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Jio’s Giant Leap: Reliance Confirms IPO in Early 2026
Business, Equities, Market News, Markets - January 10, 2025

Reliance Industries Q2: Telecom and Retail Sectors Fuel Strong Growth Overview

Reliance Industries Q2: Telecom and Retail Sectors Fuel Strong Growth

Overview
Mukesh Ambani, a billionaire and India’s richest person, leads Reliance Industries, the country’s largest firm by market capitalization. However, RIL is not the only company led by Ambani that is listed on the stock exchange. Reliance Industrial Infrastructure Limited, a RIL-promoted firm, has declared its quarterly earnings for the October-December 2024 period.

Price History of RIIL
On Wednesday, shares of the Reliance Industries-backed company closed at Rs 1113 per on the BSE, down 2%. RIIL, with a market capitalization of Rs 1,680.63 crore, is a component of the S&P Smallcap Index. Reliance Industrial Infrastructure shares have fallen 20% in the last six months and 17% over the last year.
According to BSE statistics, the Reliance stock has increased by 22 percent in the last two years and 29.53 percent in the last three years and consequently, the shares of RIIL have surged by 142& in the last 5 years. Meanwhile, Ambani-led Reliance Industries is a promoter in the company, with 68,60,064 shares representing a 45.43 percent ownership.

Bernstein Report
Reliance Industries Limited will experience a recovery cycle following a bad year in 2024, according to Bernstein analysis. According to this analysis, RIL’s near-term growth drivers will include telecom, retail, and refining. In 2025, the recovery will be spearheaded by a 12% increase in Jio’s Average Revenue Per User (ARPU) without rate increases, as well as 4-5% user growth. Retail operations are also expected to improve, with double-digit EBITDA growth, providing strength to the RIL.

The research notes that the company’s current valuation of 10.1x projected EV/EBITDA is 17% lower than its three-year average. With earnings likely to climb by 19% or higher in FY26, Bernstein has upped its target price for RIL to Rs 1,520, representing a 25% upside.
According to the analysis, Reliance Jio would be a primary driver of RIL’s recovery, with revenue growth forecast at a CAGR of 17% over the next three years.

By FY26, ARPU is forecast to increase by more than 14%, and Jio’s subscriber base is expected to reach 500 million, resulting in a 48% revenue market share.
According to the study, Jio’s lower capital investment is further bolstering its profitability, which benefits RIL. According to the research, RIL’s retail business is expected to rebound from the setbacks suffered last year following the shop rationalisation. It expects a return to 15% growth by FY26, aided by normalized capital spending and higher revenue per square foot.

According to the research, the refining business, which was under pressure from dropping GRMs in FY24, has begun to reverse its trajectory. GRMs are predicted to rise by 5.4% year on year in FY26, helped by a weaker Indian rupee.
The corporation will gain from its new investments in the energy sector, which include solar and storage capacity. RIL intends to use 20 GW of panel production for internal consumption and manufacture green H2 in 2025, with a goal of reaching 50 Wh of cell-to-pack battery manufacturing by 2027.The Reliance gigacomplex will be the largest end-to-end renewable energy manufacturing facility.

According to the study, Reliance plans to create a battery gigafactory by 2026 and to accelerate sodium iron technology to a megawatt level by 2025. RIL inked its first 25-year PPA for 128MW and an MOU with the Maharashtra government for 100kTPA GH2 production (an investment of USD1.8 billion), which will help the business in public markets, according to the report.

Bernstein values RIL using a sum-of-the-parts approach, taking into account growth in its core segments. Jio’s telecom section is valued at 12x projected EV/EBITDA, while the retail segment is evaluated based on core and non-core operations. Refining and petrochemical segments are valued at 7 times FY26 EV/EBITDA. Bernstein emphasized RIL’s potential to generate substantial free cash flow and offer solid returns for investors, citing a steady-state EBITDA of USD 22 billion expected for FY25-27.

Q3 Results Date
The Ambani-led firm’s Board of Directors will meet next week on January 15, 2025, to accept un-audited standalone and consolidated financial reports for the quarter/nine months ended December 31, 2024. RIIL said last month that the Trading Window closing period will begin on January 1, 2025 and expire 48 hours after the Company’s financial statements for the third quarter ended December 31, 2024 become Generally Available Information.

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Electricity Distribution Companies Continue to Strain State Finances, Says RBI

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RBI's Revised Co-Lending Norms Set to Transform NBFC Growth
Business, Equities, Market News, Markets - January 10, 2025

RBIs financial stability review spots two risk from trump 2.0

RBIs financial stability review spots two risk from trump 2.0

The Reserve Bank of India (RBI) publishes its Financial Stability Review (FSR) semi-annually in a financial year. It generally evaluates the nature and magnitudes of risks affecting the Indian financial sector. It analyzes the strength of financial institutions to mitigate these risks with the help of stress tests. These risks consist of both international and domestic risks, with special focus on domestic risks. In the month of December 2024, the FSR realised signals of two prominent risks coming from the US elected-President Donald Trump’s administration.

The Financial Stability Unit (FSU) of RBI and its FSR publication came into existence to initiate crisis management and also to prevent crises such as the global financial crisis 2008. The FSU came into existence in August 2009 by global financial crisis 2008 and implementation of semi-annual publication of FSR in October 2009. Today, the FSR is released in the months of June and December every year. The FSR focuses on both macroeconomic and market related risks.

