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Dear readers, As we approach yet another weekend, here are some key developments across various sectors. Nvidia has surpassed Apple to become the world’s largest company, driven by the AI boom. Meanwhile, the US Federal Reserve cut interest rates, by 25 basis points to 4.75%, the second such reduction in 2024. In the workplace, Gen Z’s approach to mental health got attention, with one employee taking a week off after a breakup. Additionally, Indian banks are expecting steady growth, despite challenges in unsecured lending. Read on for all the details! <h2>Top stories from the week </h2> Indian banks to have steady growth in earnings over next 3-4 years, fees from unsecured lending may dip, notes Jefferies report Jefferies forecasts steady earnings growth for Indian banks over the next 3–4 years, with a 13% annual loan growth rate. However, a decline in unsecured lending could reduce fee income. While net interest income is expected to grow at 12%, challenges such as rising defaults and a potential dip in rate cuts could affect profitability. Despite this, banks’ return on equity and assets remain promising. <a href="https://www.businessinsider.in/finance/news/indian-banks-to-have-steady-growth-in-earning-over-next-3-4-years-fees-from-unsecured-lending-may-dip-notes-jefferies-report/articleshow/115048179.cms" data-type="tilCustomLink" target="_blank">Read more</a> Nvidia becomes world’s largest company amid AI boom, surpasses Apple in the race Nvidia has surpassed Apple to become the world’s largest company by market capitalization, driven by the AI boom. The company’s strong performance is fueled by surging demand for its chips used in AI technologies. With a market cap hitting $3.43 trillion, Nvidia continues to dominate the AI hardware sector, powering data centres and AI research. The company’s revenue growth of 122% YoY further cements its leadership in the AI space. <a href="https://www.businessinsider.in/business/news/nvidia-becomes-worlds-largest-company-amid-ai-boom-surpasses-apple-in-the-race/articleshow/115003223.cms" data-type="tilCustomLink" target="_blank">Read more</a> ‘He had a breakup and took a one-week leave’: Manager shares about his Gen-Z employee, internet reacts A manager’s tweet about granting a Gen Z employee a week off for a breakup sparked widespread debate. While the manager expressed frustration over project delays, internet users defended the employee’s mental health needs, criticizing the manager’s lack of empathy. Some supported the manager’s view, pointing out generational differences in work culture. The incident went viral, furthering discussions about Gen Z’s unique workplace expectations. <a href="https://www.businessinsider.in/careers/news/he-had-a-breakup-and-took-a-one-week-leave-manager-shares-about-his-gen-z-employee-internet-reacts/articleshow/115041747.cms" data-type="tilCustomLink" target="_blank">Read more</a> US Fed cuts interest rates by 25 bps, Powell notes Trump’s victory to have no impact on policy decisions The US Federal Reserve has cut interest rates by 25 basis points to 4.75%, the second such reduction in 2024. Fed Chairman Jerome Powell emphasized the Fed’s independence despite Trump’s criticism and suggested that the economic outlook remains uncertain, though the Fed is focused on inflation targets. Trump’s policies may lead to higher inflation, adding complexity to the Fed’s efforts to stabilize prices. Experts anticipate that bond yields will stabilize, benefiting emerging markets like India. <a href="https://www.businessinsider.in/finance/news/us-fed-cuts-interest-rates-by-25-bps-powell-notes-trumps-victory-to-have-no-impact-on-policy-decisions/articleshow/115070690.cms" data-type="tilCustomLink" target="_blank">Read more</a> Big Tech’s winners and losers from Donald Trump’s win, according to the market After Donald Trump’s election victory, tech stocks surged, with companies like Tesla seeing significant gains. Tesla’s rise was fueled by Trump’s public support for CEO Elon Musk. Conversely, companies like Apple faced challenges due to fears over potential tariffs on China. While some, like Google, might benefit from lighter regulations, others like Meta could face political challenges. Overall, the election results reshaped market expectations for Big Tech’s future. <a href="https://www.businessinsider.in/tech/news/here-are-big-techs-winners-and-losers-from-donald-trumps-win-according-to-the-market/articleshow/115067798.cms" data-type="tilCustomLink" target="_blank">Read more</a> <h2>Top web stories</h2> <a href="https://www.businessinsider.in/entertainment/webstories/donald-trump-on-screen-a-look-at-his-iconic-cameos/slidelist/115045250.cms" data-type="tilCustomLink" target="_blank">Donald Trump on screen: A look at his iconic cameos</a> <a href="https://www.businessinsider.in/india/webstories/8-lifestyle-mistakes-contributing-to-health-problems-in-india/slidelist/115051791.cms" data-type="tilCustomLink" target="_blank">8 lifestyle mistakes contributing to health problems in India</a> <a href="https://www.businessinsider.in/travel/india/webstories/10-magical-indian-experiences-every-traveller-should-try/slidelist/115052527.cms" data-type="tilCustomLink" target="_blank">10 magical Indian experiences every traveller should try</a>

