Trumponomics, poor growth, and high valuation certainly don't make a bullish recipe for Indian markets, warns Debashis Basu.
The Q1FY24 earnings season has started on a dismal note for corporate India. The early-bird companies' revenue growth has been at a 10-quarter low, while the combined earnings of non-BFSI (banking, financial services, and insurance) companies seem to have hit the ceiling. The numbers suggest corporate India is entirely dependent on BFSI companies and the IT services sector to drive growth in revenue and profit while other sectors are showing signs of stagnation.
The December meeting of the Reserve Bank of India's (RBI's) six-member Monetary Policy Committee (MPC) will start on Wednesday even as there is no clarity on whether Governor Shaktikanta Das, the chair of the panel, will continue in office after his term ends next week. The outcome of the meeting will be announced on Friday by Das at 10 in the morning.
The meltdown in Dalal Street that wiped out investor wealth to the tune of 44 trillion in 2025 also seems to be having a ripple effect on the country's vibrant automobile retail sales.
The Economic Survey seems convinced that 2019-2020 saw the bottom of the economic cycle, points out Abheek Barua, chief economist, HDFC Bank.
Experts are of the opinion that though the second half of this financial year will see some recovery, volume growth is likely to remain in single digit as compared to the double-digit rise recorded in past years.
Crude oil prices could dip to the low $60s by the end of 2025 after rising to $80 a barrel in the last quarter (October-December) of 2024 - up nearly 10 per cent from current levels, suggest analysts at JP Morgan. The main players in West Asia, including Saudi Arabia and the UAE, have a strong incentive to keep the conflict contained, according to the JP Morgan report.
Large Indian IT services companies are expected to report "muted" sequential show in a traditionally strong second quarter, as macroeconomic challenges continue to weigh on global discretionary spending, say market watchers. The big earnings week for tech heavyweights is up ahead, with Tata Consultancy Services (TCS) scheduled to announce its results on October 11, and both Infosys and HCL Technologies on October 12. Wipro is slated to declare its Q2FY24 results next week, on October 18.
Even as the high inflation figure for October has ruled out any possibility of a rate cut by the Reserve Bank of India's (RBI's) monetary policy committee (MPC) in December, a rate cut in February also looks uncertain due to global uncertainties. Economists told Business Standard that unless domestic growth slows markedly, the outlook on rate cut remains unclear. India's headline inflation touched a 14-month high of 6.2 per cent in October, breaching the MPC's upper tolerance band of 6 per cent.
The country's real GDP growth in the first quarter will be better than the Reserve Bank's estimate of 8 per cent, economists said on Tuesday. Economists at the country's largest lender SBI pegged the growth at 8.3 per cent while domestic rating agency Icra estimated it to come even higher at 8.5 per cent. The Reserve Bank of India (RBI), which expects the GDP to grow at 6.5 per cent in FY24, has estimated a growth of 8 per cent in the April-June period.
'If global growth continues to be sluggish, India instead could potentially take a bigger piece of a shrinking pie,' says Prachi Mishra, managing director, Global Macro Research, and India chief economist, Goldman Sachs.
However, the second quarter of FY24 is expected to be muted, and, with that, the hope of double-digit growth is now being pushed to FY25. However, analysts are expecting the momentum in the closure of record total contract values (TCVs) will continue, as has been the case over the last two quarters.
As the Union Budget 2025-2026 (FY26) inches closer, the Indian real estate industry is seeking stamp duty cuts, revised home loan limits and updated affordable housing norms through Pradhan Mantri Awas Yojna (PMAY), single-window clearance and eco-friendly policies, among others. Industry leaders and consultancy firms, including Anarock, Raheja, Gaurs, Kanodia Group, Reach, Urban Space, Justo and Eros Group, have shared their expectations.
It will be the second Budget of the Modi 3.0 government and eighth straight Budget for Nirmala Sitharaman, rare in Indian polity.
