Business Standard Podcast

Just as consumers are trying to manage their budgets in the current high inflationary environment, FMCG companies too are resorting to both time-tested and innovative ways to mitigate unprecedented input cost rise.  Companies are going for a mix of both direct price hikes and grammage cuts. Raw materials like edible oils, wheat, crude oil derivatives, laminates and corrugated boxes that go into making biscuits, soaps, cosmetics and detergents have been on an upswing since the second half of FY21, with geopolitical factors aggravating the inflation.  The wholesale food price index inched up to 8.88% in April from 8.71% in March. And Hindustan Unilever’s CFO Ritesh Tiwari recently said that reducing the volume in certain price-point packs is “the only way for us to take price increases”. The 10 rupee bar of the company’s Vim soap weighs 135 grams now, compared with 155 grams about three months ago, Bloomberg reported. At the same price point, a pack of the crunchy aaloo bhujia made by Haldiram’s is 42 grams now, down from 55 grams. Making the products smaller while still maintaining the same price is termed ‘shrinkflation’. Akshay D-Souza of retail intelligence platform Bizom also says that when a company is very heavily exposed in terms of revenue to certain price points, tinkering with them is a competitive risk that could result in loss of market share. He said that for many in India, a tea and a small biscuit pack double up as their meal.  Dabur India CEO Mohit Malhotra has called Rs 1, 5 and 10 as “sacred price points” whereas HUL’s Ritesh Tiwari referred to these as “magic price points”. Taking a look at how much Low Unit Packs contribute to the sales of some of the top FMCG companies will give a sense of how important these price points are for them in India. HUL gets almost 30% of its business from Rs 1, 5 and 10 packs, for Brittania this moves up to 50-55% and Parle Products, which makes Parle-G and Hide and Seek biscuits, derives a massive 70% of its revenue and volumes from 10 rupee packs and below. Speaking to Business Standard, Krishnarao Buddha, Sr Category Head - Marketing, Parle Products said theirfirst step during high inflation is to try and absorb the costs. Price points are extremely critical in biscuits and snacks industry, he says adding that for Rs 10 packs and below, companies always go for weight reduction. Consumers are fine with price increases for packs beyond Rs 20, he says. In the past 12-14 months, Parle hiked prices by 7 to 8% by weight cuts and direct hikes. "I believe that in 2025 Rs 10 will the new Rs 5," he says.   Brittania Industries MD Varun Berry recently said that low unit price points in a country like India are impossible to vacate given it has a lot of bottom of the pyramid consumers. It is for this reason that companies go to lengths to protect lower price points, even at the cost of profitability.  According to Varun Berry, Managing Director, Britannia Industries, the compay is not in any position to vacate Rs 5 segment at this point. He says contributions from Rs 2 and Rs 3 packs has migrated to Rs 5 and above. In the words of Berry, India has a lot of bottom of the pyramid consumers. "Time will tell when to press the pedal on Rs 10 and move on from Rs 5," he says. Another strategy that has started to come up is ‘bridge packs’. Giving an example, HUL said it introduced a new size between its Rs 10 and Rs 35 Lifebuoy soap which gives better value for consumers while ensuring affordability and at the same time gives scale to the manufacturer. HUL is trying to introduce bridge packs across all categories impacted by commodity prices. Although companies incorporate a range of tactics to overcome inflationary pressures, they have no option but to go for grammage cuts for smaller packs so they do not lose out on market share in a competitive segment where significant volumes are dependent on price-sensitive consumers.

