News Nook: Oct 3, 2024

 Indian Sector Specific News:

A) Indian Renewable Energy:

1) Reliance Group Secures 1270 MW Renewable Energy Projects in Bhutan

• Anil Ambani-led Reliance Group has secured 1270 MW of renewable energy projects in Bhutan, including 500 MW solar and 770 MW hydro energy.
• The projects are part of a joint venture with Bhutan’s Druk Holding and Investments, focusing on solar, hydropower, and green technologies.
• Reliance Group has set up a new company, Reliance Enterprises, to execute the Bhutan projects, aligning with its broader revival plan.
• Reliance Power, a zero-debt company, plans to raise funds for renewable energy expansion, and Reliance Infra is raising Rs 6,000 crore to support its operations and investments.
• Source: Outlook Business

2) TPG, JSW Energy, and Inox Wind Compete for Siemens Gamesa's Indian Unit

• TPG, JSW Energy, and Inox Wind are vying to acquire Siemens Gamesa Renewable Power's Indian division, with a potential valuation of up to $500 million.
• The deal's valuation is influenced by contingent liabilities, which could impact the final price.
• Siemens Gamesa aims to divest non-core assets to focus on key markets and improve profitability.
• The acquisition aligns with the bidders' efforts to expand their renewable energy portfolios.
• Source: Economic Times

3) Adani Enterprises Merges Subsidiaries to Strengthen Green Energy Ecosystem

• Adani Enterprises merged its subsidiaries, Adani Infrastructure and Mundra Solar Technology, with Adani New Industries Limited (ANIL) to enhance its green energy initiatives, effective October 1, 2024.
• ANIL focuses on solar, wind power, electrolyzer, and green hydrogen manufacturing and operates at full solar capacity (4 GW) as of the June quarter.
• The company will fund additional capital expenditures for ANIL through a planned Qualified Institutional Placement (QIP) next week.
• ANIL's solar module sales grew by 125%, reaching 1,379 MW in the June 2023 quarter.
• Source: Trading View

B) Indian Pharma:

1) Dr. Reddy's Partners with Gilead to Manufacture and Commercialize HIV Drug Lenacapavir

• Dr. Reddy's Laboratories has signed a royalty-free, non-exclusive licensing agreement withGilead Sciences to produce and market the HIV drug Lenacapavir in India and 120 other countries.
• Lenacapavir, approved by the USFDA, is used to treat HIV-1 infection in adults with multi-drug resistant HIV-1 who are failing their current antiretroviral regimen.
• The agreement includes the right to manufacture and commercialize Lenacapavir for HIV prevention (PrEP), pending global approval.
• Dr. Reddy’s will handle technology transfer, clinical studies, and product registration for this latest HIV treatment in low- and middle-income countries.
• Source: moneycontrol

C) Indian IT:

1) ITC Infotech Acquires Blazeclan Technologies for ₹485 Crore

• ITC Infotech, a subsidiary of ITC, acquired 100% shares of Blazeclan Technologies for ₹485 crore on October 1, 2024.
• Blazeclan, a cloud solutions provider, is an AWS Premier Partner and Snowflake Elite Partner, with expertise in cloud migration, consulting, and data analytics.
• Blazeclan operates across several countries, including India, Singapore, Australia, and the USA, with a turnover of ₹294.57 crore in 2023-24.
• The acquisition enhances ITC Infotech's multi-cloud and hybrid cloud capabilities, strengthening its role in digital transformation for clients.
• Source: moneycontrol

2) Indian IT Firms Expected to Earn More from Third-Party Sales

• Top Indian IT companies, including TCS, Infosys, and Birlasoft, are likely to report an increase in pass-through revenue from strategic partnerships with third-party sellers in their upcoming quarterly earnings.
• TCS is expected to see higher revenue from BSNL partnerships, though margin expansion may be limited to 20 basis points quarter-on-quarter.
• Birlasoft's EBITDA margin is projected to decline from 15.8% in FY24 to 12.4% in FY25 due to competition, slower revenue growth, and increasing pass-through revenue.
• Source: Economic Times

3) Freshers Hiring in Indian IT Sector Set to Double in FY2025

• After FY2024 saw the lowest intake of fresh graduates in the Indian IT sector since 2000, freshers hiring is expected to double in FY2025.
• The downturn in freshers' hiring was linked to challenges in the IT industry, affecting recruitment at prestigious institutions like IITs.
• Aditya Narayan Mishra, MD and CEO of CIEL HR Services, shares optimism about a rebound in hiring for the upcoming fiscal year.
• Source: India Times

4) Q2FY25 Updates for IT Giants: Infosys, Wipro, TCS, and HCL Tech

• Infosys and Wipro will announce their Q2FY25 (July-September 2024) results on October 17, 2024. Both companies' boards will consider interim dividends on the same date, if approved. Infosys will also hold an investor/analyst call on October 17, while Wipro's trading window will remain closed until October 19, 2024.
• TCS is set to declare its Q2FY25 results on October 10, 2024, and will consider a second interim dividend. The record date for shareholders is October 18.
• HCL Tech will announce its Q2FY25 results on October 14, 2024, along with the consideration of a third interim dividend. The record date for the dividend is October 22.

