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New Delhi, <keyword id="20748494" type="General" weightage="20" keywordseo="domestic-commercial-vehicle" source="keywords">Domestic Commercial Vehicle</keyword> (CV) volumes are expected to dip 4-7 per cent year-on-year next fiscal with high base effect kicking in, rating agency <keyword id="19908266" type="General" weightage="20" keywordseo="icra" source="keywords">Icra</keyword> said on Tuesday. The volumes are expected to remain muted through the January-March quarter on account of a perceived pause in the infrastructural activities as the model code of conduct kicks in ahead of the general elections. "Icra estimates the domestic CV industry volumes to register 2-5 per cent year-on-year growth in volumes in FY24. Subsequently, the industry's sharp <keyword id="20748180" type="General" weightage="20" keywordseo="upcycle" source="keywords">upcycle</keyword> is expected to plateau in FY25, with a decline of 4-7 per cent in volumes," the rating agency stated. <keyword id="20277974" type="General" weightage="20" keywordseo="icra-ratings" source="keywords">Icra Ratings</keyword> Vice President &amp; Co-Group Head <keyword id="20322347" type="General" weightage="20" keywordseo="kinjal-shah" source="keywords">Kinjal Shah</keyword> said he expects the long-term demand for CVs to remain intact. The continued focus on infrastructure capex, emphasis on private participation in infrastructure, construction, defence and manufacturing activities would remain a long-term positive for the CV industry, he said. "However, in the near term, Icra expects the volumes to plateau on a high base, amid the transient moderation in economic activity in some sectors with the onset of the general elections," he added. Overall, the domestic CV industry's ability to scale previous peaks hinges on sustenance of the macro-economic environment, improvement in infrastructure activity and increased demand for last mile transportation, Icra stated.

Domestic commercial vehicle industry to see 4-7% dip in volumes next fiscal: Icra

