Business Standard Podcast

India’s automobile sector, consisting of passenger vehicles, commercial vehicles, two-wheelers, three-wheelers and quadricycles, again ended the last financial year on a bleak note.  Total dispatches from factories to dealerships declined 6% to 17.53 million units, marked by diverging performances among the segments. The sector’s sales had peaked in 2018-19 when it sold 26.26 million units.    India’s two wheeler segment was the worst hit by the pandemic and it is still showing no signs of recovery. The segment reported its lowest wholesales in the last 10 years in FY22, data from the Society of Indian Automobile Manufacturers shows. After falling almost 18% in FY20, two-wheeler sales dipped further 13% in FY21 and another 11% last fiscal to 13.47 million units, the lowest since 2011-12. Two-wheeler dispatches are currently just 64% of the 2018-19 level when the segment scaled a high of 21.18 million units.   On the other hand, the cost of ownership of passenger vehicles (PVs) and two-wheelers has also risen substantially following a surge in fuel prices, price hikes by manufacturers to cover BS-VI costs, and costlier raw materials. Show the visuals of Honda Activa and Hero Splendour and TVS Jupiter The transition to BS6 norms from BS4 came into effect on April 1, 2020. This pushed vehicle prices across segments as manufacturers developed new engines that met the rigorous BS6 emission rules. In the year following the introduction of BS6 engines, the price of top models like Honda Activa and Hero Splendour and TVS Jupiter became costlier by 10 to 11,000 rupees. Meanwhile, the passenger vehicle segment put up a strong show last year, with dispatches rising 13% to 3.07 million units. This segment has recovered to 91% of FY19 level. (below gfx for this para, convert to bar graph) But this recovery was completely led by a stupendous growth in the sales of utility vehicles, given India is in the midst of an SUV boom. Sales of utility vehicles registered a 40% jump to 1.49 million units while passenger car sales declined by 4.8% to 1.46 million units. India’s automakers appear to have put the challenges of Covid-19 behind them as sales surpassed 2019 levels in the month of May this year for major car makers like Maruti Suzuki, Hyundai, Tata Motors and Mahindra & Mahindra.  (below gfx for  Two-wheeler sales remained sluggish but they benefited from some pent up demand and wedding season in the first two months of the financial year. People returning to offices and reopening of educational institutions is also helping Two-wheeler sales this year. Anuj Sethi, Senior Director - Ratings, CRISIL says, growth momentum in PV sales will continue this year. If not for the chip shortage, sales in FY22 would’ve been higher, he said adding that chip availability is expected to improve from the second half of this year. PV sales can touch 34 lakh units, crossing FY19 record. Income levels in rural markets were impacted in last 2 years and 2W sales expected to register 5-6% growth.   While semiconductor shortage remains the major challenge for carmakers, Maruti Suzuki Chairman RC Bhargava has said the government’s plan to make six airbags mandatory in passenger vehicles from October 1 will make small cars more expensive and drive out a chunk of potential buyers. Providing driver and front passenger airbags in all cars is already mandatory.  Adding another four airbags will increase the cost by Rs 17,600, according to auto market data provider JATO Dynamics. In some cases, the cost could be higher as companies will be required to make engineering changes to the car's structure to accommodate the additional airbags. Buyers of entry-level cars are much more price-sensitive compared to the bigger car segment. Meanwhile, the government also increased the third-party (TP) motor insurance premium for various categories of vehicles with effect from June 1, which will jack up the insurance cost of cars

The number of startups in India continues to swell with each passing day. And so do that of the unicorns. Till May this year, India had 100 unicorns with a total valuation of $332.7 billion. On Sunday, Prime Minister Narendra Modi said that Indian startup unicorns’ average annual growth rate was higher than in the United States, the UK and other countries. Modi said that the startups continue to create value despite the pandemic-led slowdown. Meanwhile on Thursday, Union Minister Jitendra Singh said startups will determine India’s economy and that of the world too. Last week, logistics player Delhivery became the twelfth start-up to list on the bourses since 2019. Even as foreign investors are tightening their purse strings and asking the startups to brace up for tough days ahead, a Business Standard analysis found that their key management made a killing as they took the start-ups towards IPO filings. Of the 12 start-ups analysed by Business Standard, employee benefits -- which includes salaries, bonuses, wages and gratuity-- increased 21.4 per cent in the year of filing of the red-herring prospectus. The year before, the average increase in employee benefits was just 8.8 per cent. However, the key management personnel and their relatives earned considerably more. The average remuneration for KMPs jumped 114.9 per cent in the year of RHP filing -- up from 70.3 per cent a year earlier. The remuneration, in this case, does not include data on rents and other benefits accrued to the top management during this period. However, it does include short-term and long-term benefits and ESOP expenses. A look at the larger sample of 93 companies, which filed their red-herring prospectus for IPOs in the last year and a half, also shows stark differences in compensation. The average employee salary was up 10.9 percent across the board. While average key managerial personnel remuneration was 39.2 per cent higher in the year of RHP filing. The gap in start-ups is thus higher than other companies. One reason for this is that start-ups tend to hire more personnel as they move closer to the IPO. Also, there is a more of a need in these companies to align themselves with market-linked salaries and retain top talent.  An earlier analysis of a sample of 76 companies from the Nifty 100 index by Business Standard had indicated that the gap between the compensation of top executives and the median employee was 184-times. Among sectors, the gap between CEO salary and median employee salary is distinct among pharmaceutical companies at 340 times in FY21, followed by automotive at 308 times and telecommunications at over 257 times. In contrast, banks have the least inequality, with a median CEO compensation at 91 times the median employee salary. Other sectors with low CEO-to-median employee salary include insurance and cement at 105 times, and industrial at 150 times in FY21. There has been a similar increase in income gap between the top management and regular corporate employees in other countries as well. The average US CEO salary was 351 times a typical worker’s salary in 2020, according to an August 2021 report from US-based think tank Economic Policy Institute. And it was closer to 307 times in 2019, according to authors Lawrence Mishel and Jori Kandra in their report titled ‘CEO pay has skyrocketed 1,322 per cent since 1978’. Watch video

