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Market round-up: Service providers lifted loan offtake in FY17

LiveMint logoLiveMint 03-05-2017 Livemint

A look at which sectors helped bank credit to grow at a reasonable 9% in fiscal year 2017 (FY17) shows an interesting trend. While it is known that disbursals to companies from banks decelerated sharply, banks lent more than ever to trading businesses. It is not retail loan growth but disbursals to service providers such as transport firms, traders and professional services that lifted bank loan offtake. Loan disbursals to professional services soared 32% in FY17, a sharp jump from 23% in the previous fiscal year. Similarly, growth in loan disbursals to traders surged to 12.3% from 4.2% a year ago. Overall loan offtake to the services sector grew at an impressive 19.5% in FY17, while retail loan growth had decelerated slightly to 16.7%.

Coal India posts strong sales volume growth in April

Coal India Ltd, which accounts for about 80% of the country’s coal production, reported 6.1% year-on-year sales volume growth to 45.3 million tonnes (mt) in April. In the year-ago period, volume had declined by 2.5%. Edelweiss Securities Ltd’s outlook on Coal India’s volume surge is optimistic, particularly after it posted 6%-plus year-on-year growth in April 2017 for the fifth month since November 2016 (except February 2017 when growth was lower at 4.8%). “Also, 5% year-on-year dip in production indicates potential reduction in inventory by ~10% to ~60mt in April 2017,” the brokerage firm said in a report on 2 May.

Purchasing costs rise for nineteenth month in April

Manufacturing conditions in India improved for the fourth month in a row in April, but purchasing costs increased for the 19th consecutive month, showed the latest Nikkei India Manufacturing PMI (Purchasing Managers’ Index) survey. The rate of cost inflation gathered pace since March and was above the average recorded over the current sequence of rises. According to the respondents, higher prices had to be paid for metals, chemicals and plastics. Despite the spike in input prices, less than 5% of manufacturers raised their output prices in April to pass on higher cost burdens to clients. On the other hand, almost 93% signalled no change in selling price.

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