Bajaj Auto Q2FY25 Financials: Strong Revenue and Profit Growth, Margins Improve

Introduction

The semiconductor industry was put into the unexpected limelight in 2021 when chip shortages initially forced the shutdown of vehicle production lines. The focus grew when certain high-tech and consumer electronics businesses started to report chip shortages or expressed worries about supply chains.

Everyone can clearly see that we live in a world dominated by semiconductors, the small chips that power several automotive features, including blind-spot detection, seat adjustment, and interior Illumination.

Relations between Washington and Beijing are strained as a result of the rising tensions brought on by the visit of Nancy Pelosi, the speaker of the US House of Representatives.

What would occur if China annexed Taiwan?

Some scholars claim that if China conquers Taiwan, the former will gain more independence to expand its strength throughout the western Pacific.

Furthermore, China may put the American military outposts in jeopardy if this takeover occurs, especially those on the island regions.

China, however, disputes any bad intentions and insists that its goals are wholly benign. But President Xi Jinping of China declared that "reunification with Taiwan must be realized" and that if necessary, the force will be used to achieve this goal.

Simply put, the dragon views the island country as a renegade province that the latter seeks to subdue.

What is the US's role in the conflict between China and Taiwan?

Washington has a history of strategic ambiguity, to the point where it might use force to intervene if China invaded Taiwan. The One-China policy, which recognizes only one Chinese government, based in Beijing, and has formal links with Beijing rather than Taipei, is adhered to by this country in its official capacity. It has, however, also promised to give Taiwan protective armaments and emphasized that any invasion by China would be of great concern.

Taiwan is the largest supplier of Semiconductor Chips in the World

A significant portion of Taiwan's IT sector is made up of the semiconductor industry, which includes IC manufacture, design, and packing. Taiwan plays a significant role in the semiconductor industry's worldwide supply chain.

Additionally, its contract manufacturers represented more than 60% of the entire income generated by semiconductors worldwide in 2021.

Around 20% of the world's semiconductor market, or US$115 billion, was accounted for by Taiwan. Taiwanese businesses control 50% of the global market in some industries, such as foundry operations, with Taiwan Semiconductor Manufacturing Company (TSMC) dominating the foundry industry.

Taiwan manufactures essential semiconductors and electronic equipment and controls 10% of the world's shipping container capacity, holding a crucial role in the global supply chain.

Technology companies from Taiwan control the majority of the world's capacity for producing semiconductors, including cutting-edge and effective chips. The largest contract chip manufacturer in the world, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), is now investing in a new $12 billion facility in Arizona.

India’s Role in the entire Scenario

India has its own limitations, therefore it won't participate more politically in Taiwan unless the situation is dire. Since the beginning, India has adhered to a "One China" policy; yet, India must recognize that Taiwan is the main center of the American Indo-Pacific strategy. In the bigger picture of limiting China, it does play a significant supporting role.

Our links now extend beyond commerce to include educational possibilities for Indians who wish to learn Chinese and follow Chinese trends.

Global Impact

The COVID-19 epidemic and China's zero-COVID policy have already caused unprecedented amounts of disruption in supply chains throughout the world since 2020.

Due to trade and supply route restrictions brought on by the Russia-Ukraine war, shipping prices have increased.

A blockage or delay in semiconductor chip exports might be one of the numerous effects of a confrontation between China and Taiwan. This would have an impact on several global businesses, including manufacturing, internet communications technology (ICT), and research and development.

The Taiwan Strait is one of the busiest shipping lanes in the world, helping the transport of technology and natural gas supplies to international markets.

A butterfly effect might result in hyperinflation, job losses when factories stop operating, and recessionary economies.

SBI Financials

State Bank of India's net profit in the first quarter of the current financial year on a standalone basis has declined by 7 percent.

State Bank of India (SBI) reported a net profit of Rs 6,068.08 crore compared with Rs 6,504 crore in the same quarter last year. Due to Mark to Market (MTM) losses on its investment book, the bank's operating profit decreased by 33% to Rs 12,753 crore from Rs 18,975 crore in the April-June quarter of the previous fiscal.

