Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: The NSE Nifty 50 closed at 22,402.40, up by 0.15%, while the BSE Sensex settled at 73,852.94, rising by 0.16% on Wednesday. Bank Nifty gained 0.46%, ending at 48,189, with Indian markets trailing Asian peers due to subdued Q4 earnings, particularly in IT and other heavyweight sectors.

BUSINESS

REC Extends ₹1,869 Crore Term Loan for Kiru Hydro Electric Project

What happened

REC Limited, a significant player in the power sector, has announced a term loan of ₹1,869.265 crores to Chenab Valley Power Project Private Limited (CVPPPL). This loan agreement is specifically aimed at supporting the development, construction, and operation of the greenfield 4 x 156 MW Kiru Hydro Electric Project located on the Chenab River in Kishtwar district, Jammu and Kashmir.

The Kiru Hydro Electric Project is a crucial endeavour, encompassing a run-of-river scheme that includes the construction of a 135-meter-high dam and an underground powerhouse featuring four units of 156 MW each. 

Why it matters

This financial assistance from REC Limited to CVPPPL is pivotal for several reasons. Firstly, it underscores the ongoing efforts to boost renewable energy sources, particularly hydroelectric power, which plays a vital role in India's sustainable energy mix. By supporting projects like Kiru Hydro Electric Project, the country moves closer to achieving its renewable energy targets.

Secondly, the Kiru Hydro Electric Project's development is expected to contribute significantly to the economic and social development of the region. The project will create employment opportunities, foster local infrastructure development, and enhance the overall quality of life for communities in and around Kishtwar district.

Lastly, this collaboration between REC Limited and CVPPPL exemplifies the synergy between public and private entities in driving infrastructure development and sustainable energy initiatives. 

Zoom out

The collaboration between REC Limited and CVPPPL, a joint venture of NHPC and JKSPDC, underscores a strategic effort to tap into India's hydro potential. CVPPPL's projects like the Kiru Hydro Electric Project, Pakal Dul Hydro Electric Project, and Kirthai-II Hydro Electric Project, totalling 3,094 MW, are significant strides towards India's renewable energy goals.

Moreover, REC's substantial finances, with a loan book of ₹4.97 lakh crore and net worth of ₹64,787 crore, highlight its crucial role in funding key power sector projects.

BIG MONEY MOVES

Coca-Cola and Microsoft seal $1.1 billion deal for AI and cloud services

Coca-Cola has recently inked a significant deal with Microsoft, valued at $1.1 billion over five years, to leverage the tech giant's cloud computing and artificial intelligence (AI) services. This agreement builds upon their previous collaboration, where Coca-Cola had signed a $250 million deal in 2020 to utilize Microsoft's cloud infrastructure and business software.

As part of the new deal, Coca-Cola will explore Microsoft's Copilot offerings to enhance productivity within the beverage company. Copilot is an AI assistant designed to streamline tasks like summarizing lengthy email discussions and creating business presentations, among other functions.

Eldeco and HDFC Capital collaborate, raise ₹ 350 crore for residential projects

Eldeco Infrastructure and Properties, a division of the Eldeco group, has secured a substantial investment of ₹350 crores from HDFC Capital Advisors Limited. This investment is part of their joint platform to develop residential projects across India. With this latest funding round, the platform's size has now reached an impressive ₹ 850 crore, with ambitious plans to generate ₹8,000 crore from a total of 17 projects.

BUSINESS

Foreign Investors Trim Holdings in HUL as Sales Challenges Persist

What happened

Foreign investors have significantly reduced their holdings in Hindustan Unilever Ltd. (HUL), India's largest staples company, to a four-year low. This move comes amidst challenges faced by the company, including weak consumer demand and increased competition in the market. Data compiled by Bloomberg indicates that foreign funds reduced their ownership of HUL to 12.7% by the end of March, down from 14.5% in June of the previous year.

Why it matters

The decrease in foreign ownership of HUL reflects concerns about the company's sales growth, which has been faltering recently. 

• HUL's shares have experienced a decline of over 9% in the past 12 months, making it one of the underperformers in the NSE Nifty 50 Index. 
  
  

• The FMCG company has reported a 6% decline in standalone net profit for the fiscal fourth quarter, down to ₹2,406 crore compared to ₹ 2,552 crore in the previous year. 
  
  

• The company's sales showed only marginal growth, reaching ₹14,693 crore in the fourth quarter.

Investors are cautious due to the expensive valuations of companies like HUL amid sluggish sales growth and increased competition from newer brands. Additionally, factors such as lower agricultural yields impacting rural demand have added to the challenges faced by HUL.

Zoom out

While foreign investors have been reducing their stakes in HUL, domestic investors have shown increased interest, with the proportion of shares owned by domestic investors reaching a record high of 13.2%. This shift in ownership dynamics highlights the differing perspectives on HUL's performance and potential.

BIG PICTURE

✈️ Boeing navigates $355 million loss amid safety concerns

Boeing, a titan in the aerospace industry, recently reported a substantial $355 million loss for the first quarter. This financial stumble is part of a broader narrative engulfing the company, marked by safety issues and operational challenges.

One of the key incidents that has drawn scrutiny is the detachment of a door plug from a Boeing 737 Max during a flight by Alaska Airlines earlier this year. This event not only caused significant damage but also reignited concerns stemming from the tragic crashes involving Max jets in previous years.

🏭️ Tata Electronics ventures into advanced chip production

Tata Electronics is laying the groundwork for cutting-edge chips, with plans to produce advanced 14-nanometer (nm) technology chips alongside their ongoing 28 nm node manufacturing efforts. This move comes after the recent groundbreaking ceremony for their ₹91,000-crore semiconductor fabrication plant, a joint venture with Powerchip Semiconductor Manufacturing Corporation (PSMC).

The 14 nm chips represent a significant leap in technology, offering greater energy efficiency, enhanced performance, and faster speeds due to their compact size.

BUSINESS

PepsiCo's Strong Global Sales Offset US Slowdown in Q1 Earnings

What happened

PepsiCo, the global snack and beverage giant, reported its first-quarter earnings for 2024, exceeding revenue expectations due to strong demand for its products internationally. Despite this positive performance, the company faced challenges in the United States, with a slowdown impacting its sales figures. 

• In the last quarter, PepsiCo made $18.25 billion in revenue, which went up by 2.3% compared to the same time last year. 
  
  

• Their organic revenue also increased by 2.7%. 
  
  

• The company earned $2 billion in net income, up by 6%, and its core earnings per share grew by 7% to $1.61.

Why it matters

One of the key drivers of PepsiCo's success has been its international business, which contributed approximately 40% of its total revenue for fiscal 2023. This significant international presence has helped offset challenges in its North American market, where consumers have shown caution amidst inflationary pressures and multiple price hikes.

PepsiCo's iconic brands like Tropicana Juices, Lays chips, and 7UP have continued to attract consumers globally, particularly in regions such as Europe, Asia Pacific, and China. This strong demand in international markets has been crucial in balancing out slower growth in the United States.

However, the Quaker Foods North America unit encountered significant hurdles, witnessing a notable 24% decline in sales due to product recalls linked to potential Salmonella contamination.

Zoom out

Looking forward, PepsiCo is feeling optimistic about the future. They're aiming for a 4% rise in organic revenue and an 8% boost in core earnings per share for 2024. Their dedication to rewarding shareholders through dividends and buying back shares, combined with their focus on creating new products and reaching more customers, sets them up for ongoing success.

Even with challenges in the market, PepsiCo believes they can keep performing well and stay at the top in the global snacks and drinks industry.

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