Current FSR report
The FSR of the month of December 2024 identifies two distinct risks associated with the upcoming new administration in the USA which will assume office in a fortnight. The first risk is the uncertainty brewing in the economy due to the support given to cryptocurrency by Trump’s regime. While, the second risk is the risk to the global economy from Trump’s proposed economic policies. It could occurring due to increasing geopolitical tensions, uncertainty associated with trade and industrial policies and potential tightening of financial conditions around the world leading to lower global economic output compared to its baseline projects.

The victory of Donald Trump in the US presidential elections gave a liberating path for the people and institutions who support the idea of decentralised finance or DeFi and particularly cryptocurrency. The Trump has a favorable opinion about Bitcoins and preference for crypto friendly regulations. Following the victory of Trump, Bitcoins registered pricing hiting more than $100,000 in the secondary market. This rally was influenced by the expectation of implementation of crypto-friendly policies under his regime.

Three reasons influencing the Bitcoins
There are three reasons which strongly influenced the rally of Bitcoins. Donald Trump in his election has constantly promised that he would make a strategic bitcoin hoard. This hoard would act as a reserve asset, where the US government would accumulate and hold a significant amount of Bitcoin. This reserve asset would be similar to any country’s foreign exchange or gold reserves. The main purpose for creating this reserve asset is to bring stablization in the financial system by mitigating inflation and also to strengthen its position in the global cryptocurrency market. The second reason is Trump and his family are closely connected with the cryptocurrency and DeFi movements via investments. The last reason is Trump nominated Paul Atkins, cryptocurrency supporter for the position to head the Securities and Exchanges Commission. It hints at easing up of earlier regulatory restrictions on crypto products.

Views of RBI
The Reserve Bank of India is worried about the risks associated with crypto products on the overall financial system. Its attempt to ban crypto products in India was rejected by the Supreme Court of India. As the Supreme court said that RBI does not have the right to impose restrictions on cryptocurrency trading. After this judgement, RBI strengthened the regulations and prohibited regulated entities from financing or supporting crypto products.

Many senior officers have given their public opinions on risks associated with cryptocurrency. The Deputy governor of RBI, T. Rabi Sankar stated that cryptocurrencies are created with the specific purpose to avoid a regulated financial system in his public speech in the year 2022. Further he stated that the cryptocurrencies have the potential to destroy the currency system, the monetary system, the banking system and overall government’s capacity to control the economy. The crypto products act as a threat to the financial sovereignty of a nation. There is also a possibility of strategic manipulaton by private firms or the governments who created and control them. These are reasons which led to the formation of the most advisable and possible choice of banning cryptocurrency in India.

During the discussion at Peterson Institute, Washington DC in October 2024, the former governor of RBI, Shaktikanta Das asserted the risk associated with cryptocurrency to the financial and monetary system. He requested coordination between central banks across the world regarding regulation on the crypto products.

Despite all this, the strong position of the Trump administration towards crypto products is increasing anxiety within RBI and its view towards risks associated with it. The current FSR report particularly states that widespread use of crypto-assets and stablecoins will certainly affect macroeconomic and financial stability. It could adversely impact the effectiveness of monetary policy, fical risk and avoid capital flow managment measures. It will also draw away the resources available for the purpose of financing the real economy and in turn threaten global financial stability. Despite the crypto products market being small in size, it keeps on growing. Its association with the traditional financial system is increasing to a potential systemic risk. Stablecoins also pose a potential risk.

The RBI is worried about the linkages between the monetary system and DeFi due to the potential it carries. As instability in DeFi can lead to temporary issues like liquidity problems, maturity mismatches, price volatility in assets and also have a spillover impact on the real economy, while regulators having no control on it.

Trump is promoting tokenisation as well. He and his three sons are providing support to World Liberty Financial, who develops tokens against crypto products. Though the company declines association with Trump’s extended family, there are proofs such as purchases of tokens or play roles of advisory.

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Tata Motors Stock Slump: Analyzing the Decline and Road Ahead

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Waaree Energies Surges Over 11% on FTSE Index Inclusion Buzz
Business, Equities, Market News, Markets - January 10, 2025

Infrastructure: Prioritizing Consistent Growth in Budget 2025-26 Overview

Infrastructure: Prioritizing Consistent Growth in Budget 2025-26
Overview

Overview
With the Indian economy flourishing, there are numerous investment opportunities in multitude of sectors. The growth potential is excellent, thanks to technological advancements in the dynamic industry, which are augmented by different legislative reforms. The Indian economy has so far been resilient to persistent downside threats. Despite the slight dip in expectation of growth at 6.5-7% in the fiscal year 2024-25 according to the Economic Survey 2023-24, there is a positive sentiment about global economic backdrop. Coming to infratruscture segment of the nation, it is believed that Finance Minister Nirmala Sitharaman is likely to increase capital expenditure (capex) in the infrastructure sector in the Union Budget 2025-26 in order to bolster and boost urban development. Sitharaman will deliver the budget for 2025 on February 1, 2025. According to Federation of Indian Chambers of Commerce & Industry (FICCI) regarding the upcoming budget, the focus of government in the last few years on capex has been contributing to support recovery and sustain the momentum of growth. During persistent headwinds from the global front, public capex, especially physical, social, and digital infrastructure, would be critically important for the maintenance of growth momentum.
In the previous Union Budget that is in 2024-25 maintained a strong commitment to balancing multiple objectives in order to achieve Viksit Bharat’s vision. Continuing and extending the reform program on the nine priorities established in the Union Budget 2024-25 will be critical to maintaining the economy’s resilience.