The bank's interest income increased to Rs 72,676 crore from Rs 65,564 crore previously. Net interest income grew from Rs 27,638 crore in the first quarter of the previous fiscal to Rs 31,196 crore which is 12.87 percent. The net interest margin increased from 3.15 to 3.23 percent.

Core operating profit jumped by 14.39 percent year over year,  from Rs 16,873 crore in Q1 FY22 to Rs 19,302 crore in Q1 FY23, when trading income and MTM were excluded.

The bank's gross (NPA) ratio increased from 5.32 percent at June's end of the previous year to 3.91 percent today. Similar to this, net NPAs decreased from 1.7% in June 2021 to 1.02 in June 2022. Domestic NIM for Q1FY23 climbed by 8 bps YoY to 3.23 percent. While the net NPA ratio decreased by 77 bps YoY to 1.00 percent, the gross NPA ratio decreased by 141 bps YoY to 3.91 percent.

The Provision Coverage Ratio (PCR), which was 75.05 percent, increased by 719 bps YoY. A 90.14 percent PCR (Inclusive AUCA) was reported. The slippage ratio for the reviewed quarter was 1.38 percent, an improvement of 109 bps year over year. Corporate loan volume increased by 10.57%, while SME and agricultural loans also saw year-over-year increases of 10.01% and 9.82%, respectively.

Deposit increased by 8.73% to Rs. 40 lakh crore. As of June 30, the bank's CASA ratio dropped 64 basis points to 45.33 percent. Retail bank deposits are up 8.73% year over year. Credit Cost for Q1 FY23 was 0.61 percent, up 18 basis points year over year. At the end of the June quarter of 2022–23, the capital adequacy ratio (CAR) was 13.43%.

SBI added that 38% of retail asset accounts and 65% of savings bank accounts were opened online using YONO. The proportion of alternate channels in all transactions climbed from 95.1% in the first quarter of FY22 to 96.6 in the first quarter of FY23.

Reasons:

Due to Mark to Market (MTM) losses on its investment book, the bank's operating profit decreased by 33% to Rs 12,753 crore from Rs 18,975 crore in the April-June quarter of the previous fiscal.

The bank's Return on Asset and Return on Equity, which was 0.48 percent and 10.09 percent, respectively, suffered from the MTM hit.

Non-interest income fell significantly. The sharp reduction in SBI's non-interest income was a significant factor in the company's profit decline. In the June quarter, SBI's non-interest income was barely Rs 2,312 crore, compared to Rs 11,802 crore in the same quarter of the prior fiscal year.

How much return did SBI share give?

Talking about the stock of SBI, the company's stock has given a return of 13 percent to the investors in YTD time. At the same time, it has given a return of 22.20 percent in the last year and has given a return of 90.02 percent to the investors in the last 5 years.

Performance of SBI Share Price

Promoter ownership of SBI was 57.57 percent as of June 2022, with no shares pledged.

Dividends of Rs 07.10 per share have been issued by SBI for the fiscal year that ended in March 2022.

SBI's share price increased by 84.45, or around 19.38 percent, during the course of the past year, from Rs 435.7 to Rs 520.1.

At 43,884.2, the S&P BSE BANKEX Index is now trading (up 0.77 percent). It increased by 3,153.0 points (up 7.74 percent) in the past year, from Rs 40,731.3 to Rs 43,884.2.

The S&P BSE SENSEX has increased 8.25% overall.

Introduction

As we observe our nation's 75th Independence Day, let's review how freedom has changed through time.

For India's savings, a route to financial independence has been gradually carved out thanks to the efforts of governments, regulators, and financial institutions. This route capitalizes on the country's economic expansion using share markets, mutual funds, and other investment avenues that let investors reap from it.

Steps to Financial Freedom

Certain reasons have led to a rise in the importance of financial independence. Every middle-class individual should take into consideration this idea because it is no longer optional and almost a necessity.

Set a Financial Goal

To become financially free, one must plan ahead and handle their existing finances. It's crucial to organize your expenses and debts since doing so will allow you to start saving and stop depending on a set monthly salary.