With food and fuel prices going through the roof, economists expect the Reserve Bank of India, to go for faster, steeper interest rate hikes over the next few months. As per a Reuters poll of economists, the repo rate could reach its terminal level early next year.   It further projects the central bank to raise its key policy rate by at least 100 basis points over the next four MPC meetings, the first of which will be held next week between June 6 and 8. This hawkish sentiment gained currency after the RBI announced an out-of-policy repo rate hike of 40-bps in May.   Manish Banthia of ICICI Prudential AMC, for instance expects the RBI to hike rates by 150 basis points over the next three policy reviews with a 50-basis point hike every two months.   Manish Banthia, senior fund manager - fixed income, ICICI Pru AMC says witnessing ‘interest rate adjustment’ scenario. RBI needs to normalise repo rate amid recovery. Interest rate swap market pricing-in repo rate at 6% over 3-6 months and liquidity withdrawal to continue during this period. Liquidity adjustment will be in focus, says Banthia.   Surplus liquidity in the system is being withdrawn rapidly amid inflationary pressures. According to bankers, the increase in the cash reserve ratio to 4.5% since May 21, has sapped 87,000 crore rupees from the system.   In addition, the RBI is selling dollars and sucking out rupee liquidity, resulting in excess liquidity coming down rapidly. According to the central bank’s data, the daily liquidity absorption from the banking system was 2.96 trillion rupees on May 30.   This was lower than 3.22 trillion rupees registered on May 20 – a day before the CRR hike came into effect. Bankers believe the central bank may be moving towards reducing the liquidity surplus to 1.5% of NDTL.   As far as next week’s meeting is concerned economists expect the RBI to raise repo rate anywhere between 35-50 bps. They also expect the retail inflation projection to be revised upwards to a maximum of 6.9% for FY23. However, experts are divided on steps towards liquidity absorption. While bankers expect no hike in CRR, the economists expect yet another 50-bps hike. Rahul Bajoria of Barclays’, for instance says, “A further tightening in liquidity cannot be ruled out. We expect a 50 bps increase in the cash reserve ratio again to take the level to 5% in our base case.”  Indian econo my is facing a dichotomy of surging prices and a good agricultural production outlook. Thus, it’s getting increasingly difficult to predict the monetary policy action. Nonetheless, a rate hike in June is a ‘no-brainer’, but the markets will be eyeing RBI governor Shaktikanta Das’ comments on growth outlook, liquidity measures and inflation projections. On Friday, India’s Services PMI data, the US’ jobs data, and other stock-specific action will guide the markets.   Watch video

