Netflix Adds A Third More Subscribers Than Expected; Shares Jump 8%

 

Streaming video pioneer Netflix Inc added over a third more subscribers than expected in the last quarter of 2016, a sign of success for its ambitious global expansion that sent its shares up 8 percent in extended trading.
Netflix signed up 7.1 million new subscribers globally, far more than the 5.2 million analysts had expected, according to research firm FactSet, beating targets at home and abroad even as it raised prices.
Original shows like "Marvel's Luke Cage" and British drama "The Crown" performed strongly around the world, Netflix said, noting that competitors were adapting to compete.
Amazon.com Inc recently expanded its Amazon Prime Video service globally, and Britain's BBC announced plans to release entire series at once to allow the "binge watching" popularized by Netflix.
"It's becoming an internet TV world, which presents both challenges and opportunities for Netflix as we strive to earn screen time," the company said in its quarterly letter to shareholders.
Netflix, in its earnings report, said it added 5.1 million subscribers outside the United States and 1.9 million in its home market in the quarter ended Dec. 31.
Analysts had forecast 3.73 million non-U.S. additions and 1.44 million at home.
"The future battleground at home is now in keeping hold of customers as much as it is in trying to acquire new ones," said Neil Saunders, head of retail analyst firm Conlumino.
"In our view, the fact that consumers have readily absorbed the price increase, and that Netflix has continued to advance its subscriber numbers in spite of it, indicates the company is now firmly in pole position in the streaming arena."
Netflix said it planned to release more than 1,000 hours of original programming this year, up from 600 hours last year. It recently signed a deal with comedian Jerry Seinfeld to stream his show "Comedians in Cars Getting Coffee" as well as two new stand-up specials and other shows he will develop.
The Los Gatos, California-based company said revenue rose 35.9 percent to $2.48 billion in the December quarter. Analysts on average had expected $2.47 billion, according to Thomson Reuters I/B/E/S.
The company said it expected to add 1.50 million subscribers in the United States in the current quarter, fewer than the FactSet estimate of 1.79 million.
In international markets, Netflix said it expected to add 3.70 million subscribers, above the average estimate of 3.05 million.
Netflix projected negative free cash flow of about $2 billion in 2017, up from negative $1.7 billion in 2016.
Up to Wednesday's close of $133.26, Netflix's stock had risen 33.5 percent since it reported third-quarter results in October.
Netflix rose as much as 8.2 percent in after-hours trading, adding nearly $5 billion to the company's stock market value.

Gold Under Pressure On Yellen's Support For Rate Hikes

Gold prices on Thursday held on to their losses from the previous session, when they fell 1 percent on a strong dollar, after Federal Reserve Chair Janet Yellen advocated lifting U.S. interest rates gradually.

FUNDAMENTALS
-Spot gold was largely flat at $1,203 per ounce by 0100 GMT. The bullion hit an eight-week high of $1,218.64 on Tuesday, but fell 1 percent in the previous session as dollar strengthened.

-U.S. gold futures were down 0.7 percent at $1,203.50 per ounce.

-With the U.S. economy close to full employment and inflation headed toward the Federal Reserve's 2 percent goal, it "makes sense" for the U.S. central bank to gradually lift interest rates, Fed Chair Janet Yellen said on Wednesday.

-The U.S. central bank should be able to raise rates "in a gradual and patient manner," Dallas Fed President Robert Kaplan said on Wednesday.

-U.S. consumer prices increased in December as households paid more for gasoline and rental accommodation, leading to the largest year-on-year increase in 2-1/2 years and signaling that inflation pressures could be building.

-With euro zone growth and inflation slowly picking up pace, the European Central Bank is set to argue on Thursday that its extra-easy policy stance is still needed to keep the recovery on course.

-China's economy likely grew by a steady 6.7 percent in the fourth quarter, the same pace as in the previous three quarters, supported by higher government spending and record bank lending that has stoked concerns about debt risks, according to a Reuters poll of 62 economists.

-Japan's government could debate after April revising its target of eliminating the primary budget deficit by 2021, two government sources said, as infrastructure spending and a delay in the sales tax hike make wiping out the deficit unlikely.

-The Philippines has cancelled the environmental permits of six more companies, including four miners, Environment and Natural Resources Secretary Regina Lopez said on Wednesday.

