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Interest Payment Burden to reduce in FY26
Business, Equities, Markets - January 22, 2025

No requirement of capital investment in state-run banks in the Budget 2025

No requirement of capital investment in state-run banks in the Budget 2025

According to the Reserve Bank of India (RBI) regulations, banks in India are required to maintain a Capital to Risk-Weighted Assets Ratio of atleast 11.50 percent. It aims to maintain capital adequacy in the banks in order to fulfill financial commitments as well as to mitigate financial losses. It is to give protection from various risks such as operational risk, credit risk, and market risk.

Most of the public sector banks in India not only fulfill the criteria but also have CRAR of around 16 percent and more as well.

Capital Adaquecy of Public Sector Banks
In the month of December 2024, the Bank of Maharashtra’s CRAR is about 18.71 percent which is the highest record in between all the public sector banks in India. While, the position of lowest capital position is held by Bank of Baroda. It has a CRAR of about 16.26 percent. Even the lowest CRAR fulfills the criteria of RBI’s capital adequacy regulations.

Overall, it indicates state-run banks are not in need of capital financing at this point of time.

Asset quality of Public Sector Banks
In recent times, asset quality of state-run banks is not risky. In the month of September, 2024, their ratio of gross non-performing assets fell to 2.6 percent of the total credits. As per the recent report of RBI’s Financial Stability, it is the lowest record compared to the records of the previous 12 years. While, the net non-performing assets ratio is close to 0.6 percent.

Financial health of Public Sector Banks
The macro stress tests conducted on Public Sector Banks indicates that these banks have the strong capability to tackle stressful situations. In the month of September, 2024, public sector banks’ capital adequacy was about 16.60 percent. It indicates their strong financial health. It also hints that it is improbable for the Union budget 2025 to provide capital financing for state-run banks in India.
Probability of Capital Investment in Public Sector Banks
In the past, the government of India has often taken an initiative of providing capital investment to state-run banks. In the previous 10 Union Budgets of India, the government of India has given capital investment to public sector banks for about three times. The total capital financing accounts to Rs. 3.35 lakh crore.

The main purpose of these capital investments in the state-run banks is to fulfill the regulations. It is also to maintain strong credit growth. It is important to maintain credit growth as it helps to expand the scope of lending to businesses and people. It results in boosting economic growth. This purpose of boosting credit growth is important in state-run banks compared to private sector banks.

Apart from the funding through the Union Budget, state-run banks were able to get capital financing from the Indian government. It got capital investment of about Rs. 20,000 crore in the financial year 2022. In this same financial year, four state-run banks in India got capital financing of about Rs. 14,500 crore in the month of March. This financing was done with the use of pure discount bonds.

The overall financial health of public sector banks indicates that the budget 2025 may not have new capital investment for public sector banks in India.

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Trump Tariffs Push US Inflation to Eight-Month High
Business, Equities, Markets - January 22, 2025

Trump Regime: Opportunities of transformation in the midst of Chaos

Trump Regime: Opportunities of transformation in the midst of Chaos

Overview
On 20th January, 2025, Donald Trump became the US President for the second time. Before taking his oath on Monday, an article was published by the Wall Street Journal regarding Trump not making any statement regarding tariffs matter on his first day of official authority. This resulted in the dollar going down and a hike in US stock futures. This indicated that the investors are relieved. However, he made an announcement of implementation of 25 percent of import tariffs on goods from Mexico and Canada by 1st February, 2025. This led to fall in US stock futures as well as rise in dollar indicating investors are nervous. This whole situation implies the impact of Trump’s news and actions on the markets and also indicates that such uncertainty will prevail in the upcoming 4 years as well. The Indian stock market has also been facing fluctuations since yesterday.

Trend of Crypto Coins
Before his official oath on Monday, he launched a meme coin known as $Trump. The price trend of this coin was quite volatile as first it spiked high and later fell at a rate. The same situation was observed in the crypto coin launched by Melania Trump which is known as $Melania. This overall trend shows how investors need to get ready for a ride of excitement and later nervousness in this uncertain cryptomarket and overall market.

This situation is not actually difficult for US investors as Trump and his allies understand and work for fulfilment of the needs of US investors. In contrast to this, other countries’ stock markets, especially countries like Panama, Canada, and Mexico, have to take cope unaided.

Policies of New Trump Regime
The current uncertainty in the market indicates strong unpredictability of policies implemented under Trump’s regime. Trump has constantly focused on matters such as tariffs, change in immigration policy, and increase in oil production. So far, his actions are aligning with his agendas during election campaigns. His focus has not yet shifted towards China but there is a high chance that it will move towards it. Apart from this, it seems Trump looks at tariff matters from the point of negotiation tool or strategy to gain upper hand. It is possible that he is trying to get compromises from other nations.

Trump’s ideas seem to move towards expansionism. Although, he looks like someone who is only focusing on domestic matters. He is considering taking over regions such as Greenland, Panama Canal, and Canada. It indicates his idea towards expanding territory of the United States as he mentioned about growth in wealth, expansion of territories, in his oath ceremony speech. Trump also seems to admire the work of Willian Mckinley as the US President. The US President William Mckinley took control of regions such as the Philippines and Gaum from Spain, and also Puerto Rico, and Cuba.

