News Nook: Oct 29, 2024

Indian Sector Specific News:

A) Indian BFSI:

1) PNB Expands Services and Manages NPAs Amid Strong Q2 Results

• PNB’s Q2 net profit surged 137% to ₹4,714 crore, with plans to launch a wealth management arm for high-net-worth clients.
• Around 48% of its loans are linked to repo rates, allowing quick repricing; however, NPAs, especially in MSMEs, remain a challenge despite selective lending and improved collections.
• PNB’s underwriting focus aims to keep NPAs under 1%, with minimal exposure to risky sectors and high-rated MSME loans.
• Source: Financial Express

B) Indian Automobile:

1) Citroën and Jeep Launch New Dealerships in India to Boost Presence Before Diwali

• Citroën and Jeep have opened three new multi-brand dealerships in Thrissur, Asansol, and Meerut, showcasing a wide range of models, including SUVs and electric vehicles.
• These dealerships offer 3S facilities (Sales, Service, and Spare parts) for a complete customer experience, with trained staff and modern diagnostic tools.
• Citroën now has 156 outlets in India, while Jeep India has expanded to 150 locations.
• Source: Zee Business

2) Auto Dealers Face High Inventory Amid Festive Season Despite Production Cuts

• Auto-dealers hold a record 7.9 lakh vehicles, worth ₹79,000 crore, due to an 18.8% drop in September PV sales, with an inventory backlog of 80–85 days.
• OEMs reduced production by 18% in the April-September 2024 period to manage declining sales and exports, yet the market remains pressured by economic conditions and seasonal factors.
• FADA urges OEMs and the RBI to support dealers with improved funding policies, while focused inventory management and festive promotions are needed to revive demand.
• Source: Moneylife Digital

C) Indian Telecommunication:

1) Telecom Operators Urge Govt to Remove ‘Double Whammy’ Licence Fees

• Telecom body COAI requests the Centre to scrap licence fees, citing it as a "double whammy" since TSPs pay heavily for spectrum and then on AGR, which restricts investment capacity.
• COAI argues removing AGR-related fees would allow telcos like Jio, Airtel, and Vodafone Idea to improve networks, boost digital inclusion, and enhance services, especially in remote areas.
• The Supreme Court’s recent rejection of telcos' AGR recalculation petition has intensified COAI’s appeal to the Department of Telecommunications.
• Source: The Telegraph

D) Indian Pharma:

1) Indian Pharmaceutical Sector Struggles with Profit Margins Amid Market, Regulatory Challenges

• Profit margins in India's pharmaceutical sector have dropped by 20-30% over the past 6-8 years due to U.S. price pressures and high operational costs, leading to cuts in quality assurance and R&D investments.
• Prolonged lead times and excess inventory in U.S. warehouses are escalating costs; experts suggest shifting to pull-based procurement and buffer management to reduce lead times and inventory by up to 50% and 40%, respectively.
• The industry faces resource strains, with overextended R&D departments and rising quality concerns; adopting proactive compliance and flow management systems could improve efficiency and regulatory standing.
• Source: KNN India

E) Indian Agriculture:

1) Farmer Producer Companies Face Registration Hurdles and Limited Access to Resources

• About 36% of Farmer Producer Companies (FPCs) reported excessive documentation requirements for registration, with 22% needing to visit multiple offices.
• Survey by NAFPO and DIU reveals that 50% of FPCs lack crop insurance, and 61% have no access to agricultural machinery; 24% also report insufficient support for knowledge and marketing.
• Data from six Indian states highlights challenges despite strong FPC management structures, with almost all having a CEO.
• Source: Business Standard

2) Haryana Sees 29% Drop in Stubble Burning Incidents This Year

• Haryana reports a 29% decline in stubble burning incidents, with only 713 cases recorded this year due to government initiatives promoting crop residue management.
• The state government incentivizes farmers with ₹1,000 per acre for managing paddy residues and has set zero-burning targets for local panchayats.
• Despite the reduction, 192 farmers have faced police action for violations, resulting in ₹8.45 lakh in fines and 418 'red entries' noted in official records.
• Source: Business Standard

3) Dr. Jitendra Singh Launches India's First Biomanufacturing Institute, BRIC-NABI