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Industrial Revolution Can Help Indian Start-Ups Provide Quick Solutions, Says Government

Davos: Industrial revolution can "give us answers" and can help start-ups in India to provide quick solutions, Union Minister Nirmala Sitharaman said on Tuesday. 

Speaking at the World Economic Forum (WEF) annual meet here, she said, "I don't think we should worry about it (industrial revolution)."

She was participating in a session on 'Harnessing Regional Cooperation in South Asia' where Sri Lankan Prime Minister Ranil Wickremesinghe and Bangladesh Prime Minister Sheikh Hasina were also present. 

The Commerce and Industry Minister emphasised that industrial revolution "can give us answers", adding that countries like India cannot stay away from robotics.

According to her, industrial revolution can help start-ups in India to be able to give quick solutions.

"We have to be careful how we play it (industrial revolution) up in our countries," she added.

Talking about South Asia region, she said it can be the engine for growth in the world.

Old taste, crispy returns: Your child powered this multibagger; you missed it.

NEW DELHI: Dad, bring me a packet of CRAX when you come home. Sounds familiar?

It is possible that kids like your children have helped DFM FoodsBSE 2.34 %, which markets corn rings and wheat puffs under the brand names CRAX and NATKHAT, to script a strong growth story over the past five years.

But it is also possible that you did not know that DFM Foods is one of the luckiest stocks that have given multibagger returns to investors over the past six years.

And this has helped the stock clock a over 1,500 per cent return during this period. The stock has risen from Rs 124 on January 17, 2011 to Rs 1,957 on January 16, 2017.

An investment of Rs 10,000 made in the stock in January 2011 would have become Rs 1,57,823 today.

The company has been posting consistent rise in top line and bottom line figures for over a dozen quarters so far. During the past five years, consolidated profit after tax of the company grew over 25 per cent annually (CAGR) till March 31, 2016. Net profit grew from Rs 8.32 crore in FY11 to Rs 25.04 crore in 2015-16. Top line climbed from Rs 119.84 crore to Rs 388.95 crore in the same period.

According to an annual report of DFM Foods, the snack food industry consists of two principal segments – the traditional ethnic snacks which have been around for generations and the “modern” snacks, which have emerged over the last couple of decades.

The traditional ethnic snacks segment consists largely of the unorganised sector along with a few organised players. Of late, there has been a shift in this market from the unorganised to the organised sector.

The modern snacks segment consists largely of organised players, who employ automated production systems, mass marketing and organised sales and distribution systems across geographies. Products manufactured in this segment have been accepted well by the market, resulting in rapid growth.

Opportunities & threats
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Continuous growth in the economy, increasing disposable income and rapid urbanisation offer immense opportunity for the healthy growth in the business. However, some of the threats faced by the business include uncertain economic conditions and uncertainty over raw material price s.

Valuations
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The stock today trades at a price-to-earnings ratio of 77.12 against its long-term average of 40.35. The debt-to-equity ratio of the company was at 0.97 as on March 31, 2016. Return on capital employed (RoCE) advanced from 29.99 per cent in FY12 to 35.86 per cent in FY16, whereas return on net worth increased from 39.21 per cent to 45.29 per cent.

The stock hit its all-time high level of Rs 2,433 on June 17, 2016 and an all-time low of Rs 2 on May 13, 1999.

Sebi Mulling Relaxed Norms For REITs, InvITs, Startups Listing

New Delhi: To make domestic capital markets more attractive, regulator Sebi has lined up wide-ranging relaxations to its norms for REITs and InvITs and an easier set of listing rules for startups.

Several attempts are being made to garner due attention from business houses in the country but all the efforts failed leading to Sebi reconsidering the proposal to give further relaxations.

The Securities and Exchange Board of India (Sebi) will consider these regulations in its board meeting next month, according to sources.

A consultation process is already underway for making the InvITs(Infrastructure Investment Trusts), REITs (Real Estate Investment Trusts) Regulations and to review the framework for

Institutional Trading Platform (ITP) for startups.

Sebi had notified the REIT and InvIT Regulations in 2014, allowing setting up and listing of such Trusts, which are very popular in some advanced markets. However, no single Trust has been set up as yet as investors wanted further measures, including tax breaks, to make these instruments more attractive.

While the government provided for certain tax benefits in the Budget this year, Sebi has now decided to further relax the rules.

