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Indian companies across multiple sectors have reported disappointing results in the second quarter of fiscal year 2025, notes a new JM Financials report. Consequently, their poor performance has triggered stock price corrections for affected companies. The brunt of this weaker than expected earnings was largely borne by consumer centric sectors like FMCG (fast moving consumer goods), retail, and auto, which slacked largely due to dampened urban demand. For instance, India's largest automaker, Maruti Suzuki, reported a 5% YoY decline in its total domestic passenger vehicle wholesales, largely on the back of pent-up inventory. Similarly, Honda reported a staggering 23% YoY dip in its total sales during October 2024. A recent report by Bernstein noted that around 48% of the companies listed on the NSE100 index missed their earnings estimate for Q2FY25, the highest since March 2020. Most companies have mentioned deteriorated domestic demand, urban slowing, macroeconomic risk, and margin pressures as the main reasons behind the dip. "The quarter's earnings have made investors nervous," noted the JM Financials report. The challenging environment stems from multiple factors: softening consumer demand, rising input costs, and companies' limited ability to increase prices. Moreover, this is not limited to just one quarter. Companies have been reporting weak, single-digit earnings growth for the last six consecutive quarters. Data from India Data Hub also suggests that corporate profits of listed companies plunged by as much as 3.4% during the quarter ended September 30, 2024. This is in stark contrast to the year-ago period, where they had shot up by over 40% The oil and gas sector had a difficult quarter, with refiners hit by weak margins and city gas distributors struggling with higher input costs. Financial institutions showed mixed results. While government-owned banks reported strong numbers, microfinance institutions and some private lenders faced massive difficulties with their unsecured loans. Most notable amongst this was the case of IndusInd Bank, which saw its net profits dip by 40% amidst burgeoning provisions, which climbed 87% to Rs 1,820 crore in Q2, as against Rs 974 crore reported in the year-ago period. <h2>Markets head southwards</h2>The selling trend by FPIs has dragged down the major Indian indices, the Nifty 50 and Sensex, both of which have dropped by around 8% since the beginning of this selling spree in October. According to National Securities Depository Ltd. (NSDL) data, FPIs offloaded equities worth a significant Rs 19,994 crore in just the first five trading sessions of November last week. The impact is clearly visible on Indian stock markets. Data suggests that while every sector in October closed the month in red, auto, oil and gas, and consumer durables were the most badly hit, each declining by as much as 10% during the month. Another indicator underlining the inherent weakness of the market was that the month saw only 242 stocks hit their 52-week high, significantly below the usual monthly average of 310.

India Inc. stares at an earnings dearth in Q2, FMCG, auto, and consumer durables falter