Start Saving

The road to financial independence begins there. The sooner you start saving, the longer you save will eventually benefit you in long term. It makes no difference where you start, but it is more crucial that you begin making plans for the future.

Risk tolerance level

Just as important as choosing a financial objective is understanding one's risk tolerance level. One may easily narrow down the most worthwhile investment possibilities if they are aware of their level of risk tolerance. Financial decisions may become murky if one is unable to identify their personal risk tolerance.

Understand what a wonder, compound interest is

Most people will accumulate wealth more reliably by combining tiny sums of money with time and the power of compound interest.

Construct an Investment Portfolio

Choosing a variety of investments that are geared toward attaining your goals and objectives at an investment risk level that you are comfortable with is the key to building an investment portfolio. The selection of a particular investment is the second most important component after asset allocation.

Invest Systematically through SIPs each Month

Regular and systematic investing is required if you want to get the desired outcomes. A powerful feature for goal planning is a systematic investment plan (SIP). You only need to choose one of the top and most suitable mutual fund programs to SIP into.

Searching for the best mutual funds for a systematic investment plan in India? Fulfill your financial goals now with Swastika.

Add some equity to your Investment Portfolio.

Equity investments have rewarded investors by increasing their money in a fairly short amount of time when compared to other investment alternatives. By starting early, and making investments in the right stocks, one might strive to save enough money to achieve financial independence at a young age.

Live life debt-free

You must quit living in debt if you want to become financially independent. Make sure to minimize or settle your outstanding bills as soon as you can. Avoid taking out loans or using credit cards frequently to meet your immediate needs because doing so might harm your financial stability

Abundant Wealth

The "4 percent rule" is a retirement rule of thumb that states that an investor can safely withdraw 4 percent, adjusted for inflation, from a balanced portfolio of stocks and bonds each year and be reasonably certain that the money will continue to grow and won't run out. This is how financially independent people who live off their portfolio income operate.

The Road to Financial Independence

Having the right mindset is essential to achieve financial freedom. Making secure and wise investments is therefore essential to financial independence since it allows you to gradually increase your wealth. Investors who desire predictable capital growth, however, have had sleepless nights due to fluctuating stock indices and monetary policy changes. Fixed-income assets are therefore ideal for investors looking for guaranteed returns.

भू-राजनितिक तनाव बढ़ने के कारण सोने में सुरक्षित मांग बढ़ने लगी है। पिछले सप्ताह घरेलु वायदा सोना तेज़ रहा और भाव 52500 रुपये प्रति दस ग्राम के स्तरों को छू गए जबकि चांदी की कीमते सीमित दायरे में रहते हुए 58800 रुपये प्रति किलो के ऊपरी स्तरों को छू गए। धीमी होती हुई ग्लोबल अर्थव्यवस्था और अमेरिकी डॉलर इंडेक्स मे दबाव सोने और चांदी के भाव को सपोर्ट कर रहा है। डॉलर की नरमी के चलते औद्योगिक धातुओं के लिए पिछले सप्ताह अच्छा रहा लेकिन चीन और यूरोज़ोन के कमजोर मैन्युफैक्चरिंग आकड़ो से सुस्त मांग के संकेतो से सप्ताह के अंत तक इनमे दबाव बनता दिखा। हालांकि, डॉलर की तुलना में रूपया पिछले दो सप्ताह से मजबूत रहा है जिससे कीमती धातुओं की बढ़त सीमित रही। भारतीय रिज़र्व बैंक द्वारा भी शुक्रवार को ब्याज दरे 0.50 प्रतिशत बढ़ा दी गई है जिससे रूपया मजबूत हुआ है। जबकि कॉमेक्स वायदा में सोना 1800 डॉलर प्रति औंस के स्तरों को पार कर गए। दुनिया भर से निराशाजनक आर्थिक संकेतो की बढ़ती संख्या ने आने वाली मंदी पर चिंताओं को बढ़ा दिया है। हालांकि, अमेरिका से जारी होने वाले पैरोल के आंकड़े मजबूत दर्ज किये गए है जिससे ऊपरी स्तरों पर कीमती धातुओं के भाव में दबाव भी बना है। सेफ हैवन मांग बढ़ने के पीछे चीन और ताईवान के बीच बढ़ रहा तनाव है जिसमे मिलिट्री ड्रिलिंग में मिसाइल दागने के बाद सोने में तेज़ी देखने को मिली है।

