News Nook: Oct 10, 2024

Indian Sector Specific News:

A) Indian Telecommunication:

1) Telecom Industry's AGR Growth in April-June FY25

The telecom sector saw a 0.13% growth in adjusted gross revenue (AGR) in Q1 FY25, with total AGR reaching ₹70,555 crore.
Bharti Airtel and Reliance Jio posted gains, while Vodafone Idea experienced a decline in AGR.
Average revenue per user (ARPU) from wireless services rose to ₹157.45, alongside a 1.59% increase in the internet user base.
Source: Economic Times

2) Impact of Tariff Hikes on Telecoms

Bharti Airtel is expected to experience stronger revenue growth in Q2 FY25 compared to Reliance Jio and Vodafone Idea, driven by recent tariff hikes and broadband user growth.
The tariff increases will raise average revenue per user (ARPU) for all private telecoms, but subscriber losses are anticipated, especially for Vodafone Idea and Jio.
Airtel's user losses are predicted to be minimal due to its lower base of price-sensitive customers, while state-run BSNL may gain users from the price hikes.
Source: Economic Times

B) Indian Renewable Energy:

1) IEA Report on Global Renewable Energy Growth

Renewable energy capacity will grow by over 5,500 GW by 2030, but will still fall short of the UN goal to triple capacity set at the COP28 conference.
Solar PV will account for 80% of this growth, while wind energy is set to double its expansion rate by 2030 compared to 2017-2023.
Despite missing the global target, 70 countries are on track to meet or exceed their national renewable energy goals by 2030, with renewables becoming the cheapest power source in most regions.
Source: Business Standard

C) Indian BFSI:

1) Rate-Sensitive Stocks Rally After RBI Announcement

Stocks in rate-sensitive sectors like real estate, auto, and BFSI surged after the RBI decided to keep the repo rate unchanged at 6.5%, with Nifty Realty and Bank indices gaining around 1%.
Experts believe the short-term rally is positive, but long-term performance will depend on earnings reports and management outlooks, with liquidity and refinancing being key concerns.
Future rate cuts are expected, potentially as soon as February 2025, which could influence market sentiment and performance further.
Source: moneycontrol

2) Employment Verification Discrepancies Surge by 44% in Key Sectors

A report by AuthBridge reveals a 44% increase in employment verification discrepancies across six major sectors due to stricter background checks by companies, highlighting a growing emphasis on trust and transparency in hiring practices.
Sector-specific trends show the telecom industry leading with an 18.2% discrepancy rate, while the BFSI sector recorded 10.4%. The pharma sector experienced a staggering 50% rise, now at 17.1%, indicating heightened risks of identity fraud.
The IT and ITES sectors saw a 9.8% decrease in discrepancies but still face challenges with falsified credentials. AuthBridge's CEO emphasizes the need for secure verification solutions to maintain workforce integrity and operational stability in a complex hiring environment
Source: goodreturns

3) Startups Raise $10 Billion in July-September Quarter Amid Funding Decline

Startups raised $10 billion in the July-September quarter, representing a 15% decrease in funding compared to the previous quarter, as reported by 1Lattice. The total number of deals also dropped by 30%, from 318 to 229.
Top funded startups include PhysicsWallah, which secured $210 million, and Rapido, raising $200 million, both indicating a trend toward larger, high-ticket deals despite overall declines in activity.
Notably, debt financing surged to $4.2 billion, up from $2.2 billion, comprising 40% of total capital raised, with the BFSI sector leading funding activities at $3.5 billion .
Source: Economic Times

Indian Economy and Government Initiatives

1) RBI Changes Stance to Neutral, Keeps Repo Rate Steady at 6.5%

The Reserve Bank of India (RBI) has unanimously decided to change its monetary policy stance to neutral while maintaining the repo rate at 6.5%, marking the tenth consecutive meeting without a change in the rate.
RBI Governor Shaktikanta Das emphasized the focus on achieving a durable alignment of inflation at 4% while supporting growth, despite significant risks from geopolitical tensions and adverse weather affecting inflation.
The MPC projects real GDP growth for 2024-25 at 7.2% and CPI inflation at 4.5%, indicating a cautious yet optimistic outlook for the Indian economy.
Source: Business Standard

2) India's Path to High-Income Status Is Uncertain: Insights from World Bank Chief Economist

Indermit Gill, Chief Economist at the World Bank, emphasized that India's transition from a middle-income to a high-income developed country is not guaranteed without specific economic reforms, such as enhancing economic freedom and improving education quality.
Gill highlighted that from 1990-2023, only 34 countries successfully transitioned from middle to high income, with most having unique advantages, like natural resources or proximity to the EU for better market access and institutional improvements.
He noted that the majority of the global population, around 6 billion, lives in middle-income economies, with only 250 million reaching high-income status, making it challenging for larger economies like India to ascend
Source: Business Standard

International News:

China's Stock Market Slump Sends Ripples Across Global Markets

China's Shanghai Composite Index fell over 5%, driven by disappointing stimulus measures, prompting concerns across global markets, particularly affecting European commodities and currencies like the Australian dollar.
The absence of substantial financial interventions has severely impacted European mining and luxury stocks, including Rio Tinto and BHP, following a decline in iron ore prices .
This downturn highlights the interconnectedness of global economies, indicating that investors in various sectors should brace for potential volatility as China's economic policies continue to influence international trading dynamics
Source: finimize