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Market watchdog SEBI has come out with a consultation paper in a bid to ease the functioning of <keyword id="22476006" type="General" weightage="100" keywordseo="ESG-Rating-Providers" source="keywords">ESG Rating Providers</keyword> (ERPs), pushing for the development of a <keyword id="23760035" type="General" weightage="20" keywordseo="subscriber-pays-model" source="keywords">subscriber-pays model</keyword>. As of July 2024, nine ERPs are registered with SEBI to operate in the country. These include <keyword id="23760037" type="General" weightage="20" keywordseo="CRISIL-ESG-Ratings" source="keywords">CRISIL ESG Ratings</keyword> &amp; Analytics, ESG Risk Assessments and Ratings, GlobeTrend Climate Impact Institutional Investor Advisory Services, <keyword id="23760038" type="General" weightage="20" keywordseo="NSE-Sustainability-Ratings" source="keywords">NSE Sustainability Ratings</keyword> and Analytics, PGS Impact, Pragati Development Consulting, CARE ESG Ratings, and SES ESG Research. Per the paper's proposal, ERPs won't be required to disclose ESG (environmental, social, and governance) ratings to the bourses, provided they confirm that there is no non-public information that could potentially affect the rating. Another proposal was the simultaneous sharing of the ESG rating reports both to the rated companies and to the subscribers who pay to access these reports. ERPs should ensure that rated entities, their group companies, or associates cannot subscribe to their own ESG ratings, SEBI said in its consultation paper. Some of the other suggestions put forth by SEBI include: 1. Companies will have a specific timeframe to respond to the ESG report, and any such comments should be included in the report as an addendum. 2. In case the ERP does not agree with the remarks issued by the rated company, they can add their comments to the report as well. 3. ERPs can rate unlisted issuers or other products, provided they meet specific guidelines from relevant regulators. SEBI is receiving public comment on these proposals until November 15, 2024. <h2>Steady returns </h2>Of the 11 ESG mutual fund schemes available to Indian mutual fund investors, the Quant ESG Equity fund has generated the highest returns of about 45.44% over one year, data from ValueResearch showed. Simply put, had you invested Rs 10,000 every month in this fund for three years, you would have accumulated a corpus of Rs 5,47,525. Over three years, the returns on this fund come to around 26%. This was followed by the ICICI Pru ESG Exclusionary Strategy fund, which yielded 44.73% returns over the same period. However, over ultra-short terms, i.e., 1-3 months, ESG funds have largely delivered negative returns, underscoring their suitability only as a long-term investment avenue. Only the SBI ESG Exclusionary Strategy Direct Fund and Quantum ESG Best In Class Strategy Direct Fund have been around for 5 years, during which they have generated returns of about 16.67% and 18.7%, respectively. <keyword id="23760036" type="General" weightage="20" keywordseo="ESG-mutual-funds" source="keywords">ESG mutual funds</keyword> typically select and invest in companies that are ESG-compliant, i.e., who weave in environmental conversation, social welfare, and robust <keyword id="20392393" type="General" weightage="20" keywordseo="corporate-governance" source="keywords">corporate governance</keyword> practices into their working philosophy and work ethos, while simultaneously generating decent financial returns for stakeholders as well.

SEBI mulls measures to facilitate ease of doing business for ESG Rating Providers (ERPs)