<ul class="summary-list"><li>Narendra Modi's party won far fewer seats than expected in India's election.</li><li>Modi's weakened majority may make it tougher for his government to push through reforms.</li></ul>Narendra Modi looks set to secure a historic third term leading Indian despite his party winning <a target="_blank" href="https://www.businessinsider.com/india-election-results-narendra-modi-bjp-congress-2024-6">far fewer seats than exit polls had suggested</a>.The outcome sent <a target="_blank" href="https://markets.businessinsider.com/news/stocks/india-stock-market-news-narendra-modi-election-nse-nifty-50-2024-6">Mumbai-listed stocks plummeting</a> — and Modi's significantly weakened majority could be a source of concern for American businesses, too.Modi's decade as Prime Minister has often been controversial, with his vision of building a "divine India" fueling <a target="_blank" href="https://edition.cnn.com/2024/02/05/india/india-modi-ram-temple-analysis-intl-hnk/index.html">a rise in Hindu nationalism</a> that's threatened to marginalize other religious groups.But his pro-growth, pro-business policies have boosted growth and drawn in huge amounts of foreign investment — as well as winning the support of some of the <a target="_blank" href="https://www.businessinsider.com/modi-india-election-economy-russia-oil-wealth-dimon-cook-musk-2024-5">loudest voices on Wall Street</a>."Modi has done an unbelievable job in India," JPMorgan boss Jamie Dimon told <a target="_blank" href="https://www.businessinsider.com/jpmorgan-jamie-dimon-economy-inflation-recession-stagflation-geopolitics-crypto-bitcoin-2024-4">the Economic Club of New York</a> in April. "I know the liberal press here, they beat the hell out of him. He's taken 400 million people out of poverty."Elon Musk has also <a target="_blank" href="https://x.com/elonmusk/status/1781541775183610310">posted on X</a> about his desire to visit India and meet with Modi. The pair are expected to discuss Tesla's plan to build a multibillion-dollar new factory in the world's most-populated country.Meanwhile, Apple CEO Cook said on a November earnings call that India is an "incredibly exciting market" and a "major focus of ours" given the explosive growth in potential customers as locals get richer. Modi has also met with Nvidia CEO Jensen Huang, Microsoft boss Satya Nadella, and Alphabet's Sundar Pichai in recent years.<h2 id="cc1fb394-3381-4ed0-9ccc-2a81f77556e6">Political stability</h2>"I think most investors have read the tea leaves and have realized that some of the political stability and predictable policies that they expect, that they desire when it comes to making investment decisions, is likely to be available in India," Rajesh Kumar Singh, a trade official for India, told Business Insider in January at <a target="_blank" href="https://www.businessinsider.com/davos-global-elite-saying-about-ai-behind-closed-doors-2024-1">the World Economic Forum in Davos</a>."I think the trick for India is going to be political stability, going forward for a period of time — because I think a lot of the economic fundamentals are there," Andy Baldwin, a partner at EY, said at the same conference.But Modi's significantly reduced majority could erode that sense of stability and make it tougher for him to pass further pro-market reforms, analysts said on Tuesday.<h2 id="f9ebf5af-aee7-426d-b5c8-03320c6cb9dc">China hedge</h2>"The fear will be that if he has to rely on alliances with smaller parties, any market-friendly policies will be diluted," Russ Mould, investment director at AJ Bell, wrote in a research note."Some may now worry that India's lofty earnings rating leaves it exposed on the downside now that the political narrative may not be quite as clear cut as once thought," he added.One appeal of India for the likes of Dimon, Musk, and Cook will likely have been Modi's firm grip on power, as USA Inc aims to hedge its bets on China given its strained relationship with the US and post-pandemic economic woes.The surprise election result could undermine that confidence.