Weekend wrap: Nvidia’s AI-driven surge, Indian banks’ steady growth and more

Indian financial services firm <keyword id="19913826" type="General" weightage="100" keywordseo="Zerodha" source="keywords" meta.keywordsubtype="org" meta.entityname="Zerodha" meta.hostid="261" meta.entityid="Zerodha">Zerodha</keyword> made headlines recently for hitting ₹8,320 crore revenue in FY24. However, its CEO and co-founder <keyword id="19923447" type="General" weightage="20" keywordseo="Nithin-Kamath" source="keywords">Nithin Kamath</keyword> says that the company is preparing for a decline in revenue as several regulatory changes are expected to take effect later this year. Kamath, in a blog post, outlined the challenges ahead, which could result in a <keyword id="20168027" type="General" weightage="20" keywordseo="revenue-drop" source="keywords">revenue drop</keyword> of up to 50% as Zerodha faces a combination of stricter regulations and shifting market conditions. <h2>Zerodha braces for revenue drop</h2>One of the main concerns for Zerodha is the new Securities and Exchange Board of India (SEBI) regulation, which will be implemented on October 1, 2024. Kamath expects a 10% dip in revenue as the "true-to-label" circular is enforced. This change will impose stricter guidelines on brokers like Zerodha regarding the kind of financial products they offer, potentially limiting some of their key revenue-generating activities. Another significant factor affecting Zerodha’s future revenue is the ongoing review of index derivatives regulations. Index derivatives, which are a crucial part of Zerodha's business model, could soon face changes that might severely impact the company’s earnings. Kamath estimates that such modifications could reduce earnings by 30-50%. Additionally, with the <keyword id="20930760" type="General" weightage="20" keywordseo="Securities-Transaction-Tax" source="keywords">Securities Transaction Tax</keyword> (STT) set to rise in October 2024, the costs of futures trading could further impact Zerodha’s profitability, though the effect on options trading may be limited. Zerodha is also set to face revenue pressures due to changes in Annual Maintenance Charges (AMC) under the new Basic Services Demat Account (BSDA) thresholds. From October 2024, brokers will only be able to charge full AMC fees from customers with holdings of ₹10 lakhs or more, up from ₹4 lakhs currently. Combined with Zerodha's removal of account opening fees, this is expected to significantly impact their revenue. Yet another challenge comes from Zerodha’s decision to halt payouts from its referral program. The program, which incentivised customers to refer others to the platform, will now only allow payouts to Authorised Persons (AP) registered with exchanges. This new regulation limits the number of people who can refer customers, slowing the firm's growth. <h2>Zerodha's financial results</h2>Despite these looming challenges, Zerodha posted strong financial results for the fiscal year 2024. The firm recorded a 62% increase in profits, reaching ₹4,700 crore, with revenue climbing by 21% to ₹8,320 crore. Traders using Zerodha's platform are also sitting on over ₹1 lakh crore in unrealised profits, largely driven by strong market performance and increased retail participation. However, Kamath also cautioned that the profitability boost in recent years has been fuelled by a bull market, which could reverse at any time. If the market turns, Zerodha, like many other financial service providers, may face significant challenges. To prepare for such an eventuality, the company has built up a strong financial position, with Kamath stating that their net worth now stands at nearly 40% of the customer funds they manage.