New Delhi [India], May 22 (ANI): Benefiting from strong sales, organised gold jewellery retailers are set to clock 17-19 per cent <keyword id="19965932" type="General" weightage="20" keywordseo="revenue-growth" source="keywords">revenue growth</keyword> in the current financial year 2024-25, according to <keyword id="19898320" type="General" weightage="20" keywordseo="Crisil" source="keywords" meta.keywordsubtype="org" meta.entityname="Crisil" meta.hostid="261" meta.entityid="Crisil">Crisil</keyword>. The rating agency asserted that the projected revenue would be driven by higher realisations stemming from elevated <keyword id="19910265" type="General" weightage="20" keywordseo="gold-prices" source="keywords">gold prices</keyword>, while volume remains steady. Gold, considered a safe haven asset for investment, has been in demand for considerable period of time, with its prices rallying to hit record highs every now and then. Geopolitical conflict in the West Asia that stretched for long now, buying by several central banks including RBI, physical demand, have altogether pushed gold prices towards northwards. Retailers are likely to step up marketing and promotional campaigns this fiscal to combat the moderation in demand amid rising gold prices, Crisil said on Wednesday. Hence, operating profitability may marginally moderate 20-40 basis points (100 basis points is equal to 1 percentage point) year-on-year to 7.7-7.9 per cent. "Working capital requirements may rise, too, resulting from increased inventory due to a substantial rise in gold prices and new stores additions. That said, credit profiles should remain stable," the rating agency noted. The organised gold sector accounts for slightly more than a third of the market, with the highly fragmented unorganised sector making up the rest. Domestic gold price increased 15 per cent during fiscal 2024 and reached Rs 67,000 per 10 gm as on end of March 2024. Now, they are trading at over Rs 74,000. Gold kept its shine as one of the safer investment options seen by various central banks across the world as well as end consumers amid geopolitical uncertainties. Gold is a scarce commodity, and any mismatch in demand-supply conditions may invariably trigger sharp price rise. Moreover, Crisil believes <keyword id="21263075" type="General" weightage="20" keywordseo="organised-retailers" source="keywords">organised retailers</keyword> will continue to gain market share at the expense of the unorganised ones, supported by changing consumer preferences and store expansion into Tier 1 and 2 cities and beyond. Himank Sharma, Director, CRISIL Ratings, "Stronger cash generation, due to healthy revenue growth and adequate profitability, will keep credit profiles of organised gold jewellery retailers stable, despite an expected rise in working capital borrowings." At the global level too, gold prices too are at their peaks. Historically, gold, as an asset, is considered to be a haven as it typically manages to retain or appreciate its underlying value in times of turbulence. (ANI)

Benefiting from strong sales, gold jewellers set for 17-19% revenue growth in 2024-25: Crisil

The Indian IT services sector is staring at a second consecutive year of muted <keyword id="19965932" type="General" weightage="20" keywordseo="revenue-growth" source="keywords">revenue growth</keyword> due to modest increase in <keyword id="21414675" type="General" weightage="20" keywordseo="tech-spends" source="keywords">tech spends</keyword> in Europe and the US, a domestic rating agency said on Wednesday. Crisil Ratings said it expects the sector to grow at 5-7 per cent in FY25, after a growth of 6 per cent estimated to have been achieved in FY24. The overall industry size is pegged at USD 250 billion and it creates over 50 lakh direct jobs. "The slowdown in technology spend will continue this fiscal, weighing on the revenue growth of IT service providers," said Aditya Jhaver, director at Crisil. The industry is, however, expected to sustain in the key metric of profitability, as the operating profit margins will be stable at 22-23 per cent, the agency said, attributing it to prudent management of <keyword id="19999266" type="General" weightage="20" keywordseo="employee-costs" source="keywords">employee costs</keyword>. Crisil said the sectoral revenues achieved a compounded annual growth rate of 12 per cent for the decade through FY24. High interest rates and economic slowdown in client markets led to a modest single-digit growth in tech spends by companies in the banking, financial services and insurance (BFSI), retail, technology and communications sectors in FY24, the agency said. It said these four sectors account for nearly two-thirds of the industry's revenues. Jhaver said revenue from BFSI and retail segments will continue to be a drag with subdued growth of 4-5 per cent in FY25. Manufacturing and healthcare, which contribute a tenth of the revenue, were the only bright spots and continued double-digit growth in tech spend given the focus on process automation and research and development-based analytics, especially in healthcare. As revenue growth remained subdued, IT service companies pulled back on addition of fresh talent, resulting in headcount reductions by 4 per cent in 2023 by top 12 companies. This, along with the decline in attrition to 13 per cent as of December 2023 from the high of 20 per cent in FY23 provided a breather by limiting higher-cost replacement hiring during FY24, it said. Associate director Joanne Gonsalves said the ratings company expects IT service providers to remain "cautious" on fresh hiring in FY25 too, which will maintain employee utilisation at a healthy level of ~85 per cent. Continued healthy cash generation, strong balance sheets and sizeable cash surplus will keep the credit quality of IT service providers stable, the rating agency said. Players will continue to eye acquisitions, especially small and mid-sized opportunities that could enhance their product baskets and increase digital capabilities, it said. An appreciation in the rupee value or sustained delay in economic revival in key markets amid ongoing geopolitical conflicts could pose downside risks, it added. SEE ALSO:<a href="https://www.businessinsider.in/tech/mobile/news/realme-narzo-70-narzo-70x-5g-smartphones-launched-in-india-starting-at-11999/articleshow/109557895.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/realme-narzo-70-narzo-70x-5g-smartphones-launched-in-india-starting-at-11999/articleshow/109557895.cms" target="_blank">Realme Narzo 70, Narzo 70X 5G smartphones launched in India starting at ₹11,999</a> <a href="https://www.businessinsider.in/tech/news/apple-let-loose-event-scheduled-for-may-7-ipads-expected-to-be-launched/articleshow/109553148.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/news/apple-let-loose-event-scheduled-for-may-7-ipads-expected-to-be-launched/articleshow/109553148.cms" target="_blank">Apple Let Loose event scheduled for May 7 – New iPad models expected to be launched</a><a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8a-may-be-more-expensive-than-its-predecessor-as-per-a-new-leak/articleshow/109499394.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8a-may-be-more-expensive-than-its-predecessor-as-per-a-new-leak/articleshow/109499394.cms" target="_blank">Google Pixel 8a may be more expensive than its predecessor, as per a new leak</a>