Modi's election surprise raises questions about India for USA Inc 

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

<ul><li>The IT sector’s wage bill growth fell to 3% in Q3 FY24 from 22% in the same quarter last year.</li><li>Sectors like <keyword id="19931572" type="General" weightage="20" keywordseo="fmcg" source="keywords">FMCG</keyword>, metals, power, cement, pharma, chemicals also saw single digit wage growth in Q3.</li><li>The <keyword id="19910880" type="General" weightage="20" keywordseo="bfsi" source="keywords">BFSI</keyword> sector remained an outlier as its wage bill growth was strong at 22% in Q3.</li></ul>The age of sharp salary hikes seems to be over. <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>’s top 500 listed private companies’ wage growth has moderated to 9% year on year in the third quarter of FY24. Including public sector enterprises, BSE500’s wage inflation slowed to 11%. In the same quarter last year, it was at 20%, says a report by <keyword id="20055355" type="General" weightage="20" keywordseo="nuvama-institutional-equities" source="keywords">Nuvama Institutional Equities</keyword>. “The worrying aspect of wage bill growth is the sharper moderation in private sector wage bill growth. Private sector wage bill growth has moderated to 9% YoY—a decadal-low (ex-Covid). Such a sharp slowdown, if it persists, could weigh on consumption, particularly the premium segment,” says <keyword id="19895773" type="General" weightage="20" keywordseo="nuvama" source="keywords">Nuvama</keyword>’s Q3FY24 Earnings Review. Unsurprisingly, the IT sector saw the most moderation, as its wage bill growth in Q3 at just 3% year on year. In the corresponding quarter last year, it was at 22%. “For IT companies, headcount is now contracting year on year. While this could bottom out, sustained recovery is needed for its revival,” said Nuvama. As per Xpheno, the top eight IT services firms in India<a href="https://www.businessinsider.in/careers/news/it-bellwethers-slash-headcount-in-fy24-but-indian-techies-find-a-home-with-gccs/articleshow/107679515.cms"> reduced their headcount by</a> 75,000 in the last one year. Sectors like FMCG, metals &amp; mining, power, cement, pharma, chemicals saw single digit wage growth. “Wage bill growth is moderating in most other spaces as well. For most sectors, wage bill growth is below the levels seen a year ago,” said Nuvama. On the other hand, sectors like auto, consumer services, durables and real estate sector saw double digit wage bill growth in the quarter. BFSI sector remains an outlier The only sector which saw strong wage bill growth in Q3 is banking, financial services and insurance sector; which came in at 22%. The average annual attrition in the sector is still high, at around 30-35%. In private banks, it’s <a href="https://www.cnbctv18.com/business/companies/rbi-closely-watching-high-attrition-at-some-private-banks-says-shaktikanta-das-18207931.htm">much more pronounced</a> at 40-45%. While private sector banks saw their wage bill go up by 23%, in PSU banks, the growth was at 20%. Financial services, however, saw its wage bill go up by 29%. Wage bill growth <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sector </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q3 FY24 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Q3 FY23 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IT </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">22% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">BFSI </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">22% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">19% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Metals &amp; Mining </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Energy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Consumer services </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">14% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">24% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Auto </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">14% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">9% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Durables </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">14% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FMCG </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Industrials </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">11% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Power </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Cement </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Real estate </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">32% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Pharmaceuticals </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">9% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Chemicals </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">0% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8% </td></tr></tbody><tbody></tbody></table>Source: Capitaline, Nuvama Research Dwindling EBIDTA growth The Nuvama report also says that in the third quarter, BSE500’s revenue growth remained subdued at 6-7%, similar to what was seen in the first half of FY24. The earnings before interest tax depreciation and amortization (EBIDTA) growth on other hand, dwindled to 10% from 20% seen in the first half. “This is mainly due to fading input price tailwinds and operating de-leverage. PAT growth, however, held up in high teens. All in all, chinks are developing in profit momentum with EBITDA slowing sharply as margin tailwinds fade while demand fails to recover,” Nuvama said. Even as the aggregate profit growth held up to 16% YoY in Q3, a weak revenue growth does not spell good news for corporate employees who are hoping for a chunky wage hike. “Given a weak top line, wage bill growth is likely to remain subdued going ahead as well, potentially weighing on urban consumption,” says Nuvama.