Mumbai: The Reserve Bank is unlikely to cut the benchmark <keyword id="20071327" type="General" weightage="20" keywordseo="interest-rate" source="keywords">interest rate</keyword> in its forthcoming bi-monthly monetary policy review later in the week as <keyword id="19999652" type="General" weightage="20" keywordseo="retail-inflation" source="keywords">retail inflation</keyword> is still a cause of concern, and there is a possibility of the Middle East crisis deteriorating further, impacting crude oil and commodity prices, say experts. Earlier this month, the government reconstituted the Reserve Bank's rate-setting panel -- <keyword id="19913109" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="keywords">Monetary Policy Committee</keyword> (MPC). The reconstituted panel, with three newly appointed external members, will commence its maiden meeting on Monday. MPC Chairman RBI Governor Shaktikanta Das will reveal the outcome of the three-day discussion on Wednesday (October 9). The <keyword id="19899810" type="General" weightage="100" keywordseo="Reserve-Bank-of-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank of India" meta.hostid="261" meta.entityid="Reserve Bank of India">Reserve Bank of India</keyword> (RBI) has kept the repo or short-term lending rate unchanged at 6.5 per cent since February 2023, and experts think some easing could only be possible in December. The government has tasked the central bank to ensure that Consumer Price Index (CPI) based retail inflation remains at 4 per cent with a margin of 2 per cent on either side. In the current context, experts feel that the RBI may not follow the US Federal Reserve, which lowered the benchmark rates by 50 basis points, and the central banks of some developed nations, which have reduced the interest rates. "We do not expect any change in the <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword> or stance by MPC. The reason is that inflation for September and October will be above 5 per cent, and the present low inflation is due to the base effect. Besides, core inflation is inching upwards," said Madan Sabnavis, Chief Economist, Bank of Baroda. Further, the recent Iran-Israel imbroglio can intensify, and there is uncertainty here, he said. "Hence, the status quo is the most likely option even for new members. Inflation forecast may be lowered by 10-20 bps and no change in GDP forecast likely," said Sabnavis. The central bank last hiked the repo rate to 6.5 per cent in February 2023 and since then, it has held the rate at the same level. Icra Chief Economist Aditi Nayar said that given the undershooting in the initial first quarter GDP growth relative to the MPC's forecast and the likely sizeable undershooting in the second quarter CPI inflation print as well, "we believe a stance change to neutral may be appropriate in the October 2024 policy review". This could be followed by a shallow rate-cutting cycle of 25 bps each in December 2024 and February 2025, she added. "The abundant monsoon offers some insurance for crop inflation. The impact of global political developments and geopolitical uncertainty on the growth inflation dynamics remains a risk," Nayar added. An HSBC report said three developments stand out -- softer growth numbers have trickled in recently, inflation has been falling, and the external environment has moved from rate hikes to cuts. "We believe the RBI doesn't gain from waiting any longer. We think it will change its stance from a hawkish 'withdrawal of accommodation' to 'neutral' in the upcoming 9 October policy meeting, followed by repo rate cuts of 25 bps each in the December and February meetings, taking the repo rate to 6 per cent," the report said. The RBI kept the repo rate unchanged at 6.5 per cent in its August bi-monthly review amid risks from higher food inflation. This was the ninth consecutive MPC meeting, which decided to maintain the status quo on the rate front. Pradeep Aggarwal, founder and chairman, Signature Global (India) Limited, said while the real estate industry, developer community, and homebuyers are hoping for an interest rate cut in the upcoming monetary policy review, the RBI is likely to hold on to the interest rate cuts for the tenth consecutive time. "The apex bank still seems uncomfortable with the overall retail inflation scenario, particularly food inflation. As such, it is expected to maintain the status quo. The recent interest rate cut by the US Federal Reserve has ignited similar hopes even in India, but the domestic scenario is very different," he added. SBM Bank India Head Treasury Mandar Pitale believed that the MPC has persistently advocated a restrictive policy until inflation aligns durably towards the 4 per cent target. "With the unfavourable base effect taking the next couple of CPI prints near 5 per cent plus or minus, it will pose a major challenge for MPC to start easing from the October meeting," Pitale said, adding that the MPC is also expected to deliberate upon the global factors like growth-inflation behaviour in developed economies. The government has appointed Ram Singh, Saugata Bhattacharya, and Nagesh Kumar as external members of the MPC. They have replaced Ashima Goyal, Shashanka Bhide, and Jayanth R Varma. Apart from the Governor, the other internal members are the RBI Deputy Governor in charge of monetary policy Michael Debabrata Patra and the Executive Director monetary policy department of RBI Rajiv Ranjan. In an off-cycle meeting in May 2022, the MPC raised the policy rate by 40 basis points and it was followed by rate hikes of varying sizes, in the subsequent meetings till February 2023. The repo rate was raised by 250 basis points cumulatively between May 2022 and February 2023.

