Asian stocks are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.4% while the Hang Seng is down 1.1%. The Nikkei 225 is trading down by 0.2%. US stocks jumped on Thursday, giving the Nasdaq its biggest daily gain since March, as Microsoft's upbeat earnings spurred a rebound in technology names and investors snapped up oversold shares.
Back home, India share markets have opened the day on a negative note. The BSE Sensex is trading down by 216 points while the NSE Nifty is trading down by 77 points. The BSE Mid Cap index opened the down by 0.2% while BSE Small Cap index opened the day down by 0.5%.
Except for healthcare stocks, all sectoral indices have opened the day in red with power stocks and metal stocks witnessing maximum selling pressure.
The rupee is trading at Rs 73.43 against the US$.
Yes, bank share price plunged over 7% in the opening session after its September quarter profit dropped 3.8% year-on-year to Rs 9.6 billion for September quarter due to onetime hit on mark-to-market (MTM) investments in corporate bonds and higher provisions on loans to a corporate client.
Telecom stocks opened the day on a mixed note with GTL Ltd and AGC Networks leading the losers. Bharti Airtel Ltd. reported a surprise net profit in the July-September quarter aided by a one-time deferred tax gain without which it would've suffered a loss.
The company's PAT fell 65.4% to Rs 1188 million in Q2FY19 over Rs 3430 million in the same period last year. India's second-largest telecom network's net profit rose to Rs 1.2 billion in the three months ended September from Rs 1 billion in the preceding quarter. Bharti Airtel posted a profit because of a deferred tax gain of Rs 26.3 billion in the reporting quarter.
Consolidated revenue of the company slipped to Rs 204.2 billion against Rs 217.8 billion in the corresponding quarter last year. Revenue dipped 6.2% on account of sustained pricing pressure in India mobile segment.
Average revenue per user (ARPU) of the company declined 28.8% to Rs 101 for the quarter ended September 30. The figure stood at Rs 142 in the same period last year.
Consolidated net debt increased by Rs 103 billion to Rs 1,132 billion against Rs 1,029 billion sequentially.
The pressure on ARPU came from the consolidation of Telenor customers which Airtel acquired, and consumers switching to lower-priced postpaid plans offering similar benefits. Bharti Airtel's margin in India was also impacted by a rise in diesel prices, a rapid network rollout and higher tower rentals due to the exits by Vodafone India and Idea Cellular Ltd.
Moreover, Bharti Airtel has been the victim of loss of pricing power in the sector. Sliding operating margins had a direct impact on the company's return on equity over the past decade.
Bharti Airtel's Sliding Valuations
And the poor operating numbers apart from debt-heavy balance sheet weighed on the valuations.
Bharti Airtel share price opened the day down by 1.6%.
To know more about the company, you can access to Bharti Airtel's latest result analysis and Bharti Airtel's 2017-18 Annual Report Analysis on our website.
Moving on to the news from the economy. The fiscal deficit of the Central government has widened in the first half of 2018-19 to 95.3% of the Budget Estimate (BE), mainly on account of slow growth in revenue collections.
The deficit was at 91.3% of BE at September-end of the last financial year.
In actual terms, the fiscal deficit or gap between the total expenditure and receipts was Rs 5.94 trillion during April-September this fiscal.
The government has budgeted to cut fiscal deficit to 3.3% of GDP in 2018-19 from 3.53% in the previous financial year.
The fiscal deficit target for 2018-19 is Rs 6.24 trillion.
As per the data released by the Controller General of Accounts (CGA), the tax collection (net) at September-end was Rs 5.82 trillion, or 39.4%, of BE. It was 44.2% of the BE in a similar period last fiscal.
The total receipts of the government during April-September 2018 were Rs 7.09 trillion, or 39%, of BE, compared to 40.6% in the same period of 2017-18.
The CGA data showed that total expenditure during April-September 2018 was Rs 13.04 trillion or 53.4% of BE.
The capital expenditure was Rs 1.62 trillion or 54.2% of BE, the reports noted.
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