Zerodha co-founder Nithin Kamath says bracing for a huge revenue hit even as the company hits ₹8,320 crore revenue in FY24

The generative AI provides more <keyword id="20069513" type="General" weightage="20" keywordseo="opportunity" source="keywords">opportunity</keyword> to the Indian IT sector contrary to the believe of being a threat, highlighted a report by Nuvama Wealth Management. The report noted that although AI <keyword id="19901571" type="General" weightage="20" keywordseo="technology" source="keywords">technology</keyword> may initially disrupt the sector, especially in terms of business operations and billing models, the long-term benefits far outweigh the risks. "We, on the contrary, expect the Indian IT industry to come out stronger from the <keyword id="19906101" type="General" weightage="100" keywordseo="Gen-AI" source="keywords">Gen AI</keyword>-led disruption. We dig deep into various facets of Gen <keyword id="20037918" type="General" weightage="20" keywordseo="AI-adoption" source="keywords">AI adoption</keyword> for enterprises and find that Gen AI would create a mammoth incremental opportunity for <keyword id="20617562" type="General" weightage="20" keywordseo="Indian-IT-services" source="keywords">Indian IT services</keyword>," said the report. The report noted that as more enterprises adopt AI, the need for services such as upgradation of legacy code and data readiness for AI integration will increase, offering Indian IT firms new streams of revenue. The report mentioned one of the most significant opportunities lies in the modernization of <keyword id="21835113" type="General" weightage="20" keywordseo="legacy-systems" source="keywords">legacy systems</keyword>, particularly core banking systems (CBS). It stated that many <keyword id="19912054" type="General" weightage="20" keywordseo="financial-institutions" source="keywords">financial institutions</keyword> still use mainframe systems and outdated programming languages like COBOL. Gen AI enables automated code modernization, which will drive a major demand for Indian IT services to upgrade these systems, creating a long-term revenue stream. "Since most non-Indian (read European) do not have the scale to hire and deploy employees with the ability to code in COBOL (not to mention supply crunch)--they have ceded this opportunity to <keyword id="21817095" type="General" weightage="20" keywordseo="Indian-IT-Services-companies" source="keywords" meta.keywordsubtype="org" meta.entityname="Indian IT Services companies" meta.hostid="261" meta.entityid="Indian IT Services companies">Indian IT Services companies</keyword>" said the report. The report specifically highlighted the "upgradation of legacy code" as a key area of opportunity for IT companies as businesses prepare their systems for AI integration. Gen AI is expected to create new service lines for Indian IT companies, including AI-based <keyword id="19945906" type="General" weightage="20" keywordseo="customer-service" source="keywords">customer service</keyword>, fraud detection, predictive maintenance, and knowledge processing. These AI-driven solutions will allow IT firms to offer higher-value services to clients, boosting revenue and profit margins. "Indian IT companies have always repositioned themselves to continue to do what they do best--service customers. That has provided them with the longevity they have commanded for multiple decades now. We do not see that changing this time as well" the report added. Comparing Gen AI to "a hammer looking for a nail," the report suggested that the technology's applications are still being discovered, but its potential is undeniable. Looking ahead, the report forecasts a strong start to FY25 for Indian IT companies, with growth driven by an optimistic outlook for the Banking, Financial Services, and Insurance (BFSI) sector, increasing technology spending, and large deal ramp-ups.

Gen AI to unlock a "mammoth incremental opportunity" for Indian IT services: Report

