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LIC shares drop 4% on Rs 10,000 crore govt stake sale buzz

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LIC shares drop 4% on Rs 10,000 crore govt stake sale buzz
Shares of Life Insurance Corporation of India (LIC) dropped as much as 4% to an intraday low of Rs 810 on the BSE on Wednesday after a report said the government could begin formal marketing next month for a proposed stake sale that may raise up to Rs 10,000 crore ($1 billion).

The government plans to sell a stake of about 2% in the state-run insurer in late June or early July to institutional investors, according to a Bloomberg report.

The Department of Investment and Public Asset Management (DIPAM), under the finance ministry, is working with Goldman Sachs Group, Motilal Oswal Investment Advisors, BNP Paribas SA, and IIFL Capital Services to manage the transaction, the report added.

India had earlier sold a 3.5% stake in LIC in May 2022 through what was then the country’s largest initial public offering, raising nearly Rs 21,000 crore. The shares were priced at Rs 949 apiece during the IPO.

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As of March 31, the Indian government held a 96.5% stake in LIC, according to exchange data. The insurer has been given 10 years from its 2022 listing to comply with the Securities and Exchange Board of India’s requirement of maintaining a minimum public shareholding of 25%, giving the company until May 2032 to meet the norm.

LIC bonus issue

LIC has fixed May 29 as the record date to determine the eligibility of shareholders for the state-run insurer’s first-ever bonus issue in the ratio of 1:1.
The board had approved the plan in April to issue one fully paid-up equity share of Rs 10 each for every fully paid-up equity share of Rs 10 each held by eligible shareholders as of the record date. The company added that it will issue the bonus shares by capitalising up to Rs 6,325 crore from its reserves and surplus available as of December 31, 2025, which stood at nearly Rs 1.5 lakh crore.
LIC reported a consolidated net profit of Rs 23,467 crore for Q4 of FY26, marking a 23% year-on-year (YoY) rise from the Rs 19,039 crore profit reported in the corresponding quarter of the previous financial year. The firm’s net premium income, meanwhile, rose 12% YoY to Rs 1.65 lakh crore for the quarter under review, compared with Rs 1.48 lakh crore a year earlier.
For the financial year ended March 31, 2026, LIC reported a more than 5% rise in assets under management (AUM) to Rs 57.29 lakh crore, while net profit increased more than 19% year-on-year to Rs 57,419 crore.

With Wednesday’s decline, the stock has snapped a three-day gaining streak on the bourses.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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Flowers Foods: Despite The Dividend Cut, The Firm Still Seems Attractively Valued

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Flowers Foods: Despite The Dividend Cut, The Firm Still Seems Attractively Valued

Flowers Foods: Despite The Dividend Cut, The Firm Still Seems Attractively Valued

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Hindalco, Nalco shares jump up to 5% after aluminium prices hit 4-year high. Where is metal headed?

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Hindalco, Nalco shares jump up to 5% after aluminium prices hit 4-year high. Where is metal headed?
Shares of Aditya Birla Group‘s Hindalco Industries and state-owned Nalco rallied up to 5% on Wednesday after aluminium prices soared to a 4-year high buoyed by Iran war tensions and possible production cuts by China, the world’s largest manufacturer.

Hindalco gained as much as 4.5% to its day’s high of Rs 1,154 on the BSE, while Nalco surged 5.1% to Rs 437.50. On the London Metal Exchange, the industrial metal increased by 0.6% to reach its highest price since March 7, 2022, at $3,672.50 per metric tonne.

According to a report by Bloomberg, traders are increasingly concerned that Chinese aluminium smelters could be asked to curb production as the country intensifies its review of energy consumption and emissions across major industries.

Chinese smelters have been running at full capacity amid a global supply shortage triggered by the Middle East conflict. Aluminium prices on the London Metal Exchange (LME) have risen since the war began in late February, as supplies from the region were disrupted due to the effective blockade of the Strait of Hormuz.

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The report added that Chinese authorities are now looking to rein in excess production as inventories continue to build up. China’s Ministry of Industry and Information Technology said in a statement on May 13 that sectors including steel and oil refining would also come under scrutiny.