India’s Infrastructure
India’s landscape is fast changing as the Government of India spends extensively in infrastructure projects such as roads, railroads, and renewable energy. To stimulate domestic manufacturing and increasing demand for machinery and construction materials, the government has launched projects such as ‘Make in India’. The infrastructure sector was allocated ₹11.11 lakh crore in the Union Budget 2024, and is expected to increase to ₹18 lakh crore in the next Budget 2025. As a result of thse schemes, GDP figures are expected tom improve significantly at the same time boosting public-private partnerships.Other notable initiatives such Housing for All, National Infrastructure Pipeline (NIP), and PM Gati Shakti would support and aid in enhancement of the infrastructure sector in India.

Smart City Mission
Another major budget expectation for the infrastructure sector, would be Smart Cities Mission development and implementation. India’s urban development and overall landscape is bolstered by Smart Cities Mission. Launched in 2025, by PM Narendra Modi, the Smart City Mission aims at improving quality of life in 100 cities across in India by way of infrastructure, sustainable environment and effective essential services. Further, the solutions offered through this mission aim to promote economic growth, financial inclusion, sustainability in urban development, etc.

Mitu Mathur, Director of GPM Architects and Planners, told ETNOW.in that the 2019 budget will prioritize essential expenditures in India’s urban development, with a focus on safety, sustainability, and infrastructure. She stated that the primary focus should be on transit-oriented development, which has the potential to alleviate traffic congestion by up to 30% while increasing property prices near transit hubs by 20%. “This focus on TOD will contribute to more sustainable, connected cities with both environmental and economic benefits,” according to her.

Mathur added that the future budget must prioritize sustainable infrastructure as India’s urban population continues to grow. She emphasised that green initiatives could bring down energy consumption by up to 50% while at the same time, improved waste management could reduce 70% of urban waste going to landfills. Furthermore, in light of recent instances, women’s protection in metropolitan areas is projected to become a top focus. Beyond improved street lighting and monitoring, we anticipate financing for smart lighting systems that respond to pedestrian activity, as well as the creation of safe pathways with well-maintained paths and emergency stations,” she stated.

Goonmeet Singh Chauhan, Founding Partner of Design Forum International, anticipates that the 2025 budget would place a greater emphasis on blue-green infrastructure under the Smart Cities Development initiative. “Given the gravity of the AQI issue in most towns, a data-driven approach is required to create and improve urban green cover, tree biomass, and tree demography, as well as their relationship with habitation density. Ideas such as responsive green infrastructure, the integration of ‘city forests’ into urban fabrics, and the Federal Acquisition Regulation (FAR) of forest pockets must be adopted immediately. Expanding on ‘blue infrastructure,’ hydrological master plans for all future smart cities must be developed to capture the current nature of hydrological behavior, with a particular emphasis on drainage and aquifer studies” he emphsised.

Conclusion
India’s strong economic foundations and concentration on innovation and technology make it a prominent investment destination. The sectors mentioned above are at the heart of India’s growth story. Keeping a close eye on these industries and their potential will allow you to better capitalize on future chances.

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Tata Motors Stock Slump: Analyzing the Decline and Road Ahead

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BEML Surges by 7.86% on Likely Upgrade to Navratna Status
Business, Equities, Market News, Markets - January 10, 2025

Q3 Preview: Top-Line Growth Slows for 7th Straight Quarter

Q3 Preview: Top-Line Growth Slows for 7th Straight Quarter

In the December quarter, many brokerages predicted continued slow growth rate for companies. Only a few sectors are exceptions to this scenario and are expected to be recording strong earnings. According to the brokerages, the top-line growth for companies listed on exchanges are expected to remain muted for the seventh consecutive quarter. It is also predicted that the year-on-year margins for firms will face pressure leading to sub-10 percent of profit growth in the third consecutive quarter.

Expected Sector-wise growth
Poor profits are expected to be recorded by sectors such as automobiles, construction materials, banks, consumer staples, and oil with a growth only in single-digit. While sectors such as pharmaceuticals, telecommunications and real estate are anticipated to gain strong profit-after-tax (PAT) growth.

Announcement of Earnings report
In this ongoing earning season, Tata Consultancy Services, a leading global software services company is about to announce its earnings report on 9th January 2025. While, the firm Avenue Supermarts, owner of supermarket chain D-mart, is going to announce its earnings report on 11th January 2025.

Reasons for subdued top-lined growth
The sectors such as automobile and components sector are facing issues because of occurrence of margin compression leading to lower profit margins. According to the brokerages, margin compression challenge is observed in this sector due to unfavorable product mix and higher discounts. The weak loan growth and also rising provisions for NPAs are expected to impact the Banking sector.

The weak realisations in the construction materials sector is probably going to affect profit margins for the sector. According to a CRISIL report, cement manufacturers’ profitability is expected to hurt in the financial year 2025 due to lower realisation and poor pricing power. There are a number of reasons for the weak realisation in the cement industry such as base effect, shortage of laborers during general elections period, fall in construction activity the initial half of the year. The prices are expected to fall around 5 to 6 percent due to low demand growth and also increasing competition. This decline in realisation is due to weak pricing power and poor demand, despite inputs costs are anticipated to remain in control.

The slowing urban demand is expected to adversely affect the consumer staples sector. The sectors such as metals, mining, oil, gas and consumable fuels are predicted to report poor net income growth in single-digit.