Status-quo on interest rate likely, say experts ahead of RBI's policy review

Indian <keyword id="34984" type="General" weightage="20" keywordseo="airline" source="Orion">airline</keyword> <keyword id="6354887" type="General" weightage="20" keywordseo="industry" source="Orion">industry</keyword> is expecting to prune its <keyword id="9317682" type="General" weightage="20" keywordseo="net-losses" source="Orion">net losses</keyword> to Rs 3,000-5,000 crore in this fiscal from an estimated Rs 17,000-17,500 crore in FY2023 on the back of improved yields and stable cost environment, credit ratings agency <keyword id="6354972" type="General" weightage="20" keywordseo="icra" source="Orion">ICRA</keyword> said on Tuesday. At the same time, ICRA also estimated that domestic air passenger traffic will expand by 8-13 per cent each in FY2024 and FY2025. The <keyword id="164127" type="General" weightage="20" keywordseo="rating-agency" source="Orion">rating agency</keyword> has also maintained its stable outlook on the industry in view of healthy passenger traffic growth, improved yields and a stable cost environment. Building on the fast-paced recovery in FY2023, ICRA at a webinar on Tuesday said it is expecting the domestic air passenger traffic to grow by 8-13 per cent in the ongoing financial year, thereby reaching 150-155 million and surpassing the pre-Covid levels of 141.2 million seen in FY2020. The Industry's net loss (is expected) to shrink to Rs 30-50 billion in FY2024 from an estimated Rs 170-175 billion in FY2023, aided by improved yields and stable cost environment, ICRA said. "The air passenger traffic momentum witnessed in the current fiscal is expected to continue in FY2025, though further expansion in yields from the current levels may be limited. Thus, the industry is estimated to report a similar net loss of ~Rs. 30-50 billion in FY2025 as well," said Suprio Banerjee, Vice President &amp; Sector Head, Corporate Ratings, ICRA Limited. The momentum in air passenger traffic growth is expected to continue in FY2025 as well with a similar estimated year-on-year growth, aided by rising demand for air travel and improving airport infrastructure, ICRA said. During the first eight months of this fiscal, domestic air passenger traffic stood at 100.7 million, witnessing a 17 per cent year-on-year growth, and 5 per cent higher than the pre-Covid levels (8M FY2020) of 95.7 million. Further, the international passenger traffic for Indian carriers, at 23.9 million in FY2023, surpassed the pre-Covid levels, although it trailed the peak levels of 25.9 million in FY2019, ICRA said, adding the same is expected to cross this level in the current fiscal, with an estimated 25-27 million passengers. Moreover, the airlines witnessed better pricing power, as reflected in improved yields and in the spread between revenue per available seat kilometre and cost per available seat kilometre (RASK-CASK) for the airlines, it said. While capacity addition for the industry will continue with the total pending aircraft deliveries of around 1,500, supply chain issues at the aircraft OEMs also mean that the addition could be gradual, ICRA said. Also, a large part of these is towards replacement of old aircraft with new fuel-efficient ones, and with the expected continued growth in passenger traffic, ICRA expects the demand-supply balance to be maintained in the medium-term. Furthermore, a sizeable part of the fleet addition by airlines will also be meant for expanding international operations, it said and added that in FY2023, the share of Indian carriers in international traffic (to and from India) stood at around 42 per cent. This offers adequate growth potential for Indian carriers to gain traction in international traffic over the medium term, the rating agency noted. However, despite a healthy recovery in passenger traffic and improvement in yields, the movement of the latter will remain monitorable amidst elevated ATF prices and depreciation of the Indian Rupee vis-a-vis the US Dollar compared to pre-Covid levels, both of which have a major bearing on the airlines' cost structure, the rating agency noted. The average ATF (aviation turbine fuel) prices stood at Rs 103,189/KL in 9M FY2024, which were 59 per cent higher compared to an average of Rs 64,715/KL during FY2020, albeit a decline of 17 per cent compared to Rs 121,013 /KL in FY2023, it observed. Fuel accounts for 30-40 per cent of the airlines' expenses, while around 35-50 per cent of the airlines' operating expenses 'including aircraft lease payments, fuel expenses, and a significant portion of aircraft and engine maintenance expenses ' are denominated in US dollar terms. "More recently, the Indian aviation industry has been facing significant supply chain issues, resulting in around 20-22 per cent of the total fleet being on the ground currently. "The recent issue related to powder-coating related concerns in engines manufactured by Pratt &amp; Whitney (P&amp;W) is expected to lead to additional aircraft to be grounded by Q4 FY2024 of this fiscal 'amounting to approximately 22-24 per cent of the industry capacity," said Banerjee. This will result in high operating expenses towards cost of grounding, increase in lease rentals due to additional aircraft being taken on lease to offset the grounded capacity, along with increasing lease rates and lower fuel efficiency, which adversely impact the airline's cost structure, and thus overall cash flow generation," he added.

