EXECUTIVE SUMMARY. The Finance Minister, Nirmala Sitharaman has announced the slashing of effective corporate tax to 25.17%, inclusive of all cesses and surcharges, effective from April 1, 2019, for domestic companies. Along with other relief measures this will result in a revenue forgone of Rs 1,450 bn (US$ 20.4 bn). This announcement resulted in a huge surge in the stock market on the expectation of the increase in corporate profits. The critical issue is whether this significant relief to corporate earnings will result in a boost to aggregate demand, investment, employment and sustainable economic growth in the economy. While shareholders will benefit handsomely from the reduction in corporate taxes and increase in profits it is doubtful whether the private corporate sector in a depressed economy where the Whole Price Inflation (WPI) for manufactured goods for August was 0% will play a counter cyclical role and invest in fixed assets.
If the Bombay High Court favours the RBI in its judgement in this dispute, it would appear that the latter is empowered to invoke Section 46(1) on Uday Kotak, the CEO and Dipak Gupta, the joint managing director of the bank, as it has specifically used the word, “wilful” to describe the bank’s conduct.
"It would have been a shocker if RBI would have approved the merger. I am surprised RBI did not announce its decision earlier as the entity was in the news for the wrong reasons,” asserts research analyst Hemindra Hazari.
“In the current faltering economy, the bank is unlikely to increase its net interest margin and its fees to compensate for the expected higher credit costs and if it is unable to continue with its earlier strategy, shareholders should expect a decline in its profitability," Hazari wrote in a note
EXECUTIVE SUMMARY. On the eve of HDFC Bank’s 2QFY2020 results (October 19, 2019), an analysis of its profitability for the last 5...
“Indian rating companies are reluctant to give poor ratings to companies before the default happens,” said independent analyst Hemindra Hazari, “They fear losing their clients.”