Indian IT sector staring at 2nd straight year of muted revenue growth: Crisil

Revenues of organised <keyword id="21758362" type="General" weightage="100" keywordseo="gold-jewellery-retailers" source="keywords">gold jewellery retailers</keyword> are expected to surge by 22-25% this fiscal year, driven by the sharp reduction in import duties on <keyword id="18712" type="General" weightage="20" keywordseo="gold" source="Orion">gold</keyword> in the July Budget, according to a <keyword id="20874793" type="General" weightage="20" keywordseo="CRISIL-report" source="keywords">CRISIL report</keyword>. A recent analysis by CRISIL Ratings, which examined 58 gold jewellery retailers representing a third of the <keyword id="21165181" type="General" weightage="20" keywordseo="organised-sector" source="keywords">organised sector</keyword>'s revenues, indicates that the sector will benefit from improved <keyword id="19900859" type="General" weightage="20" keywordseo="working-capital" source="keywords">working capital</keyword> management. Although many retailers plan significant store expansions--estimated at 12-14% of existing stores--lower gold prices will reduce inventory costs, providing working capital relief. The organised jewellery sector, which accounts for just over a third of the overall market, is poised for a stronger financial performance compared to its unorganised counterpart. The steep reduction in <keyword id="20069572" type="General" weightage="20" keywordseo="import-duty" source="keywords">import duty</keyword> has come at a crucial time for the industry, as retailers prepare for the festive and marriage seasons. Following the price decline, volumes are expected to grow by 3-5% this fiscal year, reversing earlier projections of stagnant demand. Gold prices had been steadily rising since February 2024, which had subdued consumer demand and led to revenue growth driven solely by higher realisations rather than increased sales volumes. Himank Sharma, Director at CRISIL Ratings, highlighted the timely impact of the duty cut and said, "The duty cuts to their decadal lows have come at an opportune time for the gold jewellery retailers as they start stocking for the festive and marriage seasons from the latter half of August." He added, "However, the inventory losses on the existing stock due to the price cuts will be partially mitigated by the reduced spends on marketing and discounts, as demand revives. All said <keyword id="19957745" type="General" weightage="20" keywordseo="profitability" source="keywords">profitability</keyword> will see a marginal dip on-year to 7.1-7.2%." Despite the pressure on profitability, retailers' cash flows will improve due to higher revenues, enabling them to pursue expansion plans. Store expansions, expected to increase by 12-14%, will require higher inventory levels. However, the lower input costs resulting from reduced gold prices will balance out the additional working capital requirements. Gaurav Arora, Associate Director at CRISIL Ratings, added, "Gold jewellery retailers will maintain comfortable financial metrics this fiscal, with total outside liabilities to tangible net worth (TOL/TNW) and interest coverage ratios remaining around 1.0 and 9 times, respectively. These will be moderately better than our earlier expectations, keeping credit profiles stable." As the festive season approaches, gold prices remain around 17% higher than last year's average, which is expected to sustain demand and further drive revenues in the second half of the fiscal year. However, potential volatility in gold prices, changes in government regulations, and shifts in consumer sentiment will need to be closely monitored. The combination of reduced prices, increased demand, and improved working capital management is expected to keep the financial outlook for gold jewellery retailers positive, despite the slight dip in profitability. The reduced duty has caused retail gold prices to fall by Rs 4,500-5,000 per 10 grams, leading to increased demand for gold jewellery. The growth projection, 500-600 basis points higher than earlier estimates of 17-19%, is fuelled by higher volumes as more consumers are enticed by the lower prices.

