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India: Infrastructure Set to Outpace IT as the Growth Engine
Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - December 5, 2023

Beyond boundaries: G20 Influence elevates Indian markets to new peaks

Beyond boundaries: G20 Influence elevates Indian markets to new peaks

Introduction:

The recent rally in key benchmark indices, particularly in the Indian stock market, has caught the attention of market experts and participants. This is a significant milestone, marking the first time the index has crossed the 20,000 mark. It took 52 sessions for Nifty to climb from 19,000 to 20,000, indicating a steady and sustained upward trend. Sensex regained the 67,000 mark, this further emphasizes the positive sentiment in the market, with both major indices reaching new highs. Nifty reached a new peak of 20,008 after 36 sessions.

This surge is attributed to a participatory rally involving Foreign Institutional Investors (FIIs), Domestic Institutional Investors (DIIs), and Indian retail investors. Additionally, recent triggers, including the success of the G20 summit, have played a pivotal role in attracting global investors to the Indian markets.

Participatory Rally by Diverse Investors:

The driving force behind the rally in Indian indices can be attributed to the collective participation of various investor groups. FIIs, DIIs, and Indian retail investors have all played significant roles in contributing to the upward momentum. The continuous inflows from these diverse sources have created a robust and inclusive market environment.

• FIIs Inflows: Foreign Institutional Investors have been actively participating in the Indian market, attracted by the country’s economic resilience and growth potential. The influx of foreign capital has not only provided liquidity but has also signaled global confidence in the Indian market.

• DIIs and Retail Investors: Domestic Institutional Investors, along with a surge in participation from retail investors, have added depth to the market rally. Increased retail investor activity, facilitated by easier access to markets and digital platforms, has injected vitality into the markets.

G20 Success and Global Investor Confidence:

The recent success of the G20 summit has acted as a significant catalyst, drawing global investors’ attention towards the Indian markets. The resounding success in addressing global economic challenges and fostering cooperation among nations has positioned India as an attractive investment destination. The G20’s success has injected momentum into the markets, yet valuations have room to surpass previous peaks. Increased bilateral trades, particularly in segments like pipes and cables, are anticipated. Sectors such as Railways, Shipping, and Logistics stand to gain from recent announcements. With strengthened corporate earnings, indices are poised for further growth in the near to medium term. Market euphoria has propelled indices past the 20,000 mark, eyeing 20,500 levels this month. Optimism, fueled by India’s strong showing at the G20 summit, is a key driver.

The Nifty has hit 20,000 in its second attempt after July 2023, propelled by strong domestic investment flows and mixed or negative overseas flows. In the face of global concerns, India’s achievement in space and foreign diplomacy has strengthened confidence. Despite their strong advance, smallcap and midcap companies warrant a reassessment of asset allocation and consideration of profit booking or capital raising.

• International Perception: The positive outcomes of the G20 summit have enhanced the international perception of India as a stable and growth-oriented economy. This has instilled confidence among global investors, leading to increased allocations to Indian equities.

• Attractiveness of Emerging Markets: Amid global uncertainties, emerging markets, including India, are viewed as promising investment destinations. The G20 success has underscored India’s commitment to economic reforms and sustainable development, further elevating its status among emerging market economies.

Conclusion:

The global financial markets have witnessed a remarkable phenomenon in recent months, with many key indices reaching unprecedented all-time highs. This surge has captured the attention of investors, analysts, and policymakers alike. The participatory rally in the Indian stock market, driven by the collective involvement of FIIs, DIIs, and retail investors, is a testament to the overall confidence in the country’s economic trajectory. The success of the G20 summit has amplified this sentiment, attracting global investors seeking stable and promising opportunities. As the Indian market continues to evolve, monitoring the sustained inflows and the impact of global events will be essential for investors and market participants to navigate and capitalize on emerging opportunities.

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Strategic Partnerships Fuel One97’s Financial Turnaround

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Rapido vs Ola-Uber: How a Bike Taxi Startup Disrupted India’s Ride-Hailing Market
Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - November 29, 2023

Celebration Economy: The Economic Impact of Weddings on Hospitality

Celebration Economy: The Economic Impact of Weddings on Hospitality

Introduction

The hospitality industry is a key driver of the economy, contributing significantly to global GDP and employment. The industry is extremely diverse, encompassing everything from hotels and restaurants to event planning and catering. The hospitality industry has faced a number of challenges in recent years, including the global pandemic and the economic downturn. However, the industry is beginning to recover, thanks to an increase in weddings and other celebrations.

Weddings as a Catalyst for Growth

Weddings are a major source of revenue for the hospitality industry. The hospitality industry is experiencing a remarkable resurgence, fuelled by a significant increase in weddings and related events. Celebrations following the pandemic have left an indelible mark on the industry, indicating a significant shift in preferences and customs, painting a dynamic picture of evolving traditions. According to recent CAIT projections, there is a significant expected increase, with approximately 3.8 million weddings expected to take place this season, compared to 3.2 million weddings during the same period last year.

Transformative trends:

A transformative wave is sweeping through the hospitality industry, driven by forward-thinking businesses that combine tourism and hospitality services. The fallout from Covid has forever altered people’s perspectives on life and travel, resulting in game-changing developments and trends in the industry. The travel industry is buzzing with trends such as staycations, leisure travel, solo and backpacking trips, experiential travel, and destination weddings, as millennials and Gen Z continue to shape travel decisions.

Wedding tourism stands out as a particularly promising trend among these. Brands are revamping their offerings to create distinctive and memorable wedding celebrations, with the goal of providing a more enriching experience for guests of all ages. This evolution reflects a dynamic response to today’s diverse and discerning travellers’ shifting preferences and expectations.

Furthermore, according to a KPMG report, the expense of Indian weddings ranges from 5 lakh to 5 crore rupees, with individuals allocating one-fifth of their savings for this significant event. Consequently, each wedding function holds substantial potential for creating employment and business opportunities across various industries. From dedicated wedding photographers to the wedding décor team, as well as F&B vendors, every aspect contributes to making the occasion grand and impactful.