Sectors projected to have strong growth
The sectors such as pharmaceuticals, real estate, capital goods, diversified financials and telecommunications are projected to have strong year-on-year net income growth. The stable demand will possibly benefit the capital goods sector and higher average per user (ARPU) will support robust growth in the telecommunications secto. While, the pharmaceuticals sector is expected to record strong growth due to benefits from stable pricing of US generics and also growth observed in other markets in the world. The real estate is benefitted from improvement in launch activities such as the luxury housing boom, increased land transactions and new launches.

Projections
According to Kotak Institutional Equities, the net profits for third quarter of financial year 2025 is expected to increase by 7.2 percent YoY for the BSE-30 index and the Nifty-50 index is expected to surge by 9 percent YoY and 2.2 perent QoQ. On the other hand, Motilal Oswal Securities predicts an increase of 6 percent YoY growth in earnings for both MOFSL Universe and Nifty-50. Nuvama, a brokerage firm, expected top-line growth of 8 percent YoY in the third quarter of financial year 2025 for its coverage universe (OMCs not included) compared to 6 percent of growth in second quarter of financial year 2025. These projections indicate the subdued top-line growth of 10 percent in the seventh consecutive quarter.

Also, the Nuvma’s coverage universe (commodities and BFSI not included) is expected to have stable EBITDA margin growth YoY compared to its significant expansion in the financial year 2025. It will certainly influence PAT growth. The brokerage firm expects 9 percent of PAT growth compared to 6 percent of PAT growth in the second quarter of the financial year 2025. This growth is weak compared to more than 20 percent growth in the financial year 2025. The profits on a year-on-year basis is estimated to be weak for commodities, consumer goods, and pharmaceuticals. On the other hand, it will be a robust growth for the industrials, banks and the chemicals sector.

According to brokerage firms, the EBITDA margins will remain flat on an year-on-year basis at 17.7 percent for listed firms. This is due to strong performance in the healthcare and telecom setcor and also due to weak performance in commodities and cement industry which balances it out.

Motilal Oswal Securities predicts moderate earnings growth, mainly influenced by the BFSI sector and also positive support from healthcare, real estate, capital goods and technology sector. According to it, the earnings for PSU Banks, NBFC-lending, and Private banks are estimated to increase by 13 percent, 8 percent and 2 percent on an year-on-year basis, respectively. The expected growth for PSU and private are actually indicating lowest earnings growth since the last 10 and 13 quarters, respectively. While non-lending NBFCs who are capital market players are estimated to record a 39 percent year-on year earnings. This is mainly driven by exchanges and brokers.

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Tata Motors Stock Slump: Analyzing the Decline and Road Ahead

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Investing in India’s EV Future: Analyzing Mercury EV-Tech’s Strategic Merger and Market Expansion
Business, Equities, Market News, Markets - January 9, 2025

India's Car Sales Growth Hits 4-Year Low as Urban Market Struggles

India’s Car Sales Growth Hits 4-Year Low as Urban Market Struggles

Overview
In 2024, the growth rate of automobile sales fell to barely 5%, which was the slowest pace in four years and highlighted difficulties in urban areas, according to ToI. The automotive industry is expected to sell approximately 43 lakh vehicles in 2024, up from 41.1 lakh units in 2023, based on preliminary forecasts. During the period under analysis, SUVs sales accounted for 54% of the total sales which reflects their popularity and sets SUVs as the main growth drivers.

Given the strong sales foundation of prior years, several automakers voiced optimism about the 5% growth rate, while others are preparing for more difficulties in the upcoming year. Speaking on this issues, a prominent company executive stated that the industry is now focused on getting incentives from the upcoming budget scheduled on 1st of February, 2025, and consumption would be fueled if potential income tax rates are cut.

Car sales in Urban Centres
Throughout the year of 2024, the demand for passenger vehicles remained weak which resulted in manufacturers to give aggressive price reductions coupled with discounts to accelerate sales, specifically in the latter part of 2024 which includes festive seasons. The sub-Rs 10 lakh market, which has seen a steady drop in previous quarters, has seen the most noticeable dip, according to a story in The Indian Express. Trends observed in other important consumer industries are consistent with this trend in the automotive sector. Companies that sell fast-moving consumer goods (FMCG) have also noted first indications of a slowdown in demand. Tata Consumer Products Ltd. executives have voiced concerns about a “softness” in urban demand, while Nestle India said that demand was muted in key cities, partially due to strong pressures from food inflation. Furthermore, vehicle affordability has suffered as a result of rising auto prices brought on by the recent enforcement of stronger safety and pollution standards. The slow development of urban sales has been exacerbated by this trend.

This downturn in the automobile industry is occurring at the same time that the GDP is growing more slowly. Growth fell short of the Reserve Bank of India’s 7% forecast in the first quarter, from 7.8% in the previous quarter to roughly 6.7% in the first quarter, and may further slow to 6.5% in the July-September quarter, according to the study. Additionally, rising FMCG volumes and an increase in sales of three-wheelers and tractors suggest that rural demand is still strong, according to the Finance Ministry’s September economic review. But because of weaker consumer sentiment, lower foot traffic brought on by more rain than usual, and seasonal shopping restrictions, urban demand is waning.

Performance of major car companies in 2024

Maruti Suzuki
Strong demand in rural areas helped Maruti Suzuki achieve its highest-ever yearly sales in 2024, despite the general decline in the auto sector. The company sold 17.9 lakh units in 2024 as opposed to 17.4 lakh units in 2023. In a statement given by an official from Maruti Suzuki said that they have managed to gain growth across segments. Furthermore, the sales growth spread out in almost all segments and not just SUVs where the company now has 27% share.