India Inc’s wage bill growth halves in Q3, close to decadal lows

<keyword id="20104772" type="General" weightage="20" keywordseo="Hyundai-Motors" source="keywords" meta.keywordsubtype="org" meta.entityname="Hyundai Motors" meta.hostid="261" meta.entityid="Hyundai Motors">Hyundai Motors</keyword> India's IPO worth Rs 27,870 crore, the largest India has ever seen, got off to an unhurried start today, with 18% of the total offer subscribed on the first day. The IPO, which closes on October 17, has already attracted significant attention from retail and institutional investors. The issue was subscribed 0.27x in the retail category, 0.05x in the QIB (qualified institutional buyers) category and 0.13x in the NII (non institutional investors) category. <keyword id="19972907" type="General" weightage="20" keywordseo="retail-investors" source="keywords">Retail investors</keyword> placed bids for 1.3 crore shares, as against the 4.94 crore shares which were offered to them. In contrast, Hyundai employees showed strong support for the IPO, bidding for 6,28,509 shares, as against the 7,78,400 shares allocated to them. Just a day before, Hyundai had raised Rs 8,315.3 crore from about 225 <keyword id="21330641" type="General" weightage="20" keywordseo="anchor-investors" source="keywords">anchor investors</keyword>. The list included several marquee global names, like the <keyword id="22882636" type="General" weightage="20" keywordseo="Government-of-Singapore" source="keywords" meta.keywordsubtype="org" meta.entityname="Government of Singapore" meta.hostid="261" meta.entityid="Government of Singapore">Government of Singapore</keyword>, New World Fund Inc, and the Canada Pension Plan Investment Board. These institutions, along with Fidelity, Government Pension Fund Global, and American Funds Insurance Series New World Fund, invested a combined Rs 2,191.66 crore in the company. Other notable participants in the anchor round included Vanguard, Blackrock, Goldman Sachs and JP Morgan. Hyundai Motor India allocated 4.2 crore equity shares to these anchor investors at Rs 1,960 per share. Also, 34.42% of the entire allocation to anchor investors went to 21 domestic mutual funds via 83 schemes. AMCs (asset management companies) like ICICI, Invesco, Kotak and UTI were part of this round. While the current IPO is entirely OFS (offer for sale), which means that no part of the proceeds will go to Hyundai Motor India, the company has announced that it plans to invest more than Rs 33,000 crore over the next 10 years in India. The country is an important market for the South Korean automobile giant, given that it is the 2nd largest OEM (original equipment manufacturer) in the passenger vehicle space in India. However, the market is already preparing for muted listing day gains, with the company's GMP dropping to Rs 59 today. Hyundai is estimated to list at Rs 2,019 per today's GMP, taking the expected gain/loss per share to a minuscule 3.01%, as per data from IPO site Chittorgarh.