Trump believes that the United States is a special country. It should be allowed to do anything it wants, without considering its effect on the other economies in the world. This is also one of the reasons why he wants the country to leave the Paris Agreement, the OECD tax treaty and World Health Organization (WHO).

United States’ Dominance
In the shadows of all his strong speeches, the main purpose is to keep the supremacy of the United Stated in all aspects including dominance in the economy. Currently, China is facing economic issues. Despite this, it is one of the emerging economies in terms of technology hub. Trump’s regime wants to ensure that the United States is no longer in a falling state and it is approaching to become the biggest dominant nation in the world.

Trump looks at China as the biggest competitor of the United States. It indicates that the country’s focus will be on the Asian region. Countries in Asia such as Taiwan and India could possibly play a major role in his strategies. Though, the United States looks at Taiwan as a challenge for establishing its supremacy in the semiconductor industry. Trump also believes that European countries should give fees to the country for protecting them. These countries are highly dependent on the United States and now going through a state of fear that Trump might sign a peace agreement with Russia in regards to the Ukraine situation.

Chaos of Trump’s regime
There is a lot of unpredictability in Trump’s ideas and his actions. He wants to stay away from wars but he was the one who aided the ceasefire in the Gaza region. Currently, China is suffering from an economic situation of capital outflow and deflation. In this situation, it is possible that China will agree with tariffs changes by the United States. Apart from this, there are several conflicts of interest among various groups. The people focusing on strengthening the domestic market have different views compared to ideas of supporters of Trump’s views and outlook of international entrepreneurs like Elon Musk. One of the instances of this situation is the H1-B visa case.

In conclusion, Trump’s regime will surely bring a lot of chaos in the upcoming four years. However, there is a chance of opportunities for reforms in this situation of uncertainty.

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Sensex Jumps 450 Points Amid Renewed US-China Trade Hopes and Strong Sectoral Buying
Business, Equities, Markets - January 22, 2025

Indian Quick Commerce: Growth Amid Challenges

Indian Quick Commerce: Growth Amid Challenges

Industry Overview
It is anticipated that the Indian Quick Commerce market will bring in US$5,384.00 million by 2025. A compound annual growth rate (CAGR 2025-2029) of 16.60% is anticipated for this market, resulting in a projected market volume of US$9,951.00m by 2029. A youthful, tech-savvy populace and rising smartphone penetration are driving the quick commerce sector in India. The Quick Commerce sector has expanded as a result of India’s expanding middle class and rising disposable income. Furthermore, the digital economy has grown as a result of foreign investment drawn to India by the government’s digitization initiatives and the country’s ease of doing business. Nonetheless, regulatory obstacles and inadequate infrastructure remain a danger to the expansion of the Quick Commerce business in India.

Recently, the quick commerce space has been near a saturation point due to cut-throat competition amongst key players in the market such as Swiggy, Zomato, Zepto, etc. Investors have begun to worry even more after the Q3 Results of Zomato which were announced on the 21st of January, 2025.

Worrisome Stakeholders
Investors in Quick Commerce companies have been rudely awakened by Zomato’s performance. On Tuesday, January 21, the company’s stock was down 10%, while rival Swiggy’s stock was down 9%. Based on their performance up to the previous quarter, shop rollouts, and market trends including expanding customer bases, increasing order values, expanding assortments, and store expansion, investors had mentally mapped out a path to profitability for these companies’ rapid commerce businesses. It was anticipated that Blinkit, Zomato’s fast commerce division, would approach breakeven during the December quarter.

While affirming that these tendencies are still there, Zomato’s management comments that accompanied its results also indicated a sense of urgency to open locations quickly, even at the risk of lower profitability. By the end of the year, it plans to build another 1000 dark stores, bringing its total to 1000, extending its goal by a full year. Additionally, it stated that even though the gross order value will expand by more than 100%, losses will persist in the near future.

The two main factors causing this trend to change are competition and the increasing demand from customers. The privately funded Zepto has become aggressive with its intentions for retail expansion, while publicly traded competitors like Swiggy are growing. The popularity of speedy commerce in the private market has also been cemented by the success of Zomato and Swiggy in the public markets. Zepto seems to be receiving money from investors hand over fist. Then there are e-commerce businesses that are entering the fast-paced market. Even omni-channel retailers are investigating methods to expedite delivery. The word “quick” is becoming synonymous with all online retail platforms.

As a result, the incumbents are working to increase their market share in other markets while also fortifying their position in the top ten cities, which are the primary drivers of rapid commerce growth. Future app fatigue may be a major contributing factor in this case.

Customer Retention is crucial
Analyze Blinkit’s retention rate for clients who made a single purchase between September 2022 and December 2022 from a different angle. Despite the rise in competition during this time, this customer group’s retention rate is 40–42 percent from March 2024 to December 2024. These clients also cover the cost of shipping. They are also what consumer firms call stickiness, even if Zomato promotes them as evidence of its unique proposition and execution.
Thus, if you attract clients early and provide them with a positive experience, they may become lifelong clients. This explains why it is necessary to open more stores in order to attract a larger percentage of clients who are switching to rapid commerce and then provide them with the services they require to stay loyal in the face of competition.