Hyundai India
With sales increasing by barely 1%, 2024 was a very flat year for Hyundai India. During the year, the company sold just over six lakh cars. “Despite significant challenges faced by the industry as a whole, Hyundai has maintained sales momentum in 2024,” stated Director and COO Tarun Garg.

Tata Motors
In 2024, Tata Motors sold more than 5.6 lakh cars, beating its sales record for the fourth year in a row. Managing Director of Passenger Vehicles and Electric Mobility Shailesh Chandra attributed the increase to the growing demand for SUVs and CNG-powered automobiles. Chandra further stated that PV sector saw moderate growth which was driven by SUV segment and growing demand for eco-friendly vehicles.

Conclusion
The government’s policies will determine the industry’s expectations for 2025. Many automakers are hoping that the upcoming budget would provide incentives, such as possible income tax rate reductions, that will increase affordability and stimulate consumption. However, in the near future, the persistent issues of growing expenses and stagnant urban markets can still have an impact on sales growth. The auto sector is still concentrating on sustaining growth in rural areas and using the robust demand for SUVs to offset the general slowdown in the market. Vehicle manufacturers now anticipate with strategic pricing models and supportive policies, obstables in the near future would be overcome.

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Q3 FY25: A Crucial Turning Point for India’s Growth Story

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Jindal Steel & Power Q1 FY26: Profits Surge on Operational Gains and Strategic Growth
Business, Equities, Market News, Markets - January 9, 2025

Copper holds near five months low as weak demand outlook dominates

Copper holds near five months low as weak demand outlook dominates

Copper prices remained around five month lows due to a weak demand outlook dominating the market. The reasons for this poor demand perspective is the weak performance of the manufacturing sector around the globe. The negative outlook and poor performance of manufacturing activity across the world have outweighed the usual positive effect of the weaker dollar on copper prices. Usually, a weaker dollar supports higher prices of copper because it makes it cheaper for consumers using other currencies than dollars to buy dollar-priced copper.

On the London Metal Exchange (LME), the benchmark for copper increased by 0.1 percent only to $8,775 metric ton by 11:07 GMT on 2nd January, 2025. On 31st December 2024, it touched its lowest of $8,757 since 8th August.

Despite the weak US dollar making dollar-priced metals cheaper for purchasing through the use of other currencies, traders anticipate that the dollar will appreciate again in the upcoming days. This will make dollar-priced metals more expensive for consumers using other currencies because consumers have to spend more of their own currencies. Thus, the strengthening of the dollar will result in an increase in the metal price that has been due since the end of September.

Industrial metals are also anticipated to come under the pressure occurring due to uncertainty in macroeconomic factors. This is due to the prospect that US President-elected Donald Trump might impose tariffs on imports, which could likely lead to the initiation of a trade war and adversely impact global economic growth and demand.

As per the statement of one of the copper traders, there is a lot of nervousness regarding what steps or the potential action the US President Donald Trump will take when he takes his official position as President. This uncertainty has led to not much growth in manufacturing activity and demand.

Surveys of Purchasing Managers
According to the surveys of Purchasing Managers, the slowdown in the manufacturing sector and its operation was observed in China and South Korea in the month of December. The rate of declining manufacturing activity of European factories is at a faster rate than in the month of November.

Other Metal Commodities
Aluminum prices reached an intra-day high of $2,574.50 a ton. This peak is due to growing worries about supply issues in the London Metal Exchange (LME) market. In the official trading session, it gained 0.3 percent, which accounts for $2,599. The concerns regarding supply issues resulted in reducing the discount rate for the three-month aluminum cash contract. It fell from $40 in the month of December to $23 per ton.

The LME-registered warehouses provide storage facilities for metal brands registered with the LME, and it is authorized by the LME. The aluminum stocks under the LME-registered warehouses recorded a fall of more than 40 percent, since May of the previous year. It accounts for 634,650 tons.

The metal allocated for shipment is indicated by canceled warrants. At present, it constitutes 54 percent of the total aluminum stocks. Indicating that more aluminum is expected to leave LME-registered warehouses soon.

On the basis of technical analysis, the aluminum has an upside resistance of around $2,575 per ton with a moving average of 21-days and support level of $2,553 with a 100-day moving average.

While lead price fell by 0.6 percent to $1,940.50 per ton and price of Zinc decreased by 1.3 percent to a six-week low of $2,938.50 per ton. On the other hand, the price of tin decreased by 2 percent to $28,490 per ton, and the price of nickel slumped by 1.1 percent to $15,160 per ton.

On 7th January 2025, the benchmark copper price on the LME increased by 1.7 percent, which accounts for $9,031 per metric ton at 15:30 GMT. Since the US election in the month of November, the perspective towards copper has been filled with uncertainty resulting in copper being kept in a narrow range of $9,000. According to the Analyst of Consultancy group CRU Robert Edwards, the price is influenced by macro factors. Nothing can be said certainly about the direction of the market till any solid actions such as US import tariffs take place.

The weak demand for industrial metals in China has significantly affected global prices of metals. This is due to sluggish economic growth and consumption of industrial metals. Also, the copper market is affected due to tight supplies of metals occurring due to operational issues and disruptions.