Q1: The govt has deferred the plan to privatise public sector banks, as the legal amendments have not been made yet. Do you think privatisation of PSBs is an idea whose time has come? Do you think the RBI should relax criterion to allow corporates, especially those with experience in finance business to participate in the privatisation process? Ans: >India needs a larger, stronger, Atmanirbhar financial services sector >It is for the regulators to decide the right way to achieve a strong financial services sector  >Good-quality corporate players should be allowed to enter the financial services industry >RBI should build a discussion around what the future of lending looks like   Q2: There have been hiccups in the current privatisations of PSUs that have been announced recently, like Central Electronics Ltd and Pawan Hans. Do you think that process should be strengthened and rigorus criteria should be in place to screen bidders for other PSUs as well that have been put on block?  Ans: >Need a transparent, clear well-thought-out consistent process for privatisation >The intent of the government is, it should not be in business >There are sensitivities involved. So, some of these things take time     Q3: Post FDI hike in insurance, do you think more needs to be to attract foreign capital in the sector? Ans: >Don’t have a domestic financial sector that is strong enough to support India’s growth opportunity >India can become the manufacturing hub of the world, because of the changing nature of geopolitics >Foreign capital finds the best risk-reward geography over a period of time >Capital must help create a strong domestic financial services industry, led by banking, asset management, insurance and pension     Q4: What more financial sector reforms need to be undertaken in India? Ans: >Expand banking to increase financial inclusion >Need to take banking closer to people, and digital tools can make a significant benefit >Need to provide capital to small and medium scale enterprises and explore export opportunities >With the government signing FTAs, we need to ensure capital is easily available to companies >India needs few large banks to strategically help large companies that have built necessary capabilities and are looking to build new capacities overseas >Insurance sector has gathered a large amount of assets, which need to be put to productive use >Move assets from govt securities to fund startups, infrastructure projects and create a viable corporate bond market in India     Q5: Mr Bajaj, CII has given a range of GDP estimates for FY23 based on three oil price scenarios. In this scenario of 7.4-8.2 per cent growth rate, do you think growth may be closer to the upper end or lower end? Ans: >If oil price stays around $100 level (per barrel), then I think closer to 8% is what we can look at >Rise in the interest rate and how often it happens will depend on the prevailing inflation >Inflation is partly dependent on fuel prices >Govt should cut taxes on fuel in a collaborative manner between the centre and the states >A normal monsoon is expected this year, which can arrest inflation   Q6: What sort of a magnitude of impact of inflation are you seeing India Inc going face on its margin? And: >Impact of inflation on margins will differ from sector to sector >Corporate margins have got compressed partly, in the last two quarters, because of rising input cost >That’s why some amount of price rise is passed on to the customers

India made history recently. Decades of government efforts to control the population growth are finally showing the much-needed result. The Total Fertility Rate (TFR) -- which is the average number of children who would be born to any women in her lifetime – has declined from 2.2 in 2015-16 to 2.0 in 2019-21. It was revealed in the fifth round of the National Family Health Survey, or NFHS-5, conducted over two years starting in 2019. India’s TFR of two is currently below the replacement level of fertility of 2.1 children per woman. Replacement level fertility represents the level at which a population exactly replaces itself from one generation to the next, thus leading to zero population growth if the level sustained over a sufficiently long period This rate is roughly 2.1 children per woman for most countries, although it may modestly vary with mortality rates. Replacement level fertility will lead to zero population growth only if mortality rates remain constant and migration has no effect. Meanwhile, below-replacement fertility results eventually in negative population growth and extinction of the population in the long term. Between 1992-93 and 2019-21, India’s TFR declined from 3.4 children to 2.0 children.  The TFR ranges from 1.1 children per woman in Sikkim to three children per woman in Bihar. Five states are yet to achieve a replacement-level of fertility of 2.1, according to the NFHS-5. These states are Bihar (2.98), Meghalaya (2.91), Uttar Pradesh (2.35), Jharkhand (2.26) and Manipur (2.17). All the communities are witnessing a decline in fertility. The TFR for Hindu women was at 1.94, and for Muslim women it was 2.2. The Christian community has a fertility rate of 1.88, the Sikh community 1.61, the Jain community 1.6 and the Buddhist and neo-Buddhist community 1.39. The TFR among women in rural areas has declined from 3.7 children in 1992-93 to 2.1 children in 2019-21.   The corresponding decline among women in urban areas was from 2.7 children in 1992-93 to 1.6 children in 2019-21. In all NFHS surveys, irrespective of place of residence, the fertility rate peaks at the age of 20-24, after which it declines steadily. Another interesting aspect was that the number of children per woman declines with women’s level of schooling. Women with no schooling have an average of 2.8 children, compared with 1.8 children for women with 12 or more years of schooling.

A college dropout, Gautam Adani reached Mumbai in 1978 to chart out his own course -- away from his father’s small textile business in Ahmedabad. From a diamond sorter to the world’s sixth richest man, the last 44 years saw him growing from an ambitious teenager to an astute businessman. And the last two years have been quite eventful when his wealth grew from $8.9billion to $105billion -- a figure when put on graph throws almost a 90 degree bend. He has been on a shopping spree for a while now. Last week he clinched a deal to acquire Ambuja and ACC cements.   Shares of ACC and Ambuja Cements soared up to 4% in yesterday’s trade after the deal. Analysts now believe the Adani Group may merge both these entities over the medium term.  From Adani’s acquisition spree, let us turn our focus to companies which are caught between rising attrition rate and their plan to bring all employees back to office. Scores of employees of ed-tech firm WhiteHat Jr have reportedly quit over the last two months after being told to join offices. It has brought the focus back on India Inc.’s return-to-office plan and challenges it is facing in implementing it. So what the road ahead looks like? And what are the possible solutions that India Inc can deploy?  Most companies are treading cautiously while implementing the back-to-office plan. Meanwhile, the government and RBI are also circumspect as soaring inflation is hitting the common man hard. But what is CPI inflation and how is it calculated? Let us find out in this episode of the podcast.    Watch video