Budget import duty cut will boost gold jewellery retailers' revenues by 22-25% this fiscal, notes CRISIL report

The Reserve Bank of India (RBI) may begin lowering <keyword id="19950650" type="General" weightage="20" keywordseo="interest-rates" source="keywords">interest rates</keyword> around October, provided that external factors like weather conditions and international commodity prices do not cause any disruptions, the credit rating agency, Crisil said in its report. The credit rating agency further anticipated that it expects "two rate cuts this fiscal." It said that the decision of the <keyword id="19913109" type="General" weightage="20" keywordseo="Monetary-Policy-Committee" source="keywords">Monetary Policy Committee</keyword> (MPC) decision to hold rates in its recent announcement was due to the elevated <keyword id="19999654" type="General" weightage="20" keywordseo="food-inflation" source="keywords">food inflation</keyword>. The climate conditions such as weather events are frequently changing and they need to be monitored. Going ahead, it anticipated that the macroeconomic environment would be better, creating a background for a rate cut. "The food challenge to a rate cut is expected to ease as agriculture prospects look better than last year. The monsoon has been above normal (7 per cent above the long period average as of August 7), and sowing has picked up across major foodgrains. As agriculture prospects become clearer by September, we expect it to pave the way for a rate cut," the S&amp;P's arm added in its report. In a move reflecting its cautious approach amid ongoing economic uncertainties, the RBI has decided to keep the <keyword id="20094323" type="General" weightage="20" keywordseo="repo-rate" source="keywords">repo rate</keyword> unchanged at 6.5 per cent. The decision to keep the repo rate steady comes amidst persistent concerns about <keyword id="19895000" type="General" weightage="20" keywordseo="inflation" source="keywords">inflation</keyword>, which remains above the RBI's target range. The central bank's commitment to bringing inflation down to its 4 per cent target continues to face challenges due to ongoing food inflation and other economic factors. Noting a likely uptick in core inflation, the report added that factors such as international freight costs, geopolitical risks to crude oil prices, and hikes in domestic telecom tariffs could affect this indicator. Anticipating the growth, it added, "The pace of growth of the economy is expected to ease this year, with lower fiscal support as the government pursues <keyword id="20101140" type="General" weightage="20" keywordseo="fiscal-consolidation" source="keywords">fiscal consolidation</keyword>." Announcing the MPC's decision on August 8, RBI Governor Shaktikanta Das expected the real Gross Domestic Product (GDP) growth of 7.2 per cent for the fiscal year 2024-25. Governor Das emphasized that the RBI remains vigilant regarding inflationary pressures and will take necessary actions to maintain price stability while supporting the country's economic recovery. The MPC's decision reflects a balanced approach, aiming to control inflation without stifling growth. The adjustments in repo rate have a direct effect on <keyword id="19900794" type="General" weightage="20" keywordseo="economic-growth" source="keywords">economic growth</keyword> and job creation. The lower interest rates tend to stimulate economic growth by making borrowing cheaper for businesses.

RBI expected to begin rate cuts in October, with two reductions this fiscal: Crisil

Mumbai, Revenue growth for multiplexes will slow down to 10-15 per cent in FY25 from the 20-24 per cent expected in FY24, a domestic ratings agency said on Wednesday. The profit margins will widen marginally, but will continue to be lower than the pre-pandemic levels due to the competition faced by the industry from over the top service providers like <keyword id="19897536" type="General" weightage="20" keywordseo="netflix" source="keywords">Netflix</keyword> and Amazon Prime, the report by <keyword id="19955699" type="General" weightage="20" keywordseo="crisil-ratings" source="keywords">Crisil Ratings</keyword> said. The topline will grow 10-15 per cent to Rs 7,300 crore in FY25, it estimated, adding that in FY24, the revenue growth was higher due to a slew of big-budget releases, especially from Hindi films like Gadar 2 and <keyword id="19897076" type="General" weightage="20" keywordseo="jawan" source="keywords">Jawan</keyword>, it said. The operating profit will grow by 4 percentage points to 14 per cent in FY24 on the rising revenues, and will widen further to 15 per cent in FY25, the agency said. "But that number (margins) will still be lower than the pre-pandemic level of 18-20 per cent, given the competition from Over-The-Top (OTT) content," the report said. The agency said OTT continues to benefit from high-quality and diverse content available on-tap and the competition from such platforms will keep occupancies below the pre-pandemic level going forward as well. Occupancy surged to 25 per cent in FY23 from 16 per cent in FY22, but remained below the pre-pandemic level of 30-32 per cent in FY20 amid increased penetration of OTT, it said, adding that Hindi films significantly underperformed than regional ones. "With movie producers aligning better with audience preferences and a stronger regional film pipeline, occupancies should remain at 26-28 per cent next fiscal and over the medium term," the agency's Director <keyword id="19955698" type="General" weightage="20" keywordseo="naveen-vaidyanathan" source="keywords">Naveen Vaidyanathan</keyword> said. Continued supply of high-quality movies focusing on the large-screen experience will be crucial to sustain and improve occupancy at multiplexes, the agency noted. The agency's team leader, <keyword id="20763273" type="General" weightage="20" keywordseo="shivaramakrishna-kolluri" source="keywords">Shivaramakrishna Kolluri</keyword>, however, said the slower revenue growth will take the topline to an all-time high, and attributed the same to factors such as addition of screens, rising movie ticket prices amid cost inflation and focus on premium formats. Increasing spends on refreshments following more offerings and menu revisions will also help drive the revenues, Kolluri said.