This will result in more depreciation, more investments, and a larger percentage of new stores that are not yet profitable in the short term. Because of the increased need for labor in the rapid commerce sector, competition may also result in higher operating expenses. When Swiggy’s results are released, it should be evident whether this kind of retail expansion has an effect on the company’s performance.

There’s another reason to be concerned. Zomato claimed that because of the low level of customer demand, their meal delivery service grew somewhat slowly. This is related to the slowdown in urban consumption that has occurred in certain areas. Profitability has increased, but business growth has slowed. In the December quarter, QoQ growth was only 3%.

Future of QC companies
The performance and future prospects of listed rapid commerce companies are questioned by Zomato’s financials, but the ecosystem is also called into uncertainty. For QC players as well as e-commerce and omnichannel businesses, online commerce will be a difficult environment. Significant expenditures and faultless execution are required in the battle to get customers on board—not just for groceries, but for everything from clothing to electronics—and deliver them in ten minutes. If not, accidents will probably occur, and it won’t be shocking if they do within the next year or two.

Conclusion
The primary cause of investors’ preference for short-term investments over long-term ones is their perception that QC plays are becoming profitable, which led them to overlook the comparatively high stock prices. Second, it’s unknown who will ultimately prevail among the expanding field of QC competitors. Thirdly, it is also clear how lengthy the long-term prospects will be if everyone chooses to invest. Investor opinion for these stocks may improve as the winners are separated from the losers, as time goes on, or when values become more realistic.

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Easing of risk weights on loans given to MFIs and NBFCs
Business, Equities, Markets, Research, Result Updates - January 22, 2025

South Indian Bank Q3FY25: Moderate NII, Robust Profitability, Improved Asset Quality

South Indian Bank Q3FY25: Moderate NII, Robust Profitability, Improved Asset Quality

Company Name: South Indian Bank Ltd | NSE Code: SOUTHBANK | BSE Code: 532218 | 52 Week high/low: 36.9 / 22.3 | CMP: INR 26.8 | Mcap: INR 7,014 Cr | P/BV – 0.79

NII Moderate; strong Profitability; NIMs flat; Asset quality improved

About the Stock
➡️South indian bank is private sector bank operate in south region of India headquartered in kerala. The bank has 950 branch network and majority situated in south India. The customer bas has increased from 7.3 Mn to 7.8 Mn within one year period. The bank loan book is well diversified 40% with corporate and remaining 60% retail book includes perosnal, agri and business.

Strong growth in Advances and Disbursement in Q3FY25
➡️The bank has reported strong growth annually in key business parameter. Gross Advances grew 12% YoY to 86,966 Cr, with corporate segment contributing 40% of the loan book, growing at 17% and personal segment contribute 26%, growing at same pace 26% while business loan and Agriculture contribute 15% and 19% respectively.

➡️Disburement grew 86% YoY to 1,22,572 Cr led by corpoarte book. While the bank deposit lagging behind, increased by 6% YoY and borrowings decline 30% YoY. The CASA stand at 31.15% in Q2FY25 lower by 65 bps YoY.

➡️Personal segment loan book driven by growth in mortgage loan at 79% folowed by home loan loan at 64%, gold loan 10%, auto loan 25% and credit card 4%.

➡️Retail disbursement momentum help by home loan, auto loan while agriculture and personal loan remian flat annually.

Book Growth (As on)  Q3FY25 Q3FY24 YoY (%) Q2FY25 QoQ (%)
Advances  86,966 77,686 12% 84,714 3%
Disbursement  1,22,572 65,805 86% 76,872 59%
Borrowings  2,956 4,213 -30% 2,609 13%
Deposit 1,05,387 99,155 6% 1,05,452 0%


NII growth moderate while PAT jump 12% led by lower opex and tax expense
➡️Interest income increased by 9% YoY (+1% QoQ) to 2,371 Cr driven by yield expansion and advance growth. The yield on loan expand 11 bps YoY to 7.64% while Cost of fund jump 13 bps to 4.84% result contraction in NIMs.

➡️NII grew moderate at 6% YoY (-1% QoQ) to 869 Cr due to high expansion in CoF makes NIMs flat.

➡️The bank’s PAT surged 12% YoY (+5% QoQ) to 342 Cr led by lower operating cost and tax expense despite the jump in credit cost. The stable the employee cost and total operating cost kick in operating leverage and boost the profitability.