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Q3 FY25: A Crucial Turning Point for India’s Growth Story

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MRF Q1 FY26: Revenue Up, Profits Down on Margin Pressures
Business, Equities, Market News, Markets - January 9, 2025

TVS Motor Reports 7% Sales Surge in December, Reaching 3.2 Lakh Units

TVS Motor Reports 7% Sales Surge in December, Reaching 3.2 Lakh Units

TVS Motor, the third-largest motorcycle company in India in terms of revenue. The company registered a sales surge in the month of December by 7 percent compared to the previous year of the same period. The monthly sales of the company increased by 321,787 units in the month of December 2024 as compared to 301,898 units of sales in the same period of the previous year.

The December month was good for automakers as most of the car and bike manufacturers gave a strong performance in terms of sales.

Sales of TVS motors
The TVS company registered a growth of 8 percent in their total two-wheelers sales which accounts for units in the 312,002 month of December 2024 compared to 290,064 units of sales in the month of December 2023. While sales of domestic two-wheelers recorded around 215,075 units of sales in December 2024 compared to 214,988 units of sales in December 2023.

While the total sales of motorcycles was recorded at 144,811 units in the month of December 2024 compared to 148,049 units in the month of December 2023. The overall sales of the scooter recorded an increase in sales growth by 30 percent. It observed an increase in sales growth by sales of 133,919 units in the month of December 2024 against sales of 103,167 units in December 2023. The sales of EVs vehicles by the company was 20,171 units in December 2024 compared to sales of 11,288 units in the month of Decmber 2023. It indicated an increased growth by 79 percent.

The total sales of three-wheelers of the TVS company is recorded at 9,685 units in the month of December compared to the previous year’s same period which registered sales of 11,834 units.

Exports of the TVS Motors
Total exports of the company surged to 22 percent in the month of December 2024. It recorded an increase in export units by recording 104,393 units in December 2024 and 85,391 units sold in the same period of the previous year. While the company’s export in two-wheelers recorded a growth of around 29 percent. Its performance in exports of two-wheelers is 96,927 units in December 2024 compared to exports of 75,076 units in the same month of the last year.

Comparison of third quarter of the financial year
In the third quarter of this financial year, strong sales growth was observed which accounted for 11 percent growth. This third quarter recorded total sales of 11.8 lakh units compared to 10.6 lakh units in the same quarter of the financial year 2023-2024.

Performance of other Auto Companies
As per the data released by Tata Motors, the sales observed in the third quarter of the financial year 2024-2025 by Tata Motors in the international and domestic markets is around 235,599 units of sales compared to its sales units account to 234,981 units during the third quarter of the financial year 2023-2024. Its sales on the domestic level increased only 1 percent which accounted for 76,599 units of sales compared to 76,138 compared to previous year of the same period.

Ashok Leyland company’s combined sales of domestic and international accounts for increased sales at 5 percent higher in the month of december 2024 compared to previous year of the same month. The sales of the month of December 2024 was around 16,957 units compared to 16,154 units of sales in the month of December 2023.

One of the reasons for the increase in sales could be due to many automakers signalling that they probably would raise the price of a cars per unit in the New Year.

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Strong Growth in India’s Auto Components Industry: A Positive Outlook for FY25

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Visteon Invests $10M in India's Camera Manufacturing!
Business, Equities, Market News, Markets - January 9, 2025

Bank Q3 Results reflect slower credit growth

Bank Q3 Results reflect slower credit growth

Overview
In the Indian banking space, both private and public sector banks have seen a sharp decline in credit growth in the past few months and this reduction is likely to get spilled in the financial year of 2025-26 as well. This slowdown trend is evident in the credit growth update from the Q3 results of most banks showcasing the same. Although banks have reflected increments in advances and deposits, the credit expansion and disbursement rate has taken a hit compared to previous growth rates over the past few quarters. There are many reasons for this credit growth rate erosion but the factor that stands out is RBI’s excessive crackdown on lending on unsecured loans. This is when RBI expressed a concern on bad loans thus increasing the capital requirement for personal loans and credit card loans. This has also prompted banks to improve their already high credit-to-deposit (CD) ratios. ICRA predicts that loan growth will fall to 9.7% -10.3% in the fiscal year ending March 2026. This reduction would be the result of banks lowering CD ratios and changing the implementation of adjustments in the liquidity coverage ratio framework, which would take effect in the next fiscal year.

Quarter 3 Results
Coming to the Q3 results for banks, earnings in the third quarter of FY25 will be modest, owing to weaker business growth, static margins, and asset quality stress. According to Nuvama Research, the third quarter of FY25 was difficult due to rising credit costs, slowing loan growth, a deposit shortage despite slowing loan growth, mild pressure on net interest margin (NIM), and decreased trading gains. Speaking of asset quality, micro-finance loans including unsecured loans continue to put pressure on banks’ balance sheets. While banks like HDFC, ICICI, and some state banks are less vulnerable to this factor but micro-finance Institutions (MFIs) lenders are set to see a sharp deterioration. Banks that have quite the exposure for these unsecured loans include Bandhan Bank, IndusInd Bank, and RBL Bank. IndusInd Bank reported a 0.75 percent dip in deposits and a 2.8% increase in advances, whereas YES Bank’s deposit growth was nearly unchanged sequentially and advances increased by 4.22%. Meanwhile, RBL Bank’s deposits fell by 1.11 percent, compared to a 3.3% fall, while Bandhan Bank’s deposits increased by 2.02%, despite a 1.06% loss in loans.