In one fell swoop, Indian infrastructure conglomerate Adani Group is set to become the country’s number two cement maker with the $10.5 billion acquisition of Ambuja Cements and ACC from Switzerland-based Holcim. With 70 million tonnes per annum capacity, Adani is firmly above the number three player Shree Cement, which has a production capacity of 43 mtpa. This would be the group’s biggest acquisition to date, highlighting its aggressive inorganic growth strategy. The Adani group is led by 59-year-old first-generation entrepreneur Gautam Adani, who is now Asia’s richest and the world’s sixth-richest person with a fortune of nearly $106 billion, according to Forbes.  He even briefly surpassed investment maverick Warren Buffett in the global wealth rankings recently. Dominating practically every other sector it is engaged in has been the hallmark of the Adani Group, the latest being cement. The group was born in 1988 when Gautam Adani, who had dropped out of college,  set up the  flagship company Adani Enterprises to import and export commodities.  Listed in 1994, Adani Enterprises became India’s biggest coal trader and the biggest coal mining contractor. It also acts as an incubator for the group’s new businesses.   Soon after the economic liberalization, Adani won the mandate to set up Mundra Port in Gujarat in 1995. And in 1998, Adani Ports and Special Economic Zone were set up. Mundra has become India’s largest commercial port by volume while APSEZ is India’s biggest private port operator, with 13 ports and terminals handling nearly one-fourth of the cargo movement in the country. In 1999, Adani Wilmar was incorporated as a joint venture between the group and Singapore’s Wilmar. Known for its Fortune brand, the company went on to become the largest edible oils brand and importer in India. With revenue of Rs 54,214 crore in FY22, Adani Wilmar trounced Hindustan Unilever as the country’s biggest FMCG company.  The group entered the city gas distribution business in 2001. And in 2005, it won India’s first Mine Developer and Operator or MDO contract.  Adani Ports and SEZ was listed on the exchanges in 2007. The following year, the group made its first overseas purchase by acquiring the Bunyu coal mine in Indonesia.   In 2009, Adani Power made its debut on the bourses. It is the largest private thermal power producer in India. In 2010, the group acquired the controversial Carmichael coal mine in Australia.  The mine has faced severe opposition from environmental groups. The first export shipment from the mine took place in December 2021.    Adani Transmission, the largest private-sector transmission and distribution company in India, was demerged and listed in 2015.  In 2017, the group forayed into manufacturing of solar PV panels. Adani Solar is today India's largest integrated solar cell and module manufacturer. Adani Gas and Adani Green Energy were demerged and listed in 2018. The same year, Adani Transmission acquired Reliance Infrastructure’s Mumbai energy distribution business.  In 2019, French energy major TotalEnergies bought a 37% stake in Adani Gas. Renamed into Adani Total Gas, the company operates the largest city gas distribution business in India.  Adani Green Energy is among India’s biggest renewable power companies and also the group's most valuable company with a market cap of $45 billion. In 2020, the group forayed into airports business after winning the bid to operate six Airports Authority of India airports. It also acquired the Krishnapatnam Port, which is India’s second-largest private port. Last year, it took over Mumbai International Airport and Navi Mumbai International Airport from GVK group. This made it India's biggest private airport operator, accounting for more than a quarter of the country’s airport footfalls. Speaking to Business Standard, Ambareesh Baliga, independent market analyst says debt

