News Nook: Jan 21, 2025

Indian Sector Specific News:

A) BFSI:

1) L&T Finance to Take a Cautious Approach in Q4FY25

• L&T Finance CEO Sudipta Roy stated the company will focus on risk-calibrated loan decisions in Q4FY25 while maintaining steady growth, avoiding aggressive targets.
• Collection efficiency improved to 99.49% in December-January, boosting rural liquidity, with AUM growth projected at over 20% YoY.
• Source:

2) Q3 Results: Major Companies to Announce Earnings Today

• 30 companies, including Tata Technologies, South Indian Bank, and UCO Bank, will declare Q3 earnings for the quarter ending December 31, 2024, on January 21, 2025.
• Nearly 250 companies, including HDFC Bank, Hindustan Unilever, and BPCL, are scheduled to announce earnings this week.
• Source: LiveMint

3) New SEBI Rules Force Equity Research Firms to Shut Down

• Stricter SEBI regulations introduced on January 8, 2025, have led many independent equity research firms, like Stalwart Advisors and Aurum Capital, to close due to high compliance costs.
• The rules mandate KYC procedures, compliance audits, and client record maintenance, making operations expensive for small firms with lean structures.
• Source: Economic Times

4) SEBI Clears Six IPOs

• SEBI approved IPOs for Hexaware, PMEA Solar, Scoda Tubes, Ajax Engineering, All Time Plastics, and Vikran Engineering, aiming to raise funds for various purposes.
• Anand Rathi Share and Stock Brokers' IPO draft was returned by SEBI.
• Source: Moneycontrol

B) Pharma:

1) Gujarat's Bulk Drug Park Gains Global Pharma Interest

• Over 20 pharma majors are showing interest in Gujarat's Jambusar Bulk Drug Park, set to complete by 2026, with ₹1,000 crore in central funding for infrastructure.
• The park aims to boost India's self-reliance in APIs, offering production incentives and reducing import dependency.
• Source: Pharmabiz

2) Venus Remedies Stock Surges on European GMP Certification Renewal

• Venus Remedies' stock jumped 12% after renewing its European GMP certification for Cephalosporin, Carbapenem, and Oncology facilities.
• The renewal strengthens its presence in the European market, boosting investor confidence.
• Source: Trade Brains

3) Glenmark Pharma Stock Rises After Launch of Vitamin K Injection

• Glenmark Pharmaceuticals' shares rose 2.23%, reaching ₹1,537.90, after its US unit launched Phytonadione Injectable Emulsion USP, 10 mg/mL, used to treat vitamin K deficiency-related clotting issues.
• The launch strengthens Glenmark's institutional product portfolio with a bioequivalent alternative to Hospira Inc.'s Vitamin K1 injectable.
• Source: Business Standard

C) Agriculture:

1) Union Minister Reviews Agriculture Schemes and Highlights Rabi Crop Progress

• Union Minister Shivraj Singh Chouhan emphasized regular engagement with state governments to address agriculture issues, noting a higher rabi sowing area of 640 lakh hectares compared to 637.49 lakh hectares last year.
• Prices for wheat, mustard, and soybean rose slightly week-on-week, while prices for rice, gram, potato, and tomato saw declines; key crops like wheat and rice currently trade above MSP.
• Source: PIB

D) Energy:

1) Oil Prices Decline on US Production Boost and Tariff Delay

• Brent crude dipped 0.14% to $80.04 per barrel, while WTI crude fell 67 cents to $76.72; no settlement was recorded on Jan. 20 due to a U.S. holiday.
• President Trump announced plans to increase U.S. oil production and delayed 25% tariffs on Canadian and Mexican imports until February, potentially impacting future oil prices.
• Source: Economic Times

E) IT:

1) IT Firms See Shift to Shorter Deal Cycles

• IT services firms, including TCS, HCLTech, and Wipro, are experiencing shorter deal cycles, especially for large contracts. This trend is expected to continue, driven by technological advancements and evolving client needs for flexibility.
• Clients are increasingly opting for shorter-term contracts focused on business transformation, particularly using generative AI and automation, leading to faster decision-making and higher deal volumes.
• Source: Financial Express 

F) Infrastructure:

1) Budget 2025 Expectations: EdTech Industry Seeks Enhanced Digital Infrastructure Allocation

• The EdTech industry is urging the government to increase allocations for digital infrastructure in underserved regions, promoting wider access to quality education.
• They also advocate for tax incentives for research and development in EdTech and subsidies for institutions adopting digital tools to encourage sector innovation.
• Source: Moneycontrol

2) Projected $40 Billion in EV Investments by 2030 to Boost Real Estate Sector

• The Indian EV sector is projected to attract $40 billion in investments over the next 5-6 years, with two-thirds of this amount targeting the lithium-ion battery segment.
• This investment surge is expected to create significant real estate demand, with opportunities arising for setting up manufacturing units and charging infrastructure, potentially driving a demand for 45 million sq ft by 2030.
• Source: Construction World

Indian Economy and Government Initiatives:

• The government is expected to reduce taxes, particularly capital gains and personal income tax, to stimulate investment, consumption, and business growth.
• The economy is facing a slowdown, with lower growth projections for multiple sectors, but efforts like increasing government spending and supporting industries such as agriculture and FMCG are expected to help.
• The Union Budget 2025 will focus on boosting growth through increased spending on infrastructure, defense, social welfare, and the expansion of the PLI scheme to encourage private investment and job creation.
• The Chief Economic Adviser highlighted resistance from large businesses to government policies supporting MSMEs, particularly regarding timely payments and the 45-day payment rule.

Indian Stock Market Update:

• The Sensex dropped over 1,200 points, losing ₹7 lakh crore in market value, driven by US President Trump's trade tariff announcements and rising global uncertainty.
• Investors are cautious ahead of India's Union Budget 2025, fearing disappointment in key expectations, which could further weaken market sentiment.
• Foreign capital outflows due to a stronger US dollar and rising bond yields have contributed to the ongoing market decline.
• Weak corporate earnings and signs of economic slowdown in India are dampening investor confidence and affecting market performance.

Bonus Briefs:

• The US Dollar weakened due to low trading volume, political uncertainty ahead of Trump's inauguration, and speculation about his economic policies, which could lead to inflation and interest rate cuts. 
• Meanwhile, the Euro rose as the US Dollar declined, though the ECB's dovish stance kept long-term prospects uncertain. Gold remained stable amid geopolitical tensions and inflation concerns supporting commodity prices.
• The EU faces complex inflation dynamics driven by both domestic factors like wages and fiscal policies in larger economies, and external influences such as global energy prices, trade policies, and supply chain disruptions, requiring tailored policies for diverse national economic conditions.