Years  Q3FY25 Q3FY24 YoY (%) Q2FY25 QoQ (%)
Interest income  2371 2184 9% 2,355 1%
Interest expenses 1501 1365 10% 1,472 2%
NII 869 819 6% 882 -1%
Other income  447 452 -1% 449 -1%
Total Net income 1316 1271 4% 1,332 -1%
Employee expenses 415 460 -10% 421 -2%
Other OpEx 373 328 13% 360 3%
Total Opex  788 788 0% 782 1%
PPOP 529 483 9% 550 -4%
Provision 66 49 36% 110 -40%
PBT 463 435 6% 440 5%
Tax expenses  121 130 -7% 116 5%
Tax rate  0 0 -12% 26% 0%
PAT  342 305 12% 325 5%
PAT% 12% 12% 5% 12% 5%
EPS 1.31 1.46 -10% 1.24 5%
No. of equity shares  262 209 25% 261 0%

Asset quality enhanced; stress book reduce
➡️Company has reduced the stress assets from 894 Cr in Q3FY24 to 404 Cr in Q3FY25. Bank has churned 78% of overall loan book since covid level and 91% current GNPA from old book. GNPA/NNPA stood at 4.43%/1.25% decline by 44bps/36 bps YoY (10bps/6 bps QoQ). Slippages ratio decline to 0.33% in Q3FY25 vs 0.34% in Q3FY24. The provision coverage ratio expand 310 bps YoY to 81.07% vs 77.97% in Q3FY24.

Asset Quality Q3FY25 Q3FY24 YoY (bps) Q2FY25 QoQ (bps)
GNPA 4.3 4.74 -44 4.40 -10
NNPA 1.25 1.61 -36 1.31 -6

Valuation and Key metrics
➡️Currently the stock is trading at 0.79 price to book value. The yield on advances jump 11 bps to 7.64% while CoF up by 13 bps YoY to 4.84%. This result in flat in NIMs at 3.19%. The increased in deposit rate to maintain and increased the deposit growt led to higher CoF and contract NIMs as Yield is stable.

Key metrics  Q3FY25 Q3FY24 YoY (bps) Q2FY25 QoQ (bps)
Yield 7.64 7.53 11 7.68 -4
CoF 4.84 4.71 13 4.80 4
NIMs 3.19 3.19 0 3.24 -5
ROA 1.12 1.07 5 1.07 5
ROE 13.93 16.38 -245 13.71 22
CASA  31.15 31.8 -65 31.8 -65
PCR 81.07 77.97 310 80.72 35
CAR 18 15.6 240 18.04 -4

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Jana SFB Q3FY25: Strong Secured Loan Growth, Margins Under Pressure

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BEML Unveils Electric Vehicle Fleet, Phases Out Diesel for Greener Future
Autos, Business, Equities, Markets - January 21, 2025

India Targets 50% EV Sales by 2030 for Net Zero Emission by 2070

India Targets 50% EV Sales by 2030 for Net Zero Emission by 2070

India has a set goal of achieving a net zero emission target for the year 2070. In order to achieve this goal, India has to complete Electric vehicles sales growth of 50 percent by the year 2030. On 20th January, 2024, Environment Minister of India, Bhupender Yadav made this announcement in the third International Conference on Sustainable Circularity held by Society of Indian Automobile Manufacturers (SIAM). He further stated that India has achieved a capacity to sell cars per annum more compared to the size of population of few countries. Along with this milestone, great responsibility of conserving the environment comes.

Need to hike EV sales
The Environment Minister of India states that India is recording a hike in sales of vehicles which is a good sign. The auto industry and government must work together to make sure that this hike will not harm the environment.

Electric vehicles sales are anticipated to hit the record of close to 35 percent in the year 2030. However, to make sure the automobile industry achieves the target of net zero emission by the year 2070, the sales needs to increase by 50 percent.

The hike in EV sales will not only help climate conservation but will also promote job creation. The number of sales in the Electric vehicles segment is expected to record around 10 million units by the completion of the year 2030. It will help to create employment of about 5 million.

Electric Vehicles also play a major role in reduction of CO2 emissions. These vehicles are quite sustainable for the earth. It does not release pollution in the environment. It requires batteries to work and these batteries are charged using electricity.

By the end of the year 2030, electric vehicles in India are expected to reduce CO2 emission to about 5 metric tonnes. This cutting of CO2 emissions can reach a range of 110 to 380 metric tonnes by the end of the year 2050.

Participation in GCP
Minister encouraged companies in the automobile industry to voluntarily contribute towards the environment by engaging in the Green Credit Programme (GCP) of India. By becoming part of GCP, it will give automakers rewards for their steps taken towards environment conservation.

Promote Circularity Practice
The circularity practice refers to reuse of components as well as depletion of waste formed while producing a commodity. The environment minister states that India could raise about 624 billion US dollars every year by the end of the year 2050, in case of implementation of circular practices in the manufacturing activity of the country.

The Society of Indian Automobile Manufacturers (SIAM) must encourage the practice of circularity in the manufacturing of vehicles in India. It should also make consumers aware of the significance of such practices.

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Indian Pharma to gain from Trump 2.0
Business, Equities, Markets - January 21, 2025

Indian Pharma to gain from Trump 2.0

Indian Pharma to gain from Trump 2.0

Overview
The US continues to be a significant market for Indian pharmaceuticals, contributing about 30% of overall revenues and 40% of the volume market share. India’s established dominance in the global generic pharma market places it in a strong position to profit from changes in US trade and supply chain tactics, they argued, notwithstanding the possible dangers connected with changes in tariff structures and broader geopolitical factors.