At 10.5 billion dollars, Adani Group’s buy out of Holcim India’s stake in Ambuja Cements and ACC marks India’s most expensive deal in the sector. With this, the Group has also leaped to second position in the cement industry, coming only after Ultratech Cement. While Holcim owns 63.19% stake in Ambuja Cements and 4.48% in ACC; Ambuja Cement, in turn, owns 50.05% in ACC.   The Adani family plans to make an open buy offer to buy 26% stake in these two companies from non-promoter shareholders, subject to regulatory approvals. Once approved, Adani Group will enjoy Ambuja and ACC’s combined capacity strength of 67.5 metric tonne. Going forward, analysts believe that Adani Group may consider the merger of Ambuja Cement and ACC in the medium term as it will help them rationalise fixed cost quotients at both these entities.   Market analyst G Chokkalingam, for instance, believes that the acquisition would trigger re-rating of ACC and Ambuja Cements as businesses may merge under one entity. Those at Kotak Institutional Equities, too, believe that the Ebitda per tonne for Ambuja and ACC is lower than Ultratech Cement. And this gap can be covered by Adani through synergy benefit from eventual merger of the two companies. The benefits, it says, may include saving from existing royalty payment to Holcim, investments in cost-saving projects, and margin expansion opportunity through brownfield capacity expansion. That said, some analysts believe Adani may go for brand consolidation, rather than outright merger.   Speaking to Business Standard, Uttam K Srimal, Senior Research Analyst, Axis Securities says, ACC, Ambuja lost market share over last few years, but Adani’s acquisition will bring aggression in expansion. While there may be more consolidation in the sector going ahead, there may also be brand consolidation as Ambuja and ACC hold strong brand presence across India.   That said, analysts see limited near-term synergies from the deal.   According to Gaurav Dua, Head – Capital Market Strategy, Sharekhan by BNP Paribas, Ambuja and ACC are already operating at high utilisation levels. The takeover is unlikely to provide immediate output boost, he says adding that medium-term may see backward integration benefits and aggressive expansion will be eyed. Overall, from an investment view point, analysts expect ACC to see higher re-rating as the stock has, traditionally, been an affordable bet. At the bourses, ACC closed nearly 4% higher at 2,195 rupees per share, while Ambuja Cements rose 2.6% to 368 rupees per share on the BSE in Monday. In comparison, the benchmark indices closed 0.3% up. As regards Tuesday, markets will track the listing of insurance behemoth Life Insurance Corporation of India. Shares of LIC were trading at a discount of Rs 15-20 a piece over its issue price of Rs 949 in the grey market on Monday, suggesting a weak listing today. 

The Covid-19 disruption has changed the way we live and work. While companies had to fast-forward digital transformation, their workforce adapted to remote and hybrid operations to ensure work continuity.    As economic activities are returning to normalcy, India Inc is now facing subtle pushbacks in getting its workforce back to the office.   However, mass resignation reported at Mumbai-based startup WhiteHat Jr after it asked its employees to get back to office has put the spotlight on the problem facing India Inc: Employees don’t want to return to office full-time.    According to a November 2021 survey by Nasscom and job portal Indeed, around 70 per cent of IT companies were trying to make the hybrid model work effectively. The survey found that 66 per cent of the respondents had reported higher employee satisfaction working remotely. Now, let’s examine the present employee outlook and the steps taken by India Inc. In March 2022, a financial daily reported the finding of a survey where six out of every 10 employees who responded were prepared to quit their jobs instead of returning to the office.   The same survey by recruitment firm CIEL HR Services found that a similar number of employees ready to forgo a higher-paying job that required them to come to the office. This view is prevalent among employees in sectors like IT, outsourcing, consulting and BFSI, along with tech start-ups. According to a recent Business Standard report, companies across sectors are proceeding cautiously. In June 2020, FMCG player CavinKare had said that it would rent out its corporate office and its 300+ employees might work-from-home permanently. At present, CavinKare’s corporate office is still in the WFH mode and in-person meetings are held once in 15 days. In April 2020, TCS called out for a 25/25 model. Under this model, by 2025, 25 per cent of the IT major’s workforce would work out of its facilities, without spending more than 25 per cent of their time in office.     HCL Technologies, meanwhile, has identified 40-50 per cent of employees who can work from home permanently. For its part, upGrad has established offices across multiple locations in multiple cities. This has allowed its workforce to choose their preferred work location.   Over at ITC, employees can work-from-home for up to two days in a week. However, this is subject to approval. And, in case of an emergency situation, work-from-home is allowed for up to 15 days in a month. For many who have moved back to their hometowns, it will be difficult to convince them to return to the high rents and long office commutes of the metros. Some prefer continuing from their hometown. Hybrid work models might not be enough to retain such talents. However, there are other options.   There are many advantages for India Inc too in adapting to the changed circumstances. Not to mention, the changes seen in the nature of work, like the hybrid model, might not go away even if the pandemic does. Getting employees back to work will be a continuing challenge, especially if Covid-19 cases rise again. Even if and when the pandemic ends, companies might find that they have to the employee location and not the other way round. What about you? Would you give up an attractive paycheck for work from home?  