Further, investment bank Morgan Stanley said the medium-term demand-supply outlook for the metal remains supportive, with strong sustainability-led demand expected to coincide with constrained supply growth due to China’s smelter caps and slow capacity expansion in other regions.
The brokerage added that near-term factors such as China’s supply discipline, disruptions in the Middle East and elevated energy costs are likely to keep prices firm. It also noted that favourable positioning on the global cost curve and low inventories outside the US should help limit downside risks. Analysts further said India is entering a multi-year growth cycle, which is expected to drive robust demand for aluminium and copper.Aluminium is Morgan Stanley’s preferred base metal, supported by a tighter demand-supply balance. Supply growth is constrained by China’s capacity cap, slower ramp-up in Indonesia due to power limitations, and limited expansion elsewhere. Recent Middle East disruptions have further tightened the market, with some supply losses likely to persist given long restart timelines. This has driven both LME prices and regional premia higher (Japan, Europe, the US), with the forward curve in steep backwardation and LME on-warrant inventories at multi-month lows amid strong withdrawal demand in Asia. While cost support and tight inventories limit downside risk, any deterioration in global growth could weigh on demand, it said.

“LME inventories remain near historical lows, reflecting tight physical markets and limited buffer against shocks,” it said. With constrained supply flexibility, given China’s capacity cap and slower ex-China additions, low inventories increase the risk of price spikes during demand upcycles or supply disruptions.

Morgan Stanley also initiated coverage with an ‘Overweight’ rating on Hindalco. With a target price of Rs 1,325, the Wall Street major implies an upside potential of more than 20% from the previous closing price. Per the report, Hindalco is well positioned for value unlocking, supported by strong free cash flow (FCF) generation potential over the medium term.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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CD Projekt to launch new expansion for ’The Witcher 3: Wild Hunt’

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CD Projekt to launch new expansion for ’The Witcher 3: Wild Hunt’


CD Projekt to launch new expansion for ’The Witcher 3: Wild Hunt’

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Zydus Lifesciences buyback alert! Last date to buy shares to participate in Rs 1,100 crore buyback at 7% premium

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Zydus Lifesciences buyback alert! Last date to buy shares to participate in Rs 1,100 crore buyback at 7% premium
Investors looking to participate in Zydus Lifesciences’ share buyback worth Rs 1,100 crore will likely have to purchase the shares of the company latest by Wednesday, May 27, before the stock goes ex-record date for the corporate action on Friday.

The pharma company fixed the record date to determine shareholder eligibility for the corporate action on May 29 (Friday). Only those shareholders who own the shares of the company in their demat accounts as on the record date will be eligible to tender shares.

As per SEBI’s T+1 settlement norm, investors must buy the company’s shares at least one trading day before the record date so that they are credited to their demat accounts by that date, making them eligible for the reward.

However, markets will remain closed on May 28 (Thursday) on account of Bakri Id. This effectively makes May 27 (Wednesday) the last date to buy the shares so that they are credited to the shareholders’ accounts by the record date (Friday).

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All about Zydus Lifesciences share buyback

Earlier this month, Zydus Lifesciences board approved the plan to buy back up to 95.65 lakh shares, each with a face value of Re 1, representing 0.95% of the company’s paid-up equity share capital, for an aggregate amount not exceeding Rs 1,100 crore. The buyback will be conducted via the tender route.
Also Read | Zydus Lifesciences’ Rs 1,100 crore share buyback at 13% premium: Check record date, other details
The price for Zydus Lifesciences’ biggest-ever share buyback was fixed at Rs 1,150 apiece, implying a premium of nearly 7% from the stock’s previous closing price of Rs 1,079.05 apiece.
Zydus Lifesciences’ board of directors also approved the formation of a buyback committee, which can increase the buyback price or reduce the number of shares to be bought back up to one day before the record date, without changing the overall buyback size. Other details, including the entitlement ratio and whether the promoter and promoter group will participate in the buyback, will be disclosed later.

Zydus Lifesciences share buyback history
This follows the pharma company’s Rs 600 crore share buyback conducted via the tender route at a price of Rs 1,005 per share. The buyback price implied a premium of nearly 9% over the stock’s trading level on the record date. Prior to that, the company had executed a Rs 750 crore share buyback in 2022.

Also Read | Last date to buy Bajaj Auto, GSK Pharma and 10 other stocks for dividends

Zydus Lifesciences shareholding pattern
Before the buyback announcement, the promoter and promoter group held nearly a 75% stake in Zydus Lifesciences as of May 15, 2026, while retail investors and mutual funds held around 5% each. Foreign portfolio investors owned nearly 7% of the company, while insurance companies held slightly over 6%.