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

In response to higher-than-expected tax revenue and a record surplus transfer from the Reserve Bank of India (RBI), the Indian government is considering an 8-10% increase in <keyword id="20018917" type="General" weightage="20" keywordseo="capital-expenditure" source="keywords">capital expenditure</keyword> (capex) for the fiscal year 2025, according to Pantomath Group's quarterly report, "Market Kaleidoscope: Quarterly Market Insights." This adjustment could raise the capex from the previously allocated Rs 11.11 lakh crore, aiming to bolster infrastructure and economic growth. This fiscal boost comes as India reaches a historic financial milestone. The total market capitalization of all stocks listed on the Bombay Stock Exchange (<keyword id="19895774" type="General" weightage="20" keywordseo="BSE" source="keywords">BSE</keyword>) briefly surpassed $5 trillion for the first time, placing India among global giants such as the US, China, Japan, and Hong Kong. India's primary market is set for a dynamic period, with 55 companies planning to raise over Rs 68,000 crore through Initial Public Offerings (IPOs). The first half of FY2025 has already seen 35 mainboard IPOs, collectively raising around Rs 32,000 crore with an average subscription rate of 61 times. The Indian market maintained a positive outlook in the first quarter of FY2025, driven by strong Q4FY24 earnings, favorable economic data, and positive global cues. Despite early June volatility following the 2024 <keyword id="19895394" type="General" weightage="20" keywordseo="lok-sabha" source="keywords">Lok Sabha</keyword> election results, market sentiment improved with the BJP securing 272 seats and a total of 292 seats for the NDA with allied support. This political stability under Prime Minister Narendra Modi's leadership is expected to promote long-term economic growth, with a focus on infrastructure, electric mobility, startup support, power distribution, digital privacy, and healthcare initiatives. Corporate India's performance in the March quarter of FY2024 met expectations, showing double-digit growth in net profit and single-digit revenue increases. Non-lending companies experienced moderate operating margin expansion due to favorable commodity prices and cost controls. The peaking interest rates and continuity of <keyword id="19978691" type="General" weightage="20" keywordseo="government-policies" source="keywords">government policies</keyword> are anticipated to support healthy corporate growth in FY2025. <h2>Growth to continue</h2>The government's push for increased <keyword id="20068449" type="General" weightage="20" keywordseo="ethanol-production" source="keywords">ethanol production</keyword> targets a 20% blending by 2026, benefiting ethanol-heavy sugar companies and promoting biofuel goals. The real estate market is projected to grow significantly, requiring Rs 14 lakh crore in debt financing from 2024 to 2026. This growth will positively impact the banking and financial sectors. Major telecom operators have raised tariffs post-election, potentially improving sector financials and paving the way for sector re-rating. Major cement players are expanding through acquisitions, with an expected 6-7% compounded growth and market dominance by the top five players by March 2025. FMCG Companies expect recovery in rural business due to factors like a normal monsoon, robust crop yields, and government measures, maintaining robust rural demand. The potential roll-out of the FAME 3 Scheme to support <keyword id="19963112" type="General" weightage="20" keywordseo="electric-vehicle-sales" source="keywords">electric vehicle sales</keyword> is anticipated, with a budgetary allocation of around Rs 10,000 crore. Sectors such as auto, cement, defence, railways, consumer durables, energy, and banking are expected to outperform. Lagging sectors like IT and specialty chemicals offer value-buying opportunities at lower levels. The structural bull market for Indian equity is supported by strong domestic fundamentals and government reforms, with a positive medium- to long-term market outlook. Globally, the US market showed resilience, except for the Dow Jones. The Federal Reserve maintained interest rates at 5.25-5.50%, awaiting inflation to move towards the 2% target before considering rate cuts. The US GDP grew at 1.4% annually in Q1 2024, with mixed economic indicators highlighting both strengths and challenges. The Indian <keyword id="19926041" type="General" weightage="20" keywordseo="IPO-market" source="keywords">IPO market</keyword> has seen significant growth, with a surge in companies seeking to list shares and a rise in capital raised. The first half of 2025 saw strong retail investor participation, reflecting confidence in India's growth prospects. Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Private Limited, said, "Favourable market conditions, high liquidity, a conducive growth environment with stable interest rates, and benign inflation have facilitated a boom in the IPO market. The IPO market will experience a stronger pull post-budget. India is set to become the new equity funding frontier for global corporations." He further added. "We are on the brink of sustained, long-term momentum in the IPO market, with this year potentially becoming the best for IPOs. India's solid macroeconomic environment and promising growth prospects create an ideal backdrop for this vibrant IPO market. Additionally, there is robust participation from both domestic institutional investors and retail investors." With the Indian government's potential capex increase and the robust primary market activity, the <keyword id="19948184" type="General" weightage="100" keywordseo="Indian-economy" source="keywords">Indian economy</keyword> is poised for sustained growth. The upcoming period is expected to see heightened market activity, further IPOs, and economic stability, creating a conducive environment for investment and development.

India may boost FY25 capex by 8-10% amid surging revenues and record RBI surplus, says Market Kaleidoscope report