In March this year, inflation in the US had peaked to 8.5% -- the highest in the last 40 years -- before scaling down a bit. Several other countries too are reeling under high inflation. And some of them, like Sri Lanka, are on the brink of economic collapse. India too has not remained untouched. Led by rising food and energy prices, the country’s retail inflation rate, as measured by the Consumer Price Index (CPI), jumped to a near eight-year high in April. According to data released by the Ministry of Statistics and Programme Implementation, at 7.9%, the annual retail inflation was the highest in 95 months in April. The last time the inflation print was higher than this level was in May 2014, when the figure stood at 8.33%. CPI numbers were originally introduced to give a measure of changes in the living costs of workers, so that their wages were in tune with the changing prices.  However, over the years, it has been widely used as a macroeconomic indicator of inflation and also as a tool by the government and the central bank for targeting inflation and monitoring price stability.  CPI is also used as a deflator in national accounts. It is released at 5:30pm on the 12th of every month for numbers relating to the previous month. Inflation is the measure of change in the average price of services and commodities, done at regular intervals. It indicates a decrease in the purchasing power of a unit of a nation’s currency as the products and services get more expensive.  CPI is an indicator of inflation. It measures the percentage change in the price of a basket of goods and services consumed by households. Similarly, the Wholesale Price Index (WPI) measures changes at the wholesale price levels. To measure inflation, we estimate how much CPI has increased in terms of percentage change over the same period the previous year. If prices have fallen, it is known as deflation.   Economists believe that low, stable, and predictable inflation is good for an economy.    India’s central bank, the Reserve Bank of India, pays very close attention to CPI inflation in its role of maintaining price stability in the economy.   The RBI has been mandated by the government to maintain retail inflation at 4% with a margin of 2% on either side. And the central bank is answerable to the policymakers if it misses its target for three consecutive quarters.   The CPI is designed to measure the changes over time in the general level of retail prices of selected goods and services that households purchase for the purpose of consumption.  Such changes affect the real purchasing power of consumers’ income and their welfare. The CPI measures price changes by comparing, through time, the cost of a fixed basket of commoditi

Last week, two curious events highlighted how power outages are affecting people across the social divides. In Maharashtra, Chief Minister Uddhav Thackeray was briefly logged out of a virtual cabinet meeting due to it. And about 600-km away, in a dusty Indore village, two sisters ended up taking crucial wedding vows with wrong grooms. The situation was salvaged in both the cases later. But can it be done for small and medium industries -- which are already reeling under high input cost and tepid demand.  But the government, on its part, is trying to steer the industries out of this current crisis. It has pressed more rail rakes into service to meet the scaled-up power demand. Meanwhile, Air India’s new owners too are trying to lead the debt-ridden airline out of the current crisis. They are bringing aviation veteran Campbell Wilson on-board for this. As the new chief of Air India, Wilson will have his hands full. But who is Campbell Wilson and how his 26 years old aviation experience may help the turbulent airline? In his farewell note, Campbell said that there are “mountains to climb” in his new stint. Meanwhile, for markets, it has been a downhill journey. Investors, who thronged the markets during the Covid-19 induced sell-off, are looking for cover. Rising interest rates, inflation worries and the geopolitical situation have taken a toll on their sentiment. Take a look at how asset classes have fared thus far in 2022 and the road ahead for equities amid headwinds. After the markets, let us move on to India’s nascent electric passenger vehicle industry. Most consumers who want to buy EVs have one thing to ask. How long the battery will last in one charging. This has also given rise to range anxiety. Let us know more in this episode of the podcast.  Watch video