• Union Minister Dr. Jitendra Singh inaugurated the BRIC-National Agri-Food Bio-Manufacturing Institute (BRIC-NABI) to transform India’s agri-food sector through advanced biotechnology, aligning with Prime Minister Modi's vision for a "Viksit Bharat."
• The institute is a merger of the National Agri-Food Biotechnology Institute (NABI) and the Center of Innovative and Applied Bioprocessing (CIAB), aiming to enhance agricultural R&D and support pilot-scale production of innovative technologies.
• Key features include the BioNest Incubation Centre to foster startups in agriculture and bioprocessing, and the upcoming Biomanufacturing Workshop 1.0 in December 2024 to explore sustainable production techniques.
• Source: ddnews

F) Indian Energy:

1) ONGC Chair Recommended as HPCL Head

• A government-appointed synergy panel has proposed that the chairperson of Oil and Natural Gas Corporation (ONGC) also take on the role of chairperson for its subsidiary, Hindustan Petroleum Corporation Limited (HPCL).
• This recommendation aims to enhance operational efficiency and strategic alignment between the two organizations in the oil and gas sector.
• Source: Construction World

2) As Crude Fades, Big Oil Must Borrow to Pay Investors

• Four out of five supermajor oil companies are likely to borrow funds to support $15 billion in share buybacks due to declining crude prices and refining margins.
• Analysts predict a 12% decline in earnings, totaling approximately $24.4 billion, compared to the previous quarter, leading to concerns about the long-term sustainability of these payouts.
• Only Shell is expected to cover its dividends and buybacks with free cash flow, while others face a 30% decrease in free cash flow year-on-year.
• Source: Economic Times

G) Indian FMCG:

1) Wow Momo Targets ₹100 Crore Revenue from FMCG Sector

• Fast-food chain Wow Momo aims to generate ₹100 crore in revenue from its fast-moving consumer goods (FMCG) business, anticipating that it will contribute around 25% to overall revenue.
• The company is focusing on best-selling products to enhance its presence in the FMCG market.
• With significant growth potential in this sector, Wow Momo is strategically positioning itself for expansion.
• Source: Economic Times

H) Indian FMCG:

1) Merlin Group to Invest Over ₹10,000 Crore in Bengal

• Merlin Group plans to invest more than ₹10,000 crore in West Bengal over the next 7-8 years, focusing on township development, residential and commercial real estate, retail, hospitality, and healthcare.
• The company holds a land bank of 200 acres in Bengal, which will be used for upcoming projects.
• Currently, Merlin has developed 30 million square feet in Bengal and aims to increase its annual revenue from ₹1,500 crore to ₹2,600 crore.
• Source: Times of India

2) DLF Expects ₹26,000 Crore Revenue from Gurugram Project

• DLF anticipates generating ₹26,000 crore from its new super-luxury project in Gurugram, based on current selling prices.
• The company believes that potential increases in sales figures could further boost revenue.
• Source: Construction World

3) Gurugram Home Prices Surge 76% in Two Years

• Average home prices in Gurugram have risen by 76% over the past two years, indicating a significant increase in real estate demand.
• This price hike reflects growing interest in the Gurugram property market.
• Source: ANI News

Indian Economy and Government Initiatives:

1) Government Maintains Economic Growth Forecast Amid Global Risks

• The government reports that while India's growth forecast remains between 6.5% and 7% for the current fiscal year, there are significant risks, including geopolitical conflicts and high financial market valuations in advanced economies.
• Retail inflation has risen to 5.49% in September, the highest in nine months, mainly due to increased food prices.
• Despite these challenges, a positive agricultural outlook and expected festive season demand could support economic stability.
• Source: Business Standard

2) Rajasthan's Air Connectivity Policy to Enhance Tourism and Economy

• Experts and the Federation of Hospitality and Tourism of Rajasthan (FHTR) are urging the state government to integrate an air connectivity policy into its tourism strategy to stimulate tourism and economic growth.
• The proposed policy includes viability gap funding (VGF) to incentivize airlines for starting services in less connected areas, offering Rs 5 lakh per round trip for domestic routes and Rs 10 lakh for international routes.
• The initiative aims to prioritize air connectivity for underserved regions, requiring airlines to meet minimum aircraft capacity standards of 50 seats for domestic and 180 for international routes.
• Source: Business Standard