Multiplexes' revenue growth to dip to 15% in FY25 as OTTs crimp profit margins

The Indian <keyword id="80584" type="General" weightage="20" keywordseo="steel-sector" source="Orion">steel sector</keyword> has enjoyed a multi-year demand surge which will continue in the current FY'24 but it is expected to moderate in the coming fiscal, global analytics company Crisil said. The sector has witnessed double digit demand growth rate of 11 to 13 per cent during three consecutive years and is likely to moderate to 3 to 5 per cent in FY'25, Miren Lodha, Director Research, Crisil Market Intelligence and Analytics said on Friday. "We are clearly in the midst of a demand supercycle," Lodha told PTI. The moderation is likely in the long <keyword id="34570" type="General" weightage="20" keywordseo="steel" source="Orion">steel</keyword> segment in FY'25 ahead of the general election. The only other instance of such a demand surge in the last two decades was between 2006 to 2008, he said. Lodha said the <keyword id="17408" type="General" weightage="20" keywordseo="infrastructure" source="Orion">infrastructure</keyword> sector, a key driver of the steel demand, is expected to maintain its momentum fuelled by ongoing government projects. The infrastructure segment has been driving a lot of momentum in the steel demand and is expected to continue in the coming years. However, government schemes like the Pradhan Mantri Awas Yojana are nearing conclusion, which could slow down the demand momentum in the steel sector, he said. Lodha said the recent surge in steel imports, which has been prompted by lower Chinese prices and strong Indian demand, has raised concern among the domestic manufacturers. "The disparity between import and <keyword id="124052" type="General" weightage="20" keywordseo="domestic-prices" source="Orion">domestic prices</keyword> has triggered significant imports," he elaborated. But it will self correct in the long run with the ongoing capacity addition. "New steelmaking capacity of 12-13 million tonnes is expected to come online in the second half of fiscal 25, aligning production with demand and reducing import dependence," Lodha said. Additionally, the potential demand improvement in China after the Lunar New Year coupled with expected production cuts, could further curb Chinese exports to India. Overall the Indian steel sector's outlook remains positive, albeit with a projected dip in demand next year. The industry's focus will be on ramping up domestic production and tackling import concerns to maintain a robust long-term growth, he added.