India’s small and medium businesses had only begun to recover from the economic impact of the pandemic followed by the geopolitical crisis, but the early onset of summer and recurring heat waves across north India paralysed them again. Demand for electricity shot up beyond expectations, leading to a nationwide power crisis. With coal stocks at a critical level at many thermal power plants, states found themselves in a desperate situation, resorting to unscheduled power cuts. While the bigger, urban businesses are managing to sail through the crisis, small businesses and residents are not as fortunate. A series of ground reports by Business Standard spanning across northern and western India chronicles the plight of MSMEs in Surat, Manesar, Kanpur and Jalandhar, where power shortages made matters worse for those already struggling with production lags and high prices of raw materials.   Haryana’s Manesar has been experiencing regular power cuts in industrial areas, forcing major industries to turn to diesel generator sets for backup. With soaring fuel prices, even major automakers like Maruti Suzuki are feeling the heat.   Surat, Gujarat’s textile hub, is facing a labour shortage as many workers have gone back to their hometowns.   To make the situation worse, power cuts in the city have brought down production by 10 per cent, say industry estimates. Ashish Gujarati of Southern Gujarat Chamber Of Commerce and Industry, Surat, shares the concerns of small businesses. For many small businesses, April is the time for peak production. But power outages have brought their dreams crashing down. While most are struggling with deep losses, some are being forced to shut down.   Jitubhai Vakharia, President, South Gujarat Textile Processors’ Association, Surat says, "The input cost of coal has almost doubled, the whole textile industry is dependent on imported coal. Since the Russia-Ukraine war, the availability of coal has reduced and its price has shot up."  He adds, "The cost of dyes and chemicals has increased by 25 to 40 per cent and the price of some chemicals like sodium hydrosulfite of soda or discharging agent like safolite have increased by 140 to 150 per cent. Thus, the input costs have increased, and increasing prices is difficult for us as the demand is already low in the market."    Amid coal shortage, the textile industry, though largely resilient against power cuts, is also struggling with rising prices of coal. A near-doubling in the cost of imported coal is impacting value chains.                                                      The situation is no better for leather businesses in Uttar Pradesh’s Kanpur. Here, power has to be supplied non-stop, since any disruption could cause a loss of the raw hide. With no alternative, anyone who can afford it has had to move to diesel gen-sets, as they stare at rising energy costs. Speaking to Business Standard, Nayyar Jamal, Member, UP Tanners’ Association, Kanpur says, "There’s no declared power shortage in this area but we experience power outages 5 to 6 times a day. This leads to a lot of problems, as we have a continuous operation process which involves the use of chemicals. So, during sudden power cuts, our material gets wasted. The cost of electricity for industries is highest in Uttar Pradesh. As such, competitive electricity rates will help us improve production."   Let’s turn to Jalandhar, Punjab’s export hub. The industries here are also struggling with major power shortages and are worried that the situation could deteriorate in the coming months. Businesses outside the industrial belt have regularly been subjected to unscheduled power cuts, and the heavy machinery-centric operations are turning unsustainable to run even on power backups for most MSMEs.   PTC by Dhruvaksh Saha of Business Standard. With the paddy-sowing season nearing, electricity, if not managed, would soon b

Over 100 days and a failed attempt later, the Tatas seems to have finally found another expat to steer the loss-making Air India towards a profitable business. The Tata Group has roped in 50-year-old Campbell Wilson, the CEO of Singapore Airlines’ long-haul budget unit Scoot. Singapore Airlines is also Tata’s joint venture partner in Vistara.  After their takeover in January, Tatas’ first choice to lead Air India was former Turkish Airlines chairman Ilker Ayci. But the choice ran into some trouble back home due to Turkey’s strained relations with India. The row ended when Ayci declined to take up the responsibility. “I am delighted to welcome Campbell to Air India. He is an industry veteran having worked in key global market cutting across multiple functions. Further, AI would benefit from his added experience of having built an airline brand in Asia. I look forward to working with him in building a world-class airline.” Meanwhile, Air India Chairman N. Chandrasekaran described Wilson as an industry veteran who had worked in key global markets across many functions. Singapore Airlines Group CEO Goh Choon Phong said that while the group was sad to lose Wilson, he was going to Air India with their “full blessings”. “Air India is at the cusp of an exciting journey to become one of the best airlines, offering world-class products and services with a distinct customer experience that reflects Indian warmth and hospitality,” said Campbell Wilson. Wilson said in a statement that Air India aimed to become one of the best airlines in the world. He said that he was excited to join Air India and Tata colleagues in the mission of realising that ambition. Air India will have to wait at least a month before it hands over the responsibility to Wilson. His last working day at Scoot is June 15 and industry observers do not expect Tatas to face hurdles in obtaining a security clearance from the Union Home Ministry for him. Wilson started off his career as a Management Trainee with Singapore Airlines in 1996 in New Zealand. He then worked for the group in Canada, Hong Kong and Japan before returning to Singapore in 2011 as the founding CEO of Scoot, which he led until 2016. He then served as the Senior Vice President, Sales & Marketing, of Singapore Airlines, where he worked on pricing, distribution, e-commerce, merchandising, brand & marketing, global sales and the airline’s overseas offices, before returning for a second stint as the CEO of Scoot in April 2020. By then Scoot had merged with the group’s short-haul low-cost airline Tigerair. Scoot has a major presence in India and so does Singapore Airlines.  The incoming CEO will also have to work towards paring Air India’s debt of Rs 15,300 crore, refurbishing its fleet, improving service quality and rationalising its routes.  What would be his immediate challenges at Air India? Talking to Business Standard, Ajay Awtaney, Founder and Editor, Live From A Lounge says, the