It is Europe’s most valuable tech company. Its market cap has gone from $25 billion to $225 billion in a decade. And eight months ago, it hit a lifetime high of over $350 billion. This Dutch company made almost $20 billion in net sales and over $6 billion in profits last year.  Yet, the chances are you may not have heard about it. The company, ASML Holdings, describes itself as the “most important tech company you’ve never heard of” and rightly so.  ASML is one of the world’s leading manufacturers of chip-making equipment. It designs and manufactures lithography machines-- an essential component in manufacturing microchips which go into smartphones, data centres, personal computers, laptops, cars and much more.  ASML makes lithography systems, used to create the circuitry of computer chips. Its lithography systems can be found in the factories of every major chipmaker in the world. ASML’s most advanced machines use a wavelength of light called EUV, which stands for extreme ultraviolet. The machine uses EUV light beams, generated by lasers and focused by giant mirrors, to lay out extraordinarily narrow circuits on slabs of silicon known as wafers. That in turn makes it possible to create faster and more powerful microprocessors, memory chips and other advanced components, which are critical for consumer electronics and military applications alike. A lithography system projects light through a blueprint of the pattern onto a photosensitive silicon wafer. After the pattern is printed, the system moves the wafer slightly and makes another copy on the wafer. This process is repeated until the wafer is covered in patterns, completing one layer of the wafer’s chips. To make an entire microchip, this process is repeated layer after layer, stacking the patterns to create an integrated circuit (IC). The simplest chips have around 40 layers, while the most complex can have over 150 layers.  Only a few companies, including America’s Intel, South Korea’s Samsung Electronics and Taiwan’s TSMC, are currently capable of manufacturing the most sophisticated chips. And they’ve come to depend on ASML to make them. 11,000 of its 32,000-strong workforce is engaged in Research and Development (R&D).  Since 2000, ASML has rapidly taken market share from Japanese competitors Nikon and Canon, which now mainly focus on older technology. ASML controls more than 90% of the lithography market and no competitor is attempting to build an EUV system, citing high development costs. Amid a global chip shortage, the demand for ASML’s systems is higher than its current production capacity. Last year, it sold 42 extreme ultraviolet or EUV systems and this year it expects to ship 55 units. It is the only manufacturer of EUV systems that are used in making the world’s fastest microprocessors. ASML says its job is to help the industry continue Moore’s Law. In 1965, Gordon Moore, one of Intel’s co-founders, observed that the number of transistors on a microchip was increasing rapidly, exponentially increasing the computing power while decreasing the cost of the chip. Moore predicted that the number of transistors would double every year for the next decade. In 1975, he revised the prediction to every two years. His prediction has proved to be true and today’s microchips contain tens of billions of transistors. ASML’s EUV machine pushes Moore’s Law forward and chip makers cannot produce leading-edge chips without it.   Delivering just one of these takes three Boeing 747 cargo planes, 40 freight containers and 20 trucks. The bus-sized machine comprises 100,000 parts, weighs nearly 200 tonnes and costs around $150 million. A cutting-edge chip plant needs 9-18 of these machines, which are one of the biggest capital costs for chipmakers.  ASML’s next iteration of the system, known as "High NA" EUV machines, will be even larger, and cost around $300 million each. Watch video

The central government mopped up Rs 1.41 trillion as Goods and Services Tax collection in the month of May -- a dip of 16% from the record-high numbers of April, but way above the FY 22 average of Rs 1.23 trillion. And hours before the government made the GST numbers public on Wednesday, the auto companies had also come out with their monthly dispatch figures, reporting improved sales in May. So do these numbers suggest that the Indian economy is finally reviving after the shock delivered by pandemic?  An increase in the revenue of airlines also signals economic recovery. India’s largest airline, Indigo, has reported a 29% jump in its revenue in the March quarter. But it was overshadowed by high fuel prices, pushing the low cost carrier into losses. In an interview with Business Standard’s Aneesh Phadnis and Arindam Majumder, the airline’s CEO Ronojoy Dutta tells about the upcoming competition in the air due to the entry of Akasa and Jet Airways. He also says that the airline is going through a phase of transition, and will soon become a choice on long international routes.  The Indian aviation sector is facing cost pressure due to rising crude oil prices, weaker rupee, and sticky inflation. And with Akasa Air and Jet Airways taking to the skies in the coming months, the heated competition doesn’t bode well for listed players like IndiGo and SpiceJet. We capture what the intensifying competition amid soaring fuel costs mean for incumbent players, and what should investors do? The crude oil is on the boil again, after the European Union’s decision to ban its import from Russia in a phased manner. And as the burden on the government exchequer and people’s pocket is increasing, some experts are suggesting a temporary tax on oil and gas companies which have profited from the price rise. It is called a one-time ‘windfall tax’. This episode of the podcast tells more about it. Watch video