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Zydus Lifesciences Q4 results
Zydus Lifesciences reported a consolidated net profit of Rs 1,272.5 crore for the January-March quarter of FY26, marking a 9% increase from the Rs 1,171 crore profit reported in the corresponding quarter of the previous financial year.

The company’s revenue from operations rose more than 16% year-on-year to Rs 7,587 crore during the quarter under review, compared with Rs 6,528 crore in the year-ago period.

Along with the Q4 results and share buyback announcement, Zydus Lifesciences said its board has recommended a final dividend of Re 1 per share (100%) on a face value of Re 1 each, subject to shareholders’ approval at the company’s Annual General Meeting scheduled for August 11.

Also Read | Zydus Lifesciences shares soar 7% to fresh record high after Q4 results. Should you buy, sell or hold?

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Zydus Lifesciences share price
Zydus Lifesciences shares have gained over 4% in one week and 15% in one month. The stock is up more than 18% so far in 2026.

In the longer term, the shares of the company have gained over 18% in one year, 113% in three years and around 73% in five years. The company currently has a market capitalisation of nearly Rs 1.09 lakh crore.

Also read | LIC 1:1 bonus bonanza! Is today the last day to buy shares for free rewards?

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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Have trading volumes dropped after STT hike on F&O? Here’s what data shows

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Have trading volumes dropped after STT hike on F&O? Here's what data shows
In order to control the “highly risky F&O satta”, the government raised securities transaction taxes (STT) on derivatives trading earlier this year as it aimed to curb excessive speculation. Data, however, shows little change in volumes over the two months since the higher taxes took effect.

Ashish Nanda of Kotak Securities took to X to share data showing how volumes changed after the STT hike took effect from April 1, 2026 onwards. “March was an exceptional month, but if you compare April with any other month, volumes don’t look that bad,” he wrote.

According to the data which Nanda sourced from the stock exchanges BSE and NSE, cumulative volumes for futures and options trades stood at Rs 2.55 lakh crore in April 2026, and Rs 2.56 lakh crore in May this year. This is significantly lower than the F&O trades worth Rs 3.10 lakh crore executed in March this year, but more or less at par with the volumes seen in earlier months.

“March was an exceptional month, but if you compare April with any other month, volumes don’t look that bad,” Nanda wrote. “Some softness can be seen in index futures and stock futures though. April index futures volumes were lower than 9 out of 12 previous months. Stock futures volumes were lower than 6 of previous 12 months,” he added.

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The analyst noted that options volumes, however, are not showing any sign of softness after the STT hike. “Volumes are more than 9 out of previous 12 months both for index and stock options. May is looking strong too,” he said.

After presenting the Union Budget in February this year, Union Finance Minister Nirmala Sitharaman said that the government could not remain silent as speculative ‘satta’ in derivatives inflicts heavy losses on small retail investors.
Also Read |
F&O satta is highly risky… how can the government stay quiet: Nirmala Sitharaman on STT hike
“We are touching only the futures and options segment. No one has increased transaction costs elsewhere. Speculation, what we call ‘satta’ in Hindi, is highly risky, and many people with limited funds face heavy losses. The nominal increase in STT is aimed purely at deterring excessive speculation. We respect market activity, but the government cannot ignore the losses faced by small investors. This tax is only one element to support that policy. How the rest of the market is regulated is up to the market regulator,” Sitharaman said in a statement to the press after her Budget speech.

Announcing the changes in Parliament, the finance minister said, “I propose to raise the STT on futures to 0.05 percent from the present 0.02 percent. STT on options premium and exercise of options are both proposed to be raised to 0.15 percent from the present rate of 0.1 percent and 0.125 percent, respectively.”

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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Why Runners Who Find the Right Shoe Never Look Back

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The team behind runny, the world’s #1 rated personalised running coaching app that launched in 2021, has closed its latest venture capital round having raised £5 million.

Ask any experienced runner about the moment they found their shoe, and the answer is often the same: everything changed. Not dramatically, not overnight, but in the accumulating way that the right equipment quietly removes friction from something you do repeatedly.

Running is a sport of repetition. A recreational runner covering forty kilometres per week takes roughly forty thousand strides in that time. Each stride involves a loading event – the foot contacting the ground and the body absorbing that force before redirecting it forward. Multiply forty thousand by the number of weeks in a year, and the cumulative load the foot and lower limb manages becomes a number that makes the case for shoe selection more clearly than any product description ever could.