India's biggest IPO off to a slow start, subscribed 0.18x on Day 1

<ul><li>The March quarter saw India’s top listed companies meeting analyst expectations, primarily driven by auto and BFSI sectors. </li><li>These two sectors are expected to power <keyword id="46431" type="General" weightage="20" keywordseo="India-Inc" source="Orion">India Inc</keyword>’s earnings again in FY24. </li><li>Moderating inflation, healthy macroeconomic indicators and robust balance sheets are expected to keep India Inc’s earnings robust. </li></ul>India’s top listed companies’ March-quarter earnings largely met analyst expectations, driven by strong growth in two critical sectors – auto and banking, financial services and insurance (BFSI). Analyst consensus is that these two sectors will continue to power India Inc’s earnings going forward. “Nifty's earnings growth stood at 16% year-on-year as against estimates of 14% YoY. The overall performance was driven by the BFSI and auto sectors that posted 43% and 115% YoY earnings growth,” said brokerage firm Motilal Oswal. India Inc’s performance remained healthy during the March quarter despite a challenging global macroeconomic environment and concerns of an economic slowdown in the developed markets. “Of the 21 sectors under our coverage, six sectors reported profits above our estimates, eight sectors reported in-line profit numbers and seven sectors reported profits below our estimates,” Motilal Oswal added. The Indian banking sector was a standout, <a href="https://www.businessinsider.in/finance/banks/news/icici-bank-vs-hdfc-bank-how-indias-top-two-private-lenders-have-performed-in-q4/articleshow/99733618.cms">delivering</a> a<a href="https://www.businessinsider.in/finance/banks/news/sbi-vs-bank-of-baroda-vs-canara-bank-performance-comparison-based-on-q4-2022-23-earning-reports/articleshow/100357639.cms"> second consecutive quarter</a> of stellar performance. In the <keyword id="46265" type="General" weightage="20" keywordseo="auto-sector" source="Orion">auto sector</keyword>, industry leaders<a href="https://www.businessinsider.in/business/auto/news/maruti-suzuki-q4-net-profit-zooms-43-to-2624-crore-beating-expectations-to-add-capacity-of-1-million-vehicles/articleshow/99790060.cms"> Maruti Suzuki</a> and Tata Motors beat analyst expectations –<a href="https://www.businessinsider.in/business/auto/news/tata-motors-in-top-gear-jlr-to-drive-growth-in-fy24/articleshow/100252339.cms"> Tata Motors bounced back</a> to profitability in FY23, on the back of robust performance of its British subsidiary, Jaguar Land Rover. “In-line revenue growth and strong earnings beat substantiate an earnings up-cycle trend in India. Broad market earnings underperformed, but remained strong,” said global brokerage Morgan Stanley. Auto and BFSI sectors are expected to lead growth once again, with others like telecom and consumption also amongst top favourites. <cmsannotation type="cmsannotation" annotationid="Outlook robust" comment="subhead" text="Outlook robust">Outlook robust</cmsannotation> Morgan Stanley reported a slight beat in terms of earnings and profitability in its coverage universe – while it had estimated revenue and profit growth of 13% and 19% respectively in Q4, the reported revenue and profit grew at 14% and 24%, respectively. Robust growth in revenue and profits has brought cheer back to the Indian markets as well – benchmark indices Nifty50 and the <keyword id="6484188" type="General" weightage="20" keywordseo="Sensex" source="Orion">Sensex</keyword> have entered positive territory after volatility earlier this year. While the Nifty50 is up 2%, the Sensex is up 2.4% so far in 2023. It’s not just India Inc that has delivered healthy growth – the Indian economy<a href="https://www.businessinsider.in/india/news/indias-gdp-forecast-raised-but-el-nino-export-contraction-threats-hover/articleshow/100693955.cms"> handsomely beat economist expectations</a>, expanding by 6.1% in the March quarter as against the expected 5% growth. For FY23, India’s gross domestic product (GDP) growth came in higher at 7.2%, beating the government’s own expectations of 7% growth. Foreign investors have also <a href="https://www.businessinsider.in/stock-market/news/foreign-institutional-investors-pump-27856-crore-in-indian-equities-in-may/articleshow/100693791.cms">flocked back to the Indian markets</a>, with foreign institutional investor (FII) flows surging to a 27-month high in May at ₹27,856 crore. Foreign portfolio investors (FPIs) have pumped ₹43,838 crore into Indian equities, the highest in the last 9 months. “With healthy macros, range bound oil prices, a robust fiscal balance sheet and moderating inflation, the outlook for the market looks optimistic,” Motilal Oswal said. <cmsannotation type="cmsannotation" annotationid="These sectors see downgrades" comment="subhead" text="These sectors see downgrades">These sectors see downgrades</cmsannotation> However, there are some pockets of weakness as well, resulting in downgrades. According to analysts, metals, energy and utilities are the sectors that saw the most downgrades. The IT sector, which has been struggling due to a slowdown in its core markets of the US and Europe, has seen the most downgrades from Morgan Stanley. Analysts at IIFL Securities echoed similar sentiments, stating that they are ‘negative’ on the IT sector. Analysts at Motilal Oswal reiterated their ‘neutral’ stance on the sector. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/adani-enterprises-titan-eicher-motors-tata-motors-reliance-and-other-big-companies-performance-in-nifty-50/articleshow/100474408.cms">Big boys drive Nifty50’s revenue and profit growth in FY23</a> <a href="https://www.businessinsider.in/stock-market/news/nifty-sensex-now-at-reasonable-valuations-but-midcaps-small-caps-and-financials-still-have-some-juice-left/articleshow/100611412.cms">Nifty, Sensex now at 'reasonable valuations' but midcaps, small caps and financials still have some juice left</a> <a href="https://www.businessinsider.in/india/news/indias-gdp-forecast-raised-but-el-nino-export-contraction-threats-hover/articleshow/100693955.cms">India’s GDP forecast raised but El Nino, export contraction threats hover</a>