India’s fourth-quarter GDP data released Monday showed that economic growth has not come roaring back after the pandemic. It slowed down for the third consecutive quarter, growing 4.1% in the January-March period. For the full fiscal, growth came in at 8.7% provisionally after the pandemic-related contraction of 6.6% in 2020-21. While the real GDP in 2021-22 is just 1.5% higher than the level in the pre-pandemic year of 2019-20, indicating that the bounce-back following the pandemic has only been sufficient to make up for the contraction in the previous year. Contact-intensive industries were affected by the Omicron wave in January. Trade, hotels, transport and services related to broadcasting is the only sector that is yet to recover fully. It is still 11% below FY20 level. What emerged as another cause for concern was the 0.2% contraction in manufacturing activities in the fourth-quarter from the previous year. Experts attributed the contraction to high commodity prices and supply disruptions. Private spending saw a tepid growth of 1.8% in Q4. India’s FMCG market grew 6% in the January-March quarter over last year led by double-digit price growth, according to Nielsen IQ. However, the sector’s volume declined by 4.1%. The drop in consumption was more prominent in rural markets, which saw a 5.3% dip -- the highest consumption slowdown in the last three quarters. HDFC Bank’s Principal Economist Sakshi Gupta said the consumption recovery remains under a cloud of uncertainty for the ongoing financial year with rising inflationary pressures. However, there are several bright spots too. India's factory activity expanded at a better-than-expected pace last month as overall demand remained resilient despite persistently high inflation, according to S&P Global’s Manufacturing Purchasing Managers' Index. The PMI came in at 54.6 in May, slightly lower than April’s 54.7, but above the 50-level separating growth from contraction for an eleventh month, the private survey showed. RBI data showed robust credit off take in April. Banks’ non-food credit grew at 11.3% while loans to agriculture and allied activities expanded by 10.6%. Personal loans segment continued to perform well, registering acceleration in growth to 14.7% in April, primarily driven by housing and ‘vehicle loans segments. GST collection too has remained buoyant. The collection in May, for the month of April, grew 44% year-on-year, to nearly Rs 1.41 trillion. It is down 16% from the record high collection of Rs 1.68 trillion in April but one must note that collections in May have always been lesser than in April, which pertains to the returns for March, the closing of the financial year.  Higher GST collections, to an extent, have been driven by high inflation which has pushed nominal GDP growth to 19.5% in FY22.  Meanwhile, in the automobile sector, global supply-side disruptions in semiconductor chips had led to declining production and increased delivery timings, impacting registrations adversely. Passenger car sales, tractor sales and two-wheeler sales have been falling for past several quarters. However, auto sales improved in May compared with April as supply bottlenecks eased. The country's biggest carmaker, Maruti Suzuki, reported a 7.1% rise in factory dispatches while Tata Motors’ sales, including passenger and commercial vehicles, rose 3.1%. Ashok Leyland’s sales spiked 12% while Escorts’ tractor sales rose marginally at 1.15% over the previous month. Bajaj Auto’s domestic two-wheeler sales registered a 3% increase month-on-month.  Speaking to Business Standard, Sujan Hajra, Chief Economist, Anand Rathi Securities said GDP growth slowed mainly due to negative net export. We are on a growth path but number are not as yet impressive, he said adding that consumption is not doing well but urban situation is relatively better. Public capex has started  picking up and govt is attempting investmen

Q: You have been very bullish about the RASK getting higher and higher… that the Indian customers will be willing to pay more for a higher, a better and efficient service. Your RASK is now at historic high. How much more scope is there to improve this further?  Ans: >Loss reported by the airline was Omicron-driven  >Rise in fuel prices also contributed to the airline’s loss >But the market is optimist because of the revenue performance  >In April 2022, the airline’s revenue was up 12% compared to pre-Covid >Only 5-7% of Indian travel by air and the percentage is going to grow >Companies now realising that it’s efficient to pay for employees/labours’ airfare to avoid lost business etc   >Indians are traveling more than ever, within the country and abroad >Good customer service and after-travel services are also helping in revenue growth   >Airline’s revenue is strong, but fuel prices are a problem and the mark to market adjustment distorts its numbers  Q: So, (you are indicating) higher competition and higher intensity in the market and multiple players vying for the same share of pie is not likely have any kind of impact. Ans: >Industry made a mistake in the past by assessing the revenue growth in terms of volume only  >Airlines can’t lose on every passenger and aim to make it up in volume   >Domestic airlines are now optimistic of a strong revenue up-cycle  Q: You’re looking at 55 to 60% increase in ASKs in FY23. So where will we see… Would we see Indigo ramping up frequencies existing routes or will we see more new stations coming up?    Ans: >55% growth was estimated over 2022 which had the Covid Omicron-effect >Compared to pre-Covid, IndiGo’s capacity would be above 15%, and 20% in a year’s time >IndiGo will continue to look for new stations in domestic market  >The airline is lagging behind in the revenue side on international market  Q: Is there again some thought about getting wide body planes?  Ans: >Airline to go for wide body planes if gets Minimum Connecting Time (MCT) and banks aligned  >Plans to make a foray into Europe as well as the East with XLRs  