Against that backdrop, the difference between a shoe that suits a runner’s biomechanics, training volume, and surface type and one that does not is not a marginal performance variable. It is a meaningful determinant of whether the runner stays healthy, trains consistently, and continues to improve or cycles through a familiar pattern of overuse injuries, forced rest, and frustrated restarts.

Finding the right shoe does not guarantee a runner will never get injured or that every session will feel effortless. But it removes one of the most consistently cited variables in running-related injury and fatigue from the equation – and for most runners, that is enough to change the experience of the sport entirely.

The Problem With Getting It Wrong

Most runners who have been in the sport for any length of time have experienced the wrong shoe. It may have been a pair that felt fine in the store but produced a specific hot spot by kilometre five. A shoe that looked right on paper but created knee pain on downhill sections. A style that felt comfortable for short efforts but became increasingly punishing on longer runs as the midsole failed to support the foot through accumulated fatigue.

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The wrong shoe does not always announce itself immediately. Some problems develop gradually, the foot adapting to compensate for inadequate support or cushioning in ways that build strain in the Achilles, the plantar fascia, the iliotibial band, or the knee. By the time the injury presents, its origin is two or three months in the past, and the connection to footwear is not always obvious.

This delayed feedback loop is one of the reasons shoe selection is persistently underestimated by newer runners. The discomfort from a poorly chosen shoe rarely feels catastrophic in the moment of purchase. It compounds quietly across sessions until it becomes something that cannot be ignored.

What the Right Shoe Actually Does

The right running shoe does not fix poor biomechanics, compensate for inadequate training load management, or substitute for the strength work that keeps a runner’s joints healthy. Physiotherapy clinics that work with injured runners are consistent on this point: Runner’s Edge Physio notes that shoes are one piece of the puzzle, and that training load, running form, and strength play larger roles in injury risk than footwear alone.

What the right shoe does is provide an appropriate environment for the foot’s natural mechanics to function without additional stress. It cushions the loading event in proportion to the runner’s weight, gait, and surface type. It supports the foot’s arch and rearfoot in a way that reduces the compensatory loading that misalignment creates. It fits the foot’s actual dimensions closely enough that friction, slippage, and forefoot compression are not contributing factors to the session’s accumulated discomfort.

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When a runner finds a shoe that delivers all of these things for their specific combination of foot type, gait mechanics, and training context, the experience of running changes. Not because the shoe is doing the running, but because it has stopped working against it.

The Role of Consistency in Shoe Selection

One of the less discussed aspects of running shoe selection is the value of consistency. A runner who changes shoes frequently, testing new models with each purchase, never fully establishes the baseline from which meaningful assessments of performance and comfort can be made. The body is constantly adapting to new loading inputs, which creates noise in the feedback loop that makes it difficult to distinguish what is working from what is not.

Experienced runners who have found their shoe tend to stay with it. Not out of brand loyalty or inertia, but because consistency in footwear is itself a training variable. When the shoe is known and stable, changes in comfort, fatigue, and injury risk can be attributed more reliably to training load, recovery, and form rather than to equipment variation.

This principle has a practical implication: finding the right shoe is worth the investment of time and attention it requires, because the return on that investment compounds across every training cycle that follows.

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Understanding What Makes a Shoe Right

The question of what makes a shoe right for a specific runner cannot be answered generically. It depends on a combination of factors that are individual rather than universal.

Foot type and pronation pattern determine whether a neutral, stability, or motion control shoe provides the appropriate level of support. A runner with a neutral gait in a motion control shoe is being overcorrected. A runner with significant overpronation in a neutral shoe is receiving insufficient support. Neither outcome is neutral in its effect on the body across thousands of strides per week.

Training volume and surface influence the appropriate midsole cushioning and outsole construction. A runner covering high weekly mileage on hard road surfaces needs a different cushioning specification than one doing the same distance on soft trail terrain. Chelsea Foot and Ankle’s guide to the five key factors in running shoe selection identifies terrain as a critical but frequently overlooked dimension of shoe choice – one that can invalidate an otherwise well-matched specification.

Foot dimensions – width, volume, arch height, and toe length distribution – determine whether the shoe’s last shape accommodates the foot correctly. A shoe that fits in length but is too narrow across the ball of the foot will create forefoot compression that worsens with every kilometre of a long run. A shoe with insufficient toe box depth will cause nail pressure on downhill sections that accumulates into bruising over time.

