News Nook: Oct 12, 2024

Indian Sector Specific News:

A) Indian Telecommunication:

1) Telecommunications Consultants India Ltd. (TCIL) Launches SMS Fraud Prevention

• TCIL (Telecommunications Consultants India Ltd.) has introduced a solution to enhance traceability and transparency, partnering with telecom operators to protect citizens from financial fraud through SMS.
• The system ensures the authenticity of SMS messages, preventing unauthorized scams by improving monitoring and security in SMS communications.
• Source: ET Telecom

2) Telecom Tariff Hike Expected by FY27

• J.P. Morgan forecasts a 15% increase in Indian telecom tariffs by FY27, driven by rising costs and the need for better profitability.
• The growing demand for data services and industry challenges are key factors pushing these hikes, despite market competition.
• Source: ET Telecom

B) Indian Renewable Energy:

1) India’s Push to Become a Renewable Energy Hub

• Consistent policy support is essential to position India as a global leader in renewable energy, particularly in wind energy, with the potential to add 8 GW of capacity per year.
• Strategic measures, including improved power purchase agreements (PPAs), cost-reflective tariffs, and industry collaboration, are key to accelerating capacity growth and attracting investment in the sector.
• Source: outlook business

2) IREDA Forms Subsidiary for Renewable Energy Retail and B2B Ventures

• IREDA, a state-run renewable energy financing agency, has received approval from DIPAM to set up a subsidiary to focus on retail and B2B business in sectors like EVs, energy storage, and solar projects under the PM-Suryaghar and PM-KUSUM schemes.
• This new unit will expand IREDA's reach to both urban and rural consumers, offering innovative financing solutions to promote sustainability and energy efficiency.
• Source: Economic Times

C) Indian BFSI:

1) LIC Dominates BFSI Advertising Landscape in H1 FY24

• The BFSI sector experienced a 37% rise in print ads, a 17% increase in digital impressions, and a 14% growth in TV ads during January-June 2024, despite a 2% drop in radio ad volumes.
• LIC led across all platforms, while Bajaj Finserv topped in digital; programmatic ads accounted for 80% of digital advertising, with the Securities/Sharebroking category emerging as the top segment.
• Source: afaqs

D) Indian Agriculture:

1) India Digital Agri Conference 2024 Highlights

• Dr. Devesh Chaturvedi emphasized the role of digital agriculture in transforming India's agricultural landscape, focusing on the Digital Agriculture Mission to provide farmers with real-time information for better decision-making.
• The conference aimed to foster collaboration among farmers, tech developers, and policymakers to innovate traditional farming practices and promote sustainable agriculture through digital tools.
• Source: PIB India

2) Farmers Struggle as Middlemen Benefit Amid Inflation

• RBI research shows that during high inflation, farmers earn significantly less from consumer prices in fruits and vegetables, with only 31% of the consumer rupee going to banana growers and 33% to tomato farmers, while dairy farmers earn around 70% for milk.
• The RBI suggests expanding private markets, promoting Farmer Producer Organizations (FPOs), and improving cold storage facilities to reduce reliance on middlemen and enhance farmers' income stability.
• Source: Reserve Bank of India (RBI)

E) Indian Pharma:

1) Indian Pharma and Electronics Industries Set to Gain from US Investment Restrictions in China

• With the US imposing further investment restrictions in China, global companies are likely to redirect their investments towards India and ASEAN countries, benefiting India's pharmaceutical and consumer electronics sectors.
• Indian pharmaceutical firms could see increased demand for generic drugs as the US lowers its dependency on China for active pharmaceutical ingredients, while companies like Foxconn and Pegatron expand their manufacturing capabilities in India.
• Source: Economic Times

F) Indian IT:

1) Uttar Pradesh Grants 'Industry Status' to IT-ITES Sector

• The Uttar Pradesh government has designated the IT and IT-enabled services sectors as "Industry," allowing companies to purchase land at industrial rates and benefit from lower power tariffs, which is expected to attract major global tech firms to the region.
• This initiative aims to bolster Uttar Pradesh's status as a leading IT hub in North India by improving facilities such as uninterrupted power supply, high-speed internet, and access to IT parks while streamlining land acquisition and regulatory processes.
• Source: Times of India

G) Indian Construction:

1) ICRA Forecasts Strong Revenue Growth for Indian Construction Sector in FY25

• ICRA expects the Indian construction sector to achieve a 12-15% revenue growth in FY25, supported by strong infrastructure focus and a robust order book, with a combined order book-to-sales ratio of 3.1x as of June 2024.
• While order inflows were modest in Q1 FY25 due to the General Elections, they have improved since Q2, particularly in urban infrastructure and sewage projects, though road segment inflows remain muted.
• Source: ICRA report

2) Atmanirbhar Bharat Scheme Expiry May Impact Construction Sector Cash Flows

• Icra forecasts 12-15% revenue growth for the Indian construction sector in FY2025, supported by a strong order book (3.1x order book-to-sales ratio), but warns that aggressive competition will hinder margin recovery, with operating margins expected to remain flat at around 11%.
• The expiration of the Atmanirbhar Bharat scheme in March 2024 is likely to elongate cash conversion cycles and increase debt levels, as the scheme previously provided essential relief to contractors during the pandemic.
• Source: Business Report

H) Indian FMCG:

1) FMCG Distributors Voice Concerns Over E-Commerce Practices

• AICPDF has urged an inquiry into quick commerce firms using private vehicles for food deliveries, citing risks to food safety and violations of FSSAI regulations.
• The rapid growth of quick commerce is impacting traditional trade, leading to government action and potential notices for major e-commerce players regarding compliance issues.
• Source: Business Standard

Indian Economy and Government Initiatives

Economy News Highlights

• Net direct tax collection in India increased by 18% this fiscal year, reaching ₹11.26 trillion, which is over half of the ₹22 trillion target for the year, boosting confidence among policymakers about meeting budget estimates.
• India’s industrial output contracted in August for the first time in nearly two years, affected by heavy rainfall and a sharp base effect across various sectors.
• The Global Biofuel Alliance has received diplomatic status, allowing it to operate internationally and pursue its functions more effectively.
• India and Australia are set to expand their trade pact, focusing on new sectors like e-commerce, intellectual property, and sustainability to enhance economic cooperation.

International Markets:

• Global money market funds saw inflows of $24.55 billion in the week ending October 9, driven by shifting Federal Reserve rate cut expectations and geopolitical tensions, with significant investments in Asian ($12.88 billion) and European ($7.78 billion) funds, while equity funds attracted only $3.65 billion amid cooling demand.