U.S. medicine shortage present an opportunity for Indian Pharma
With Donald Trump taking over as US president, Indian pharmaceutical professionals anticipate positive trade conditions. As stated previously, around 30% of India’s total pharmaceutical exports go to the US, making it a vital market for Indian pharmaceutical companies.

According to experts, the US is experiencing severe medicine shortages, which presents a chance for domestic pharmaceutical companies to grow and close the gap. Given the US’s shortages and backorders, industry insiders are optimistic about India’s future. They claimed that between 2025 and 2029, a large number of popular medications would lose their patents. Generics will present an additional growth opportunity for the Indian pharmaceutical business.

Market opinion on Trump 2.0
According to Sudharshan Jain, general secretary of the Indian Pharmaceutical Alliance (IPA), which represents the nation’s biggest pharmaceutical companies, India’s dedication to meeting the world’s need for life-saving medications is demonstrated by the fact that it has the most US FDA-approved plants outside of the US and is one of the biggest suppliers of generics to some of the nations with the strictest regulatory standards. Although India has solidified its position as the world’s pharmacy, providing high-quality, life-saving medications to more than 200 nations worldwide, it has also emerged as a significant pharmaceutical partner for the US, helping a significant number of patients there. India as a whole has received the most market authorizations for pharmaceuticals over the years, according to Jain.

Businesses such as Sun Pharma, Aurobindo, Dr. Reddy’s, and Torrent Pharmaceuticals are thriving in exports, which are mostly driven by the US market. In the US, the formulations industry is anticipated to perform strongly, especially because of backorders. According to an industry expert, the need has grown, and they are supplying the gap from India.

Pharma CEOs anticipate that limitations will be loosened under the Trump administration. According to another analyst, Trump is a smart businessman who would make judgments that could boost the Indian generics market in the future. With 87% of FDA-registered API factories located overseas, primarily in China, which leads production, the US depends on a global API supply chain. However, with its access to medications, India—which purchases 70% of its APIs from China—plays a crucial part in tackling global dependency.

Any tariffs imposed on China might help Indian API producers. According to Shriram Subramanian, MD of inGovern Research Services, all pharmaceutical firms will be keenly examining the Trump administration’s health sector reforms.

Data from the Directorate General of Commercial Intelligence and Statistics shows that exports to the United States increased from $7.5 billion in FY23 to $8.7 billion in FY24.

The China Plus One opportunity
Indian pharmaceutical businesses have an additional opportunity as a result of the Trump 2.0 agenda’s probable emphasis on China plus one approach for pharmaceutical manufacture and supply chain diversification. According to analysts, increased tariffs on Chinese imports may also create new opportunities for Indian pharmaceutical companies to close the supply gap in the US generic medication market.

India’s established dominance in the global generic pharma market places it in a strong position to profit from changes in US trade and supply chain tactics, they argued, notwithstanding the possible dangers connected with changes in tariff structures and broader geopolitical factors. Given the increasing diversity of the global supply chain, these developments may present Indian pharmaceutical companies with substantial chances to gain market share.

India has become a major alternative sourcing hub for countries that were previously heavily dependent on China due to its enormous industrial facilities. Positively, well-known international pharmaceutical corporations have already significantly increased their contract manufacturing prospects for Indian pharmaceutical enterprises. Indian CDMOs (contract development and manufacturing organizations) may win from the proposed US Biosecure Act.

The Biosecure Act, which aims to phase out US pharmaceutical companies’ partnerships with Chinese enterprises, may help Indian pharmaceutical companies, according to Cipla MD and worldwide CEO Umang Vohra. In light of anticipated changes in trade policy following Donald Trump’s election as president, he is upbeat about the prospects.

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Murae Organisor Reports Promising Q1 2026 Results: A Positive Start to the Fiscal Year
Business, Equities, Markets - January 21, 2025

India’s budget should focus on capacity building in the midst of hike in healthcare spending

India’s budget should focus on capacity building in the midst of hike in healthcare spending

In the recent five years, the outlay of India on its healthcare services has surged to growth of 17 percent each year. Following the occurrence of pandemic, increase in speed of spending on healthcare is observed. The portion of healthcare expenditure out of India’s GDP has approximately increased to about 1.9 percent in the financial year 2024 compared to the previous expenditure of 1.3 in the financial year 2019.

Government expenditure on Healthcare
The major part of the government spending is channeled in the direction of social health security schemes like healthcare insurances and also on primary health care services. In the past few years, the Indian government’s expenditure has increased in programmes such as medical compensation and also health care insurances. Schemes such as Ayushman Bharat aids poor people in relieving their health expenditure burden.

Comparison with global healthcare spending
India’s spending on healthcare is comparatively lower than several developed and emerging economies. These countries spend in a range of 4 to 18 percent out of their GDP on healthcare services. India’s spending on healthcare infrastructure and workforce such as nurses, doctors, hospital beds, etc is quite less than the international standards.