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Heel-to-toe drop affects the loading distribution between the forefoot and the rearfoot and influences how much work the Achilles and calf complex are required to do. A runner transitioning from a high-drop shoe to a low-drop shoe without a gradual adjustment period is at elevated risk of Achilles strain, regardless of how well the shoe fits in other respects.

Getting these variables right simultaneously is what distinguishes a shoe selection process from a shoe purchase.

Why Some Brands Build Loyalty More Than Others

The running shoe market is crowded, and most reputable brands produce competent footwear across the major categories. Yet within that field, certain brands develop loyalty among runners that goes beyond preference. These are brands whose shoes runners return to not because they cannot find alternatives, but because they have found something that works and see no compelling reason to introduce variation.

Mizuno occupies this position for a specific and consistent segment of the running population. The brand, founded in Japan in 1906, has built its running shoe range around the Wave plate technology it developed decades ago – a midsole component made from two sheets of thermoplastic rubber fused in a wave formation that distributes impact forces laterally across the midsole rather than concentrating them at the point of foot strike.

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The result is a ride quality that is distinctively different from foam-dominant alternatives. Firmer, more responsive, and with a ground-feel that runners who prefer a connected, controlled sensation consistently describe as exactly what they were looking for. The Wave Rider series, now well into its third decade of continuous development, has become one of the most reliable daily trainers in the market precisely because Mizuno has refined the technology without abandoning the characteristics that built its following.

Fleet Feet’s review of the Wave Rider 28 captures this dynamic directly: one of their testers notes having run in Mizuno shoes since 2011 after being fitted at a running store, and describes the experience of wearing the Wave Rider as one that simply works – consistently, across sessions, year after year.

The Wave Inspire, Mizuno’s primary stability offering, applies the same Wave plate technology in an asymmetric configuration that provides medial support for overpronating runners without the rigidity associated with traditional motion control construction. It has developed its own loyal following among runners managing mild to moderate overpronation who want consistent support without sacrificing the responsive ride that makes Mizuno’s neutral range distinctive.

The Compounding Return of the Right Choice

A runner who finds their shoe early in their running life and maintains consistency in their selection accumulates a compounding return across years of training. Sessions are not interrupted by the adjustment period that comes with testing new models. The body’s loading patterns remain stable, which makes it easier to manage training volume without accumulating injury risk at transitions. And the mental overhead of shoe selection – the research, the testing, the uncertainty – is resolved, leaving attention for the training itself.

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This is not an argument against trying new shoes or against innovation in footwear technology. It is an argument for understanding that finding the right shoe is a meaningful investment with a long-term return, and that the process of finding it deserves more rigour than most runners initially bring to it.

For Australian runners evaluating Mizuno’s range, the Wave Rider, Wave Inspire, and Wave Sky can all be explored and compared across neutral and stability options by browsing running shoes by Mizuno.

How to Find Your Shoe

The most reliable path to finding the right running shoe combines three elements: an understanding of one’s own foot type and gait mechanics, a clear picture of the training context the shoe will serve, and an honest trial period across multiple sessions before the choice is committed to.

A gait analysis from a specialist running retailer or sports podiatrist provides the foot type and pronation data that makes the stability category decision straightforward. Trying shoes in the afternoon, when feet are at their maximum daily volume, ensures the fit assessment reflects real-world conditions. And wearing a new shoe for progressively longer sessions before committing it to high-volume training weeks identifies any fit issues while there is still time to resolve them.

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The runners who find their shoe and never look back are not particularly lucky or uniquely biomechanically favoured. They are runners who took the selection process seriously enough to find what works, and who had the discipline to stay with it once they did.

Runners with a history of recurring lower limb injuries or those beginning a running programme for the first time are advised to consult a sports podiatrist or physiotherapist for a gait assessment before selecting footwear.

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Franklin Small Cap Value Fund Q1 2026 Commentary (FVADX)

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Franklin Small Cap Value Fund Q1 2026 Commentary (FVADX)

Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,300 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and over $1.4 trillion in assets under management as of June 30, 2023. For more information, please visit franklintempleton.com and follow us on LinkedIn, Twitter and Facebook.

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Pets at Home hails ‘better momentum’ as CEO James Bailey says turnaround is paying off

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Pets at Home reported 28% dip in pre-tax profit but analysts are reassured

A Pets at Home store

A Pets at Home store in Derby(Image: Derby Telegraph)

Pets at Home has reported “better momentum” in its bid to return to growth, even as both profits and revenue continued to decline while its recovery remains in its early stages.