तकनीकी विश्लेषण:

कीमती धातुओं के भाव इस सप्ताह तेज़ी में रहने की सम्भावना है। अक्टूबर वायदा सोने की कीमतों में 51300 रुपये पर सपोर्ट है और 52500 रुपये पर प्रतिरोध है। सितम्बर वायदा चांदी में 55500 रुपये पर सपोर्ट और 59500 रुपये पर प्रतिरोध है।

सोने के भाव में लगातार तीसरे सप्ताह भी तेज़ी जारी रही वही प्रमुख अर्थव्यवस्थाओं के आंकड़े मजबूत रहने से चांदी में भी तेज़ी देखि गई। अमेरिकी डॉलर इंडेक्स पिछले सप्ताह 1.21 प्रतिशत टुटा जिसकी कमजोरी के चलते सोने और चांदी के भाव में तेज़ी बनी रही। लेकिन, वैश्विक आर्थिक आकड़ो में सुधार के साथ मुद्रास्फीति में भी गिरावट दर्ज की गई है जिससे कीमती धातुओं की तेज़ी में लगाम लगी है। मुद्रास्फीति घटने के बावजूद फेड सदस्यों द्वारा ब्याज दरे बढ़ाने की बात कही गई है जिससे सोने और चांदी में मुनाफा वसूली भी देखने को मिल रही है।

अमेरिकी मुद्रास्फीति आकड़ो के बाद उत्पादक मूल्य मुद्रास्फीति (पीपीआई) में भी अप्रत्याशित गिरावट दर्ज की गई है। मौद्रिक नीति पर अमेरिकी फेड का रुख अभी आक्रामक है। भारत में भी अमेरिकी फेड के साथ-साथ ब्याज दरों में वृद्धि हुई है और त्यौहार की मांग आने में थोड़ा समय बाकि रहने से सोने और चांदी की कीमते लम्बी अवधि के लिहाज से अभी सीमित दायरे में बनी हुई है जिससे इनमे ऊपरी स्तरों पर दबाव बनने की सम्भावना भी नज़र आती है।

अमेरिका, चीन और भारत में मुद्रास्फीति में कमी सोने की बढ़त को फीका कर सकती है लेकिन भूराजनीतिक मुद्दो से निचले स्तरों पर सपोर्ट भी मिलता रहेगा। इस सप्ताह अमेरिका से जारी होने वाले रिटेल सेल्स और एफओएमसी मीटिंग के मिनट्स सोने और चांदी के भाव के लिए महत्वपूर्ण रहेंगे।

तकनीकी विश्लेषण

कीमती धातुओं में इस सप्ताह ऊपरी स्तरों पर दबाव रहने की सम्भावना है। अक्टूबर वायदा सोने की कीमतों में 51700 रुपये पर सपोर्ट है और 53200 रुपये पर प्रतिरोध है। सितम्बर वायदा चांदी में 57300 रुपये पर सपोर्ट और 59700 रुपये पर प्रतिरोध है।

Investment risks can't be avoided while one can reduce these risks to manage their portfolio. It's important to address the portfolio wisely as this will ensure the investor's financial future security.

Now the point is every investment carries some risk feature with it, but a portfolio takes a lot of risks with it that depend on the number of assets managed in the portfolio.

So to overcome the overall risks, we will discuss the strategies to reduce risks in the investment portfolio.

To get detailed information about your investment portfolio, feel free to contact us - at 0120 4400700

Ways to Reduce Risk in Investment Portfolio

1. Identify Risk Tolerance Capacity

While investing the hard-earned money in the stock market, every investor has some risk-bearing capacity.