Though it seems quite low in terms of spending on healthcare, it is important to look at differences in the situation of India and other countries across the globe. The Chairman of Narayan Hrudayalay, Devi Prasad Shetty states that the advanced countries have a big tax base. It helps these advanced countries to have large funds to spend on a large number of healthcare facilities and services. Another reason is the difference in population size. Several nations have smaller populations compared to India’s large population. It gives them an advantage to give access to free healthcare facilities to all. This step is difficult for India to take because of its huge population as well as its sparse resources.

Steps for improvement in healthcare
India should focus on creating an affordable healthcare environment for the population. It should increase the number of social security schemes like health insurance and the healthcare workforce base. The Indian government should focus on establishing healthcare care infrastructure and work on further expanding it. It should also take steps towards increasing the workforce base working in the healthcare sector. This can help India to fulfil the rising demand for healthcare service in the nation.

Expected growth in healthcare sector
From the year 2016, Indian healthcare observed an average annual growth of about 22 percent. It is expected to hit the record of about 670 billion dollars in the year 2026 compared to 370 billion dollars in the year 2022. The reason for the hike is increasing demand for advanced healthcare facilities.

Contribution of Private Hospitals
In the Indian healthcare services, the contribution of private hospitals is remarkable. According to the Apollo Hospitals, the portion of treatment given by private hospitals in terms of worth is expected to increase by about 69 percent in the financial year 2027 compared to the earlier 63 percent in the financial year 2020.

The reason for people relying on private hospitals and its services is more due to their plans of expansion. However, private healthcare services are usually expensive. The Indian government should take steps towards giving stimulus to private hospitals in order to provide low cost facilities to the people. It is also to initiate hiring of healthcare workforce at a faster speed. Overall, it helps the private sector to give healthcare facilities at an economical value.

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Tata Motors Q2 FY26: Sales Momentum in CVs (94,681 units, +12%), Revenue Growth Modest, Profitability Under Pressure
Business, Equities, Markets - January 21, 2025

Tata Motors to operate hydrogen internal combustion engine trucks

Tata Motors to operate hydrogen internal combustion engine trucks

Overview
As the company advances a range of technologies to promote sustainable mobility, Tata Motors will continue to invest about Rs 2,000 crore a year in the creation of new commercial vehicles and capital equipment, said Executive Director Girish Wagh. The company’s commercial vehicle (CV) branch is developing a range of technologies, including hydrogen internal combustion engines, fuel cell electric vehicles, zero-emission battery electric vehicles, and alternative fuel.

Tata Motors to operate hydrogen internal combustion engine-powered trucks
Tata Motors is set to begin using hydrogen internal combustion engine-powered trucks on a test basis in the March quarter. The business and IOCL will operate the vehicles on three routes for 18 months as part of the National Green Hydrogen Mission pilot project. The corporation is developing every technology, including battery electric and even zero-emission alternatives like alternative fuel. The company is also focusing on electric fuel cells. Wagh told PTI on the sidelines of the Auto Expo, which is a part of the Bharat Mobility Global Expo 2025, that the company is also working on H2 ICE (hydrogen internal combustion engine).

The vehicle with a hydrogen internal combustion engine was unveiled by Tata Motors last week at the Bharat Mobility Global Expo 2025. According to Girish Wagh, executive director of Tata Motors, the company is preparing for both fuel-cell electric vehicles and hydrogen internal combustion engines. According to him, the vehicles equipped with internal combustion engines that run on hydrogen would begin operations this quarter. Three routes will be served: Mumbai-Pune, Mumbai-Ahmedabad, and Jamshedpur-Kalinganagar. Wagh told PTI that the pilot project will produce a lot of data that will be used to enhance both the product and the infrastructure for hydrogen fueling.

He gave a speech on Friday in the nation’s capital during the Bharat Mobility Global Expo 2025. Wagh stated that there is a lot of work being done throughout the value chain regarding the use of hydrogen as fuel and that the company already has 15 electric fuel cell buses operating with IOCL for more than ten months. Wagh added that the company is anticipating some assistance as it prepares for the commercial launch of hydrogen-fueled vehicles in 12 to 24 months.

Tata Motors’ Budget Expectations
In order to improve its value offer, Tata Motors Commercial Vehicles is redefining itself. Wagh went on to emphasize that radical change is taking place on the foundation of safety, sustainability, and artificial and digital intelligence. According to Wagh, the market for commercial vehicles has been more volatile this fiscal year. Furthermore, the business is seeing growth in every end-use sector. Consequently, we anticipate that the fourth quarter will be a successful one.

Regarding what to expect from the next Union Budget, Wagh stated that the government has been highly supportive of the transition to sustainability and electrification. According to him, there have been numerous interventions throughout the year, including FAME incentives and PLIs, in addition to the budget.

Tata Motors to continue to spend on capital equipment
The company showcased a variety of CVs at the expo that were based on different fuel technologies, including flex fuel, battery electric, ethanol, biodiesel, CNG, LNG, diesel, and H2 ICE.