Impact on the hospitality industry:

 Increased Revenue Streams: Hotels, banquet halls, and catering businesses are experiencing an increase in bookings, which translates to increased revenue for these establishments.
 Job Possibilities: The growing demand for wedding-related services has promoted job creation in a variety of sectors of the hospitality industry, contributing to increased employment.
 Industry Diversification: The trend toward unique and personalized weddings is driving a diversification trend in the hospitality industry. This evolution reflects an industry-wide effort to cater to clients’ changing preferences for unique and customized experiences.

Sectors set to soar in wedding and hospitality boom:

1. Hospitality Sector:
– Hotels and Resorts: Increased bookings for wedding events and accommodations.
– Travel and Tourism: Rise in destination weddings contributing to increased travel.

2. Apparel and Clothing:
– Bridal Wear: Growing demand for elaborate and designer wedding outfits.
– Groom Wear: Increased focus on groom fashion and accessories.

3. Jewellery:
– Wedding Jewellery: High demand for traditional and contemporary wedding jewellery.
– Bridal Sets: Rise in purchases of complete bridal jewellery sets.

4. Entertainment and Decor:
– Entertainment Services: Demand for live bands, DJs, and other entertainment.
– Decor Services: Increased need for elaborate and personalized wedding decor.

5. Event Management and Wedding Planning:
– Event Planners: Growing demand for professional wedding planning services.
– Destination Wedding Specialists: Increased interest in unique and exotic locations.

6. Catering and Banquets:
– Catering Services: High demand for catering at weddings and related events.
– Banquet Halls: Increased bookings for wedding receptions and ceremonies.

Conclusion:

In short, the wedding and hospitality industries are reviving, which is good news for many businesses. Hotels, fashion, jewellery, and event planning are all benefiting as weddings become more popular. This boost is about more than just making money; it is about changing the way we celebrate, making things more unique and personal. This upswing is not only assisting businesses in recovering, but it is also bringing new ideas and creativity. As weddings continue to shape the industry, we can expect a bright future full of new opportunities.

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Robust Loan Book Growth and Strategic Lending Drive PFC’s Stellar Q2FY24 Results

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British Fashion Titan ASOS Makes Exclusive Indian Debut Through Ajio
Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - November 28, 2023

Nykaa Q2FY24 results: A Beauty brand on the rise with 5x growth

Nykaa Q2FY24 results: A Beauty brand on the rise with 5x growth

Company Overview:

Nykaa, established in 2012 by Falguni Nayar, stands as a prominent Indian e-commerce company specializing in beauty, wellness, and fashion products. Over the years, the company has experienced substantial growth, becoming a household name in India. Nykaa’s product range encompasses offerings from both local and international brands. Nykaa has a cumulative customer base of over 21 million, with over 3,600 domestic and international brands available across its 165 physical stores. The company also has over 80 participating brands and over 800 influencers, MUAs, and KOLs. Additionally, Nykaa has generated over 5,000 pieces of content.

Nykaa Q2 Business Segment Highlights:

Nykaa’s primary revenue driver is the Beauty and Personal Care (BPC) segment, contributing 77.9% of its revenue, 15.5% for Fashion, and 6.6% for other categories. The Compound Annual Growth Rate (CAGR) of the Gross Merchandise Value (GMV) has been 31%. The customer base has grown significantly, with 21% new consumers and 79% old customers totalling 20,016 in total. Nykaa’s product selections include over 3,600 foreign and domestic brands, as well as over 10,000 new Stock Keeping Units (SKUs) among the top 400 brands.

Strong key metrics:

In the fiscal year 2023, Nykaa demonstrated strong performance across both the Beauty and Personal Care (BPC) and Fashion segments. The BPC segment experienced a noteworthy 6% QoQ increase in monthly average visitors, reaching 26.8 million. This surge translated into a total of 10 million orders, marking a substantial 4% QoQ growth. The average order value (AOV) remained consistently strong at INR 1,916.

The Gross Merchandise Value (GMV) for the BPC segment exhibited robust growth, escalating by 8% QoQ to INR 20,016 million. Moving to the Fashion segment, there was a 6% QoQ rise in monthly average visitors, reaching 17.6 million. This uptick contributed to 1.7 million orders, reflecting a significant 18% QoQ increase, with the AOV steadily growing to INR 4061. Notably, the Fashion GMV demonstrated remarkable growth, surging by an impressive 17% QoQ to INR 7628 million.

Nykaa’s Offline Expansion:

Nykaa has significantly broadened its footprint, establishing 165 physical stores in over 60 cities across India. These stores feature three distinct formats: Nykaa Luxe, Nykaa On Trend, and Nykaa Kiosks. In Q2FY24 alone, the company successfully launched 13 new stores, contributing to an impressive 34% year-on-year (YoY) growth. This offline expansion has proven impactful, with an 8% contribution to the overall Gross Merchandise Value (GMV) in the Beauty and Personal Care (BPC) segment.

Nykaaland 2023: India’s Premier Beauty Festival

Nykaa, in its grandest celebration, hosted Nykaaland 2023, marking India’s biggest beauty festival. The event witnessed enthusiastic participation with over 80 brands, collaboration with 800 influencers, MUAs, and KOLs, resulting in the creation of over 5,000 diverse content pieces. This extravaganza drew a massive crowd, with more than 15,000 attendees immersing themselves in the beauty experience. Nykaa’s strategic social media and influencer outreach achieved a staggering reach of 525 million, amplifying the festival’s impact. A unique highlight was the first-time early access for Prive Gold & Platinum members.