Indian steel demand boom to continue this fiscal : Crisil

Strong <keyword id="141166" type="General" weightage="20" keywordseo="domestic-demand" source="Orion">domestic demand</keyword>, supported by government spending on infrastructure, building and construction segments, is expected to keep <keyword id="3658" type="General" weightage="20" keywordseo="india" source="Orion">India</keyword>'s <keyword id="164590" type="General" weightage="20" keywordseo="steel-imports" source="Orion">steel imports</keyword> elevated around the 6 million tonne (MT) mark this financial year even as the global <keyword id="34570" type="General" weightage="20" keywordseo="steel" source="Orion">steel</keyword> industry battles a slowdown, according to rating agency Crisil. Global steel demand, which has been subdued since the onset of the Russia-Ukraine conflict, is expected to grow 1.6 per cent in 2023 after a sharp fall of 3.3 per cent in 2022, the rating agency said in a report. Indeed, even that tepid rate of growth rides largely on a buoyant 13 per cent growth in demand in India, which has bucked the trend so far. This fiscal, the steel sector in India is poised to clock its third consecutive year of double-digit growth, at 11-13 per cent year-on-year, after growing 11.4 per cent and 13.4 per cent in fiscals 2022 and 2023, respectively. According to the rating agency, demand in <keyword id="1334" type="General" weightage="20" keywordseo="china" source="Orion">China</keyword>, the world's largest producer of the commodity, has started reviving after a three-year slump. However, oversupply has led to subdued <keyword id="6366990" type="General" weightage="20" keywordseo="prices" source="Orion">prices</keyword>. "Over the past few months, Chinese mills have been facing margin pressure, mainly due to high raw material prices and a depreciating yuan. Although the Chinese government is trying to keep demand afloat with infrastructure spending and relaxing policies on property ownership, real estate continues to be in a recessionary phase," the rating agency noted. Chinese mills have started pushing volumes into the global market at highly competitive prices. Between January and November this year, exports from China increased by 35.6 per cent to 82.7 million tonnes -- the highest since 2016. Chinese exports to India have also surged. Strong growth momentum has supported steel prices in India, and import volumes have increased significantly, driven by better realisation opportunities. As of November this fiscal, India had imported 4.26 million tonnes of finished steel, up 13.4 per cent year-on-year even as its exports declined 6.2 per cent to 4.03 million tonnes, making the country a net importer of finished steel. Among the ports, Mumbai remains the preferred destination for both alloy and non-alloy imports, accounting for 40 per cent of the total imports, followed by Mundra and Chennai. "This imbalance of volume at the ports leads to regional disparities in domestic prices. For instance, although prices of flat products corrected across India in November, the fall in trader prices was more significant in Mumbai compared with other major domestic steel markets," the rating agency noted.

Firm domestic demand to keep India's steel imports elevated in 2023-24: Crisil

Despite geopolitical tensions in <keyword id="19897269" type="General" weightage="20" keywordseo="europe" source="keywords">Europe</keyword> and the <keyword id="19904316" type="General" weightage="20" keywordseo="middle-east" source="keywords">Middle East</keyword>, <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s <keyword id="20631272" type="General" weightage="20" keywordseo="merchandise-exports" source="keywords">merchandise exports</keyword> grew by 5.8% to $109.96 billion compared to $103.9 billion in the same period last year, according to a CRISIL report. The report states that the deceleration in the growth momentum of exports in June compared to May was largely due to an 18.2% contraction in oil exports. The growth momentum slowed down in June, with merchandise exports increasing by only 2.6% year-on-year, down from 9.1% in May. Non-oil exports continued to maintain steady growth, rising by 7.7% in June, almost in line with the 7.8% growth recorded in May. Services exports exhibited a strong performance in June, contributing positively to the overall trade scenario. The positive aspect is that merchandise imports grew at a slower pace of 5% year-on-year in June, down from 7.7% in May. However, core imports, excluding oil and gold, surged by 7.1%, increasing from the 0.8% growth in the previous month. This spike in core imports was partially driven by a low base effect from the previous year. Despite the positive growth in exports, the <keyword id="20201391" type="General" weightage="20" keywordseo="trade-deficit" source="keywords">trade deficit</keyword> widened to $21 billion in June from $19.2 billion in the same month last year. For the first quarter, cumulative imports rose by 7.7% to $172.4 billion from $160 billion, resulting in a trade deficit of $62.44 billion, up from $56.1 billion. This widening deficit was mainly due to a higher oil trade deficit, while the non-oil trade deficit narrowed. Services exports were a bright spot, increasing by 10.2% year-on-year to $29.76 billion in May. On the other hand, service import growth moderated to 5.4%, down from 19.1% in the previous month. Consequently, the services trade surplus expanded to $13.02 billion, up from $11.1 billion in May last year. Oil exports fell by 18.3% year-on-year and 18.5% month-on-month in June, despite stable international prices. This suggests a reduction in export volumes, with exports falling to $5.5 billion from $6.8 billion in June last year and the previous month. Oil imports increased by 19.6% in June compared to 28% in May, driven by domestic demand and local refineries operating above capacity. Sectors such as drugs and pharmaceuticals, engineering goods, organic and inorganic chemicals, and ready-made garments showed positive growth. However, pharmaceuticals (9.9% vs. 10.5%) and ready-made garments (3.7% vs. 9.8%) saw slower growth compared to May. Gems and jewellery exports continued to decline, marking the seventh consecutive month of negative growth at -1.4% year-on-year. Growth in carpets, handloom products, man-made products, plastics, and linoleum was positive but slower than the previous month. Handmade carpets (-16.6% vs. 20.6%), jute manufacturing (-11.1% vs. -5.2%), and leather products (-2.2% vs -2.1%) recorded contractions. Cashew exports have been declining since 2018, with only sporadic months of positive growth. In June, cashew exports fell by 7.3%, an improvement from the 25.8% decline in May. Coffee (70% vs. 64.2%), fruits and vegetables (7% vs. 20.8%), rice (1% vs. 2.8%), spices (9.8%vs. 20.3%), tea (3.2% vs. 19.6%), and tobacco (37.7% vs. 58.4%) saw slower growth compared to May. Marine products (-7.7% vs. -3.9%) and meat, dairy, and poultry products (-13.9% vs. 22.9%) also experienced a decline. Increases were noted in electronic goods (15.9% vs. 6.7%), fruits and vegetables (22.6% vs. 3%), non-ferrous metals (47.6% vs. 1.1%), project goods (31.4% vs. -44.3%), textiles and yarn fabric made-up articles (23.8% vs. -1.1%), and wood products (16.2% vs. -7.2%). The fiscal year has started positively with steady merchandise export growth in the first quarter. Encouragingly, multilateral organisations have forecasted better year-on-year trade growth. The Indian government's focus on foreign trade agreements (FTAs) is expected to further boost trade. However, the persistent growth in imports surpassing exports is a concern, widening the trade deficit. The recent US tariff hikes on Chinese imports could lead to potential dumping by China in the Asian market, including India, which requires close monitoring. Despite these challenges, the expected moderation in domestic growth may help contain import growth and the trade deficit. The service trade surplus and robust remittance flows are positive indicators that the current account will remain stable.