When asked how much money the company would invest in developing new products, Wagh replied that it would continue to spend about Rs 2,000 crore a year on capital equipment and products, and that it would remain competitive in that area. He went on to say that up to 40% of that money is actually being spent on all of these new technologies, including connected car platforms, ADAS (advanced driver-assistance systems), and electrification. Wagh gave an explanation of why the corporation is investing in a range of technologies, stating that battery electric vehicles will be more lightweight and suitable for a specific type of route within a city or city to semi-urban area.

According to Wagh, a hydrogen-type technology is required for heavier duty and longer distances, and that’s what it looks like right now. As a result, the business is developing all of these technologies. Furthermore, he stated that Tata Motors has been working on all alternative fuels, which is where the shift would take place, because the transition (zero emission) will not come instantly. As a result, the business has made technological investments that will meet all of these needs. Tata Motors displayed 14 CVs with ADAS capabilities at the current expo. Among other things, it displayed the next-generation hydrogen-powered Prima Truck and the intra EV, an electric pickup. Further as stated by Wagh, Tata Motors has repositioned its brand for its resumes in order to better reflect India’s shifting demographics and people’s goals.

Conclusion
In addition to improving the infrastructure and vehicles, the pilot project supports Tata Motors’ repositioning for increased value in the commercial vehicle market. The company is hopeful about the industry’s future despite the fiscal year’s many obstacles, especially anticipating a robust fourth-quarter performance.

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India's Insurance Sector Booms Amid Rising Demand
Business, Equities, Markets - January 21, 2025

India's Insurance Sector Booms Amid Rising Demand

India’s Insurance Sector Booms Amid Rising Demand

Industry Overview
One of the major sectors in India that is expanding is the insurance sector. Growing incomes and greater industry understanding are the main causes of the insurance sector’s upward expansion. With an annual growth rate of 32–34%, India is the fifth-largest life insurance market among emerging insurance markets worldwide. The industry has seen intense peer competition in recent years, which has resulted in the development of fresh and creative items.
Because of the government’s gradual loosening of rules governing foreign capital flows, the insurance industry has seen significant foreign direct investment over the last nine years, totaling around Rs. 54,000 crore (US$ 6.5 billion).

India will surpass Germany, Canada, Italy, and South Korea to become the sixth-largest insurance market in ten years, according to the Insurance Regulatory and Development Authority of India (IRDAI). With first-year premiums rising 22.91% YoY to Rs. 89,726.7 crores (US$ 10.75 billion) from Rs. 73,004.87 crores (US$ 8.75 billion) in the first quarter of FY24, India’s life insurance market demonstrated robust development in the first quarter of FY25.

Moody’s Report on Insurance Industry Growth
Moody’s predicts that the industry will gain from increased premiums brought about by pricing changes, government reforms, and the expansion of the middle class. GDP growth is predicted to be 7%, which is marginally less than the previous year, but GDP per capita is expected to increase 11% year over year to Rs. 8,85,530.88 (US$ 10,233). In the first eight months of FY24, premiums for health insurance increased by 21%, demonstrating the segment’s impressive expansion. The improvements are anticipated to improve underwriting performance and boost overall profitability, notwithstanding obstacles such as underwriting losses brought on by poor pricing and an increase in claims.

Demand for Insurance products to rise in the middle-class segment
According to the survey, higher incomes, increased risk awareness, and projected price hikes brought on by government reforms in the state-owned insurance sector are all predicted to help insurers in India see an increase in premiums. Further, India’s GDP per capita increased 11% year over year to $10,233 in FY 2023, and the country’s economy is expected to grow at a rate of 7% in FY 2024, down significantly from 8.2% the year before.

The demand for insurance products is expected to increase due to the expanding middle class and increased awareness of health hazards. Specifically, during the first eight months of FY 2024, the health insurance segment grew by 21%. In comparison to the 8% growth in FY 2023, overall premiums increased by 16% during this time. It is anticipated that the premium hike will boost industry revenue.

Higher price levels to boost underwriting performance
Price hikes will improve underwriting performance, according to Moody’s. Furthermore, the report stated that while good investment returns drove the insurance industry’s overall profitability after taxes in FY 2023, weak prices and an increase in claims caused both the life and non-life subsectors to lose money at the underwriting level. The price hikes brought about by governmental reforms need to support underwriting profitability and performance.

The nation’s private insurers are strengthening their solvency, but Moody’s cautions that regulatory changes and greater underwriting exposure might put pressure on their capital adequacy. However, the report also points out that changes are being made to increase the state-owned insurance industry’s profitability. Notably, the Center has put into place a recapitalization strategy for state-owned insurers, subject to better underwriting results. The government has also sold a minority share in LIC through a stock market listing.

Underwriting losses for the state-owned insurance industry decreased by 25% in FY 2023, demonstrating the benefits of these changes. The share of premiums paid by state-owned insurers, which accounted for 66% of the underwriting loss in the non-life market in FY 2023, has also decreased from over 40% in FY 2020 to 31%.

Obstacles for Insurers Transitioning to IND AS 117
The paper further highlights possible obstacles that the industry may face as it moves to IND AS 117, which is India’s version of IFRS 17. According to the report, insurers will have to deal with system changes and reporting alignment to adhere to the new regulatory framework.