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The FTSE 250 pet supplies retailer and veterinary group recorded a 28 per cent drop in pre-tax profit to £86.5m, with group revenue slipping by one per cent to £1.47bn for the year to March.

Shareholders had been looking for encouraging signs of a recovery under new chief executive James Bailey, following the departure of the retailer’s previous boss amid declining sales.

A significant element of Bailey’s recovery strategy centres on Pets at Home’s retail division, where consumer revenue slipped one per cent to £1.3bn, attributed to a “subdued market backdrop”.

The company stated that its plans to revamp its retail operation are beginning to bear fruit, with sales and volume growth accelerating towards the latter part of last year, as reported by City AM.

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Mr Bailey said: “Material progress has been made over the past 6 months stabilising the Retail business, delivering improved satisfaction and better availability.

“We have the opportunity now to build momentum through profitable volume led growth in Retail while continuing to execute the proven growth levers of our Vet business and launch our Insurance offering.”

Pets at Home endured a turbulent period last year, when a series of profit warnings preceded the exit of former chief executive Lyssa McGowan.

Mr Bailey, the former Waitrose chief, assumed control in March following interim leader Ian Burke’s unveiling of an ambitious recovery strategy encompassing back-office redundancies, aggressive discounting and product overhauls.

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The company slashed prices across roughly 1,000 items in an effort to counter declining demand driven by weakening consumer sentiment.

On Wednesday, the retailer reported that shoppers have responded favourably to these price reductions.

Dan Lane, lead analyst at Robinhood UK, suggested the business “needed to show a credible route to recovery” and has probably reassured investors by maintaining its profit forecasts.

“The question now is whether this will stem the tide or we’re looking at a temporary reprieve from heavy price investment and cost cutting,” he said.

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Pets at Home reported customer satisfaction has risen by four per cent across its retail outlets and 1.5 per cent within its veterinary division.

The chain witnessed pre-tax profit surge by 10 per cent to £83m in its veterinary group, as it accelerated growth with eight new practice launches in the year to March.

Expanding its veterinary operations forms part of Pets at Home’s approach to capitalise on its “unique strengths” throughout the turnaround, the company said.

“As the only UK pet care specialist with highly complementary exposure across omnichannel retail, vets and soon insurance, we have considerable advantages which are difficult for our competitors to replicate,” it added. The business is preparing to launch its “disruptive” insurance division later this year, with the company hoping that breaking into this £2bn market will strengthen its retail and veterinary operations.

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The firm’s share price dipped into negative territory on Wednesday morning before clawing back gains to sit one per cent higher, although the stock remains four per cent down since the start of the year.

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Rising bond yields and inflation remain key risks for markets: Candace Browning

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Rising bond yields and inflation remain key risks for markets: Candace Browning
Global investors are increasingly looking beyond geopolitical tensions and focusing on the powerful earnings momentum being driven by artificial intelligence investments, according to Candace Browning, Head, BofA Global Research. Despite ongoing conflict-related concerns, markets continue to find support from robust corporate profits, resilient economic growth, and expectations of relatively accommodative monetary policy in the United States.

“What we are seeing really is basically that there is a trade-off between the war and then the AI capex boom on the other side, robust US earnings growth and then there is also a perception that US policymakers are going to keep monetary policy relatively easy. So, all three of those factors are sort of winning out against the war,” Browning said.

She highlighted that earnings growth in the US has remained exceptionally strong. “In the first quarter, S&P earnings were up 24%. If you exclude the hyperscalers, they were up 18%. We just raised our earnings growth forecast for US stocks from 14% to 22%. So, this is very-very strong earnings growth that we are seeing and what is happening is people are looking through what is going on in the war to this very strong earnings growth and they are investing in it for the long term,” she noted.

Browning also pointed to improving investor sentiment around geopolitical risks. “We just completed a fund manager survey and what we saw there is that 54% of the respondents expect the war to end by the end of June. Now, I do not know whether they are going to be right or wrong, but the point is that a majority of investors expect the war to end relatively quickly.”