The risk-off sentiment has gripped the investor psyche which has spared no asset class thus far in 2022.   Not just equities, but investors across most asset classes, including cryptocurrencies and metals, have seen negative returns on their investment. A massive sell-off in cryptocurrencies, for instance, wiped over $200 billion of wealth from the market in just 24 hours. While Bitcoin plunged 10% its lowest level since December 2020, Ethereum dropped as much as 16% on Thursday, May 12. Thus far in 2022, Ethereum has cracked 45%. Meanwhile, among equities, the US indices have sunk the most as fears of steeper rate hike coupled with recession plague markets. Back home, the Indian benchmark indices seem to have fared comparatively better so far. Bond markets, on the other hand, have seen the India 10-year G-Sec yield rise from 6.01 per cent a year ago to 7.25 per cent now. Meanwhile, retail inflation surged to an 8-year high of 7.8% in April. Analysts say these negative returns have largely been triggered by panic selling by new investors who exited in droves in the backdrop of rising interest rates, inflation worries and the geopolitical situation.   Going ahead, analysts expect equity markets to stage a recovery in the later part of the year as these new investors make a comeback. That said, the near-term texture of the overall market remains weak despite intermittent bounce-backs.   According to Anand James of Geojit Financial Services there is a low probability of a breach below 15,671. Pull back rally can lead the Nifty to 16,220 and consolidation in 15,945 - 16,090 is the key, he says. There seems a low probability of an all-out panic-driven collapse or a breach below 15,671. The reaction rally that could unfold thereof has room for upside till 16,220. However, consolidation in the 15,945-16,090 region is the key for setting the course for a vertical rise to the 200-DMA at 17,251. In the week ahead, investors will focus on the likely listing of LIC on the bourses on May 17. India’s largest insurance company set its issue price at Rs 949 per share.   That apart, primary markets will stay abuzz with Paradeep Phosphates and Ethos’ initial public offers. Lastly, the last leg of March quarter earnings will see more than 400 companies announcing their quarterly report card this week. Some of the prominent ones include Bharat Forge, Bharti Airtel, DLF and ITC.  

One of the reasons why Maruti was able to make inroads into Indians’ hearts was because of the fuel efficiency of its cars. In the 1990s, when Maruti-800 was a rage and a prized possession in Indian middle class homes, its advertisement pitched it as a car which never ran out of petrol. ‘Papa ki karan, petrol khatam hi nahi honda’, a child quips in a commercial after his father -- irked over his non-stop playing with a toy Maruti -- asks him to stop. Being an Indian company, Tata Motors also knows well that one of the first things that a consumer wants to know -- before taking a call on buying a vehicle -- is the fuel efficiency. That is why the largest player in India’s nascent electric passenger vehicle industry recently unveiled the long-range variant of its Nexon model. The new Nexon EV MAX offers a driving range of 437 kilometres. Tata Motors also plans to launch electric cars with a minimum range of 500 kilometres. Range anxiety refers to an EV owner’s fear that the vehicle's battery does not have sufficient charge for it to reach the destination. It is linked to how far the EV can travel on a single battery charge and the availability of charging points. According to JD Power, the relatively limited driving range of many EVs and the lack of charging infrastructure in many geographies are the primary reasons people do not buy EVs, even if they seek to be environmentally conscious and have the necessary finances. For the owner of an EV, this anxiety can particularly kick in when embarking on an unplanned or emergency trip, which might exceed the range of the EV in question. Also, remember that vehicles aren't just meant for the daily office commute, which typically takes place between two points within the same city. What if you want to go on a long drive? Or as many Delhites do, drive up to the hills during a long weekend? The owner of a conventional car or bike wouldn't think twice given the ubiquity of petrol pumps. But an EV owner will do. There can be two broad solutions to this problem -- increased battery efficiency and expansion of charging point networks. In any case, addressing this problem is necessary if we want to accelerate EV adoption because ultimately, the driver's trust is critical. A prospective owner must be confident that their EV has sufficient battery capacity to begin with, and, in case they do run out of charge, they will be able to find a charge point on the road that is both convenient and reliable. However, finding a solution to these two problems is a work in progress. Increasing battery efficiency beyond a certain point will require costly and time-consuming research, while charging points have their own challenges that are typical when setting up any infra. Still, with time and increased EV adoption, progress will indeed be seen on both fronts.   Here's a glimpse of the challenges involved. India’s 2030 vision of e-mobility states that 70 per cent of all commercial cars, 30 percent of private cars, 40 percent of buses, and 80 per cent of two-wheeler and three-wheeler sal