Indian airlines likely to prune losses to Rs 3,000-5,000 cr this fiscal: ICRA

Mumbai, The domestic air passenger traffic is expected to surpass the pre-Covid levels of 141.2 million and reach 150-155 million this fiscal, registering an estimated growth of 8-13 per cent, credit ratings agency <keyword id="19908266" type="General" weightage="20" keywordseo="icra" source="keywords">Icra</keyword> said on Wednesday. Icra also projected a significant reduction in industry's net loss for the next two fiscals and was also of the view that supply-chain challenges and engine failure issues may remain near-term headwinds. Icra maintains a "stable" outlook on the domestic aviation industry, amidst the continued recovery in domestic and international air passenger traffic, and relatively stable cost environment, it said. The momentum in traffic growth is expected to continue in FY2025 as well, with a similar estimated year-on-year growth, aided by rising demand for both leisure and business travel and improving airport infrastructure, it said. The international passenger traffic for Indian carriers surpassed the pre-Covid levels in FY2023, although it trailed the peak levels of 25.9 million witnessed in FY2019, according to Icra. It is expected to cross this level in the current fiscal, with an estimated 25-27 million passengers, representing a <keyword id="19921444" type="General" weightage="20" keywordseo="yoy" source="keywords">YoY</keyword> growth of 7-12 per cent, the ratings agency said, adding the same is expected to further grow by 7-12 per cent to 27-29 million in FY2025. "The industry has witnessed improved pricing power, as reflected in increase in yields and thus the spread between revenue per available seat <keyword id="20544428" type="General" weightage="20" keywordseo="kilometre" source="keywords">kilometre</keyword>-cost per available seat kilometre (RASK-CASK) for the airlines. "The same is expected to remain favourable, aided by a decline in aviation turbine fuel (ATF) prices and the relatively stable foreign exchange rates," said <keyword id="20849526" type="General" weightage="20" keywordseo="suprio-banerjee" source="keywords">Suprio Banerjee</keyword>, Vice President and <keyword id="20225498" type="General" weightage="20" keywordseo="sector-head" source="keywords">Sector Head</keyword> for corporate ratings at Icra. The industry is thus estimated to report a significantly lower net loss of Rs 300-4,000 crore (Rs 30-40 billion) in FY2024 and FY2025 compared to Rs 170-175 billion in FY2023, he added. According to the ratings agency, the ATF prices and indian rupee-US dollar movement have a major bearing on the airlines' cost structure. The average ATF price stood at Rs 103,547/KL in the April-February period of FY2024, which is a YoY decline of 15 per cent compared to Rs 120,978/KL in FY2023, it said. However, this was 60 per cent higher compared to an average of Rs 64,715/KL during FY2020, as per Icra. Fuel accounts for around 30-40 per cent of the airlines' expenses.

Domestic air passenger traffic to surpass pre-Covid levels to reach 150-155 mn this fiscal: Icra

Chennai, Credit rating agency <keyword id="19908266" type="General" weightage="20" keywordseo="icra" source="keywords">ICRA</keyword> on Wednesday said <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s Gross Domestic Product (GDP) would grow at 6 per cent in Q3 FY2024 from 7.6 per cent in Q2 FY2024. Further, the Gross Value Added (GVA) growth is estimated to ease to 6 per cent in Q3 FY2024 from 7.4 per cent in Q2 FY2024, driven by the industrial and agriculture sectors, amid an improvement in the services sector. According to ICRA, the anticipated deterioration in the industrial sector growth in Q3 FY2024 is partly attributable to an adverse base effect and a deceleration in volume expansion even as the continued deflation in commodity prices kept profitability of some sectors favourable. Additionally, a mild 0.2 per cent contraction in the total spending of Government of India and 25 state governments (all states except <keyword id="19915575" type="General" weightage="20" keywordseo="arunachal-pradesh" source="keywords">Arunachal Pradesh</keyword>, <keyword id="19895061" type="General" weightage="20" keywordseo="goa" source="keywords">Goa</keyword> and Manipur) in Q3 FY2024 is expected to have dulled the GVA growth in the quarter. "Lower volume growth for the industrial sector, flagging momentum in certain indicators of investment activity, a slowdown in Government expenditure and an uneven monsoon are expected to dampen the GDP growth to 6.0 per cent in Q3 FY2024 from 7.6 per cent in Q2 FY2024," <keyword id="20028743" type="General" weightage="20" keywordseo="aditi-nayar" source="keywords">Aditi Nayar</keyword>, Chief Economist, Head-Research &amp; Outreachs said. ICRA estimates the industrial GVA growth to record a broad-based moderation to 8.8 per cent in Q3 FY2024 from 13.2 per cent in Q2 FY2024, led by all four sub-sectors, namely, manufacturing, electricity, construction and mining and quarrying. ICRA projects manufacturing GVA expansion at a healthy 10 per cent in Q3 FY2024, twice as high as the 4.7 per cent seen in Q1 FY2024, albeit lower than the 13.9 per cent recorded in Q2 FY2024, amid a deceleration in volume growth as reflected in the manufacturing Index of Industrial Production (IIP). Owing to the decline in output across all major kharif crops projected by the First Advance Estimates, ICRA projects the growth in agriculture, forestry, and fishing to dip to a muted 0.5 per cent in Q3 FY2024 from 1.2 per cent in Q2 FY2024. This would be the lowest growth print for the sector since Q4 FY2019 (-0.9 per cent). In contrast to industry and agriculture, ICRA estimates the services GVA YoY growth to rise to 6.5 per cent in Q3 FY2024 from 5.8 per cent in Q2 FY2024, led by trade, hotels, transport, communication and services related to broadcasting.