InterGlobe Aviation and SpiceJet have had a hard landing on the bourses so far this calendar year.  Shares of IndiGo airlines have tumbled 10 per cent on a year-to-date basis, while those of SpiceJet have crashed 30 per cent.  In comparison, the benchmark S&P BSE Sensex has slipped 5 per cent, and the BSE MidCap index 7.4 per cent, and the SmallCap index 10 per cent, during the period. However, analysts don’t see clear skies for the two players going forward. Rising crude oil prices and entry of Akasa Air and Jet Airways cast a spell on their prospects. Ajit Mishra, VP-Research, Religare Broking, says long-term growth story intact as demand touching nearly 70% of pre-Covid levels. However, new entrants may lead to price war, he says adding that crude price at $120 per barrel and increased competition are not ideal situation for incumbent listed airlines. He expects pressure on margin and profitability going ahead. Brent crude is testing $123 per barrel mark in the international markets, after staying range-bound within $105-110 per barrel for the better part of May.  According to analysts, airlines have, historically, revised air fares based on the supply situation. Thus, an upward revision in fares, if any, may be some time away. But, there are caveats. Founder and CEO of Martin Consulting, Mark Martin says airlines are not going to absorb any more rise in cost since they haven’t recovered the losses they suffered during the pandemic. Factors favouring fare hike are higher crude oil prices, refining costs (up nearly 55%), insurance costs and ground handling costs. Air fares will rise by at least 25 per cent, he indicates. Meanwhile, Rakesh Jhunjhunwala-backed Akasa Air is mulling the launch of its commercial operations by July.  Jet Airways’s air operator certificate, too, was revalidated by the aviation regulator Directorate General of Civil Aviation in May.  With these developments playing out, Ansuman Deb of ICICI Securities believes the road ahead for incumbents will be to keep maximising yields and try keeping costs low. Some of the cost savings, including cut in salaries will reverse now, which will push up expenses further. However, route-specific innovations will be critical from here on. Speaking to Business Standard, Independent Market Analyst Ambareesh Baliga said airline stocks are not wealth creators. Currently, bias remains positive due to demand revival. However, margins faltering due to rising crude prices, he said adding that competition is heating up with Akasa Air, Jet Airways. He said it's a great time for customers on likely price war, more seats’ availability, but not a good time for investors. Airlines may struggle with profitability unless crude prices corrects sharply. Surely, airlines are in the soup as soaring fuel costs bite into their profits, while increased competition dents prospects of fare hikes. The near-term outlook, therefore, remains under pressure. Meanwhile, Thursday's trading session could be marked by volatility as investors will adjust their positions ahead of the weekly F&O expiry. That apart, stock-specific action and global cues will dictate the market trend.

Russia’s attack on Ukraine has upset the supply chain, pushing world inflation to uncomfortable levels. And one of the reasons for soaring inflation is the steep rise in crude oil prices. But as the government exchequers are bleeding, oil and gas companies around the world are minting money – whether upstream, midstream or downstream. And these gains are not coming because of any improvement in their processes but because of the geopolitical situation. Crude prices are now hovering close to $120 a barrel. On Wednesday, it was $118 a barrel. With governments and central banks taking steps to curb inflation the talk of taxing companies gaining from the crude price rise is gaining steam. Such proposals have been discussed and even imposed earlier in many countries. Last week the United Kingdom announced a 25 percent levy on energy companies to ease the financial burden on households. Some other countries like Italy and Hungary have also imposed this tax. A top government official told Business Standard on condition of anonymity that while theoretically a windfall tax on oil companies can be imposed in India, there had been no discussions on it within the current dispensation. On Monday, responding to speculation of windfall tax, state-owned companies Oil India and Oil and Natural Gas Corporation (ONGC) said they had not heard anything from the government. And if a windfall tax is imposed in India, it will not only be levied on private players like Reliance, but also on state-owned behemoths. This means the latter may have to compromise on dividends and share buybacks, both of which the centre is a beneficiary of. The centre could do with additional resources mobilisation as it faces a growing expenditure burden and a hit on revenue in FY23.  The FY23 fertiliser subsidy budget estimate is Rs 1.05 trillion.

The Statistics Ministry on Tuesday evening came out with Q4, FY 22 results -- which put India's GDP growth in January to March period at 4.1%. The Indian economy slowed down for the third straight quarter. While the overall growth for the financial year 2021-22 is estimated at 8.7%, down from the estimate of 8.8 per cent. During the March quarter, agriculture grew at 4.1 per cent, while manufacturing contracted 0.2 per cent. Public administration, defence and other services, which represent government expenditure, grew 7.7 per cent during the March quarter, supporting the overall economic growth. Among other sectors, mining and quarrying and construction grew 6.7 per cent and 2 per cent, respectively. Now, coming to GDP, from 20.3% in the first quarter and 8.5% in the second quarter, it had slowed to 5.4% in the third quarter of FY22.    According to government data, the economy expanded by 8.7% in 2021-22, compared to a 6.6% contraction in 2020-21. In its second advance estimate, the NSO had projected GDP growth during 2021-22 at 8.9%.  The FY22 Q4 GDP slowdown can be attributed to the impact of localised restrictions due to the Omicron wave and high inflation levels hitting private consumption. From the pre-pandemic year of 2019-20, India’s real GDP has grown only 1.5%. In other words, it has expanded from Rs 145.16 trillion to Rs 147.36 trillion in two years. Last month, Morgan Stanley had pared India’s growth forecast for FY23 to 7.6 per cent from 7.9 per cent estimated earlier. It had said that a slowdown in global growth, higher commodity prices and risk aversion in global capital markets had exposed India's economy to downside risks. In May, S&P Global Ratings slashed India’s growth forecast to 7.3 per cent from 7.8 per cent for FY23 on the back of rising inflationary pressure and the longer-than-expected Russia-Ukraine war. According to agency reports, the fiscal deficit for 2021-22 improved to 6.71 per cent of the GDP over the revised Budget estimate of 6.9 per cent. This was mainly on account of higher tax realisation. According to government data, the tax receipts during the fiscal were at Rs 18.2 trillion as against the revised estimates of Rs 17.65 trillion. The total expenditure, too, was higher at Rs 37.94 trillion against the revised estimates of Rs 37.7 trillion. The revenue deficit at the end of the fiscal was 4.37 per cent for fiscal 2021-22.   While the worst of the Covid-19 pandemic seems to be behind us, we are yet to make any considerable progress compared to pre-pandemic levels. In that context, a new set of challenges, particularly inflation, are looming on the horizon. How the government deals with them will determine how fast we can move past the scars of the pandemic. Enable GingerCannot connect to Ginger Check your internet connection or reload the browserDisable in this text fieldRephraseRephrase current sentenceEdit in Ginger×