Valuation and Key Ratios:

Nykaa’s stock valuation is notably high, standing at a multiple of 2,490 PE, with a market price of INR 171. This is in sharp contrast to the industry PE of 46.5. The company reports return ratios, with ROE at 1.42% and ROCE at 5.52%. Additionally, the stock is trading at 35.04 times its book value, and the EV/EBITDA stands at 149x.

Nykaa’s Q2FY24 Financial Performance:

Nykaa has experienced a notable 50% year-on-year (YoY) surge in net profit, reaching INR 7.8 crore. In Q2FY24, Nykaa maintained its upward trajectory, achieving a 22% YoY increase in revenue, reaching INR 15,070 crore. The key driver of this growth was the Beauty and Personal Care (BPC) segment, witnessing an 18% YoY surge to INR 12,782 crore, complemented by a robust 28% YoY increase in the Fashion business. The GMV soared to INR 29,435, reflecting a substantial 25% YoY growth, with significant contributions from both the BPC and Other business segments. EBITDA exhibited a noteworthy 10% QoQ increase, reaching INR 806 crore, and margins expanded by 18 bps QoQ. The PAT also demonstrated growth, reaching INR 7.8 crore.

Conclusion:

Nykaa, founded in 2012, has become a major force in Indian beauty and fashion e-commerce. With a customer base of over 21 million, 3,600 brands, and 165 physical stores, the company has witnessed substantial growth. Key Q2FY24 highlights include a 22% YoY revenue increase, with the BPC segment leading at 18% YoY growth. Nykaa’s offline expansion, showcased by 165 stores, and successful events like Nykaaland 2023 contribute to its strong market presence. Despite a high stock valuation, Nykaa’s financial indicators and a 50% YoY surge in net profit indicate a robust and strategic position in the industry.

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Robust Loan Book Growth and Strategic Lending Drive PFC’s Stellar Q2FY24 Results

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Konstelec Engineers Secures ₹16.33 Cr Contract Boost!
Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - November 23, 2023

Navigating Innovation: Tata Technologies in Engineering Excellence and Risk Mitigation

Navigating Innovation: Tata Technologies in Engineering Excellence and Risk Mitigation

Tata Technologies Limited is an Indian multinational company that provides engineering and design services, product lifecycle management, manufacturing, and IT service management to the automotive and aerospace industries. It has a global presence, with offices in 19 countries.

Company Overview:

Tata Technologies, founded in 1989, has established itself as a prominent player in the field of engineering solutions. With a history spanning several decades, the company has built a reputation for delivering innovative and reliable services to its clients. Specializing in engineering solutions, Tata Technologies has become a trusted partner for some of the global leaders in the automotive and aerospace industries.

The company’s client portfolio includes renowned names such as Jaguar Land Rover, Ford, Fiat Chrysler Automobiles, Airbus, and Boeing, showcasing its ability to collaborate with major Original Equipment Manufacturers (OEMs). Over the years, Tata Technologies has likely contributed significantly to the development and advancement of technology in the automotive and aerospace domains. The company’s focus on innovation and engineering excellence has likely played a pivotal role in shaping its success and maintaining long-term relationships with industry leaders.

Tata technologies core services:

1. Engineering, Research and Development (ER&D):
Tata Technologies’ ER&D services are focused on assisting global manufacturing customers throughout the product development lifecycle. This involves conceptualization, design, and development to create improved and sustainable products. The emphasis on sustainability suggests a commitment to environmentally conscious engineering solutions.

2. Digital Enterprise Services (DES):
The Digital Enterprise Services are tailored to help manufacturing customers leverage technology for various aspects of their operations. This includes identifying and deploying technologies, tools, and solutions to enhance manufacturing processes, service delivery, and overall product realization. This aligns with the modern trend of digital transformation in manufacturing.

3. Education Offerings:
Tata Technologies collaborates with universities and governments to contribute to the education sector. The company plays a role in equipping the next generation of engineers with the skills needed in the manufacturing industry. Additionally, offering a digital learning system to businesses and individuals reflects a commitment to addressing training needs in a dynamic digital environment.

4. Products and Value Added Reselling (VAR):
Tata Technologies assists its customers in identifying and deploying product development software from partners. Acting as a Value Added Reseller (VAR), the company adds value to these products, helping customers manufacture, service, and bring superior products to market successfully

Tata Technologies Industries: Driving Excellence Across Sectors-

 Automotive Innovation:
Navigating the automotive industry’s radical transformation, Tata Technologies delivers end-to-end solutions. From electric vehicle engineering to digital transformation, their expertise spans the entire automotive value chain. They accelerate product launches, optimize operations, and enhance customer experiences, shaping a connected, autonomous, shared, and electric future.

 Global Industrial Heavy Machinery (IHM):
In a shifting Industrial Heavy Machinery landscape, Tata Technologies provides comprehensive solutions. Their offerings, covering engineering, manufacturing, and customer experience, empower manufacturers to meet global infrastructure demands efficiently. Leveraging digital enterprise solutions, they minimize production costs, accelerate time to market, and guide their clients towards Industry 4.0.

 Aerospace Advancements:
As the aerospace industry undergoes a transformative phase, Tata Technologies contributes cutting-edge solutions. Their aerospace portfolio spans engineering, manufacturing, and customer services, addressing the industry’s need for innovative, high-precision products. With advanced technologies and a focus on customer experiences, they redefine excellence in aerospace engineering and services.

Risk factors associated with tata technologies:

 Dependence on key clients: Tata Technologies’ business is strongly reliant on a few important customers, notably Jaguar Land Rover, Ford, Fiat Chrysler Automobiles, Airbus, and Boeing. If any of these clients reduces their spending or switches to a new provider, Tata Technologies’ revenue and profitability could suffer significantly.

 Exposure to global economic conditions: As Tata Technologies works in a global market, it is subject to swings in global economic conditions. A faltering global economy could result in lower demand for Tata Technologies’ services, significantly impacting its financial performance.