India's FY24 third quarter GDP growth seen at 6%: ICRA

<keyword id="6354387" type="General" weightage="20" keywordseo="jewellery" source="Orion">Jewellery</keyword> consumption, in terms of value, is expected to grow by 10-12 per cent in this financial year, mainly on account of increase in <keyword id="46002" type="General" weightage="20" keywordseo="gold-prices" source="Orion">gold prices</keyword>, a report said on Friday. Rating agency <keyword id="6354972" type="General" weightage="20" keywordseo="icra" source="Orion">Icra</keyword> has revised upward its forecast for the year-on-year (YoY) <keyword id="19910440" type="General" weightage="20" keywordseo="domestic-jewellery-consumption" source="Orion">domestic jewellery consumption</keyword> growth (in value terms) in FY24 to 10-12 per cent from the earlier estimates of 8-10 per cent, primarily driven by the rise in gold prices. Jewellery consumption is estimated to have risen by more than 15 per cent YoY in the first half of FY24, aided by stable demand during 'Akshaya Tritiya', a festival considered auspicious for buying precious metals, and higher gold prices. However, Icra projects the growth rate to moderate to 6-8 per cent in the second half of this financial year due to sustained tepid rural demand amid persistent <keyword id="22195" type="General" weightage="20" keywordseo="inflation" source="Orion">inflation</keyword>. After remaining volatile between December 2022 and April 2023, gold prices were relatively stable in the first half of FY24, although up 14 per cent compared to the average prices during the year-ago period, noted the report. The elevated price levels supported revenue expansion of most jewellery retailers in the face of muted volume growth, it said. The ongoing tensions in the Middle East and the evolving global macro-economic environment could keep gold prices elevated in the near term. The spike in gold prices since early October 2023 and persistent inflationary headwinds remain key risks to demand, it stated. "Jewellers of the organised market is projected to record a healthy revenue expansion of 15-18 per cent YoY in FY24 on the back of their planned retail expansions and a gradual shift in consumer preferences towards branded jewellers. The organised jewellery retailers are expected to outperform the industry over the medium term supported by tailwinds from accelerated formalisation of the industry," Icra Vice President and Sector Head Sujoy Saha said. Icra has projected some moderation in FY24 in the operating margins of organised players owing to the front-loaded operating costs for planned store additions and increased advertising expenditure in the face of rising competition. Nevertheless, the benefits of economies of scale are likely to support the operating margins, which are estimated to hover in the range of 7.5-8 per cent in the near to medium term. Despite the projected increase in debt levels to fund the inventory for new stores, the debt protection metrics for the players are estimated to remain comfortable. "The organised jewellers had recommenced their retail expansion in FY23, after a brief hiatus in FY21 and FY22, with the store count estimated to have risen by more than 20 per cent during the year. The momentum is likely to continue over the near to medium term with an estimated increase in store count by 18-20 per cent YoY in FY24, supporting their revenue growth," Saha added.

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Domestic commercial vehicle industry to see 4-7% dip in volumes next fiscal: Icra

PTI

Status-quo on interest rate likely, say experts ahead of RBI's policy review

PTI

Indian airlines likely to prune losses to Rs 3,000-5,000 cr this fiscal: ICRA

PTI

Domestic air passenger traffic to surpass pre-Covid levels to reach 150-155 mn this fiscal: Icra

PTI

India's FY24 third quarter GDP growth seen at 6%: ICRA

IANS

Jewellery consumption to grow by 10-12 pc value-wise in FY24 amid rise in gold prices: Report

PTI

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