The Statistics Ministry on Tuesday evening came out with Q4, FY 22 results -- which put India's GDP growth in January to March period at 4.1%. The Indian economy slowed down for the third straight quarter. While the overall growth for the financial year 2021-22 is estimated at 8.7%, down from the estimate of 8.8 per cent. During the March quarter, agriculture grew at 4.1 per cent, while manufacturing contracted 0.2 per cent. Public administration, defence and other services, which represent government expenditure, grew 7.7 per cent during the March quarter, supporting the overall economic growth. Among other sectors, mining and quarrying and construction grew 6.7 per cent and 2 per cent, respectively. Now, coming to GDP, from 20.3% in the first quarter and 8.5% in the second quarter, it had slowed to 5.4% in the third quarter of FY22. According to government data, the economy expanded by 8.7% in 2021-22, compared to a 6.6% contraction in 2020-21. In its second advance estimate, the NSO had projected GDP growth during 2021-22 at 8.9% The FY22 Q4 GDP slowdown can be attributed to the impact of localised restrictions due to the Omicron wave and high inflation levels hitting private consumption. From the pre-pandemic year of 2019-20, India’s real GDP has grown only 1.5%. In other words, it has expanded from Rs 145.16 trillion to Rs 147.36 trillion in two years. Last month, Morgan Stanley had pared India’s growth forecast for FY23 to 7.6 per cent from 7.9 per cent estimated earlier. It had said that a slowdown in global growth, higher commodity prices and risk aversion in global capital markets had exposed India's economy to downside risks. In May, S&P Global Ratings slashed India’s growth forecast to 7.3 per cent from 7.8 per cent for FY23 on the back of rising inflationary pressure and the longer-than-expected Russia-Ukraine war. According to agency reports, the fiscal deficit for 2021-22 improved to 6.71 per cent of the GDP over the revised Budget estimate of 6.9 per cent. This was mainly on account of higher tax realisation. According to government data, the tax receipts during the fiscal were at Rs 18.2 trillion as against the revised estimates of Rs 17.65 trillion. The total expenditure, too, was higher at Rs 37.94 trillion against the revised estimates of Rs 37.7 trillion. The revenue deficit at the end of the fiscal was 4.37 per cent for fiscal 2021-22. While the worst of the Covid-19 pandemic seems to be behind us, we are yet to make any considerable progress compared to pre-pandemic levels. In that context, a new set of challenges, particularly inflation, are looming on the horizon. How the government deals with them will determine how fast we can move past the scars of the pandemic. Enable GingerCannot connect to Ginger Check your internet connection or reload the browserDisable in this text fieldRephraseRephrase current sentenceEdit in Ginger×

