Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Indian benchmark indices ended higher on October 10, with the Sensex rising 144 points to 81,611 and Nifty closing just below 25,000. Banking, metal, and energy sectors gained, while Pharma and IT sectors saw sharp declines.

TOP STORIES

TCS Margins Slip for the First Time Since 2019

What happened?

Tata Consultancy Services (TCS), India's largest IT services company, reported a net profit of $1.43 billion for the September 2024 quarter, down 1.59% from the previous quarter. This marks the first time since 2019 that TCS has seen a drop in margins during this quarter. 

While revenue climbed 2.2% sequentially to $7.67 billion, net profit lagged behind predictions of $1.48 billion.

•  TCS’s operating margins narrowed to 24.1%, hurt by rising equipment costs, particularly due to its $1.83 billion 4G network project for BSNL.

Why it matters?

The fall in profit, despite higher revenue, highlights the impact of increasing operational costs, with equipment expenses more than doubling to $386 million. While TCS’s communication and technology sector brought in $1.44 billion and contributed to growth, its largest market, the Americas, saw a decline, fetching $67 million less than last quarter. 

This adds to concerns as India’s $254 billion IT sector faces economic uncertainties, and clients continue to focus on cost-cutting rather than growth-driven projects. The pressure on margins is a warning sign amidst a competitive global tech environment.

Conclusion

Despite the profit slip, TCS remains optimistic about future growth, adding 5,726 employees last quarter, bringing its headcount to 612,724. CEO K. Krithivasan remains hopeful that easing economic pressures will boost consumer confidence and lead to stronger investments. 

PAISON KA KHEL

Hyundai accelerates with ₹32,000 crore investment

Hyundai Motor India has announced plans to invest ₹32,000 crore in the country over the next 10 years. This major investment includes ₹6,000 crore dedicated to a new plant in Pune, which will increase the company’s production capacity by 30% by 2028, raising output from 824,000 to nearly 1.1 million vehicles.

Hyundai’s upcoming IPO, open from October 15 to 17, is expected to attract both local and global investors. The price range is set between ₹1,865 and ₹1,960 per share.

Property developers trim debt, riding high on home sales

Listed property developers have halved their debt, bringing it down to ₹20,808 crore by June 2024 from a hefty ₹44,817 crore the year before. The secret? Skyrocketing home sales in India’s top seven cities.

Major players like DLF, Sobha, Lodha, and Godrej Properties saw bookings soar to ₹90,573 crore in FY24, over three times the amount in FY19. DLF alone slashed its debt by 165%, now sitting pretty with ₹2,896 crore in surplus cash.  

TOP STORIES

Myntra’s Big Fashion Festival Sees a 36% Surge

What happened?

Myntra’s latest Big Fashion Festival (BFF) made quite the splash this year, racking up 627 million customer visits—an impressive 36% jump from last year’s 460 million. The online fashion giant also gained over 1.5 million new customers, with 80% of them coming from non-metro, tier-II, and tier-III cities. 

This isn’t surprising, considering last year, 42% of the platform’s festive demand came from these regions. Myntra also expanded its brand portfolio to over 9,700 brands, up from 6,000, marking a 61% increase in brand participation.

The inside story

The festival’s growth highlights Myntra's stronghold in India’s fashion e-commerce market, especially beyond metro cities. Categories like women’s ethnic wear, men’s occasion and casual wear, and sports footwear saw increased demand, alongside 1.5x growth in beauty, personal care, and home furnishings.

The Gen-Z-focused fashion segment, FWD, also experienced a 2.5x increase in customer acquisition, with a staggering 3.4x demand jump in men’s fashion. On the payment front, credit card transactions surged 9x, while the Myntra-Kotak co-branded credit card saw an 8x rise in usage during the event.

Zoom out

The platform not only boosted its customer base and brand lineup but also achieved logistics success, with 75% of orders delivered by its last-mile fleet and Kirana partners, covering 98% of India's pin codes. With numbers like these, Myntra continues to expand its reach into smaller towns and leverage innovative payment options.

GLOBAL NAZARA

HSBC plans $300M cost cuts – senior bankers in the crosshairs

HSBC is thinking about trimming $300 million in costs, and it seems senior bankers are first on the chopping block. CEO Georges Elhedery is considering merging the commercial and investment banking units, streamlining roles, and targeting higher-level execs. After all, why pay for two execs when one can do the job? HSBC's cost-cutting spree follows its retreat from the U.S., France, and Canada, with a growing focus on Asia. 

Nuclear power returns to fuel AI 

Tech giants like Microsoft, Amazon, and Google are turning to nuclear power to handle the growing energy needs of AI. The Three Mile Island nuclear plant in Pennsylvania, once closed after the infamous 1979 incident, is reopening to supply energy to Microsoft’s data centres. Similarly, Amazon is investing $650 million in another ageing nuclear plant in the state.

India is also exploring the potential of small modular reactors (SMRs) for industries like steel, eyeing clean energy solutions. 

TOP STORIES

Senco Gold set to shine online with Melorra buyout

What happened

Senco Gold Ltd, a Kolkata-based jeweller that went public last year, is in advanced talks to acquire online jewellery retailer Melorra. The deal is expected to be valued between ₹40-50 crore, though the valuation is still under negotiation.

Melorra, founded in 2015, has raised $88 million in funding but has struggled with financial losses, including a 73.5% rise in losses in FY22. 

Driving the news

Melorra, once valued at $312 million, has seen a dramatic fall in value, with a recent bridge round valuing it at a tenth of its previous worth. The company has also reportedly stopped paying employees, highlighting its financial distress. Senco’s move to acquire Melorra comes at a time when competition in the jewellery e-commerce space is heating up.

Brands like CaratLane, owned by the Tata Group’s Titan, and new entrants like Giva, which recently raised ₹100 crore, are expanding aggressively. By acquiring Melorra, Senco could gain access to an established e-commerce platform, making it more competitive in a fast-growing market.

Zoom out

While Melorra has faced operational struggles, Senco’s expertise and resources could turn its fortunes around. With gold prices rising due to geopolitical factors and central bank buying, Senco’s traditional retail business is already seeing a 27% year-on-year growth.

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