News Nook: Jan 4, 2025

Indian Sector Specific News:

A) BFSI:

1) Strong Growth in Bank Advances and Deposits in Q3

• Banks like Bank of Baroda, Bank of India, Yes Bank, and IDFC First Bank reported strong growth in both advances and deposits for Q3, with deposits rising by up to 14.6%.
• IDFC First Bank's CASA deposits grew by 32.3%, reaching Rs 1.13 lakh crore, and its CASA ratio improved to 47.8% in December 2024.
• Source: Financial Express

2) New RBI Guidelines Reshape P2P Lending

• The RBI's updated guidelines for P2P platforms impose restrictions on funds usage, credit risk management, and financial exposure to ensure responsible lending, with limits on lenders' total exposure and individual loan amounts.
• P2P platforms must now use escrow accounts for fund transfers, maintain transparency with monthly disclosures on loan performance, and are prohibited from offering cross-selling products, focusing on a pure intermediation model.
• Source: Mondaq

3) SEBI Unravels Ketan Parekh's Front-Running Scam

• SEBI's investigation into Ketan Parekh's front-running activities revealed his use of multiple phone numbers to communicate trading instructions, which were traced through IMEI connections and call data.
• The regulator's analysis linked Parekh to various mobile numbers and uncovered his identity as "Jack Latest" through birthday data, confirming his involvement in passing non-public information (NPI) to front-runners for illegal trades.
• Source: Moneycontrol

4) Milind Nagnur Resigns from Kotak Mahindra Bank

• Milind Nagnur, the Chief Operating Officer and Chief Technology Officer of Kotak Mahindra Bank, has resigned citing personal reasons, with his last day set for February 15, 2025. The bank has implemented an interim structure to maintain smooth operations.
• This exit comes after Kotak Mahindra Bank faced an RBI-imposed ban on onboarding new customers and issuing credit cards due to IT and user access management issues, which the bank is actively working to resolve.
• Source: Moneycontrol

B) Automobile:

1) Car Sales Highlight Need for Demand Boosters in Upcoming Budget

• Passenger vehicle sales in 2024 grew at 4.5-4.7%, the slowest in four years, with growth partly limited by a high base and moderating demand for cars under ₹10 lakh. However, overall retail car sales rose 9% to 26.1 million units, surpassing the pre-pandemic peak.
• Declining real wages, high inflation, and stagnating consumption, especially among middle-income households, are impacting demand. Experts suggest focusing on boosting demand through measures like consumption vouchers, increasing MGNREGA wages, and cash support to farmers in the upcoming budget.
• Source: New Indian Express 

2) Piyush Goyal Advocates for Coexistence of Charging and Battery Swapping Infrastructure to Boost EV Adoption

• Shri Piyush Goyal emphasized the importance of battery swapping alongside charging infrastructure to fast-track electric vehicle (EV) adoption in India. He called for the creation of a "people’s movement" led by charging infrastructure development.
• The Minister envisioned battery swapping and charging stations at every petrol pump and CNG station. Industry representatives highlighted the sector's potential to grow to $20 billion by 2030, urging equal subsidies and incentives for both fixed-battery and battery-swapping EVs.
• Source: PIB Delhi

C) Pharma:

1) Pharma Sector's Budget Wishlist: Tax Reforms and Strengthened PLI Scheme

• The pharmaceutical sector is seeking import duty exemptions, tax simplifications, and an enhanced Production-Linked Incentive (PLI) scheme in the upcoming Budget. Key demands include expanding tax exemptions for life-saving drugs and oncology treatments.
• Pharma bodies also want the scope of Section 115 BAB of the Income Tax Act broadened to include pharma R&D firms, offering them a lower corporate tax rate of 15%.
• Source: Business Standard