India has the world’s fourth-largest coal reserve. It is the second-biggest producer of fossil fuel behind China and is home to the world’s biggest coal miner, Coal India, which accounts for 80% of the country’s domestic output. The minable capacity of already allocated coal blocks is around 15% to 20% higher than the expected demand in 2030. So why, year after year, India’s power plants face coal shortages that lead to widespread power outages leaving parts of the country in the dark and industries in a limbo. There are several factors.  India has had a long-standing policy to minimise imports of coal. In February 2020, Coal Minister Pralhad Joshi had said that the country would stop importing thermal coal from 2023-24. Joshi had said the Coal Ministry would coordinate with Railways and Shipping Ministry and enable Coal India, captive and commercial miners to evacuate more coal by 2030. But despite efforts to increase the supply of domestic coal, there was a gap between the demand of coal and its supply. And the coal stocks at the generating stations are depleting at a worrisome rate. Now, Power Ministry is blaming declining coal imports for the current crisis. In 2018-19, 21.4 million tonnes of coal was imported for blending, 23.8 million tonnes in 2019-20 and in 2021-22, it fell to 8.3 million tonnes. Coal inventories at power plants have declined by about 13% since April to the lowest pre-summer levels in years. And for the first time since 2015, Coal India will import the fuel for use by state and private power generating companies.  The power ministry said the decision was taken after nearly all states suggested that multiple coal import tenders by states would lead to confusion and sought centralised procurement through Coal India. The Centre faced pushback from states as imported coal is five times costlier than the one mined domestically. Recently, the government also stepped up pressure on utilities to increase imports to blend with local coal.  It has even warned of cuts to the supply of domestically mined coal if power plants did not build up coal inventories through imports. But the power ministry on Saturday asked states to suspend tenders that are "under process" Despite record production, Coal India’s supply has not been able to meet the demand.  In April 2022, the company registered a growth of 27.64% by producing 53.47 million tonnes. Former coal secretary Anil Swarup told Washington Post that Coal India’s production stagnated in the last few years because of a failure by the government to appoint senior management and fund mining expansions.  Shreya Jai of Business Standard points a mismatch between coal, power and railway ministries. ower units did not stock up when Coal India had surplus coal. Imported coal-based power units not functioning for s

India has the world’s fourth-largest coal reserve. It is the second-biggest producer of fossil fuel behind China and is home to the world’s biggest coal miner, Coal India, which accounts for 80% of the country’s domestic output. The minable capacity of already allocated coal blocks is around 15% to 20% higher than the expected demand in 2030. So why, year after year, India’s power plants face coal shortages that lead to widespread power outages leaving parts of the country in the dark and industries in a limbo. There are several factors.  India has had a long-standing policy to minimise imports of coal. In February 2020, Coal Minister Pralhad Joshi had said that the country would stop importing thermal coal from 2023-24. Joshi had said the Coal Ministry would coordinate with Railways and Shipping Ministry and enable Coal India, captive and commercial miners to evacuate more coal by 2030. But despite efforts to increase the supply of domestic coal, there was a gap between the demand of coal and its supply. And the coal stocks at the generating stations are depleting at a worrisome rate. Now, Power Ministry is blaming declining coal imports for the current crisis. In 2018-19, 21.4 million tonnes of coal was imported for blending, 23.8 million tonnes in 2019-20 and in 2021-22, it fell to 8.3 million tonnes. Coal inventories at power plants have declined by about 13% since April to the lowest pre-summer levels in years. And for the first time since 2015, Coal India will import the fuel for use by state and private power generating companies.  The power ministry said the decision was taken after nearly all states suggested that multiple coal import tenders by states would lead to confusion and sought centralised procurement through Coal India. The Centre faced pushback from states as imported coal is five times costlier than the one mined domestically. Recently, the government also stepped up pressure on utilities to increase imports to blend with local coal.  It has even warned of cuts to the supply of domestically mined coal if power plants did not build up coal inventories through imports. But the power ministry on Saturday asked states to suspend tenders that are "under process" Despite record production, Coal India’s supply has not been able to meet the demand.  In April 2022, the company registered a growth of 27.64% by producing 53.47 million tonnes. Former coal secretary Anil Swarup told Washington Post that Coal India’s production stagnated in the last few years because of a failure by the government to appoint senior management and fund mining expansions.  Shreya Jai of Business Standard points a mismatch between coal, power and railway ministries. ower units did not stock up when Coal India had surplus coal. Imported coal-based power units not functioning for s