New Delhi: The upcoming Initial Public Offering (IPO) of <keyword id="20214518" type="General" weightage="20" keywordseo="Hyundai-Motors-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Hyundai Motors India" meta.hostid="261" meta.entityid="Hyundai Motors India">Hyundai Motors India</keyword> has sparked significant interest in the Indian markets, but a recent report by <keyword id="20303939" type="General" weightage="20" keywordseo="Aequitas-Investments" source="keywords" meta.keywordsubtype="org" meta.entityname="Aequitas Investments" meta.hostid="261" meta.entityid="Aequitas Investments">Aequitas Investments</keyword> suggests it may not be as promising for <keyword id="19953411" type="General" weightage="20" keywordseo="Indian-investors" source="keywords">Indian investors</keyword> as anticipated. The report highlighted several concerns, pointing to broader industry challenges and the valuation mismatch as reasons for caution. It said "Given the headwinds that the Global <keyword id="20081560" type="General" weightage="20" keywordseo="automobile-industry" source="keywords">Automobile Industry</keyword> is facing coupled with signs of a slowdown in India, the upcoming IPO might not be a great deal for Indian Investors" Hyundai Motor Company, the parent firm based in South Korea, is set to offload shares worth Rs 25,000 crore through an Offer for Sale (OFS) in the Indian market. However, the report suggested that the current global headwinds facing the automobile industry, combined with signs of a slowdown in India, may make this IPO less attractive for Indian investors. One of the key issues flagged in the report is the valuation of Hyundai Motors India. The report noted that despite contributing only 6.5 per cent of Hyundai's global revenue and 8 per cent of its overall profitability, the Indian unit is expected to be valued at approximately 42 per cent of the parent company's market capitalization upon listing. This valuation discrepancy raises concerns about whether the IPO price is justified given the Indian unit's relatively modest contribution to Hyundai's global business. "Despite contributing only 6.5 per cent of the global revenues and 8 per cent of the profitability, Hyundai's India unit will be valued at approx. 42 per cent of the Parent Co.'s MCap on listing" the report added. From Hyundai's perspective, the move makes sense. In South Korea, Hyundai's stock currently trades at a price-to-earnings (P/E) ratio of just 5x, making the sale in India potentially more lucrative. The report argues that Hyundai is looking to take advantage of the relatively higher valuations in India. It said "From Hyundai's perspective it's a no-brainer as their stock in S.Korea trades at a measly 5x P/E" Hyundai Motor Group, which includes both Hyundai and Kia, is the third-largest automaker globally, having sold 7.3 million vehicles in 2023. While Hyundai Motors India does not have a stake in Kia Motors India, the parent company owns a controlling 34 per cent stake in Kia Motors globally and fully owns Genesis Motors, a luxury brand in South Korea.

Hyundai IPO might not be a great deal for Indian investors: Report

Mumbai, The <keyword id="89466" type="General" weightage="20" keywordseo="Tea-Industry" source="Orion">tea industry</keyword> is likely to witness an 8 per cent year-on-year decline this fiscal due to decreasing export volume following the rise in supply from Sri Lanka, a report said on Friday. The operating profitability of the industry will fall for the second year in a row, shedding 100 basis points (bps) to 5 per cent due to lower realisation, Crisil Ratings said in a report. Profitability had fallen 150 bps last fiscal, primarily because of an increase in wages, the report said, adding that in FY23, wages that constitute 20 per cent of total input cost were hiked by 15 per cent. However, low leverage and negligible capital expenditure (capex) will keep credit profiles stable, the report stated. The tea industry will report 8 per cent year-on-year degrowth in revenue this fiscal, led by a decline in export volume, the agency said. "Domestic demand, which accounts for 82 per cent of sales volume, should remain steady at 1,100 million kg this fiscal. However, exports, which make up 18 per cent by volume and 30 per cent by value, may slide 12 per cent year-on-year to 200 million kg. Last fiscal, the export volume had increased 14 per cent due to lower production in Sri Lanka, a major tea exporting country," Crisil Ratings Director Nitin Kansal said. India, with a share of 11 per cent, is the fourth-largest tea exporter after China, Kenya and Sri Lanka. This fiscal, increased supply of Sri Lankan tea will impact demand for Indian produce as their production is expected to rebound following better availability of fertilisers and pesticides, said the report. Sri Lanka predominantly produces orthodox tea, which sees good demand globally because of its quality, and the country accounts for 50 per cent of the global trade. This will lower the realisation of Indian <keyword id="548344" type="General" weightage="20" keywordseo="tea-companies" source="Orion">tea companies</keyword>, with domestic production seen stable at 1,350 million kg this fiscal. The consequent decline in operating profitability will reduce cash accrual by 40 per cent this fiscal, the Crisil Ratings report noted. "Low capex intensity and stable working capital cycles will keep borrowings under control. So, the capital structure of tea companies would remain stable, with gearing expected below 0.50 times as of March 31, 2024, in line with the historical trend. Healthy balance sheets will ensure comfortable debt protection metrics, lending stability to credit profiles," Crisil Ratings Associate Director Argha Chanda said. Hence, despite weak operating performance, interest coverage will remain over 3 times this fiscal, it added.