 Technological advances: The engineering services business is continually evolving, with new technologies arriving on a regular basis. To be competitive, Tata Technologies must be able to keep up with these changes. If it does not, it risks losing clients to more innovative competition.

 Currency fluctuations: Tata Technologies operates in a number of countries worldwide, and its revenue is denominated in a number of currencies. Exchange rate fluctuations might have an impact on the company’s performance.

 Regulatory risks: In the countries where it works, Tata Technologies is subject to a range of rules. Changes in this legislation may have an impact on the company’s ability to operate in certain markets.

 Project risks: Projects at Tata Technologies are frequently difficult and require a high level of technical competence. If a project fails to reach its goals, it may result in financial losses and damage to the company’s reputation.

 Talent acquisition and retention: Tata Technologies’ services are delivered by a competent staff. If the organization is unable to attract and retain great personnel, its ability to compete in the market may suffer.

 Financial investment: The corporation invests in unsecured debt instruments on occasion, including those with interest rates lower than the market rate, which has an impact on profitability. These investments include a variety of financial products. Inter-corporate deposits are held solely by the Promoter and are repayable on demand.

 Cash flows and projections: Recognizing previous negative cash flows and projecting future negatives, the business recorded negative net cash flow from operational activities for Fiscal 2022 and the six-month period ending September 30, 2023. The negative operating cash flow in Fiscal 2022 was related to the use of client advances to pay vendors. Similarly, the latter period’s negative cash flow was caused by greater advances to suppliers.

Tata technologies partnerships:

1. Mobility in Harmony (MIH) Consortium: Tata Technologies is a member of the Mobility in Harmony (MIH) consortium, indicating its commitment to engineering sustainable mobility solutions and contributing to the acceleration of innovation in future mobility.

2. PTC: Tata Technologies collaborates with PTC, a company focused on making digital transformation a reality for businesses. In this partnership, Tata Technologies serves as a system integrator (SI) and a reseller for PTC, likely working on customized innovations that deliver maximum business advantage.

3. Kovair: Tata Technologies has a partnership with Kovair, a company specializing in enabling digital transformation through DevOps solutions and enterprise tools integrations for embedded software development. As a system integrator (SI) and reseller for Kovair, Tata Technologies likely plays a role in integrating Kovair’s solutions into their services.

4. Codincity: Codincity is Tata Technologies’ cloud and digital partner. This partnership suggests that Tata Technologies is harnessing the power of the cloud to support its customers’ digital transformation journeys. The collaboration with Codincity may involve utilizing cloud technologies to enhance Tata Technologies’ offerings.

5. Logility: Tata Technologies serves as a system integrator (SI) for Logility, focusing on delivering a digital and sustainable supply chain. This partnership aims to empower customers to grow and compete through advanced supply chain solutions.

6. Dassault Systèmes: Tata Technologies acts as a reseller for Dassault Systèmes, a company known for developing product development applications. This collaboration enables Tata Technologies to offer a range of tools and solutions that help customers thrive throughout the entire product lifecycle.

7. SAP: Tata Technologies has a partnership with SAP, where it functions as a sell partner. SAP is renowned for transforming enterprise processes, enhancing customer satisfaction, and enriching employee experiences. Through this collaboration, Tata Technologies likely provides SAP solutions to its clients.

8. Siemens: Tata Technologies plays a dual role as a system integrator (SI) and a reseller for Siemens. Siemens is recognized for empowering companies to embrace complexity, leveraging it to enhance productivity and gain a competitive advantage. This partnership positions Tata Technologies to integrate Siemens’ solutions and serve as a reseller. 

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Robust Loan Book Growth and Strategic Lending Drive PFC’s Stellar Q2FY24 Results

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RBI's Revised Co-Lending Norms Set to Transform NBFC Growth
Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - November 21, 2023

RBI's Regulatory Shift: Cross-Border Payments and Compliance in India

RBI’s Regulatory Shift: Cross-Border Payments and Compliance in India

Introduction:

The Reserve Bank of India (RBI) plays a crucial role in regulating and overseeing the Indian financial system. In recent years, the Reserve Bank of India (RBI) decided to bring cross-border payment aggregators (CB-PAs) under its direct supervision in order to enhance oversight and promote a safer and more robust cross-border payment ecosystem in India. Prior to this move, CB-PAs were only required to partner with an authorized dealer bank in India to facilitate cross-border payments. However, the RBI recognized that the growing volume and complexity of cross-border transactions necessitated a more stringent regulatory framework.

Cross-border payment aggregators (PA-CBs) will need a license from the Reserve Bank of India (RBI) to operate under the new criteria. Existing providers of online payment gateway services (OPGSPs) must apply for the license by April 30, 2024. Notably, before registering with the RBI, non-bank PA-CBs must also register with the Financial Intelligence Unit-India (FIU-IND). These rules supersede the draft Online Export Import Facilitators Directions released by the RBI in April 2022, which were withdrawn following consultations with industry stakeholders.

Who needs to comply with the new cross-border payment rules in India?

The new regulations apply to firms in India that facilitate online cross-border financial transactions for the import and export of approved goods and services. These entities include authorized dealer banks (AD Banks), payment aggregators (PAs), and PA-CBs that handle cross-border payments. An example would be a payment service provider that lets a foreign merchant to receive payments for things sold to a buyer in India.

Non-Bank PA Authorization Requirements-CB Service Providers:

All non-banks that provide PA-CB services must apply to the RBI for authorization as a payment system operator (PSO) under the Payment & Settlement Systems Act, 2007, by April 30, 2024. They can apply for license in one of three ways: export-only, import-only, or export and import. AD Banks that offer these services do not require a special license.