Recently listed Life Insurance Corporation and Delhivery came out with their maiden quarterly result announcements on Monday. While LIC posted 18% year-on-year fall in its net profit, Delhivery’s net loss remained largely flat.   Revenues for both the companies, however, rose 11.6% and over 100% respectively, showing robust operational performance. Yet, shares of LIC cracked about 3%, while those of Delhivery ended over 2% higher in a weak market.   Going forward, analysts will remain watchful on both these companies given their respective fundamental concerns.   Nirav Karkera, Head – Research, Fisdom says net profit fell 18% YoY to Rs 2,371.5 crore. Around 18% growth in net premium in a seasonally strong quarter is a dampener. Cost control remains a concern.   That apart, analysts pointed out that LIC’s Q4 profit got a boost from writeback of provisions worth 1,000 crore rupees. This, they said, was a one-time gain and may not be available going forward. Besides, they also said low dividend outgo of Rs 1.5 per share isn’t rewarding Moreover, the deferment of declaration of the Embedded Value till June was another setback for investors. LIC’s EV at the end of September 2021 was 5.39 trillion rupees. However, almost 70% of LIC’s embedded value consists of equity mark-to-market gains, which inherently makes the EV more volatile.   Nirav Karkera, Head - Research, Fisdom says LIC has done a better job on AUM front than private players. But it has been facing pressure on yields on its investment. He pointys that LIC could be staring at some mark-to-market losses.   That said, stability in longer duration persistency ratios, improving gross net-performing asset, expectations of increased non-par products in the portfolio, and growth in topline are a saving grace. Thus, Gaurang Shah of Geojit Financial Services remains bullish on the stock from a long-term perspective.   Shah says LIC is a long-term play and vast opportunities available in the sector. As results in upcoming quarter should be better, he says the stock may see Rs 1,000 levels in long-term.   Coming to Delhivery, analysts suggest investors avoid entering the stock at current levels given that the firm is yet to turn profitable.   AK Prabhakar, Head of Research, IDBI Capital says, Delhivery is a loss-making company. He suggests, avoid buying the stock at current levels. Revenue visibility, growth, stability are three factors to keep in mind before investing in any stock.   In a nutshell, analysts suggest investors wait for a couple of quarters before they judge LIC’s performance. This is because it is a fundamentally strong company with profits on its books, but entered the markets amid macro-economic headwinds, increased competition from private players, and risks to return from investments. On the flipside, Delhivery’s profitability may be 2-3 years away which doesn’t give comfort to market watchers.   On Wednesday, markets will react to India’s March quarter GDP numbers that were released after trading hours yesterday. That apart, Manufacturing PMI data, and auto sales data for May, stock-specific action, and global cues will also sway the indices. 

The 15th edition of the Indian Premier League came to a close on Sunday. Debutants Gujarat Titans were crowned the winnerS after they defeated Rajasthan Royals by seven wickets.  All eyes are now on the upcoming e-auction of the league’s media rights, which is set to commence from June 12. It promises to be a high voltage event. Indian cricket’s governing body BCCI has set the reserve price at Rs 32,890 crore for the 2023-27 cycle of the IPL.  This is nearly double of the Rs 16,347 crore that Star India, now part of The Walt Disney Company, shelled out for the last five years for consolidated TV and digital bid.   Sony Pictures Networks India held the media rights for the first 10 years, for which it paid about Rs 8,200 crore.  For the next 5-year cycle, the rights will be sold in four buckets and interested parties have to bid separately for each.  The four categories are: >Television rights for the Indian subcontinent >Digital rights  >Non-exclusive digital rights for a set of 18 matches, which include the season opener, four playoffs and evening games of weekend double-headers, and >Rest of world At least ten companies have reportedly picked up the bid documents by paying the BCCI a non-refundable fee of 29.5 lakh rupees including GST.  These include Disney-Star, Sony, Zee Entertainment, Amazon, Apple, Google, Sky Sports UK and South Africa’s SuperSport. Amazon’s Prime Video recently began live-streaming cricket matches and reportedly wants to win the IPL rights to expand its user base. However, a sharp fall in IPL’s TV viewership has led some in the industry question the base price for media rights. Sony Pictures Networks India’s MD and CEO NP Singh told a financial daily earlier this month that the reserve price needs a reality check amid the decline in viewership.  IPL’s viewership fell by 30-35% in the first four weeks of the 2022-season compared to last year’s figures.   With viewership falling consistently, some advertisers had reportedly asked Disney-Star to make good their loss by offering them spots on other high-impact properties. Maruti Suzuki Executive Director Shashank Srivastava had on May 1st said that in the first 25 matches, television ratings for the company’s target group of males, between 22 and 40 years of age, dropped by around 58%. He added, the carmaker was in discussions with Star for additional Free Commercial Time on ‘live’ matches so that the overall reach numbers and commitments that were made could be met. Experts pointed to possible reasons for the viewership fall, including audience fatigue given this season was the longest ever – lasting 65 days and 74 matches with two new teams. Chennai Super Kings and Mumbai Indians, which are among the most consistent sides with large loyal fan-bases, displayed poor performance. They ended the season at the bottom of the points table.  The performances of big names like RCB’s Virat Kohli, CSK’s MS Dhoni and MI’s Rohit Sharma were also lacklustre. With zero super overs this season, the audience also did not get to witness the kind of nail-biting finishes they seek.  Santosh Desai, MD & CEO of Futurebrands Consulting says too much reshuffling happens in IPL, teams need some stability. As the pandemic waned, people spent more time outside.Fundamentally, Indian Premier League or cricket has not lost its charm, he says. K Madhavan, President of The Walt Disney Company India and Star India, had said Disney-Star will not engage in a bidding war and pay multiple times more even though it is looking at retaining the media rights. He told Business Standard that it will only go for bidding if it makes for a viable business. “If someone offers 10-times for the property, we are not there,” he said. However, cricket has proved to be a winner for streaming giant Disney+. It added nearly 8 million new subscribers worldwide in the March quarter — half of them courtesy Disney+