Sebi's board is expected to consider an easier set of norms on REITs and InvITs. It may allow the REITs and InvITs to have up to five sponsors, as against the current norm for maximum three.

Under the proposal for REITs, Sebi would allow up to 20 per cent investment by such trusts in under-construction projects, up from a maximum of 10 per cent allowed currently.

Besides, relaxations would be made to provisions relating to compliance of minimum public holding norms, as also for investments by the associate entities of the trustees.

Sebi also proposed to rationalise the requirements under the Related Party Transactions, under which approval of 60 per cent unitholders apart from related parties, is required for passing a related party transaction.

Further, approval is required of 75 per cent unitholders, apart from related parties, for passing special resolutions such as change in investment manager, investment strategy and delisting of units.

Under the proposal for InvITs, Sebi may allow such trusts to invest in two-level SPV (special purpose vehicle).

The regulator plans to remove the restriction on the SPV to invest in other SPVs, thus allowing InvIT to invest in a holding company which subsequently holds stake in SPVs.

Currently, InvIT holds a controlling stake in SPVs that do not invest in other SPVs.

Besides, it is proposed to reduce the mandatory sponsor holding in InvIT to 10 per cent of the total units of such units on a post-issue basis for a period of three years, from the current requirement of 25 per cent.

The current requirement may limit monetisation for sponsors and reduce release of capital for them. Further, in certain circumstances, it may lead to sponsors putting money out of their own pocket in the InvIT to maintain the required 25 per cent stake.

Regarding startups, Sebi plans changes to the framework of Institutional Trading Platform (ITP), which has not seen much traction even though it was put in place in august 2015. Not a single startup has been listed on this platform till date.

The valuation concern has also discouraged startups for listing on the platform.

The rules were brought in to encourage Indian startups and entrepreneurs to remain within the country rather than go overseas for raising funds.

Sebi would consider an easier framework that allows more investor categories, relaxed shareholding norms and reduced trading lot amount.

Stay Away From Welspun India, Warn Analysts After 48% Fall In 4 Days

Welspun India shares were locked down in lower circuit for the fourth straight session on Thursday. Shares of one of the world's largest textile manufacturers have shed nearly 50 per cent of their value since Monday, leading to a market cap erosion of over Rs 4,500 crore.

Welspun India shares have crashed, following Target Corp's decision last week to cancel its contract with the company over the substitution of Egyptian cotton with non-Egyptian cotton in bedsheets and pillowcases sold between August 2014 and July 2016.

On Wednesday, Bed Bath & Beyond Inc became the fourth company to initiate review of Welspun India's bedding products. Wal-Mart and JC Penny have earlier initiated review of Welspun's products.
NDTV Profit spoke to three analysts to know if investors should buy Welspun India following the sharp selloff this week.

Gaurang Shah of Geojit BNP Paribas said investors should not buy Welspun India, unless somebody is a "great fan" of the company.

"There is too much news flows and the management's clarification is not helping. More cancellation of contracts is possible," Mr Shah said.

Technical analyst Sarvendra Srivastava also advised investors to stay away from Welspun India.

"When there is a corporate governance issue or when a company's trust is at stake, this market penalizes the stock... Welspun India is coming down on its own weight," he added.

Market analyst Sharmila Joshi said there are concerns that other textile manufactures may also get impacted because of the controversy around Welspun India.

"Either it's a deliberate mistake or some slip up of gigantic proportions... Investors should wait for clarity before buying this stock," she added.

Welspun India shares were down 10 per cent at Rs 53.55 as of 09.45 a.m., underperforming the 0.3 per cent gain in the broader Nifty.

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Rupee Slumps To 67.21 Against Dollar

Mumbai : The rupee depreciated by 16 paise to trade at fresh three-week low of 67.21 against the dollar at the forex market today following increased demand for the American currency from importers and banks.

The dollar firmed up against some global currencies on US interest rate hike hopes this year after the Federal Reserve Vice Chairman Stanley Fischer said country's economy was picking up, which weighed on the rupee, forex dealers said. However, a higher opening of the domestic equity markets capped the rupee's losses, they added. The local currency on Friday tumbled by 24 paise to close at three-week low of 67.05 against dollar on sustained demand for the US currency from banks and importers amid rise in crude oil prices. 

Meanwhile, the benchmark BSE Sensex recovered 57.53 points or 0.20 per cent to 28,134.53 in early trade.