Key Requirements for Non-Bank PA-CB Providers to Obtain RBI Authorization:

1. Registration with the Financial Intelligence Unit (FIU-IND): Before seeking for RBI authorization, all non-bank PA-CBs must register with the FIU-IND. This registration assures compliance with anti-money laundering (AML) and counter-terrorism financing (CFT) requirements.
2. Minimum Net Worth:
a. Existing non-bank PA-CBs must have a net value of INR 15 crore at the time they apply for RBI permission. Furthermore, by March 31, 2026, they must boost their net worth to INR 25 crore.
b. New non-bank PA-CBs: New non-bank PA-CBs that begin operations after the circular’s publication must have a net worth of INR 25 crore by the end of the third fiscal year after gaining authorization.
3. Wind-up Requirements: Existing PA-CBs that do not achieve the net worth requirements or apply for RBI authorization within the specified timeframe must cease PA-CB operations by July 31, 2024.

Import and Export PA-CB Account Requirements:

An Import Collection Account (ICA) with an Authorized Dealer Bank (AD Bank) is required for PA-CBs. Payments for import transactions must be received by the PA in an escrow account, from which money must be transferred to the ICA for onward settlement to the offshore merchants.
PA-CBs that solely do exports must keep an Export Collection Account (ECA) with an AD bank. The ECA can be in Indian Rupees (INR) or in international currencies. Separate currency accounts must be kept for all foreign currency transactions. Only merchants who have been directly onboarded by export PA-CBs can settle transactions in currencies other than INR.

RBI’s comprehensive regulatory measures:

The RBI has imposed a significant compliance burden on Prepaid Payment Instrument Issuers (PA-CBs) by subjecting them to direct regulatory supervision of the DPSS. Considering that the domestic leg of a transaction involves cross-border payments either at the destination or origination, the RBI aims to standardize regulations across the entire spectrum of payments, covering both domestic Payment Aggregators (PAs) and PA-CBs.
In sending a clear message, the RBI emphasizes that payment processing companies must undertake robust merchant onboarding, customer complaint redressal, anti-money laundering, and information security protocols. Overall, this underscores the importance of adherence to comprehensive regulatory standards in the payment processing industry.

Conclusion:

The Reserve Bank of India (RBI) has implemented new laws in India for cross-border payment aggregators (PA-CBs). These policies are intended to improve oversight, create a more secure and resilient cross-border payment environment, and assure compliance with comprehensive regulatory standards. Registration with the Financial Intelligence Unit (FIU-IND), meeting minimum net worth requirements, maintaining specific account requirements for import and export transactions, and implementing robust merchant onboarding, customer complaint redressal, anti-money laundering, and information security protocols are key requirements for non-bank PA-CB providers to obtain RBI authorization.

https://www.equityright.com/navigating-the-economic-landscape-indias-growth-trajectory-amidst-key-risks/

 

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Sensex Jumps 450 Points Amid Renewed US-China Trade Hopes and Strong Sectoral Buying
Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - November 21, 2023

Riding the Tech Wave: Nasdaq's Surge Sparks Asian Stock Rally

Riding the Tech Wave: Nasdaq’s Surge Sparks Asian Stock Rally

The global stock market is intricately interconnected, with events in one region often influencing markets around the world. Recently, the Nasdaq Composite Index, dominated by technology stocks, witnessed a substantial boost, driving positive momentum in the Asian stock market.

Technology stocks performed well, and benchmarks in South Korea and Australia rose slightly. Hong Kong futures began positively, led by the Golden Dragon index of US-listed Chinese companies, which gained more than 3.5%. The S&P 500 closed at its best level since August, and the Nasdaq 100 reached a 22-month high.

The Nasdaq has reached new highs as tech giants soar

In recent months, the Nasdaq Composite Index, a stock market index that tracks the performance of technology companies, has been on a tear. A number of factors, including strong earnings reports from many of the index’s largest companies, have contributed to the Nasdaq’s recent surge. Apple, Microsoft, and Alphabet (Google), for example, all reported record earnings in the third quarter of 2023, helping to boost investor confidence in the tech sector.

Aside from strong earnings, investors are bullish on the tech sector’s long-term growth prospects. As the world becomes more digital, demand for tech products and services is expected to rise, benefiting tech companies.

The Nasdaq’s outperformance can be assigned in part to its substantial weighting of technology companies. As people spend more time online and buy more tech products as a result of the COVID-19 pandemic, technology companies have been among the biggest winners.

The Nasdaq Effect on Asian Markets:


The impact of US stock prices on Asian stock markets is complex and varies depending on several factors, including the overall health of the global economy, investor sentiment, and the specific companies traded on each market. However, there is a general positive correlation between the two markets, which means that when stock prices in the US rise, so do stock prices in Asia, and vice versa.

Asian stock exchanges, including Tokyo, Hong Kong, and Shanghai, reacted positively to the
Nasdaq’s stellar performance. Boosted by the optimism surrounding the technology sector,
investors in the region increased their holdings in tech-related stocks, contributing to a broad-based rally.

Key players in the Asian stock rally:

➢ Dominance of the Technology Sector: Technology stocks were among the primary drivers of the Asian stock market rally. Companies involved in semiconductor manufacturing, software development, and e-commerce were crucial.
➢ Economic Optimism: The rise in Asian stocks reflects a broader sense of economic optimism as global economies recover from the COVID-19 pandemic’s challenges. Investors are bullish on the technology sector’s resilience and growth potential in the post-pandemic era.
➢ Investor Confidence: The Nasdaq’s performance boosted investor confidence, prompting increased participation in Asian markets. Positive market sentiment and a desire for technology-related opportunities aided the overall rally.
➢ Global connectivity: Global financial markets are like a web, with events in one country affecting markets in other countries. This was demonstrated when Asian stock prices rose following the Nasdaq’s rally. This demonstrates how major stock indices around the world are linked.