Tea companies to witness 8% dip in revenue on decline in exports: Report

<ul><li>Resumption of international travels, conferences, G20 meets, and weddings are driving demand for hotels, say analysts.</li><li>The demand for leisure travel has also sustained, analysts say.</li><li>Mumbai, Delhi and Bangalore are likely to lead revenue per available room (RevPAR) growth, said a report by Nuvama Institutional Equities.</li></ul>The <keyword id="46343" type="General" weightage="20" keywordseo="hotel-industry" source="Orion">hotel industry</keyword>, which has been recovering from its pandemic lows for the last few months, is expected to post record earnings in the January-to-March quarter, expect analysts. “Q4FY23 will be a record quarter owing to a sustained travel surge, bunched-up weddings and normalisation of international travel,” said analysts at Nuvama Institutional Equities. Analysts say that the hotel industry has been in a recovery zone ever since the opening up of the economy with resumption of international travels owing to social events and corporate events. “Leisure was the first segment to pick up during recovery; this hasn’t stalled or waned even after the economy opened up. International travel resumed as there were social events, corporate events and MICE. There is no slowdown in demand currently,” said the report. More boost from G20 events In spite of a good showing ever since the lockdowns ended, there is scope for more growth hereon, expect analysts. “We believe, on the high base that the sector is at, incremental demand and supply shall be in sync, normalising rate movements. Key upside could come from sustained demand for leisure travel, normalising international travel and events such as the <keyword id="42982" type="General" weightage="20" keywordseo="g20-summit" source="Orion">G20 summit</keyword>,” said the Nuvama report. Based on the G20 calendar, there are several events scheduled in March and April 2023 to be held in cities like Amritsar, Gandhinagar, Mumbai, Chennai, Udaipur, Visakhapatnam, Darjeeling, Guwahati, Hyderabad, Kumarakom, Goa, Varanasi, and Bhubaneswar. The G20 holds annual summits where leaders from member countries gather to discuss global economic issues. India holds the G20 presidency this year. From a high base In fact, the strong performance of hotel companies in the December quarter reflects a strong uptick in demand. Tata group hospitality firm Indian Hotels Company’s net profit in Q3 jumped four times to all-time high at ₹383 crore on the back of robust demand. “Buoyed by a strong demand in the third quarter, both leisure and business hotels in key domestic markets reported occupancy of over 70% and a rate growth of 27% as compared to pre-Covid levels,” said Indian Hotels Company in an exchange filing. Adding to it, even Lemon Tree in Q3 reported a significant jump in net profit, which rose to ₹48.6 crore as against a loss of ₹5.2 crore in the same period last year. Mumbai, Delhi and Bangalore to lead regional growth for the industry Analysts say that the demand outlook for the sector in 2023 will remain robust on the back of events such as world cup hockey and cricket, apart from the ongoing G20. It will also bode well for more price increases this year. “For CY23, companies are budgeting average room rate (ARR) growth of 5–10% with a 2–5% increase in occupancies,” said a report by Nuvama Institutional Equities. R<a href="https://www.businesstoday.in/latest/corporate/story/hotel-prices-in-india-rise-15-20-so-far-in-2023-heres-why-370227-2023-02-14">eports </a>say that hotel prices across destinations have risen in the last few months due to wedding season, return of <keyword id="575625" type="General" weightage="20" keywordseo="corporate-travel" source="Orion">corporate travel</keyword> and events. It states that most cities have bounced back growth from pre-Covid levels. The report said that Mumbai, Delhi and Bangalore are likely to lead revenue per available room (RevPAR) growth. Added to that, the report also says that tier-2 and tier-3 cities have seen a fair amount of growth too. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/rbis-mpc-could-pause-rate-hikes-in-april-to-gauge-the-impact-of-hikes-so-far-sbi-research/articleshow/99030220.cms">RBI’s MPC could pause rate hikes in April to gauge the impact of hikes so far: SBI Research</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/indian-housing-market-stays-strong-despite-global-headwinds-anarock-research/articleshow/99030280.cms">Indian housing market stays strong despite global headwinds: Anarock Research</a>

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