Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Indian benchmark indices ended their six-day losing streak on October 8, with the Nifty closing above 25,000. The Sensex rose by 584.81 points, or 0.72%, finishing at 81,634.81, while the Nifty gained 217.40 points, or 0.88%, to settle at 25,013.20.

TOP STORIES

The Diverging Fortunes of Metal Companies This Quarter

What Happened

The latest quarter (Q2 FY25) for metal companies reveals a tale of two sectors. While ferrous metals, like steel, face challenges with plummeting prices and rising imports, non-ferrous metals are basking in higher prices. 

Domestic hot-rolled coil steel prices have dipped by about 10% year-on-year to ₹50,900 per tonne. Companies like JSW Steel and SAIL are projected to see staggering EBITDA drops of 42% and 29%, respectively. Conversely, non-ferrous firms like National Aluminium Co. (Nalco) are thriving, with an expected EBITDA increase of over 100% thanks to a 51% spike in alumina prices.

Why It Matters

These trends are significant for major players like Tata Steel, Nalco and Hindalco. While Tata Steel may report a slight dip in EBITDA from Indian operations, the easing losses in Europe should allow for overall growth. The company enjoys the highest EBITDA margin of around 20%, aided by its access to iron ore mines. 

On the flip side, the non-ferrous sector's average LME prices of aluminium, zinc and copper surged 10-15% year-on-year, reflecting a resilient market. Despite the strong performance, non-ferrous metals are not immune to volatility; prices recently fluctuated, impacting future projections.

Zoom out

As we sift through the mixed results, it’s evident that the metal industry is navigating tricky waters. Stock prices reveal a tale of optimism, with National Aluminium Company (Nalco) surging over 20% in the last month, while the Nifty Metal index has gained over 7%. However, as the old saying goes, "What goes up must come down," so let’s hope this isn’t just a brief flirtation with success!

PAISON KA KHEL

Sheela Foam expands its cushion, grabs 10.5% stake in Furlenco

Sheela Foam, the parent of Sleepwell Mattress, is padding up its investment game by acquiring a 10.5% stake in furniture rental company Furlenco for ₹107 crore. The deal, approved by Sheela Foam's board, will be wrapped up by October 14, 2024. 

In this comfy deal, Sheela Foam will subscribe to over 50 lakh equity shares and grab 3.5 lakh shares from existing stakeholders. This isn't their first snuggle with Furlenco—last year, they had already picked up a cosy 35% stake for ₹300 crore.

Modi kicks off ₹7,600-crore projects in Maharashtra

Prime Minister Narendra Modi is all set to kickstart major development projects in Maharashtra, worth a whopping ₹7,600 crore. Today, via video conference, Modi will lay the foundation stone for these projects, including a ₹7,000 crore upgrade of Nagpur’s Dr. Babasaheb Ambedkar International Airport. 

He’s also green-lighting a new terminal at Shirdi Airport for ₹645 crore to manage the swarm of Sai Baba devotees. And for the healthcare boost 10 new medical colleges will open across Maharashtra. 

TOP STORIES

Patanjali Secures Approval for ₹1,100 Crore Acquisition

What happened

Patanjali Foods has received the green light from the Competition Commission of India (CCI) for its ₹1,100 crore acquisition of the home and personal care (HPC) division of its parent company, Patanjali Ayurved. This acquisition, aimed at strengthening Patanjali Foods' position in the fast-moving consumer goods (FMCG) sector, will see the integration of a diverse range of products, including haircare, skincare, dental care and home care items.

Why it matters

This strategic move not only expands Patanjali Foods' product lineup but also reinforces its ambition to become a leading player in the FMCG market. The acquisition falls under related party transactions, maintaining fairness as Patanjali Ayurved is a significant promoter of Patanjali Foods. 

Given the growing demand for natural and Ayurvedic products, integrating Patanjali Ayurved’s established HPC brand could enhance customer loyalty and market share. Moreover, with Patanjali Foods already involved in processing oilseeds and producing a variety of food and health products, this acquisition aligns perfectly with their broader business strategy.

What’s next?

Patanjali Ayurved’s diverse portfolio in manufacturing and trading Ayurvedic medicines and home and personal care items, coupled with bulk trading of rice, positions it uniquely in the competitive FMCG landscape.

With an impressive revenue of ₹31,961.62 crore last fiscal year—up from ₹31,821.45 crore the year before—Patanjali Foods is on a promising trajectory.

GLOBAL NAZARA

Adidas rides the Samba wave as Nike stumbles

As Nike faces challenges, Adidas is strutting forward, thanks to its hit Samba and Gazelle sneakers. With sales expected to jump 10% to €6.4 billion in Q3, analysts say the Samba craze won't last forever—after all, sneakerheads already have their pairs! To keep things fresh, Adidas is introducing new colours and styles, but experts warn they should "tap the brakes" to avoid burnout.

While Adidas plans to shift focus to models like the Campus and SL72, it’s also revving up with Formula 1-inspired designs. For now, Nike’s stumble is Adidas' chance to sprint ahead—carefully.

Samsung’s Q3 profit soars 274%, but apology included

Samsung Electronics reported a jaw-dropping operating profit of approximately 9.1 trillion won ($6.8 billion) for Q3, marking a staggering 274% increase from last year’s 2.43 trillion won. However, this figure fell short of the expected 10.3 trillion won, leading the tech giant to issue a rare apology for trailing in the booming AI chip market. 

TOP STORIES

SpiceJet Flies High with Fleet Expansion

What Happened

SpiceJet's share price soared over 9% on October 8, reaching an intraday high of ₹63, after the airline announced plans to expand its fleet by 10 new aircraft by the end of November. This expansion comes right after a successful ₹3,000-crore Qualified Institutional Placement (QIP) in September, aimed at driving the airline's turnaround.

Of the 10 new planes, seven will be leased and three grounded aircraft will return to service. Two leased planes have already arrived and will be inducted by October 10, with the remainder set to follow by mid-November. 

Why It Matters

SpiceJet’s ₹3,000-crore QIP wasn’t just a financial boost—it’s helping the airline get back on its feet. With investors like Goldman Sachs, Morgan Stanley, Tata Mutual Fund and Discovery Global Opportunity Ltd backing the deal, the airline is using these funds strategically. They have already cleared ₹71 crore in Goods and Services Tax (GST) dues and settled ₹80 crore in salary arrears for the period between June and August 2024.

In addition, the airline has successfully resolved long-standing disputes, including a $16.7 million claim by Engine Lease Finance Corporation (ELFC), settled for a lower, undisclosed amount. This settlement will allow for the return of more grounded planes.

Time for Takeoff?

While the airline's stock has shown a strong recovery, up 80% in the past year, it still faces significant debt—around ₹3,700 crore in lessor, engineering and statutory liabilities. But the fresh capital from the QIP and the upcoming fleet expansion are expected to help restore SpiceJet’s operations to pre-2019 levels when it had 74 operational aircraft compared to just 28 today.

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