Conclusion:

The Nasdaq’s recent rise and its positive impact on Asian stock markets demonstrate the
interconnectedness of global financial markets. The strong performance of technology
companies in the United States has reverberated throughout Asia, boosting investor
confidence and fuelling a broad-based rally. As the global economy improves and demand
for technology products and services rises, Asian stock markets are well positioned to
continue rising.

https://www.equityright.com/navigating-the-economic-landscape-indias-growth-trajectory-amidst-key-risks/

 

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Rapido vs Ola-Uber: How a Bike Taxi Startup Disrupted India’s Ride-Hailing Market
Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - November 20, 2023

Navigating the economic landscape: India's growth trajectory amidst key risks

Navigating the economic landscape: India’s growth trajectory amidst key risks

Introduction:

Driven by positive global trends and timely investments in energy and technology, India is expected to overtake Germany and Japan to become the world’s third-largest economy by 2027 and hold the third-largest stock market by 2030.

India’s economy has grown at the highest rate in the world over the last ten years, with an average GDP growth rate of 5.5%. This indicates that India’s economic might has been on an impressive upward trajectory. Global offshore, digitization, and the energy boom are three disruptive factors that are coming together to provide India a once-in-a-lifetime chance to boost economic growth and enable its billion-plus population to live in greater prosperity.

By 2031, India’s GDP may have surpassed $7.5 trillion, more than doubling from its current $3.5 trillion level. India is expected to become a major player in the global economy. If India’s share of global exports doubles, it would mean that the country is exporting twice as many goods as it is today. This would be a major boost for India’s economy, and it would create many new jobs for Indian workers. In the upcoming years, the market value of the Bombay Stock Exchange could reach $10 trillion, with an expected 11% annual growth. This would be a major development for India’s financial sector, and it would make the country a more attractive destination for foreign investment.

Boosting India’s production share in global markets:

India has the potential to become a global manufacturing powerhouse. The country has a large pool of young, talented workers, and it is making significant investments in infrastructure and education. As a result, India is becoming increasingly attractive to multinational companies looking to set up manufacturing operations. This could lead to a significant boost in India’s share of global manufacturing exports.

Increasing credit availability: In recent years, India has made tremendous success in increasing credit availability, and this trend is projected to continue. This will make borrowing money easier for businesses, resulting in higher investment and job growth.

Starting a new business: India is a hive of entrepreneurial activity, and this trend is likely to continue in the coming years.

Improving Life Quality: The quality of life for Indians is predicted to increase as the country’s economy grows.

Driving a boom in consumer spending: Indian consumers are anticipated to spend more money as their standard of living improves. This will increase demand for products and services, hence stimulating economic growth.

India is expected to experience significant economic growth in the coming years, with an annual output growth of over $400 billion from 2023 onwards. This growth will rise to over $500 billion annually after 2028,  India is poised to become a global economic leader, playing a significant role in shaping the global economic landscape.

 

Global Offshoring Builds a Global Workforce

Companies have been outsourcing various services, including software development, customer service, and business process outsourcing (BPO), to India for many years. This trend was initially driven by India’s lower labour costs and availability of skilled professionals. However, recent factors, such as tighter global labour markets and the rise of distributed work models, are renewing interest in India as a global outsourcing destination.

India is also on route to become the world’s factory, due to corporate tax cuts, investment incentives, and infrastructure spending, which are driving capital investments in manufacturing.

The confidence of global firms in India’s investment prospects is at an all-time high. Optimism among multinational corporations (MNCs) regarding investment prospects in India’s manufacturing sector has reached an unprecedented high. These positive trends are driving projections of a substantial rise in manufacturing’s share of India’s GDP, from the current 15.6% to 21% by 2031. Simultaneously, India’s export market share is expected to double during this period, further cementing its position as a global manufacturing powerhouse. Manufacturing’s proportion of GDP in India might rise from 15.6% to 21% by 2031, more than doubling India’s export market share.

Key risks to India’s economic growth:

1.Prolonged Global Recession:

The Indian economy is highly dependent on global demand for exports, and a prolonged global recession might have a severe influence on its growth prospects. If large countries such as the United States and Europe face a lengthy slump, demand for Indian goods and services may fall, resulting in decreased exports and slower economic growth.

2.Unfavourable Geopolitical Developments:

India is prone to geopolitical tensions and conflicts because of its geographical location in a politically volatile region. Instability and violence in a region can disrupt trade, raise security concerns, and discourage foreign investment. These elements have the potential to destroy the Indian economy, making it more difficult for businesses to plan and invest.

3.Domestic Policy Fluctuations:

Domestic policy changes in India, such as taxation, labour legislation, and environmental restrictions, can have a substantial impact on the investment climate and business environment. Unpredictable or unfavourable policy changes can discourage foreign investment and make commercial operations onerous, stifling economic progress.

4.Lack of Skilled Labor:

India’s rapid economic expansion has resulted in an increase in the demand for skilled labour, but the country’s education system is not yet completely prepared to meet this demand. This skilled labour shortage can limit the growth of some industries and make it difficult for firms to find the expertise they need to compete globally.

5.Energy Shortages:

India is a net energy importer, and rising global energy prices could put a pressure on the country’s economy. Energy scarcity can also cause power outages and disruptions in industrial production, weighing on economic growth.

6.Commodity Volatility:

The Indian economy is subject to commodity price movements, particularly oil prices. Rising oil prices can raise India’s import bill and add to inflationary pressures. Commodity volatility can also make it difficult for firms to plan ahead of time.

 

Q2FY24: Shriram Finance reports robust AUM growth Drives NII soars to 4,594 Cr

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Zomato Q3FY25: Strong GOV Growth Amid Profitability Pressures
Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - November 6, 2023

Zomato's Q2FY24: Savoring success - GOV surges, Gold glitters

Zomato’s Q2FY24: Savoring success – GOV surges, Gold glitters

Company Overview:

Zomato Limited, founded in 2010, is one of the biggest online Food Service platforms in terms of food value sold. Its services include meal delivery, dining out, and loyalty programs, among others. Zomato had a significant footprint across 23 countries as of December 31, 2020, with 131,233 active food delivery restaurants, 161,637 active delivery providers, and an average monthly food order of 10.7 million clients. Zomato also operates Hyper pure, a one-stop procurement system that provides high-quality ingredients and kitchen goods to restaurant partners.