Auto and BFSI seen driving India Inc’s earnings growth this financial year

Following six consecutive days of losses, Indian stock indices surged back into positive territory on Tuesday. Analysts attribute this recovery to a combination of bottom-fishing by investors and a boost in market sentiment driven by the <keyword id="19931558" type="General" weightage="20" keywordseo="Bharatiya-Janata-Party" source="keywords" meta.keywordsubtype="org" meta.entityname="Bharatiya Janata Party" meta.hostid="261" meta.entityid="Bharatiya Janata Party">Bharatiya Janata Party</keyword> (BJP) heading for a third straight term in the Haryana assembly elections. The <keyword id="19896382" type="General" weightage="20" keywordseo="Sensex" source="keywords">Sensex</keyword> closed at 81,634.81 points, gaining 584.81 points, or 0.72 percent, while the <keyword id="19896381" type="General" weightage="20" keywordseo="Nifty" source="keywords">Nifty</keyword> ended at 25,013.15 points, up 217.40 points, or 0.88 percent. All sectoral indices posted gains, with the notable exception of Nifty Metal. Nifty Media, Auto, <keyword id="19933821" type="General" weightage="20" keywordseo="pharma" source="keywords">Pharma</keyword>, and Oil &amp; Gas emerged as top performers for the day. Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, noted a shift in investor strategy amid the <keyword id="20964705" type="General" weightage="20" keywordseo="market-recovery" source="keywords">market recovery</keyword>. “Traders should consider using this recovery to lighten positions and remain selective for long trades. We continue to favor IT and pharma stocks for their resilience and recommend careful stock selection in other sectors,” Mishra said. The recent string of losses, spanning six sessions, saw the Sensex and Nifty plummet by 4 to 5 percent. Market watchers attributed the dip to a correction phase following a recent bullish run, exacerbated by geopolitical tensions in the Middle East, particularly following a fresh wave of violence between Israel and Iran. <keyword id="19931025" type="General" weightage="20" keywordseo="V-K-Vijayakumar" source="keywords">V K Vijayakumar</keyword>, Chief Investment Strategist at Geojit Financial Services, highlighted a cautious approach for investors navigating the current market landscape. “The best strategy now is to accumulate high-quality, fairly valued bluechips like the leading financials and IT stocks,” Vijayakumar advised. Despite the recent downturn, Indian stocks had previously benefited from the U.S. Federal Reserve’s decision to lower interest rates by a steep 50 basis points, a move that has been supporting capital inflows into emerging markets like India. <keyword id="20015748" type="General" weightage="20" keywordseo="foreign-portfolio-investors" source="keywords">Foreign portfolio investors</keyword> (FPIs), who have been net buyers for four consecutive months, continued to offer some support to the Indian markets through September. Looking ahead, investors are focused on upcoming policy announcements and corporate earnings reports. The <keyword id="19899810" type="General" weightage="20" 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>’s (RBI) monetary policy outcome on Wednesday is expected to provide additional market cues. The RBI has maintained the repo rate at 6.5 percent for nine consecutive meetings, a policy stance that is closely watched by both domestic and international investors. As the market gears up for the release of India Inc.’s second-quarter earnings, analysts suggest that investor sentiment may further stabilise if results meet or exceed expectations. The BJP's continued strength in Haryana has lent a boost to market confidence, signaling political stability and continuity that many view as favorable for India’s economic trajectory. (With inputs from agencies)