According to brokerage Motilal Oswal, systemic credit growth has fallen to 11.5% from a previous high of 16%, owing to a slowdown in unsecured retail and demand deceleration in certain other secured areas. While a few banks, like as IndusInd Bank and RBL Bank, have already reduced their growth forecasts, select large banks are also expected to publish sluggish full-year growth forecasts due to a high credit-deposit (CD) ratio and mounting asset quality worries. In Q3, HDFC Bank’s advances increased by 3% year on year to ₹25.42 lakh crore, while deposits increased by 16% to ₹25.63 lakh crore. According to preliminary data supplied by banks, only IDBI Bank and IndusInd Bank showed loan growth outpacing deposit growth during the quarter.

HDFC Case
Analysing HDFC Bank’s case, the gap between credit and deposits was glaring. Deposits increased five times faster than loans, by 15% year on year, compared to 3% loan growth in the third quarter. More importantly, the December quarter marked the first time since the bank acquired its parent in July 2023 that the bank’s aggregate deposits exceeded its total loan book.
Total deposits climbed by 15% year-on-year to Rs 25.63 lakh crore, with loan book at Rs 25.42 lakh crore. To put it in perspective, in the quarter ending December 2023, the gap between HDFC’s loans and deposits was a huge Rs 2.55 lakh crore, with deposits at Rs 22.14 lakh crore and loans at Rs 24.69 lakh crore. HDFC Bank sold Rs 21,600 crore of loans through securitization during the quarter, bringing the total amount sold to Rs 46,300 crore for the fiscal year, allowing the bank to reduce its C/D ratio from 110% in July 2023 to 87% in September. The lender’s deposit growth rate was 15.8% over the previous year and 2.5% quarterly.
Consequently, HDFC Bank Ltd. was the second largest contributor to the 350-point decline in the Nifty 50 index on Monday, January 6. The stock is adding approximately 40 points to the Nifty’s downward trend. The stock was the greatest contributor to the Nifty’s decline on Friday, with losses of more than 2.5%.

PSU Banks
Shares of state-owned banks fell on Monday (6th of January, 2025) after these banks reported modest deposit and credit growth data for the October-December quarter (Q3) of 2024-25 (FY25). The Nifty PSU Bank index fell 4%, with Union Bank of India emerging as the biggest loser, with its shares falling 7.5% to close at Rs 114.7, followed by a 5.7% drop in shares of Bank of Baroda (BoB) to Rs 228 and a 4.7% slide in shares of Bank of India to Rs 99.8 on the NSE. Meanwhile, the Pune-based Bank of Maharashtra reported a slight 1% increase in deposits, but advances increased by 5.13 percent sequentially. PNB’s deposits increased by 4.9% in the third quarter of FY25, while advances increased by 4.7%.

To summarise, according to central bank data, retail credit growth fell to 16.3% in the fortnight ending November 29, 2024, down from 18.7% in the same time in 2023, owing mostly to a drop in growth of personal loans and auto loans. Auto and personal loan growth has been cut in half, to 10% from 21% and 12% from 25% a year ago, according to central bank data. Credit card outstanding growth has also slowed to 18% in November 2024, down from 34% the previous year. Thus, to rescue this situation, RBI is expected to induce liquidity soon by way of further rate cuts which would allow the deposits and advances to grow in tandem with GDP of the nation.

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Centre Eases Capex Loan Norms to Boost State Spending in FY25

Centre Eases Capex Loan Norms to Boost State Spending in FY25

Overview
The Center has loosened a number of regulations pertaining to the issuance of interest-free capital expenditure loans to state governments in order to guarantee that the entire Rs 1.5 lakh crore allocated for 2024–2025 is utilized throughout the year and to prevent a reduction in public capital expenditures.

The action is intended to reduce the probable shortfall between the actual budgetary capital expenditure and the Rs 11.1 lakh crore budgeted level. To put this in perspective, just about Rs. 5.13 lakh crore or about 12.3% or less than the previous year had been spent from capex budget by November, 2024. The government hopes to streamline the procedure for states and increase capital spending in the latter quarter of FY25 by transforming tied savings into untied loans.

To aid long-term asset creation and investments, capex loans which are provided by the government as interest-free advances for 50 years are intended. Of the entire amount allotted for FY25, Rs 95,000 crore is linked to particular reforms like infrastructure development, land reform, and industrial growth, while Rs 55,000 crore is currently untied and available to states for initiatives of their choosing. However, with less than Rs 1 lakh crore sanctioned so far this year, disbursements have delayed. In the first half of FY25, the Center approved Rs 70,000 crore and released Rs 40,000 crore, falling well short of the yearly target of Rs. 1.15 lakh crore.

Delays in disbursement of loans
Delays in states achieving reform-linked standards, which were released in August rather than February, have resulted in slower payments of the tied share of the capital expenditure loans. States’ capacity to enact the necessary reforms was further hampered by the fact that this postponement fell during both the general and state elections. States have shown the greatest interest in tourism projects out of the 12 conditional allocations under the linked component. Urban land reforms, car scrappage, and working women’s hostels are further areas of concentration. Rs 25,000 crore of the Rs 95,000 crore in tied loans are contingent on states attaining a minimum of 10% growth in capital expenditures. The remaining portion will be released depending on growth in April–September of FY25, with the other half being determined by performance in FY24. After certain states such as Andhra Predesh, Kerala, and Punjab failed to meet the criteria, in FY24, the centre’s allocation of Rs. 1.30 lakh crore was reduced to Rs. 1.05 lakh crore.