Zomato Q2FY24: GOV Up 47%, EBITDA Profitable at INR 41 Crore

Zomato’s consolidated Q2FY24 results were positive, with strong growth across key metrics. GOV (B2C business) grew 47% year-over-year to INR 11,422 crore, driven by strong growth in order volume. Adjusted revenue grew 53% year-over-year to INR 3,227 crore. Adjusted EBITDA improved significantly from a loss of INR 192 crore in Q2FY23 to a profit of INR 41 crore in Q2FY24.

The strong GOV growth was driven by increased demand for food delivery and quick commerce services. Zomato’s Gold program also played a key role, contributing to over 40% of food delivery GOV. The improvement in adjusted EBITDA margin was driven by a number of factors, including increased gross take rate, improved operational efficiency, and reduced costs. Zomato’s is focused on expanding their reach into smaller towns, increasing their customer base, and improving their operational efficiency.

Zomato Gold Soars to 3.8 Million Members, Boosts GOV by 40%

Zomato’s Gold program is shaping up very well. It has scaled to 3.8 million members within just three quarters since its launch, and these members now account for ~40% of the company’s food delivery GOV. This suggests that the program is highly popular with customers and is driving significant business for Zomato. The Gold program offers a number of benefits to members, including discounts on food delivery orders and priority access to restaurants. This makes it a very attractive proposition for customers, especially those who order food delivery frequently.
The fact that Gold members account for such a large proportion of Zomato’s food delivery GOV is a significant positive. It shows that the program is driving loyalty and repeat business among customers. This is important for Zomato, as it helps to reduce the cost of customer acquisition and retention.

Zomato’s Blinkit Turns Contribution Positive in Q2FY24, Margin Improves to 1.3%

For the first time, the quick commerce (Blinkit) business turned Contribution positive for the full quarter in Q2FY24. The business’s contribution margin (as a percentage % of GOV) has increased from -7.3% in Q2FY23 last year (when we acquired the business) to +1.3% today in Q2FY24. Blinkit’s same-store sales grew in Q2FY24, which indicates that existing stores are serving more customers and generating more revenue. This is a positive sign, as it suggests that the company’s unit economics are improving. Blinkit also added 28 new stores in Q2FY24, bringing its total store count to 411. This expansion is helping the company to reach more customers and grow its business.

Valuation and Key Ratios:

Zomato’s stock is currently trading at a valuation of 5.25 times its book value of Rs. 22.9 per share at the current market price of Rs. 116. The company reports an ROE of -5.91 % and ROA of -5.46 % in Q2FY24. The interest coverage ratio stood at -7.63x in Q2FY24, indicating the company’s solvency, while the current ratio stood at 3.93x in Q2FY24. The P/B ratio for the company is 5.06.

Financial Performance Highlights for Q2FY24:

The quarter’s net profit declined year on year (YoY), with a loss of 497 crores in Q2FY24 compared to a profit in the same period last year. The company’s EV/EBITDA ratio increased QoQ, rising to 2,045 in Q2FY24 from Q2FY23. Despite a negative PAT of 497 crores in Q2FY24, the company managed to reduce its losses as compared to the previous quarter. The Price to Book Value ratio scaled significantly year on year, reaching 5.25 in Q2FY24 from a lower ratio in the same quarter last year. Earnings per share (EPS) improved significantly from quarter to quarter (QoQ), with the company reporting a loss of -0.58 in Q2FY24 compared to a greater loss in the prior quarter.

Conclusion:

Zomato’s second-quarter FY24 results were mixed, with great rise in GOV and EBITDA but a sustained loss in net profit. The company’s Gold program is operating effectively and increasing client loyalty. The Blinkit firm is also profitable, which is a good indicator. Zomato’s values, however, remain high in comparison to its financial performance. Overall, the organization is still in the investment phase, with the goal of growing its reach and boosting profitability.

HDFC Bank’s Q2FY24 PAT reached INR 159 bn driven by strong loan growth

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IFL Enterprises Surges With 13x Revenue
Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - November 2, 2023

Indian stock surge draws investors leaving China

Indian stock surge draws investors leaving China

India is expected to become the world’s third-largest economy by the end of the decade, with projections indicating a robust annual average real GDP growth of 6 percent, outpacing mostother major economies. This forecast comes from the consultancy firm Capital Economics. The Indian stock market has been on a tear in recent months, with the benchmark Sensex index rising by over 20% since the start of the year. This surge has attracted a wave of foreign investment, with many investors choosing to leave the Chinese market and invest in India instead.

Fertile Investing Ground

India’s economy and stock market have been doing well recently and India has also
outperformed china. The MSCI India index, which measures the performance of Indian stocks,has gone up by 7.5% this year, while the MSCI China index, which tracks Chinese stocks, has gone down by 7.6%. Over the last five years, Indian stocks have risen by 63%, while Chinese stocks have fallen by 18%. India’s economy is growing faster than China’s, with a growth rate of 7.8% in the June quarter, compared to China’s growth rate of 6.3%.

Foreign investors have been moving their money from Chinese stocks to Indian stocks, even though Indian stocks are more expensive and has higher valuations. This is because China’s economy hasn’t rebounded as strongly as expected, which has raised concerns about deflation (a decrease in prices) and made investors less confident in the Chinese market.

“India’s markets seem really encouraging and promising. They’re experiencing substantial growth, and there’s a lot of money being invested in building infrastructure. India is one of the fastest-growing economies. On the other hand, in China, we’re seeing issues in the property sector,” explained Jonathan Curtis from Franklin Templeton during his recent trip to India.

Indian stocks have outshined Chinese stocks by a significant amount. This is thanks to the billions of dollars invested by foreign funds and a growing number of individual investors who have tripled in number since the pandemic started.