Conclusion
In FY 2023, the insurance industry in India as a whole reported a $6.9 billion profit after taxes, a 41% rise over the previous year. Nonetheless, rising claims in the life and non-life segments—which increased by 14.5% and 13.8%, respectively—had a negative impact on underwriting performance, which remained poor. Increasing operating and commissioning expenses presented difficulties for non-life insurers as well.

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India: Infrastructure Set to Outpace IT as the Growth Engine
Business, Equities, Markets - January 21, 2025

Impact of Trump 2.0 on Indian Equity Market

Impact of Trump 2.0 on Indian Equity Market

On 20th January, 2024, Donald Trump became the President of the USA for the second time. There are rising concerns among investors about what will be Trump’s policies and how it will impact markets and the economy.

Trump has a wide-range of agendas such as reforms in immigration and foreign policies, changes in manufacturing and fiscal policies of the country, and acceptance of cryptocurrency for his second term. Each of these agendas will have a widespread impact at international level.

In this term, Trump aims to make the US a manufacturing hub. He made this goal already clear in his election campaigns. He stated that he will implement new tariffs which will be higher and will cover broad-range of commodities than the earlier tariffs implemented in the years 2018 and 2019.

Total Energy Dominance
When Trump took his oath for his term as a President, he announced his plan known as total energy dominance. This plan aims for making the USA completely independent in terms of energy production. This idea will help to boost the US economy. It will lead to creation of more jobs. This plan will also help to achieve the goals outlined for the manufacturing sector and foreign policies.

The total energy dominance plan is to make the country domestically self-sufficient in terms of satisfying its own needs and also able to provide for others. This will make the USA capable of defeating rivals such as China and Russia in terms of growth and development.

To achieve this goal, Trump has chosen Chris Wright for the position of the Secretary of energy. Chris Wright is a strong believer of using fossil fuels and does not believe in climate conservation. This will possibly lead to end of Climate Change Conference of United Nations (UN). The steps to increase production and export of oil in the USA will lead to fall in international prices of crude oil and also contraction of subsidies given for green energy. It will also lead to fall in demand for both Electric Vehicles and solar power.

This approach of focus on fossil fuels will adversely impact investment made for renewable energy. In the past few years, large investments were made in production and implementation of green energy solutions for the purpose of transport and electricity. In several developing countries, these big investments are aided by government support to make them successful. However, now these countries have to reevaluate these investments.

Changes in US tariffs
In the past seven years, the imposition of the US tariff on China has surged at a double-digit average growth of 19 percent from a small one-digit form. This scenario was quite beneficial to countries such as India, Mexico and Vietnam. This term of Trump will be different as it will see a possible rise in tariff for China by about 60 percent as well as rise in tariff for all the countries in the world including Mexico and Canda by about 10 percent.

In contrast to this, a serious high rise in tariff for Indian products is not possible due to the US looking at India from a point of geopolitical advantage compared to aggressive China. Though, it has a trade deficit with India.

Despite this, India’s high average tariff for the USA products has always been a point of concern between the countries as it is quite higher than US tariffs. In consideration to this, it is important to look out for sectors such as beverages, high-end vehicles, Electric Vehicles and many more.

Coming towards the uniform tariff of about 10 can adversely affect many Indian sectors. Indian firms need to focus on changes in tariff barriers with other developing countries. This will be affected by the success of the USA shift towards other countries from Iran, Russia, and China.

In the period of Trump 1.0, India’s position as Generalised System of Prefereces (GSP) ceased. It previously gave India permission to export some products to the USA market without any tariff barriers. Later, some products such as aluminium, steel came under the purview of tariffs. Even in this scenario, India was able to increase its trade surplus with the USA due to its adoption of global supply chains. India has a possibility of getting a chance in sectors such as textiles, electronics and pharmaceuticals in this term of Trump as well. Over the period, Indian sectors such as chemical, electronics and many more are able to achieve a big position in exports.

Other reforms
Trump’s reforms focus on immigration policies, fiscal changes, liberation, and deduction of taxes. He aims to send back about 1 million of the immigrant population out of 13 million undocumentated immigrants. It will adversely impact supply chain, inflation and growth leading to stagflation.

This step by the USA will put pressure on Indian IT firms located in the USA as these companies will have to shift towards hiring locals which will be expensive and put a burden on their profit margins.

Changes in Fund Flows
It is possible for change in the channel of allocation of funds from asset classes such as equities to cryptocurrencies in the scenarios of rising policy and valuation risks in equities. This idea is supported by Trump’s support for cryptocurrency and introduction of memecoins. Despite this, wide acceptance of crypto is only possible when it will be accepted by financial institutions and have more practical uses.

The yield of 10 years has surged significantly due to the strong US economy, possibility of new tariffs and big fiscal deficit. This situation is not good for developing countries like India. The Indian market is performing low due to large FII outflows and rupee depreciation. Despite this, there is a positive signal of stabilisation as USA’s high interest rate has the desired outcome and this could possibly lead to deduction in interest rates. Overall, the yield and dollar index can possibly stabilize and give good signs to developing countries.

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