Auto mobile retail sales in India witnessed a 10 per cent annual growth in July driven by robust sales across passenger vehicles, two-wheelers and commercial vehicles, industry body FADA said on Monday. Total retail sales across segments rose to 17,70,181 units last month, as compared to 16,09,217 units in July 2022. Passenger vehicle sales saw an increase of 4 per cent to 284,064 units last month, as compared to 273,055 units in the year-ago period, the Federation of Automobile Dealers Associations (FADA) said in a statement.
India Inc continued to grapple with muted revenue growth in the September 2024 quarter (Q2FY25) and witnessed a decline in margins and profits. The headwinds were especially severe for non-financial companies, while banking, financial services, and insurance (BFSI) firms significantly outpaced the rest of the corporate sector. The total profit of 1,353 listed companies that have released their Q2FY25 results thus far dropped by 0.6 per cent year-on-year (Y-o-Y) - the first cumulative earnings decline in eight quarters.
The auto major is not just looking at domestic sales, but also planning to ramp up exports to key markets from here, like the Middle East, North Africa and Australia.
'This is also a time when you realise that short-term trading and dabbling in derivatives may result in financial losses.'
'Consider your household's financial health and all your other goals.' 'Buying a house might seem like an urgent goal, but it is rarely the only one.'
Dalal Street had a roller coaster ride in 2024 from shattering record after record to facing heavy correction off-late but equity markets still rewarded investors with positive returns, driven by a surge in domestic fund flows and a resilient macro landscape. The first half of the year saw robust corporate earnings, a surge in domestic flows, and a resilient macro landscape, driving the Nifty to an all-time high of 26,277.35 in September 2024, according to Motilal Oswal Wealth Management.
S&P Global Ratings on Monday cut India's economic growth forecast for current fiscal year to 7 per cent, but said the domestic demand-led economy will be less impacted by the global slowdown. S&P had in September projected the Indian economy to grow 7.3 per cent in 2022-23 and 6.5 per cent in next fiscal year (2023-24). "The global slowdown will have less impact on domestic demand-led economies such as India... India's output will expand 7 per cent in fiscal year 2022-2023 and 6 per cent in next fiscal year," S&P Global Ratings Asia-Pacific chief economist Louis Kuijs said.
Maruti Suzuki India (MSIL) does not anticipate growth in the small car segment because people continue to find these vehicles unaffordable, chairman R C Bhargava said on Wednesday. He said the market had clearly shifted towards the sport utility vehicle (SUV) segment and the company will go in the same direction. The domestic sales of utility vehicles jumped in India by 34.54 per cent to about 2 million units in FY23.
'The current crisis is one of incomes, driven by poor job growth, agrarian distress and poor investment sentiment,' notes Harsh Pati Singhania, director, JK Organisation.
From the 30-share Sensex pack, Tata Consultancy Services, Infosys, NTPC, HCL Technologies, Axis Bank, Tech Mahindra, Bajaj Finserv, Sun Pharma, IndusInd Bank and Reliance Industries were the major laggards. Tata Steel, Hindustan Unilever, Mahindra & Mahindra, Nestle and State Bank of India were among the gainers.
Fitch Ratings on Thursday retained India's growth forecast for the current fiscal at 6.3 per cent citing economic resilience despite tighter monetary policy and exports weakness, but upped year-end inflation projection on El Nino threat. The Indian economy grew 7.8 per cent in the April-June quarter of current fiscal on strong services sector activity and robust demand. "The Indian economy continues to show resilience despite tighter monetary policy and weakness in exports, with growth outpacing other countries in the region," Fitch said, while projecting 6.3 per cent growth for current fiscal (April-March), and 6.5 per cent for next fiscal.
'The RBI's MPC will maintain the current policy rates (6.50%) at the policy meeting, given ongoing inflationary pressures.'
Moody's on Friday slashed India's GDP growth projections for 2022 to 7 per cent from 7.7 per cent earlier as the global slowdown and rising domestic interest rates will dampen economic momentum. This is the second time that Moody's Investors Service has cut India's growth estimates. In September, it had cut projections for the current year to 7.7 per cent from 8.8 per cent estimated in May. "For India, the 2022 real GDP growth projections have been lowered to 7 per cent from 7.7 per cent.
