Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Indian equities started the week sluggishly but rebounded thanks to strong performances in the Energy and Metal sectors. On May 21, the Sensex closed down 52.63 points at 73,953.31, while the Nifty rose by 27 points to finish at 22,529.

BUSINESS

Zudio Soars with 203 New Stores, Leading Value Fashion Space

What happened

The past fiscal year witnessed Trent Ltd’s value apparel brand, Zudio's dynamic expansion, marked by the inauguration of an impressive 203 new stores nationwide. This robust growth strategy propelled Zudio into 46 new cities while fortifying its position in an additional 48 cities. Consequently, Zudio's network now encompasses 545 stores across 164 cities.

The new stores, typically covering 10,000 square feet, added significant market coverage, with each new store costing between ₹3 crore to ₹4 crores to set up, including capital expenditure, deposits, and inventory.

Why it matters

Zudio’s expansion is noteworthy not just for the sheer number of stores, but for what it signifies about the value retail market in India. 

• With a consolidated revenue of ₹3,540 crore, Zudio's growth underscores the rising demand for affordable fashion, particularly among younger shoppers. 
  
  

• This boom in value retail market is expected to surge from $111 billion in FY23 to $170 billion by 2026, growing at a 15% compound annual growth rate. 

As Zudio takes the lead, it faces fresh competition from new entrants like Yousta from Reliance Retail, Style-Up from ABFRL, and InTune from Shoppers Stop. This competitive landscape highlights the lucrative potential and fierce rivalry within the value retail sector.

Zoom out

Zudio’s impressive expansion and robust financial performance paint a vivid picture of a brand rapidly scaling new heights.

• As part of Trent Ltd’s diverse portfolio, which includes Westside and Star supermarket, Zudio's growth contributes to the parent company's consolidated revenue of ₹12,375 crore and a profit of ₹1,477 crore for the fiscal year ending March 2024. 

The strategic focus on fashion-forward, locally sourced merchandise for younger consumers has paid off, positioning Zudio as a formidable player in the value retail market.

BIG MONEY MOVES

Kalpataru secures ₹7,550 crore EPC contract with Saudi Aramco

Kalpataru Projects International Ltd has secured three contracts worth SAR 3.4 billion (₹7,550 crore) from Aramco to expand Saudi Arabia's gas supply network. The contracts involve EPC work and a Letter of Intent for 800 km of gas pipeline expansion under the Master Gas System Network's third phase. This project aims to enhance gas supply to industrial consumers in the region. 

*EPC stands for Engineering, Procurement, and Construction

JSW cement to invest ₹3,000 crore in new Rajasthan plant

JSW Cement, part of the $24.25-billion JSW Group, will invest ₹3,000 crore to build a cement manufacturing facility in Nagaur, Rajasthan. Funded through a mix of debt and equity, the plant will feature a 3.30 MTPA clinkerization unit and a 2.50 MTPA grinding unit. An 18 MW waste heat recovery power system will also be included. This project is set to create over 1,000 jobs, strengthening JSW Cement’s presence in northern India.

BUSINESS

HAL's Growth Accelerates through Defense Modernization

What happened

Hindustan Aeronautics Ltd. (HAL) is on the brink of significant growth, fueled by defence modernization initiatives and breakthroughs in indigenization programs. The company recently secured a pivotal order for manufacturing 83 indigenous Light Combat Aircraft (LCA) MK 1A, slated for delivery by 2029. This move underscores India's commitment to bolster its defence capabilities through locally developed aircraft.

HAL's recent success is reflected in its robust financial performance, with shares skyrocketing by nearly 15% following strong Q4FY24 results. 

Why it matters

HAL's trajectory toward growth is not just a matter of financial figures but also strategic positioning. 

• With a substantial order book exceeding ₹94,000 crore, HAL's revenue outlook remains promising, projected to grow by 15-18% moving forward. 
  
  

• Management anticipates fresh orders worth ₹47,000 crore in FY25, hinting at a burgeoning net order book expected to surpass ₹1.2 trillion by year-end.
  
  

• Key highlights include an 18% year-on-year increase in revenue and an impressive 82% surge in EBITDA.

The aeronautics giant is actively venturing into the global defence aircraft market and commercial aircraft segments, signing pivotal agreements with industry giants like Airbus, Safran, and GE. These partnerships encompass initiatives ranging from maintenance facilities to engine manufacturing, marking HAL's foray into cutting-edge technologies and international markets.

Zoom out

HAL's journey is not without challenges, including geopolitical uncertainties impacting supply chains and potential delays in government orders or market penetration. However, investors' confidence, evident in the near tripling of stock prices in the past year, reflects optimism and resilience in HAL's capabilities.

BIG PICTURE

EU approves world's first major AI regulation

The European Union has approved the world's first significant regulation for artificial intelligence, the AI Act. This groundbreaking legislation aims to set comprehensive rules for AI technology, applying a risk-based approach to ensure safety and transparency. The law prohibits high-risk AI applications like social scoring, predictive policing, and emotional recognition in sensitive environments such as workplaces and schools.

Companies violating the AI Act could face fines of up to 35 million euros ($38 million) or 7% of their annual global revenues, whichever is higher.

Reliance partners with Norway's Nel for hydrogen electrolysers

Reliance Industries has teamed up with Norway's Nel ASA to supply hydrogen electrolysers as part of its ambitious renewable energy plans. Mukesh Ambani, chairman of Reliance, announced a massive investment of $75 billion in renewable infrastructure.

This investment will cover the development of generation plants, solar panels, and electrolysers, aiming to position Reliance at the forefront of green energy.

BUSINESS

India's Deep-Sea Mission: Unearthing Minerals for the EV Revolution

What happened

India is diving 6 kilometres deep into the Indian Ocean in a competitive quest with China for essential minerals like cobalt and manganese, crucial for electric vehicles (EVs) and solar panels. The country has applied to the United Nations' International Seabed Authority (ISA) for licenses to explore the Carlsberg Ridge and Afanasy-Nikitin Seamount (ANS).

These efforts aim to secure strategic resources amidst rising global interest. Currently, India holds licenses for two other regions in the Indian Ocean, allowing exploration of polymetallic nodules and sulphides.

Why it matters

The quest for these minerals isn’t just about supply but also about strategic positioning. As M. Ravichandran, Secretary of the Ministry of Earth Sciences, emphasized, competing with China for these resources has significant geopolitical implications.

India’s exploration involves advanced technology and methods, from ship-based studies to autonomous underwater vehicles. This is part of a broader strategy to reduce reliance on imports, mainly from the UK, China, and Norway, and to tap into the potential of the vast, unstudied ocean resources.

India has already identified 380 million tonnes of polymetallic nodules, including 1.5 million tonnes of cobalt, in the Central Indian Ocean.

Zoom out

India's deep-sea exploration is a bold step towards securing essential minerals for its burgeoning EV and renewable energy sectors. By investing in underwater mining technology and pushing for international exploration licenses, India is positioning itself as a significant player in the global race for critical resources. The efforts not only promise economic benefits but also reinforce India’s strategic autonomy in a mineral-dependent future. 

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