This risk tolerance capacity depends from person to person, and to determine risk factors, one can consider the age, the number of dependents, financial status etc.

Usually, people avoid such risk-taking capacity and invest more than their estimated risk to generate high returns, but this affects their portfolio when markets face downtime.

So understand your risk tolerance before investing, and this practice generates a good risk-return value that ultimately helps maintain the investment portfolio.

2. Maintain Liquidity

A financial emergency is unpredictable, i.e. it can occur anytime, so one needs to take back the investments, and it might be possible for the market facing downtime.

So to reduce this risk, try to maintain enough liquidity. Adding a few liquid assets in the portfolio lets your other investments generate long-term results.

One can keep the emergency funds aside that will equal the amount required for 3-4 months of expenses. In this way, the urgent need for cash won't affect the portfolio, and you need not compromise your long-term investments.

3. Asset Allocation

Asset allocation involves investing in different asset classes to reduce the risks involved with investment and generate high returns. Other asset classes are equity, debt, mutual funds, gold, real estate etc.

To implement an asset allocation strategy, mix investing means investing in the combination of asset classes which are inversely correlated, i.e. equity and gold, equity and debt etc.

If equity stock under performs, such gold stock balances the returns by overperforming, or vice-versa can be possible.

With this strategy, one can easily reduce the risks in the investment portfolio and secure higher revenue.

4. Diversify Investment

Once you get the combination of asset classes per your investment goals, diversify those asset classes to reduce the risks involved in investing.

This strategy helps reduce the overall risk of an investment portfolio as diversifying the investment within the same asset class divides the risks among multiple investments of that class.

For instance, you are investing in equity mutual funds and diversifying this investment among the large-cap, small-cap and mid-cap funds.

If any of the funds generate low returns, this loss is limited to that investment only because other assets are not affected.

Also Read: Portfolio Diversification: A Beginner’s Guide for Asset Allocation & More

5. Diversification across sectors

In the market, every sector is in a different phase; while a few sectors are quite risky and possess optimal returns, there are sectors which offer high returns at low risks.

So diversify your investments among multiple sectors such that if one sector is not doing well, you have an option that delivers better returns simultaneously.

For instance, The technology sector is usually in the mode of amazing growth, but this also faces downtime. At the same time, the utility sector stays consistent in terms of returns even aftermarket collapse.

6. Focus On Time in the Market

Most of the time, investors take quick decisions to buy particular stocks as their price continuously rises in the least amount of time

But without even checking the stock's past performance, investing can increase the risk. So instead of timing, the market investors should focus on the long run to stay with investments in the long term.

Because small fluctuations do not impact the portfolio much, therefore reduce the risk in the investment portfolio.

7. Invest in Index Funds

Investors should add a few index funds to their investment portfolio to reduce the risk. However, these funds are quite expensive but perform better than other funds.

Index funds produce good returns and lower expense ratios than other active funds.

Also Read: Tips and Tricks for Every New Stock Investor

8. Monitor Your Investment

Investing is not just enough. Being an investor, you always want to stay in the market for the long term, but that doesn't mean letting go of what's happening with your investments.

One should monitor the investments in a particular period. Reviewing the portfolio's performance shows the poor-performing assets and thus minimizes the risk involved.

You can track the investments for a year or every six months to help diversify the investments in the asset classes. Ultimately analyzing the performance reduces the risk in the investment portfolio.

9. Invest in Blue Chip Stocks

Investing in blue chips offers you several benefits as with the help of it, you can reduce liquidity risk to a greater extent. Hence, investors are advised to check the credit rating of debt securities to avoid any type of risks associated with it.

Although almost all blue-chip stocks involve some type of risk, investing in blue chip stocks minimizes your risks to a greater extent.

10. Monitor Regularly

We need to monitor our portfolio regularly even if you are a long-term investor. If you want to be a successful investor, you need to regularly an eye on your portfolio’s performance.

Conclusion

With every investment, you make some risks involved in it. To get high returns with your investments, follow all these strategies to reduce risk in the investment portfolio. This information aims to help you achieve your financial goals through continuous growth in your investments.