Amendments in norms
States that experienced severe natural disasters in 2024–2025—as confirmed by the home ministry panel—will get an additional allocation of up to 50% of the funds already allotted under the untied category, according the most recent change to the regulations. The impacted states would have to utilize this sum for projects aimed at preventing future disasters as well as for the rehabilitation of infrastructure, ideally in areas devastated by the disaster. Additionally, on a first-come, first-served basis, states that have used the first installment under the untied category and have used the second installment will receive an additional allocation of up to 100% of the original allocation to the Hill and North East States and 50% of the original allocation for the other states.

Compared to the earlier allocation of Rs 55,000 crore for FY25, these two adjustments will significantly boost the total flow of untied loans to states. Further, the Center has loosened a number of requirements under the loan’s “tied” component, including as the one pertaining to the states’ “own capex” accomplishment.

According to the first standards, the Center gave states Rs 25,000 crore as a capex performance incentive: 50% if they achieved over 10% on-year growth in FY24, and the remaining 50% if they achieved over 10% growth in the first half of FY25. According to the 15th Finance Commission’s decision, funds would be distributed across the states in proportion to their share of central taxes and charges. The Center also modified incentives for the implementation of the SNA SPARSH Model for Just-in-Time disbursement of money under nationally sponsored schemes, as well as criteria pertaining to infrastructure projects in both urban and rural areas. These would guarantee that states will make full use of loans designated for these uses.

Further, the transfer of funds under the scheme has been extremely rapid this year, particularly in the last two to three months. Since several states were unable to comply with the severe conditions imposed by the Center, the Center was able to disburse Rs 1,05,551 crore, or 70% of the expenditure of Rs 1.5 lakh crore, during the previous fiscal year. Between April and November of the current fiscal year, the Center’s capital expenditures fell by more than 12%.
It is said that government’s capex would fall short of the FY25 target of Rs. 11.11 lakh crore by Rs. 1-1.5 lakh crore.

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India's Manufacturing Sector Hits 12-Month Low in December

India’s Manufacturing Sector Hits 12-Month Low in December

India’s manufacturing sector recorded a 12 month low growth in December due to slow down growth in factory orders and expansion of production. It is also due to increased competition and price pressures on the operations of the sectors.

India’s Purchasing Managers’ Index (PMI)
The HSBC PMI compiled by S&P Global states that in the month of December PMI tone down to 56.4 from 56.5 in the month of November. It indicated a muted improvement in operational conditions. Despite the fall in December, the average PMI for the year 2024 increased to 57.5 from its earlier average record of 56.8 in the year 2023. It implies that even after falling from 56.5 in the month of November, it remained above its average growth in the long-run of 54.1, indicating a strong rate of growth. In the second quarter of the fiscal year 2025 recorded a slow growth in the manufacturing sector. In the September quarter, it fell to 2.2 percent against 14.4 percent in the previous quarter of the same period and 7 percent in the June quarter.

In the September quarter, India’s GDP growth slowed down to 5.4 percent. In the first quarter of the fiscal year 2025, India’s GDP growth was around 6.7 percent compared to 8.2 percent in the same period of the previous year.

Despite the joint-slowest in a year which is equal to September growth rate, the latest expansion is certainly sharp. The survey’s qualitative data hints that growth was mainly hampered due to competition and price pressures. Also, the output levels increased at a substantial pace even in the situation of slowest growth in the year 2024. This was mainly due to favorable demand acting as the main determinant of production growth.

As per the data of the month of December, the sector observed the least extent of improvements in the year 2024 in the situation of slower rise in output, new orders and purchase stocks. The growth rates remain substantial and aided in giving support to expansion in purchase and employment levels. The survey also stated that cost pressures went mild due to fall in cost burdens, however inflation in prices charged on consumers remains historically high.

This survey is formulated on the basis of the responses collected from the questionnaires given to 400 firms in the manufacturing sector and 50 point mark threshold which separates expansion from contraction.

The Economist at HSBC Ines Lam states that the Indian manufacturing sector ended the strong year 2024 with signs of moderate cooling trend. The new orders observed the slowest rate of expansion in the year, indicating weaker growth in future production. Despite this, the new export orders observed a rise in growth at faster speed from the month of July. Although an increase in overall prices of input has tone down slightly, the cost pressures on Indian manufacturing firms is still high. In the month of December , the input costs kept on rising due to firms recording an increase in container, material and labour costs. While the selling price was high due to firms continuously raising selling prices at a faster rate for the last 11 years. This is the reason for customers facing hiking in prices higher than the range of rise in cost pressures.

Impact on employment levels and infrastructural output
In case of employment levels, the sector observed a rise in job creation level for the 10th month in a row. Also the rate of employment level is the most rapid in four months. It accounts to one out of the ten companies employing extra employees compared to less than 2 percent of the firms that are doing layoffs. It is quite significant that infrastructural output in India, which accounts for about two-fifths of industrial production, observed a surge to a four-month high in the month of November. As per the data released, the reason for this was due to a rise in six out of the eight core constituent sectors during the month.

Other aspects such as level of input inventories, purchasing growth and smaller lead times supported the monthly rise in growth. Sharp accumulation level was observed, but the weakest since December 2023.

Perspective of the Manufacturing firms
The outlook of manufacturing firms is optimistic in terms of rise in output levels. This optimism can be seen in advertisements, investment and expectation of favorable demand. However, this perspective is certainly affected by concerns such as inflation and competitive pressures.

While the manufacturing sector hit a slump to a 12-month low in December, service sector has significantly regained momentum in the last month after facing a mild moderation in the month of November. This is due to new orders and output levels rose to a four month high in service sector activity.

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