Maruti Suzuki Second Most Expensive Auto Stock In The World, CAG Says UIDAI Extended 'Undue Favor' To Wipro And Other News

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High road: Maruti Suzuki’s is the second most expensive auto stock in the world after tesla Motors. Among the top 20 global auto stocks, India’s largest carmaker trades at 21.22 times fiscal year 2018 price-to-earnings, while US’ Tesla Motors trades at 33.42 times. The shares of Maruti Suzuki recorded a fresh high on Tuesday at 5,037.90 rupees. Among what contributed to Maruti’s high valuation was its ability to allowing customers to buy a model with any fuel option. Its biggest market is India and valuation of Indian markets are at a large premium to other markets.

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Chained wings: To win the frequent fare wars, Indigo has been maintaining low flight prices for a while. Although this has pleased the passengers, it has ended up burning a hole in the market leader’s pocket. This has hit Indigo’s bottomline and resulted in a loss of 7 percent from its net profit growth for June quarter. Air fares in India are said to be the lowest as a major chunk of domestic air travelers belong to the middle class category and prefer affordable flights. To please such travelers, most airlines are taking a hit. To improve their profitability they will have to increase the fares, in which case frequent travelers will either look for other travel options or end up spending more on commute.

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Roadbump: UIDAI, which manages Aadhar, extended “undue favor” to Wipro in a maintenance contract in which nearly 50 million rupees of avoidable expenditure was incurred. This was discovered by the CAG, who observed that the two parties had deviated from the terms of the original contract that they entered into in May 2011. However, Wipro has stated that the company maintained the highest standards of corporate governance and transparency in the matter.

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In hopes to bounce back: Several online retailers were shocked to see a fall in sales in the previous two quarters, hence they may be planning another discount session this month. The online retail sales dropped to $12 billion in June from $13 billion in March and $15 billion in December. Flipkart and Snapdeal’s attempt at cutting cost along with the new government rules prohibiting discounts contributed to restricting the e-commerce sector’s growth over the past few months. The falling sales may spell doom for the e-commerce sector in India, where the online retail sector still has miles to go.  

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Parliament update: As the NDA government has managed to make the opposition soft on the long-pending Goods and Services Tax Bill, it seems it may finally be passed in the Rajya Sabha on Wednesday. The amendments made by the cabinet last week helped considerably in forging the political consensus on the bill. Meanwhile, the passage of the Benami Transactions Bill in the Rajya Sabha on Tuesday brought the government another step closer to curbing black money within the country. The bill allows confiscation of Benami properties, which are assets held in the name of another person or under a fictitious name to avoid taxation.

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Another hero decides to leave: Nimesh Kampani of JM Financial Ltd has stepped down from his position as the managing director of the company. He will vacate the position on September 30, when he turns 70. He will be succeeded by his son Vishal Kampani.

#Qotd

“I believe it is important for all businesses to implement a proper succession plan and I am committed to follow the same,” Nimesh Kampani said.

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