Allocators Enticed


Foreign fund managers, who handle a lot of money (billions of $), are taking their investments out of Chinese stocks and putting some of it into Indian stocks, even though Indian stocks are considered relatively expensive. In August, they withdrew around $12 billion from Chinese stocks, while India received approximately $1.5 billion in investments, with a significant portion going into financial stocks.

China’s economy, which was expected to rebound strongly after the pandemic, hasn’t
performed as well as anticipated. This is due to problems in the housing market and increasing local government debt. Chinese households are saving more, which is leading to weaker domestic demand. This economic uncertainty has made investors less confident and has put pressure on stock prices. Experts have noted that China is different from other countries in its post-pandemic recovery because it’s facing a risk of prices falling instead of rising. This uncertainty about investing in China has opened up an opportunity for India.

India’s economic foundation looks good, despite challenges like geopolitical tensions, rising prices, and supply chain disruptions. In September, foreign investors sold about $1.8 billion worth of Indian stocks, but the Sensex (an Indian stock market index) still rose by 1,000 points in the same month, thanks to continued investments from local investors, particularly mutual funds.

Indian markets are not heavily dependent on China’s weakness, there are other reasons for their strength. The growing number of individual investors in India plays a significant role. Additionally, consistent investments through mutual funds are considered a healthy trend. Strong corporate earnings growth is also attracting investors. Hong Kong-based brokerage CLSA recently upgraded its view on India, saying it plans to allocate more weightage to India compared to what index management company MSCI suggests. They’re moving money out of China and Australia to invest more in India.

Investment Destinations

India’s technology sector is a popular choice for investment due to its successful digitization efforts and a tech-savvy population. The nation’s strong education system and English speaking workforce have contributed to this tech focus, with Indian-born
CEOs leading major U.S. tech companies.

Early-stage venture capital is a way for investors to enter India’s tech scene, with success stories like Flipkart, an e-commerce company, valued at around $40 billion after being acquired by Walmart. However, India’s investment landscape can be less liquid, making it challenging to find buyers for venture-backed companies.

The growing Indian financial sector is appealing to foreign investors, with HDFC Bank and Bajaj Finance stocks being popular choices. Infrastructure is another promising area for investment, thanks to government initiatives like the Delhi Mumbai Expressway project, which will significantly reduce travel times. One significant factor driving India’s growth is its young population, which is expected to contribute to a robust GDP and make India the world’s second-largest economy by 2070, according to a Goldman Sachs study. Investing in India today may be a wise choice if this bright future unfolds as predicted.

https://www.equityright.com/indias-soaring-success-dedicated-india-funds-outperforming-emerging-markets/

 

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Dabur Subsidiaries Face Cancer Lawsuits in US and Canada
Business, Equities, Expert Views, Investor Forum, Market News, Markets, Research, Research Reports, Result Updates - November 2, 2023

Dabur Subsidiaries Face Cancer Lawsuits in US and Canada

Dabur Subsidiaries Face Cancer Lawsuits in US and Canada

Overview of Dabur


Dabur India Ltd. is one of India’s leading consumer goods companies with a portfolio of over 250 herbal and Ayurvedic products. The company was established in 1884 and has a long history of developing and manufacturing traditional Indian healthcare products.

Dabur’s products are divided into several categories, including

➢ Healthcare This category includes products similar as Dabur Chyawanprash, Dabur Amla, and Dabur Honitus.
➢ Haircare This category includes products similar as Dabur Vatika, Dabur Amla Hair Oil, and Dabur Red Paste.
➢ Oral care This category includes products similar as Dabur Red Toothpaste, Dabur Lal Dant Manjan, and Dabur Meswak Toothpaste.
➢ Skin care This category includes products similar as Dabur Gulabari, Dabur Odomos, and Dabur Vatika Naturals.
➢ Home care This category includes products similar as Dabur Red Air Freshener, Dabur Odomos Mosquito Repellent Cream, and Dabur Pudin Hara.

About the case


Homegrown FMCG major Dabur on Wednesday said its three foreign subsidiaries are facing cases in civil and state courts in the US and Canada. Two consumers have filed suits against Dabur subsidiaries in the United States and Canada, alleging that the company’s Vatika Naturals Coconut Styling Gel caused them to develop cancer. The suits were filed in California and Ontario in late 2022 and early 2023, independently.

The complainants, both women, allege that the hair gel contains the chemical 1,4 dioxane, which is a known carcinogen. They claim that they used the hair gel for several times before developing cancer, and that the product’s marker didn’t adequately advise consumers about the risks of using it.

Dabur has denied the allegations, saying that its hair gel is safe and that there’s no scientific evidence that it causes cancer. The company has also said that it’s committed to consumer safety and that its products are tested to ensure that they meet all applicable safety norms.

The subsidiaries are Namaste Laboratories LLC, Dermoviva Skin Essentials Inc., and Dabur International Ltd. The suits are still in their early stages, and it’s too early to say how they will be resolved. still, they’ve raised concerns about the safety of Dabur’s hair products and other products that contain 1,4- dioxane.

What’s 1,4- dioxane?

1,4- dioxane is a synthetic chemical that’s used in a variety of artificial and marketable
products, including cosmetics, cleaning products, and paint strippers. It’s also a by- product of some manufacturing processes. 1,4- dioxane is a known carcinogen, and the International Agency for Research on Cancer (IARC) has classified it as a Group 2B carcinogen, which means that it’s “conceivably carcinogenic to humans.”

Implicit health pitfalls of 1,4- dioxane-
Exposure to 1,4- dioxane can do through inhalation, ingestion, or skin immersion. Cancer, skin irritation, eye vexation and 1,4- dioxane can irritate the airways and cause coughing, gasping, and shortness of breath.

https://www.equityright.com/indias-soaring-success-dedicated-india-funds-outperforming-emerging-markets/

 

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