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Sectoral Recovery May Differ After Conflict Ends

Discussing the possible normalization of the global economy after the conflict subsides, Browning said the recovery would not be uniform across sectors.“Well, it is going to vary a lot by sector as to how quickly things normalise. Some sectors it is going to take longer than others,” she said.
According to Browning, energy markets could stabilize relatively quickly if geopolitical tensions ease. “In terms of the oil sector, we think that if it were to end by the end of June that you could see oil prices back at sort of the $85 level by the end of 2026.”
She added that global recession risks still appear limited. “We are not expecting there to be a recession globally. We are still looking for GDP growth of about 2.2% in 2026 and 2.2% also in 2027.”

However, sectors such as agriculture may take longer to fully recover from supply chain disruptions and cost pressures.

AI Spending Boom Still Has Room to Run
While concerns over the sustainability of AI-driven growth continue to surface, Browning believes the investment cycle still has momentum.

“Well, that is a very good question. Everybody is trying to figure that out,” she said while discussing future earnings growth linked to artificial intelligence.

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Browning reiterated that the current trajectory remains strong. “We expect for the full year that S&P earnings will be up 22%. So, we see this earnings growth continuing throughout 2026 and into 2027.”

She acknowledged that the long-term monetization potential of AI remains uncertain. “Now the question is how will these new technologies, how much revenue will they actually generate and how much productivity will they actually produce in the end. And so far we do not know the answer to that and I do not think we will know the answer to that for at least another year or so.”

Still, near-term spending trends remain supportive. “What we do know is that we expect the AI capex boom, investment in AI to continue for at least another 12 to 18 months. So, we see a pretty strong earnings outlook over the near term.”

Rising Debt Levels Not Yet a Major Concern
The scale of AI infrastructure investments has sparked debate over how companies will finance the spending surge. Browning acknowledged that several companies have taken on debt to fund expansion but argued that corporate balance sheets remain significantly healthier than during earlier technology cycles.

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“These companies that were effectively debt-free have taken on substantial debt,” she said. “However, if you compare the quality of the companies in the S&P 500 today in terms of their debt-to-equity ratios and their cash flow generation, if you compare those companies today to the onset of the internet, in fact, the companies today are much more profitable and have much stronger balance sheets.”

She added that while leverage trends are being monitored closely, there is no immediate concern regarding financial quality.

AI Rally Expands Beyond Big Tech
One of the key shifts underway in markets, according to Browning, is that AI-led growth is no longer confined to large technology firms alone.

“What we are seeing now happening is the earnings growth is spreading out to companies beyond just technology,” she said.

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Browning noted that industries tied to the AI supply chain are also benefiting. “This AI capex boom is helping companies in all different kinds of sectors. For example, construction, power generation, lots of other areas are participating in this earnings acceleration.”

She emphasized that the broader participation in earnings growth marks a major difference from earlier phases of the rally when gains were concentrated among a handful of technology giants.

India’s Long-Term Story Remains Intact
On emerging markets, Browning said geopolitical tensions have temporarily weighed on investor sentiment toward countries dependent on energy imports, including India.

“The war in Iran has badly hurt countries that particularly need more energy security such as India,” she said.

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However, she believes easing tensions and policy changes could revive investor interest. “Once the war in Iran ends, that will be a real positive for India.”

Browning maintained a constructive long-term outlook on India, citing demographics and domestic demand trends. “India is one of the major emerging market countries that is really driven by domestic demand rather than exports. So, we think that that on the long run is actually a huge opportunity for India.”

She added that India’s expanding middle class and consumption-driven growth model differentiate it from export-led economies like China.

“You have got a very young demographic. It is driven by domestic demand not by export which is very different than China. And so over time you can have this growing Indian middle class and very strong consumption characteristics that would come with that.”

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Bond Yields and Inflation Emerging as Key Risks
Despite optimism on earnings, Browning cautioned that rising bond yields remain an important risk factor for equities.

“We are definitely concerned about rising long-term bond yields,” she said, pointing to historical trends that suggest weaker equity returns once US 10-year yields move above 4%.

She also acknowledged that inflationary pressures linked to geopolitical disruptions have altered expectations for monetary policy.

“There is no doubt that the monetary conditions are tighter today than we thought they would be at the beginning of the year and that is a direct result of the war and increased inflation.”

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While Browning said her base case still assumes no Federal Reserve rate hikes this year, she admitted the probability of further tightening has increased.

On inflation, she said uncertainty remains over whether current pressures are temporary or structural. “The question is, is this inflation transitory or is it more core and I think the jury is still out on that, we are not really sure about that yet.”

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Analysis-Samsung pay deal marks seismic change for South Korea, emboldening unions

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