Gross GST collection grew 9 per cent to over Rs 1.87 lakh crore in October on higher revenues from domestic transactions. The Central GST collection stood at Rs 33,821 crore, State GST at Rs 41,864 crore, Integrated IGST at Rs 99,111 crore and cess at Rs 12,550 crore.
There is no near-term respite for the country's largest fast-moving consumer goods maker, Hindustan Unilever (HUL), which is facing multiple challenges on the growth front. With demand showing no signs of improvement, especially in the rural segment, the October-December quarter (Q3) of 2023-24 (FY24) is likely to be similar to the previous quarter, with volume growth in the low single digits. The stock, which is down 7 per cent over the past year compared to the 11 per cent jump for the S&P BSE Sensex, could underperform the benchmark in the near term as well.
FMCG CEOs indicate that the market should stabilise post the general elections and that some growth should make its way back especially in rural areas
Retail sales of vehicles across categories in India grew by 11.21 per cent at 32,08,719 units in November, as compared to 28,85,317 units in the same month last year riding on two-wheeler demand, Federation of Automobile Dealers Associations said in Monday. Retail sales of two-wheelers were at 26,15,953 units last month, as compared to 22,58,970 units in November 2023, a growth of 15.8 per cent buoyed by the festive spillover.
'What is unusual about the current period of slow growth is that it has come without an external driver -- high oil prices and/or successive monsoon failures -- as was the case with all previous periods of slowdown, going back 50 years, notes T N Ninan.
Management commentary on demand environment, and forward guidance will be in focus when Indian IT services players declare their September quarter results for financial year 2024-25 (Q2FY25). The industry is exepected to have continued on the path of recovery in Q2, similar to the preceding quarter, rather than sprint towards growth. The top four firms likely grew between 0 per cent and 4 per cent year-on-year (Y-o-Y), according to consensus estimates.
Consolidated earnings of Bharat Forge in Q3FY23 missed estimates, largely due to higher-than-expected interest burden, although operational numbers (including standalone numbers) were close to consensus. Still, the management guidance was positive and appeared to be based on logic.
The stock of Crompton Greaves Consumer Electricals has shed about 12 per cent since the start of the month due to a muted near-term outlook. Demand slowdown across segments and pre-buying in cooling products in the June quarter are expected to weigh on revenues going ahead. In addition to pre-buying in the preceding quarter, demand conditions are soft on account of lower consumer spending due to inflationary conditions, weakness in rural demand and the fact that Q2 remains a soft quarter after a strong summer.
A Rs 525-crore contingency provision during the July-September period led to a 19 per cent fall in IndusInd Bank's share price on Friday (October 25). Contingency provisions are generally made when a lender expects more bad loans in the coming quarters. Shares of the bank on Tuesday (October 29) declined 1.53 per cent to settle at Rs 1,038.2 apiece on the BSE.
Growth in India is expected to slow to 6.3 per cent in FY 2023/24 (April-March), a 0.3 percentage point downward revision from January, the World Bank said Tuesday but noted there is an unexpected resilience in private consumption and investment and robust growth in the services. The World Bank made these points in its latest edition of Global Economic Prospects according to which global growth is projected to decelerate from 3.1 per cent in 2022 to 2.1 per cent in 2023. In Emerging Markets and Developing Economies (EMDEs) other than China, growth is set to slow to 2.9 per cent this year from 4.1 per cent last year. These forecasts reflect broad-based downgrades.
S&P Global Ratings on Monday kept its forecast for India's economic growth unchanged at 6 per cent in the fiscal year starting April 1, before rising to 6.9 per cent in the following year. In the quarterly economic update for Asia-Pacific, S&P saw inflation rate easing to 5 per cent in 2023-24 fiscal, from 6.8 per cent in the current financial year. It saw India's gross domestic product (GDP) likely growing by 7 per cent in the current financial year ending March 31 (2022-23), before slowing to 6 per cent in the next 2023-24 fiscal.
The number of Indian passengers has jumped more than 20 per cent in the past year
Continuing its dismal performance, industrial growth fell further to 1.9 per cent in September, mainly due to poor output from the manufacturing sector.