Indian exports show resilience amid global challenges in first quarter, says CRISIL report

New Delhi, <keyword id="19955699" type="General" weightage="20" keywordseo="crisil-ratings" source="keywords">Crisil Ratings</keyword> on Monday said the credit quality outlook for Indian corporates remains positive for the April-September period of the 2024-25 fiscal year with upgrades continuing to outpace downgrades. In the last fiscal year, <keyword id="19898320" type="General" weightage="20" keywordseo="crisil" source="keywords">Crisil</keyword> gave 409 rating upgrades and 228 downgrades. Some export-linked sectors, such as textile and seafood, saw a higher downgrade rate due to subdued global demand or high-cost inventory that impacted profitability. "India Inc's credit quality outlook is positive for the first half of fiscal 2025 with upgrades expected to outnumber downgrades. Multiplier effect of government capex will continue to drive infrastructure and linked sectors. Healthy balance sheets will continue to support the credit quality outlook, with capex funding seen prudent," <keyword id="21152659" type="General" weightage="20" keywordseo="crisil-rating" source="keywords">Crisil Rating</keyword> said. It said the outstanding bank credit is expected to cross Rs 200 lakh crore by March 2025, from Rs 172 lakh crore a year ago, even though there would be moderation in the rate of credit growth. The Indian economy with a GDP growth of 6.8 per cent is expected to remain the fastest-growing large economy in the current fiscal. The growth will, however, moderate from 7.6 per cent expected in 2023-24 as high interest rates and lower fiscal impulse to growth will temper demand, according to Crisil. Crisil Ratings Managing Director <keyword id="20983741" type="General" weightage="20" keywordseo="gurpreet-chhatwal" source="keywords">Gurpreet Chhatwal</keyword> said the three key pillars of India Inc's credit quality -- deleveraged balance sheets, sustained domestic demand and government-led capex -- kept the upgrade rate elevated in the second half of FY24. "With balance sheets in most sectors at their healthiest, capacity utilisation around peak levels and expected interest rate cuts, a broad-based pick-up in private capex is finally in sight," Chhatwal said, adding that sectors with export linkages could have some uncertainties around them. Stating that bank credit outstanding could cross Rs 200 lakh crore by March 2025, credit growth will remain healthy, albeit a tad lower at 14 per cent this fiscal year. Credit growth was 16 per cent in the last fiscal year that ended on March 31. Overall gross non-performing assets (NPAs) will continue to trend down and touch fresh decadal lows, it said. Crisil Ratings Senior Director and Chief Ratings Officer <keyword id="21152658" type="General" weightage="20" keywordseo="krishnan-sitaraman" source="keywords">Krishnan Sitaraman</keyword> said there is a likelihood of interest rate cuts globally in 2024. "We expect the RBI to cut interest rates in the second half of the current fiscal," Sitaraman said, adding that credit quality is likely to remain positive. The RBI is scheduled to announce its first monetary policy review for the current fiscal on April 5. For FY25, as many as 21 of 26 corporate sectors have strong to favourable credit quality outlook, marked by robust balance sheets and healthy operating cash flows -- expected to be as much, or higher, than in fiscal 2024. These include auto-component manufacturers, companies in the hospitality and education sectors where the credit quality is supported by healthy domestic demand. It also includes sectors benefiting from the government's infrastructure spending, such as construction companies, and steel, cement and capital goods manufacturers. Four corporate sectors -- specialty chemicals, agrochemicals, textile cotton spinning and diamond polishers -- are facing headwinds given their fortunes are aligned with global macroeconomic conditions, which are subdued at present.