Q2FY25 Projections:

• Tier I IT firms (TCS, Infosys, HCL Tech) are expected to post revenue growth ranging from 0-3% quarter-on-quarter (QoQ) in constant currency (CC).
• Tier II IT companies may experience growth between flat to +4.5% QoQ CC.
• Mid-tier companies with strong capabilities in data engineering and ERP modernization are expected to perform well.
• Market Sentiment indicates improved earnings growth compared to Q1FY25, supported by demand from North America and the healthcare sector.
• Source: livemint

D) Indian FMCG:

1) Marico Ltd Q2FY25 Update: Mid-Single-Digit Volume Growth

• Marico Ltd reported mid-single-digit volume growth in its domestic business for the quarter ended September 2024.
• Rural demand outperformed urban demand, driving the improvement.
• Parachute Coconut Oil achieved double-digit revenue growth due to price hikes.
• Saffola Oils saw low-single-digit revenue growth.
• International business showed positive contributions across all overseas markets.
• Source: Economic Times

2) Hindustan Unilever Limited (HUL) Performance Overview

• For Q1 FY25, HUL reported a 2% year-on-year increase in revenue from operations, rising to ₹15,166 crores, while net profit grew by 3% to ₹2,538 crores.
• The company's revenue from operations for FY23-24 reached ₹61,896 crores, with Beauty & Personal Care accounting for 36.3% of total revenue, followed closely by Home Care at 35.4%.
• Revenue from India increased by 2.5% to ₹59,629 crores, though revenue from international markets declined by 5.8%.
• Looking ahead, HUL is focused on driving competitive growth through brand investments, cost-saving measures, and rebuilding gross margins to effectively compete in the evolving FMCG landscape.
• Source: TradeBrains

3) Rain Impact on Dabur's Beverage Business in Q2FY25

• Dabur's beverage segment faced reduced demand in Q2FY25 due to heavy rainfall and flooding across India.
• India experienced 11.6% more rainfall than average in September, after a 9% and 15.3% above-average rainfall in July and August, respectively.
• The company expects a mid-single-digit decline in consolidated revenue for the quarter, following a strategic correction in distributor inventory.
• UBS downgraded Dabur's stock from 'Buy' to 'Neutral', citing high valuation concerns and risks in beverage sales growth, along with rising competition from cola drinks and coconut oil brands.

 Indian Stock Market Overview:

Market Update: Nifty and Sensex Dive, Oct 3 2024

• The Nifty 50 index dropped nearly 500 points, falling below 25,500, while the Sensex lost over 1,000 points amid negative market sentiment.
• Most stocks in the index (41 out of 50) are down, with Asian Paints, BPCL, and Eicher Motors among the biggest losers.
• US markets are struggling due to ongoing geopolitical tensions, which is impacting investor confidence.
• Some companies, like Alembic Pharma, saw stock gains after positive news, while state-run oil companies faced significant losses due to rising crude oil prices.

International Markets:

• Renewed conflicts in the Middle East, including a missile attack from Iran on Israel, have heightened market anxiety as investors brace for potential wider conflicts amid upcoming U.S. elections.
• U.S. port strikes could distort economic data, especially affecting the struggling global industrial economy, which is showing signs of contraction according to recent manufacturing surveys.
• Despite geopolitical turmoil, U.S. interest rates and stock markets remain stable, with the S&P 500 only slightly down and the VIX volatility gauge near three-week lows.
• Investors are awaiting important reports, including the ADP private sector payrolls and OPEC+ discussions, as well as insights from various Federal Reserve officials.
• The Africa Finance Corporation (AFC) successfully issued a $500 million Eurobond with a 5.55% coupon rate in an oversubscribed transaction, marking its first foray into international capital markets in nearly three years, attracting over $1.2 billion in orders, and is focused on financing infrastructure projects across the continent while being owned by Nigeria's central bank and other African financial institutions.