28 Nov

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BUSINESS

Pharma Tango - India Dances as Drugmakers Dodge China

What happened

In a plot twist that's shaking up the pharmaceutical dance floor, drugmakers are gracefully sidestepping China's moves, seeking a new partner in India. Reports from ten industry insiders unveil a strategic shift, with companies aiming to minimize reliance on Chinese contractors, especially in the realm of clinical trials and early-stage drug manufacturing.

For almost two decades, China has held the spotlight as the go-to destination for pharmaceutical services, offering a tempting mix of low costs and rapid services. However, recent global uncertainties, compounded by heightened tensions, have prompted Western governments to encourage companies to "de-risk" and diversify their supply chains away from the Chinese tango.

Why it matters

The rising star in this drama is India, stealing the spotlight as an attractive alternative. 

• XYZ Corp and its cohorts are rethinking their RFP (request for proposal) recipients, with Indian manufacturers gaining traction. 

• The four big players - Syngene, Aragen Life Sciences, Piramal Pharma Solutions, and Sai Life Sciences - report a surge in interest and requests from Western pharma giants, signaling a shift in the pharmaceutical power play.

As the pharma spotlight shifts, India is seeking a larger slice of the $42 billion pharmaceutical services pie. 

Zoom Out

While the full impact on Indian manufacturers may take time, the wheels are in motion. India's pharmaceutical industry, valued at $15.6 billion this year, is gearing up for strong growth, estimated at over 11% annually for the next five years. As drugmakers reshuffle their cards, India will gain an edge, eyeing a more prominent role in the pharma services sector.

Meanwhile, investors now having a chit-chat with pharma companies are like:

BIG MONEY MOVES

India's Solar Installations Dip 47% to 5.6 GW

India witnessed a 47% decline in solar installations, reaching 5.6 GW from January to September 2023. The July-September quarter reported a 34% drop to 1.9 GW compared to the previous year. Despite a 6% quarter-on-quarter rise, the utility-scale installations fell by 54% to 4.2 GW. Challenges include delayed projects, oversupply in China affecting module prices, and transmission issues. 

NIDM and TERI Join Forces for Disaster Resilience Revolution!

In a groundbreaking move, the National Institute of Disaster Management (NIDM) and The Energy and Resources Institute (TERI) have inked a pact to boost innovation and knowledge-sharing. Aligned with the PM's 10-point agenda, this collaboration involving 260 universities aims to promote awareness, training, and capacity building in disaster management. The strategic partnership is a crucial step in addressing challenges posed by disasters and climate-related risks, reinforcing a joint commitment to building a resilient and safer India.

BUSINESS

SAIL on Track for a Steel Price Hike!

What happened

In a recent post-earnings call with analysts, Anil Tulsiani, the finance director of the Steel Authority of India (SAIL), dropped a financial bombshell. SAIL, the behemoth of India's steel production, is gearing up to boost the provisional price of rails supplied to the Indian Railways for the fiscal years 2022-23 and 2023-24. Tulsiani, in his signature matter-of-fact style, cited surging costs as the driving force behind this move.

• Last fiscal year, the Railways agreed to a provisional price of Rs 67,500 per tonne, a leap from the previous Rs 63,624 per tonne set for FY18-19.

•  This price pact is specific to rails boasting an Ultimate Tensile Strength (UTS) of 90 kg/mm2 and a weight ranging from 52 kg to 60 kg per meter.

Why it matters: Buckle Up, Railways!

SAIL's move to raise rail prices stems from the considerable gap between the provisional and finalized rates, presenting a financial challenge for the company. Tulsiani emphasized the need for an ad hoc increase to align prices with the actual production costs.

SAIL's sales strategy, having supplied about 0.92 million tonnes of rails to the railways during FY22, hinges on adjusting prices to sustain profitability. The company's robust performance in H1(first half of a financial year), marked by record sales and a Rs 1,750 crore improvement in turnover, underlines the significance of pricing adjustments in supporting financial health.

Zoom out

But that's not all. Tulsiani sprinkled some more financial fairy dust by revealing SAIL's ambitious debt reduction plan. With their eyes set on slashing the debt figure to Rs 22,000 crores by year-end, the finance director highlighted a targeted reduction of Rs 3,500 crores. The company's commitment to maintaining a 1:1 debt-to-equity ratio and phasing out expansion plans over the next three to four years signals a prudent financial approach.

BIG PICTURE

🎮️ ByteDance restructures Nuverse amid gaming stumble

TikTok’s parent company ByteDance's gaming venture, Nuverse, faces a setback with significant layoffs after two years of lackluster performance. Initially a threat to Tencent and NetEase, the gaming department is restructuring amid doubts about ByteDance's A/B testing strategy's applicability to the gaming industry. The move follows ByteDance's heavy acquisitions, including a $4 billion studio purchase. The layoffs contribute to the broader challenges in China's internet industry, grappling with regulatory crackdowns and economic obstacles.

😲 China's wealth giant ZEG shocks with $65 billion debt revelation

A major Chinese wealth management company, Zhongzhi Enterprise Group (ZEG), has alarmed investors, confessing it's "severely insolvent" in a letter. The Beijing-based firm, heavily tied to China's struggling real estate sector, revealed a staggering debt of 460 billion yuan ($65 billion) against assets of 200 billion yuan. ZEG, part of China's vast shadow banking sector, grapples with a liquidity crunch and asset impairment.

BUSINESS

Blue Dart Unveils 40 New Franchisees Across India

What happened

Blue Dart Express Ltd unveiled ambitious nationwide expansion plans, marking the inauguration of 40 new franchisees and company-owned retail outlets. This move follows the establishment of over 100 new stores in the current year, significantly amplifying the company's reach to cover more than 56,000 locations across India. The strategic placement of these outlets in key cities like Kolkata, Delhi, and Mumbai underlines Blue Dart's commitment to bolstering nationwide connectivity.

Why it matters

Blue Dart's nationwide expansion isn't just about increasing numbers; it's a strategic move to enhance customer convenience and reinforce last-mile logistics, especially in remote areas. 

• By strategically positioning in major cities, Blue Dart aims to optimize its delivery network, ensuring a seamless and efficient service across the nation. 

• The emphasis on fortifying last-mile logistics is crucial, addressing the challenges of reaching even the remote corners of the country. 

• The addition of 40 new franchisees and retail outlets reflects the company's dedication to staying at the forefront of logistics services in India.

Zoom out

Blue Dart's proactive approach to nationwide expansion, with a focus on both franchisees and company-owned outlets, demonstrates a commitment to adapt and evolve in the dynamic logistics landscape. By strategically placing these new establishments in key cities, the company not only expands its physical footprint but also reinforces its logistical capabilities.

MIRCH MASALA

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