by exporters but will be passed on to the buyers in the US.

Nitin Awasthi, an analyst at InCred Equities, said India remains a top contender in the shrimp game with global supply tightening and local fundamentals becoming strong. The short-term pain is real, but the long-term story stays intact.

Published on August 7, 2025

Source link

Will souring sugar company stocks turn the tide?

by Hansraj Agrawal | Aug 7, 2025 | Business

Shares of sugar companies have been on the downtrend in the last one year amid fear of supply glut and volatile market. Some of the stocks have fallen nearly 50 per cent in the last one year.

However, a few such as EID Parry delivered a return of nearly 51 per cent, Bannari Amman Sugars 16 per cent and Balrampur Chini Mills jumped over 12 per cent outperforming the Nifty 50’s 5 per cent gains. These companies have defied the broader sector slump, thanks to their diversified revenue streams, flexible distillery set-ups, low debt and strong financials. Industry analysts see some positives going forward amidst challenging times for the sector.

The global sugar market, entering mid-2025, is experiencing an inflection point defined by strong production in India and Brazil, changing consumer preferences and the accelerating momentum of ethanol-blending programmes. After a period of relative price stability in Q2 2025, recent weeks have seen global raw sugar prices moderate as robust supply from major origins coincides with a tepid uptick in global demand.

India, on track to achieve a 12 per cent ethanol-blending rate by 2024-25 (targeting 20 per cent by 2025-26), is sustaining its dual role as a sugar powerhouse and a rising green fuel producer. Domestic sugar consumption in India remains high but efficiency gains and climate-adaptive practices are gradually offsetting the risks from erratic weather and policy shifts, says a note from CMB News.

Prices of the sweetener are set to rise despite a higher output projection by industry bodies. With climbing demand due to the upcoming festival season and the likelihood of improved margins for sugar companies will have a positive impact on the sugar stocks. As such, shares of most sugar companies, the second largest agro industry, showed a positive bias. The Centre’s push towards ethanol blending, too, lends support for the uptick in sugar stocks.

Production up

India is the second-largest producer of sugar in the world after Brazil. The majority of the sugar used in India is made from sugarcane. The erratic nature of sugar output, which is dependent on weather, directly impacts the price of sugar. Other factors that determine the price movement are the government’s policy on sugar exports, freight subsidy and pricing.

India’s sugar production is projected to surge to 34.90 million tonnes (mt) in the 2025-26 season, marking an 18 per cent increase, according to Indian Sugar Mills Association, an apex trade body. This boost allows for potential exports of 2 mt. A significant 5 mt of sugar could be diverted for ethanol production, while domestic offtake is pegged at 28 mt.

Ample supplies from top sugar producers Brazil, India and Thailand have dragged the global futures prices down. “India may allow local sugar mills to export sugar in the season that starts in October, as early signs point to a bumper sugarcane crop. That prospect has helped push prices lower in recent trading sessions,” according to StoneX analyst Lucas Fonseca.

The current monsoon season has seen above-average rainfall, spurring plantings. With sugarcane acreage expanding in key producing States like Maharashtra and Karnataka, the National Federation of Cooperative Sugar Factories has forecast a 19 per cent increase in production in 2025-26.

Striking gold with ethanol

Going forward, ethanol is set to become the money spinner for most of the sugar mills. Ethanol is a biofuel produced naturally through the fermentation of sugars by yeast. It is used in the production of drugs, plastics, polishes and cosmetics, and also as an alternative fuel source. It is the latter that is going to bring a windfall for the sugar makers.

Shruti Jain, Chief Strategy Officer, Arihant Capital Markets, told businessline that while higher ethanol diversion supports long-term growth, auto majors have flagged concerns like minor mileage dips (1-3 per cent) and corrosion risks, especially in older vehicles. However, with a shift towards E20-compatible vehicles, the sector is well-positioned for structural growth. “Select integrated sugar companies with strong ethanol capacities could benefit the most from this transition,” she added.

“Since April 2023, automakers have rolled out E20 compatible engines, mitigating long-term risks. Ethanol’s lower calorific value does impact mileage marginally; however, the structural shift toward flex-fuel and higher blend adoption ensures consistent demand for ethanol. For the sugar sector, this translates into a sustainable revenue stream from ethanol diversion, enhanced margin visibility and insulation from global sugar price volatility. Overall, ethanol integration remains a long-term structural tailwind for the industry despite near-term apprehensions,” said Saurav Chaube, Research Analyst, SAMCO Securities.

Mixed outlook

The Indian sugar industry faces a complex outlook despite projections of higher production, driven by strong pre-monsoon showers, improved yields and effective disease management.

However, Chaube, on a cautious note, said that structural challenges such as elevated inventory levels and stagnant sugar MSP persist which are squeezing mill margins. Ethanol economics are also strained since ethanol prices have remained stagnant for the past three years impacting margins and profitability. Policy support through higher MSP, revised ethanol pricing and a 2-mt export allowance is critical to prevent domestic price pressures.

At the current juncture, increase in ethanol price is the most important lever to improve profitability as this will lead to more diversion of sugarcane-based feedstock, lower sugar production and consequently, higher sugar prices as well, said Elara Securities. “Currently, we have a neutral view on the sector as we await policy triggers to fructify. Balrampur Chini is our top pick in the sector,” the domestic brokerage said.

While El Nino was a factor in the previous season (2023-24), impacting production due to reduced rainfall and groundwater availability, the 2024 monsoon and normal to above-average monsoon so far in 2025, are likely to have a positive effect on the upcoming season. The stronger monsoon has replenished water resources and encouraged farmers to expand cultivation of this cash crop. Key risks include the upliftment of curbs on ethanol import as part of US-India Trade Talks and price pressure unless export programmes allowed or other balancing measures are taken.

Published on August 7, 2025

Source link

« Older Entries

Next Entries »

Times Top News

Times Top News