Is it the summer heat, steep fuel prices, food inflation or something else? The fledgling online delivery platforms are suddenly facing, what they said, an acute shortage of riders. It forced Swiggy to temporarily suspend its pick-up and drop-off service Genie in three major cities. While most other gig firms are not able to deliver products on time. And all of this is happening when the country witnessed a surge in the labour force last month. So why are gig workers in such a short supply? And how it may affect the food delivery and quick commerce firms?  After the gig platforms, let us move on to another fledgling but fast growing industry. US carmaker Ford on Thursday scrapped its plan to manufacture electronic vehicles in India. Elon Musk-owned Tesla is also exploring options in Indonesia after a prolonged haggling with India over duties and tariffs. So is India’s EV policy enough to turn it into a global EV and battery-manufacturing hub like China? A little policy rejig by the government can indeed woo many more global EV makers to India. Meanwhile, after two consecutive bad summers, the consumer durable sector is finally seeing signs of recovery this year. Rising temperature and an improved consumer confidence are likely to drive demand for the white goods segment. However, soaring inflation, analysts believe, can cap the overall demand. Find out whether you should bet on cool consumer durable stocks as the mercury soars. After the economy and markets, let us turn our focus to the corridors of the Supreme Court where a debate to scrap British-era sedition law is raging. The apex court has now directed the Centre and state governments to keep all the trials and appeals filed under IPC’s section 124 (A) in abeyance. So what exactly is this sedition law? And why do most experts believe that it has been misused since inception? This episode of the podcast offers some insight and more.    Watch video

An undisruptive summer coupled with above-normal temperature is expected to bring some respite for consumer durable companies after facing weak demand for the past two years. According to a report by Reserve Bank of India (RBI), confidence among consumers saw a sharp uptick as retail credit surged to 14% in first half of FY22.   Despite fears of Covid’s third wave, the demand for consumer durables, too, saw a significant growth at over 69% to Rs 28,409 crore, hitting an all-time high. The air-conditioner business grew by approximately 27% in volume terms and around 38% in value terms in March this year, reports suggest. While metros and urban markets continued to show strong demand, rural and semi-urban areas witnessed moderation. Dealers expect this healthy demand momentum to continue going forward. But there is a catch. Analysts expect rising raw material prices, especially that of aluminum, copper and PVC to weigh on margin of white goods and wire and cable companies in FY23. Rising interest rates are also an overall sentiment dampener, as companies try to pass on the rise in input cost to the consumers. To offset commodity inflation, consumer durable companies took price hike of 5-10% in FY22. But earnings recovery in first half of FY23 depends on how much price hike is passed on to the consumers. GFX in> “For now, fear of weak demand may be preventing a full pass-through” – Pranjul Bhandari, Chief India Economist, HSBC Securities and Capital Markets (India)   VO4> According to Pranjul Bhandari, Chief India Economist, HSBC Securities and Capital Markets (India), dividing wholesale price index, or WPI, inflation into input and output prices, only 50 per cent of the input costs over the past six months have been passed on — generally, it’s about 80-90 per cent. VO/GFX out>   VO5> In this backdrop, VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services believes margins of consumer durable firms to remain muted in FY23 as the industry cannot fully pass elevated costs to consumers. Except Bluestar, shares of consumer durable companies like Crompton Greaves, Voltas, Havells, Orient Electric, Whirpool and V-Guard have been under pressure as they bled from eight per cent up to 21 per cent this year.   In comparison, S&P BSE Consumer Durable index and S&P BSE Sensex tanked over 16 per cent and 10 per cent, respectively, during the same period. Moreover, the sector is sensitive to rising interest rates. With a surprise rate hike of 40 basis points by RBI, consumers are likely to spend less on discretionary items in a cash-strapped economy. Analysts believe that only companies having higher scale and lean cost structure will be able to manage cost inflation better than peers.   Overall, analysts expect 2022 to remain mixed for the industry depending on revival of economic indicators, improvement in supply chain dynamics, and consumer confidence. Lastly, benchmark indices closed lower for fifth straight day yesterday. Both Nifty50 and Sensex tumbled over 2 per cent each. Delhivery IPO was subscribed over 23% on day-2. As regards today, investors’ will watch out Q4 results of Tech Mahindra, Escorts and Bandhan Bank.