2) 5,000 Drug Manufacturing Units at Risk of Closure: Industry Seeks Extension

• Nearly half of India's 10,000 drug manufacturing units may not meet the 2025 deadline for upgrading to the revised Schedule M standards, putting them at risk of closure. Only 2,000 units currently comply with good manufacturing practices (GMP).
• The industry is requesting a two-year extension to meet the new requirements, including infrastructure upgrades and additional training, but no extension has been announced yet by the government.
• Source: Economic Times

D) FMCG:

1) FMCG Firms to See Muted Revenue Growth Due to Weak Demand

• FMCG companies are expected to report low-single-digit revenue growth in FY25's December quarter due to weak urban demand and high input costs. Analysts forecast a deceleration in volume growth across most firms, with growth likely in the low-to-mid single digits.
• To offset this, companies have implemented low-to-mid single-digit price hikes. Brands like Dabur India and Marico anticipate flat or modest profit growth, with Marico also expecting significant margin contraction.
• Source: Financial Express

E) Telecommunication:

1) Optiemus Partners with LS Spectrum for Drone-Based Spectrum Analyzers in India

• Optiemus Infracom's subsidiary, Optiemus Unmanned Systems, has partnered with LS Spectrum Solutions to market, assemble, and distribute drone-based spectrum analysis solutions in India, aimed at enhancing telecom, defense, and homeland security sectors. The drones will enable real-time spectrum monitoring, improving management of communication frequencies and detection of unauthorized activities.
• This collaboration supports the 'Make in India' initiative, with Optiemus leveraging local expertise to deliver cost-effective, advanced solutions for industries such as telecommunications and civil aviation.
• Source: TimesTech

F) Agriculture:

1) Operation Greens Fails to Support Onion Farmers

• Onion prices have dropped drastically, and many farmers are losing money as the procurement price at mandis has fallen by 65%. This happened due to an oversupply of onions, despite the government’s Operation Greens scheme meant to stabilize prices.
• The Ministry of Food Processing Industries spent only 34% of its allocated budget for 2024-25, leading to a failure in addressing the price crisis and providing adequate support for farmers.
• Source: DTE

G) Energy:

1) Govt Redirects Gas Allocation to City Gas Retailers

• The government has reduced the supply of natural gas for LPG production and shifted it to city gas retailers like IGL and Adani-Total Gas to meet rising demand for CNG and piped cooking gas.
• This adjustment, starting in mid-January, will benefit city gas retailers as they receive more gas, but may result in higher costs for LPG production as more expensive gas sources are used.
• Source: Economic Times

2) India’s Petroleum Demand Expected to Rise in FY25

• India’s petroleum demand is projected to grow by 3%-4% in FY25, primarily driven by increased diesel and petrol consumption, reflecting a 3% growth in the first seven months of FY25 and 5% in FY24.
• However, oil marketing companies (OMCs) are expected to face pressure on refining margins in FY25 due to regional oversupply, lower product cracks, and reduced benefits from price differences between crude varieties.
• Source: ET EnergyWorld

H) IT:

1) IT Sector to Report Modest Growth in Q3

• Tier 1 IT companies like TCS, Infosys, and HCL Tech are expected to show modest growth in Q3 FY25, with revenue growth ranging from -0.8% to 3.3% QoQ in USD terms.
• Tier 2 firms such as Coforge are projected to see stronger growth, with a revenue increase between 0.1% and 3.8% QoQ due to better operational execution.
• Source: Hindustan Times

Indian Economy and Government Initiatives:

• CII has urged the government to reduce fuel excise duties, raise MGNREGS wages to Rs 375, increase PM-KISAN payouts, and lower income tax rates to boost consumption and support economic growth.
• FISME has urged the government to analyze proposed tariffs and trade barriers, like quality control orders and anti-dumping measures, before implementation to protect the manufacturing sector.

Bonus Briefs:

• Berkshire Hathaway's stock rose 23% in 2024, surpassing the S&P 500 and giving investors over $119,000 in gains.
• Warren Buffett's leadership and strong strategies drive optimism for the company's future.