Credit quality outlook of India Inc positive in first half of FY25: Crisil Ratings

New Delhi: While the <keyword id="20199673" type="General" weightage="20" keywordseo="moderation" source="keywords">moderation</keyword> in <keyword id="20468215" type="General" weightage="20" keywordseo="CPI" source="keywords">CPI</keyword> <keyword id="19895000" type="General" weightage="100" keywordseo="inflation" source="keywords">inflation</keyword> is a welcome development, experts caution that the road ahead could be bumpy. The sequential momentum in <keyword id="19960157" type="General" weightage="20" keywordseo="food-prices" source="keywords">food prices</keyword> remains strong, with a 2.5 per cent month-on-month increase in prices, higher than the average sequential growth, indicating that inflationary pressures may persist. The uneven distribution of monsoon rainfall and the potential for excess rainfall in the coming months pose additional risks to food prices. RajSinha, Chief Economist at CareEdge, noted, "Despite the moderation in the inflation of the food and beverage basket when compared to last year, the sequential momentum remains strong, with a 2.5 per cent M-o-M increase in prices, higher than an average sequential grow." Dharmakirti Joshi, Chief Economist at CRISIL, highlighted the impact of the high-base effect, stating, While the high-base effect -- along with sequential monthly movements -- was supportive of food inflation, it had an adverse bearing on core inflation. The big worry now is food prices continue to be elevated with the on-month rise slightly higher than usual for July. "The good part is monsoon and sowing have been progressing well and the expectation is that the arrival of fresh supplies in the market should over the next few months curb the food price rise. Overall, though, we expect inflation to ease and average 4.5 per cent this fiscal mostly due to softer food prices. This should allow the <keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword> to begin cutting earliest by October", Joshi added. Raghvendra Nath, Managing Director of Ladderup Wealth Management, expressed optimism regarding the CPI data, stating, "This decline is primarily attributed to a reduction in the Consumer Food Price Index, which fell from 9.36 per cent in June to 5.42 per cent in July. This improvement should offer reassurance to the <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> (RBI), which has indicated that <keyword id="19920341" type="General" weightage="20" keywordseo="rate-cuts" source="keywords">rate cuts</keyword> will occur only when inflation sustainably aligns with its 4 per cent target. He added, "Positive expectations for the monsoon and adequate buffer stocks support the continued downward trend of CPI. However, any substantial rise in crude oil prices due to the ongoing geopolitical crisis could adversely affect inflation and the broader economy." Sanjeev Agrawal, President of the PHD Chamber of Commerce and Industry, also commended the decline in CPI inflation, stating, "It is highly appreciable that the CPI inflation has exhibited a decline in the year-on-year inflation rate at 3.5 per cent for the month of July 2024 from 5.08 per cent in June 2024." He added, "The food and beverages inflation eased sharply from 8.4 per cent in June 2024 to 5.06 per cent in July 2024 and fuel and light inflation from -3.7 per cent in June 2024 to -5.4 per cent in July 2024, are the main drivers of the softening inflation trajectory." India's Consumer Price Index (CPI) inflation eased significantly to 3.54 per cent in July 2024, marking its lowest level in nearly five years and a sharp drop from 5.08 per cent in June. This decline, which brought inflation below the Reserve Bank of India's (RBI) medium-term target of 4 per cent for the first time since 2019, has been largely attributed to a favourable base effect and a dramatic reduction in <keyword id="20621131" type="General" weightage="20" keywordseo="vegetable-prices" source="keywords">vegetable prices</keyword>. The primary driver behind this sharp moderation was the steep fall in vegetable inflation, which plummeted from 29.3 per cent in June to 6.8 per cent in July. The Consumer Food Price Index (CFPI) also saw a significant reduction, falling from 9.36 per cent in June to 5.42 per cent in July, contributing to the overall easing of CPI inflation. (ANI)

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