According to a press release by the RBI, its board after reviewing the current economic situation along with global and domestic challenges, has decided to transfer a sum of Rs 99,122 crore as surplus (commonly known as dividend) to the central government. This move alongside the recent policy measures taken by the RBI, would mitigate the adverse impact of the second wave of Covid-19 on the Indian economy. The RBI has been following a July to June accounting financial year, but has now aligned the truncated accounting year with the government’s April to March fiscal year this one time. With this change in the RBI accounting year to April-March, apart from approving the transfer of dividend to the central government, it has also decided to maintain the Contingency Risk Buffer at 5.5%. With doubts being raised in financial circles whether the government would be able to meet its disinvestment target and expenditure commitments, this inflow is certainly a relief for the central government. Some analysts feel that margins of corporates could also be impacted for Q1FY22 due to the economic slowdown and high commodity prices impacting the direct tax collection. But this is positive for the Indian economy due to the current Covid pandemic and for the central government. Stock market did well for the week gone by on the back of huge support from banking heavyweights like SBI, Hdfc Bank, ICICI Bank and Kotak Mahindra Bank. The BSE Sensex jumped by 976 points or 1.97% to close at 50540 levels, while the NSE Nifty ended higher by 1.81% or up by 269 points to close at 15175 levels. It is worth pointing out that the mid cap stocks have been outperforming lately and with excellent Q4FY21 financial results, the NSE Mid Cap Index is doing exceedingly well for the current month also. Though valuations are expensive for some, stock pickers are betting heavily on mid caps to do well in the current FY and buy selectively. Media and entertainment stocks are being looked at by fund managers and brokers as one sector to do well in the current financial year. Driven by strong operating performance, Zee Entertainment Enterprises reported a consolidated profit of Rs 275 crores for the quarter ended March 2021. Incidentally, the company had reported a loss of Rs 766 crore for the same quarter of last fiscal. Consolidated revenue stood at Rs 1,965 crore with advertisement income growing 8.1% to Rs 1,122 crore, while the subscription revenue rose 8.4% to Rs 803 crore. Most of the brokerage houses have revised their target price for the Zee stock on the back of strong earnings outlook. They feel that if the company continues to post steady earnings growth for the next few months, then the Zee stock could surprise most of the market men. Media analysts tracking the sector expect the Zee stock currently trading at Rs 190 to appreciate by 20% in the next six months’ time frame.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.