Stocks rebound as BJP's Haryana win spurs optimism in Indian markets

Prime Minister <keyword id="19895781" type="General" weightage="20" keywordseo="narendra-modi" source="keywords">Narendra Modi</keyword> urged CEOs of US majors to take advantage of India's growth story as the country is making all efforts to become the third largest economy of the world in his third term. India is currently the fifth largest economy of the world after the US, China, Germany and Japan with a GDP of around USD 3.9 trillion. India has been the fastest growing large economies of the world with GDP growth rate of over 7 per cent for the last three consecutive years. Addressing CEOs of the large US tech firms on Sunday, Modi said India will make every effort to become the third largest economy in the world in his third term (2024-29). Companies should take advantage of India's growth story for collaboration and innovation by co-developing, co-designing, and co-producing in India for the world, harnessing the opportunities from the country's economic and technological growth, he said. Assuring the business leaders of India's deep commitment to the protection of intellectual property and to fostering tech innovation, Modi highlighted the economic transformation happening in the country, particularly in electronics and information technology manufacturing and semiconductors. Modi asserted that his government was committed to making India a "global hub of <keyword id="20073013" type="General" weightage="20" keywordseo="semiconductor-manufacturing" source="keywords">semiconductor manufacturing</keyword>". The meeting took place at the Lotte <keyword id="19904497" type="General" weightage="20" keywordseo="New-York" source="keywords">New York</keyword> Palace Hotel on Sunday during the second leg of Modi's three-day US visit. It saw the participation of CEOs of 15 major US-based firms working on cutting-edge technologies such as AI, quantum computing and semiconductors. "Had a fruitful roundtable with tech CEOs in New York, discussing aspects relating to technology, innovation and more. Also highlighted the strides made by India in this field. I am glad to see immense optimism towards India," Modi said in a post on X. During the conference, Modi said technology collaboration and efforts such as the Initiative on Critical and Emerging Technologies (ICET) lie at the core of the India-US Comprehensive Global Strategic Partnership, according to a Ministry of External Affairs press release. Organised by the Massachusetts Institute of Technology (MIT) School of Engineering, the CEOs of top US tech firms, including Google CEO Sundar Pichai, Adobe CEO Shantanu Narayena, Accenture CEO Julie Sweet and NVIDIA CEO Jensen Huang attended the meeting. Others who participated in the roundtable included AMD CEO Lisa Su, HP Inc. CEO Enrique Lores, IBM CEO Arvind Krishna, Dr Noubar Afeyan, Chairman of Moderna, and Verizon CEO Hans Vestberg. Modi also talked about India's BIO E3 (biotechnology for environment, economy and employment) policy to develop the country into a biotech powerhouse and on the topic of AI, noted that India's policy is to promote AI for all, underpinned by its ethical and responsible use. The CEOs appreciated India's growing prominence as a global technology hub, driven by its innovation-friendly policies and flourishing market opportunities. They also expressed strong interest in investing and collaborating with India, agreeing that investing in startups would be a synergistic opportunity to innovate and develop newer technologies in the country. Others who attended the conference included Biogen Inc CEO Chris Viehbacher, CEO of Bristol Myers Squibb, Chris Boerner, Eli Lilly and Company CEO David A. Ricks, LAM Research CEO Tim Archer, GlobalFoundries CEO Thomas Caulfield, and the CEO of Kyndryl, Martin Schroeter. "Further cementing technology and business connect. PM @narendramodi interacted with the top tech leaders and CEOs of USA, in a Roundtable hosted by the Massachusetts Institute of Technology School of Engineering, in New York today. PM emphasised India's growth prospects and discussed initiatives to foster collaborations and innovation across diverse sectors," the official account of the MEA said in a post on X. The prime minister had a separate meeting with Krishna P Singh, CEO of Holtec International, which is into nuclear and solar power generation. They discussed Holtec's plan for expanding manufacturing in India and advancing energy cooperation, PMO India said in a post on X. Earlier on Sunday, Modi addressed the <keyword id="20115166" type="General" weightage="20" keywordseo="Indian-diaspora" source="keywords">Indian diaspora</keyword> at the packed Nassau Veterans Coliseum on Long Island in New York. He also held bilateral meetings with world leaders at the sidelines of the UN General Assembly session here. Modi reached New York on Saturday after attending the Quad Leaders' Summit hosted by President Joe Biden in Wilmington, Delaware. <div type="Article" hostid="261" msid="113516805" title="Why is Indian Prime Minister Narendra Modi visiting the US this weekend?" mstype="2" mssubtype="0"></div>

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