Automobile companies see mixed results in Q4 on BS-III impact

The enterprise noticed a slow healing from the effect of Automobile demonetization companies results in Bharat Stage III car ban by means of the Supreme Court impacted net profits. The car industry appears to be having combined effects inside the fourth sector of FY17. While 4 wheeler organizations appear to be posting the increase in net income, for 2-wheeler organizations it seems to be a bad region.

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The industry saw a sluggish restoration from the effect of demonetization to be all of sudden be hit via any other catastrophe, ie the Bharat Stage III vehicle ban via the Supreme Court.
However, their certain segments inside the automobile industry enterprise which have been able to energy thru this. The passenger automobiles segment especially turned into largely unharmed by using this decision. However, the two-wheeler segment saw the first-rate effect on their sales for the sector.

Maruti Suzuki mentioned almost sixteen% yr-on-12 months rise in its internet earnings for the fourth area ended March 31, 2017, the end result. The organization suggested a net profit of Rs 1,709 crore in Q4, growing by way of 15.77% compared to Rs 1,476.2 crore within the corresponding period of the previous year.

ALSO READ: Maruti Suzuki Q4 net income at Rs 1709 crore; gives Rs 75 per percentage dividend
Its general earnings stood at Rs 21,196.10 crore, witnessing the increase of nineteen.24% year-on-12 months (YoY) and 7.11% area-on-region (QoQ) foundation.
The four-wheeler groups such as Mahindra & Mahindra, Tata Motors and Ashok Leyland have yet to reveal their outcomes for the region. However, their results may want to see an impact of the BS-III ban was in large part visible on the commercial motors (CV) phase of those 3 companies.

Tata Motors, Ashok Leyland, and Mahindra & Mahindra had BS III inventory well worth Rs five,076 crores nonetheless unsold after April 1.

ALSO READ: Tata Motor, Ashok Leyland, Mahindra left with over Rs 5,000 crore of unsold BS III vehicles
Eicher Motors, however, published a massive 34% increase in net earnings. It’s internet profit rose to Rs 459.44 crore in Q4 FY17 from Rs 343.10 crore in the equal zone ultimate year.

However, the huge upward push in Eicher Motors was largely because of the high income of Royal Enfield at some stage in the area. Quarter after quarter the sales of Royal Enfield saw a widespread increase.
In January Royal Enfield posted a 25% increase in sales, observed through a 19% increase in February and 17% boom in sales in March.

Two of the biggest two-wheeler groups in India, Hero MotoCorp and Bajaj Auto, noticed a big decline in income during Q4. TVS Motor too posted a decline in net income at some stage in the quarter.

Hero MotoCorp’s net profit plummeted by way of 14% in Q4 as it stood at Rs 717.75 crore from Rs 833.29 crore within the equal zone remaining 12 months.

This big decline in internet income of the employer changed into attributed to the huge discounts after the BS-III verdict of the Supreme Court at the ban of the motors. It’s net income declined by means of 7.6% to Rs 7,606.31 crore from Rs eight,227.93 crores.

Similarly, Bajaj Auto reported a fifteen% drop in internet profit in Q4. The agency reported a net profit of Rs 802 crore at some stage in the zone from Rs 949 crore in the same quarter a year returned.
ALSO READ: Bajaj Auto hopes to rev up income in FY18 after bumpy experience
The organization said that this turned into because of demonetization of excessive foreign money notes in the course of November and the recent BS-III vehicle ban that impacted its revenues at some point of the region.

TVS Motor reported a 6.80% decline in internet earnings at some point of the quarter. It’s internet earnings declined to Rs 126.77 crore in Q4 from Rs 136.03 crore within the corresponding sector ultimate 12 months.

It’s bike sales declined to 2.15 lakh units as in opposition to 2.Forty seven lakh units registered in the fourth sector.

The car region ought to but see a complete restoration handiest via Q2 FY18 on the premise of an economy financial system healing and pent up call for. Also, normal monsoon season expectations are anticipated to push sales.

“We assume quantity recovery in Q2FY18 and robust bounce back in H2FY18 amid economic recuperation and pent up demand. Healthy again output and a better rural financial system could hold cushioning the volume over following few months,” said vehicle analyst Mitton Shah of Karvy Broking.

One of the widely known mediums for financial transaction messaging called Swift has been facing criticism for not being able to fulfill the needs of financial markets around the world. There are some who believe that it has turned out to be inefficient for settling cross-border payments for not being able to manage real-time settlement of any transaction amount and not being transparent in payment status and settlement risk.

Global Payments Innovation – A New Initiative

In response to such criticism, Swift has launched Global Payments Innovation (‘GPI’), which has the ability to make funds available on the same day for B2B transfers that fall in the same time zone. It also offers secure remittance information, an end to end payment tracking, and better transparency. The first phase of the project was made life in January this year and is currently in use by twelve banks, including ING, ‘Danske’ Bank, ‘Citi’, and Bank of China. It is currently focusing on B2B payments. Swift has made another commitment to expanding its cross-border payment system.

The effort of improving global messaging service might be too small or too late in terms of resolving worldwide payment clearance, payment, and settlement blockage, especially for customers from the non-banking sector.

‘Bitcoin’ Remittance Companies

Both new and old ‘bitcoin’ remitters are already working on resolving these issues. They use different ‘blockchains’ to transfer money around the world. Align Commerce is one of the ‘bitcoin’ remittance companies that became famous for $20.25 million in funding. ‘Marwan Forzley’, CEO of Align Commerce, considers distributed ledgers and ‘blockchain’ to be next generation opportunity.

These payments were around $26 trillion in 2014, which is around 33 percent of the world’s GDP. Due to inconsistent and non-standardized infrastructure, the money will stay trapped in today’s system. For sending payment across the border, a customer has to find a transmitter for managing money transfer. The transmitter will be able to transfer payment due to its contacts with financial institutions in both home and recipient countries. Furthermore, each institution has its own intermediary, which adds more to the complexity of the process. Every bank, involved in managing the transfer, charges its own service fee and it can take 7 days for a process to complete.

The corporate sector around the world was estimated to be $15.7 trillion in 2014. They can negotiate fees between 1 to 2 percent of the payment amount. Whereas, small and medium size companies; and person to person transactions can be charged up to 15%. The hidden cost of these transactions makes it harder for customers who cannot afford it.

If a customer belongs to a ‘underbanked’ or underserved part of the world, he may not be able to find those paths that may enable simplified cross-border payments, for example, taking the services of a transnational bank for payment transfer by using their infrastructure.

 

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