Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: On Friday, Indian indices ended their four-day winning streak amid profit booking at record highs. The Sensex and Nifty 50 are expected to open flat today, taking a breather after last month's rally, due to mixed global cues.

BUSINESS

India Snatches 50% of Mobile Export Decline from China and Vietnam

What happened

India has pulled off a mobile phone export heist, snagging a whopping 50% of the shipment decline from China and Vietnam. While China's exports dipped by 2.8% and Vietnam's by 17.6% in FY24, India's exports surged by a jaw-dropping 40.5%. This growth, driven largely by iPhone exports, showcases India's prowess in attracting global supply chains, thanks to initiatives like the smartphone Production-Linked Incentive (PLI) scheme.

Why it matters

India's proactive adoption of the China+1 strategy and the PLI scheme has paid off, positioning the country as a key player in global electronics manufacturing. With Apple doubling its production and exports from India under the PLI scheme, the country has seen its iPhone production soar to $14 billion.

• In FY24 alone, iPhone exports accounted for a whopping 65% of India's $15.6 billion mobile exports and over one-third of its total electronics exports, which crossed $29 billion.
  
  

• Three major iPhone vendors—Foxconn, Pegatron, and Wistron (now part of Tata)—have set up shop in India, boosting production from $7 billion to $14 billion and exports from $5 billion to over $10 billion between FY23 and FY24. 
  
  

Zoom out

India's surge in mobile exports isn't just impressive; it's a tech-tastic triumph. By nabbing such a large share of the export decline from its Asian neighbours, India has firmly established itself as a heavyweight in global electronics manufacturing. As geopolitical tensions simmer, India's strategic initiatives and vibrant manufacturing ecosystem are proving to be game-changers.

BIG MONEY MOVES

Railways ₹31,000 crore wagon plan derailed by supplier woes

The Indian Railways is restructuring its ₹31,418 crore wagon procurement strategy following issues with supplier Modern Industries. Originally tasked with delivering 9,242 wagons worth ₹ 3,776 crores, Modern Industries' order was reduced to 3,151 wagons valued at ₹1,287.54 crores due labor unrest.

This adjustment comes as the railways seek to augment their fleet of 300,000 wagons. With Titagarh Wagons and Texmaco Rail leading the pack among the seven suppliers involved, other vendors will now step up to bridge the gap, ensuring railway operations stay on track despite these unforeseen challenges.

BEL bags ₹ 3,170-crore order to upgrade army tanks

Bharat Electronics Limited (BEL) just scored a ₹3,172-crore contract to upgrade the Indian Army's BMP 2/2K tanks with snazzy new sighting and fire control systems. The deal, inked at Armoured Vehicles Nigam Limited's HQ in Chennai, sent BEL's stock climbing 1.59% to ₹ 309.35.

In total, BEL has secured orders worth ₹4,803 crore this fiscal year, including projects like Doppler Weather Radars and classroom jammers.

BUSINESS

ICICI Zooms Past $100 Billion Market Cap

What happened

ICICI Bank has hit a jackpot, soaring past the $100 billion market capitalization mark for the first time in its history. This milestone propels ICICI Bank into the elite league of global banking giants, now nipping at the heels of Citigroup Inc. and China Merchants Bank with a valuation of $102.72 billion. 

Why it matters

This isn’t just a feather in ICICI Bank's cap; it’s a full-blown parade float. The bank’s strong earnings and solid metrics are driving its success. For instance, ICICI Bank boasts a net interest margin (NIM) of 4.6%, which is significantly higher than HDFC Bank’s 3.4%. Additionally, ICICI’s credit-to-deposit (CD) ratio stands at a healthier 82.3% compared to HDFC’s 105%. 

The bank’s stellar performance has pushed its stock up by nearly 20% in 2024. With an impressive return on assets (ROA) of 2% and a return on equity (ROE) of 18.8%, ICICI Bank is not just keeping pace with its global peers; it's outpacing many of them. 

Zoom out

As ICICI Bank rides the crest of its $100 billion wave, analysts predict sunny skies ahead. While it still trails behind global giants like JPMorgan Chase ($572 billion) and Bank of America ($307 billion), ICICI’s rapid rise is noteworthy. The bank has outperformed several well-known global banks, including those from Canada, Saudi Arabia, Japan, and more. As analysts continue to sing its praises, it’s clear that ICICI Bank is not just a local hero but a global contender. 

BIG PICTURE

WestJet strike: 407 flights cancelled, 49,000 passengers grounded

Canada’s second-largest airline, WestJet, hit turbulence as a surprise mechanics' strike led to the cancellation of 407 flights, affecting 49,000 passengers. The Aircraft Mechanics Fraternal Association started the strike after failed negotiations, despite a government order for arbitration.

CEO Alexis von Hoensbroech criticized the union, calling the strike “absurd” and blaming it on a “rogue union from the U.S.” With only 30 of WestJet’s 200 planes flying by Sunday, many are stuck navigating a long weekend without wings.

Tech giants join forces with Gujarat Government for AI boost

IBM, Microsoft and NASSCOM have partnered with the Gujarat Government to strengthen their Deeptech Initiative program. The collaboration will establish an AI cluster for the BFSI sector and an AI Centre of Excellence (CoE) at GIFT City, Gandhinagar. 

The initiative aims to train 25,000 students in AI over the next three years, with a STEM workshop targeting 10,000 high school students annually. Chief Minister Bhupendra Patel, along with top officials, academia and industry leaders, were present at the MoU signing.

BUSINESS

ITC’s FMCG Consumer Spending Soars by 12%

What happened

ITC Ltd, the Indian conglomerate with interests from hotels to consumer goods, has a sunny outlook for India's economy, as detailed in its latest annual report. The company spotted several positive trends: a rebound in rural markets, better employment conditions and a steady rise in manufacturing and services.

Despite inflation cooling off and a favourable agricultural trade environment thanks to a good rabi harvest and normal monsoon, private consumption has been sluggish, growing only 3%—the slowest pace in two decades. 

Why it matters

The report sheds light on key factors influencing India's economics. The government's investment in infrastructure and efforts to enhance both physical and digital infrastructure are pivotal. Additionally, improvements in employment and rural market recovery signal potential growth in consumer demand. 

ITC's revenue for FY24 stayed stable at ₹69,446 crore, while profit after tax increased by 8.9% to ₹20,421.97 crore. However, the company's stock has dipped over 5% in the past year. 

On top of that, the FMCG giant covered a major milestone in its sustainability journey, meeting its 2030 target of 50% renewable energy usage seven years ahead of schedule. This accomplishment highlights ITC's commitment to reducing reliance on fossil fuels, with over 50% of its energy needs now sourced from biomass, wind, and solar power.

Zoom out

While ITC remains optimistic about India's economic prospects, driven by infrastructure investments and improved employment conditions, the company also acknowledges significant hurdles. The need for boosting private consumption, tackling climate threats to agriculture and improving market linkages will be crucial areas that require attention.

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