Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Despite a strong start, the markets quickly lost ground and ended the session in red. Realty and IT sectors saw gains, while PSU Banks and Auto sectors experienced the most significant declines.

BUSINESS

Small-Town Eateries Thrive with Zomato and Swiggy

What’s cooking?

Small eateries in India's tier II and III cities are experiencing a boom, thanks to partnerships with food-delivery giants Swiggy and Zomato. 

Take Bonfire Pizza in Rishikesh, for instance. Owner Priya Sharma faced dismal sales after opening her outlet in 2018. Struggling to stay afloat, she turned to food delivery apps. Fast forward six years and Priya's monthly sales have soared to ₹4 lakh, with 90% of her business coming from these platforms. 

Why it matters

The surge in business for small-city eateries is a win-win for both restaurateurs and food delivery platforms. Swiggy and Zomato, with eyes bigger than their stomachs, are betting on smaller cities to fuel their next growth spurt.

•  India's restaurant market is a whopping $70 billion pie, with $43 billion coming from deliveries. 

Tier II and III cities are emerging as hot spots, offering less competition and greater demand. With delivery and marketing support, small eateries can skip the hefty start-up costs and dive straight into the deep end of the customer pool. 

Zoom out

The market for eating out and ordering in is set to nearly double to ₹9 trillion by 2030, driven by urbanisation and rising affluence. While metros still serve up a significant chunk of business, the smaller cities are catching up fast. And yes, smaller cities aren’t just nibbling on traditional cuisines; they’re diving into sushi and dim sum with gusto.

BIG MONEY MOVES

Bharti Airtel's profit surges 158% in Q1, thanks to exceptional gains

Bharti Airtel's Q1 net profit rocketed to ₹4,160 crore, a 158% jump from last year, thanks to a lucky tax judgment and selling off its Sri Lankan operations. The telecom giant also saw a net profit of ₹4,088 crore from its India and South Asia operations, boosted by adding millions of new 4G and 5G customers.

CEO Gopal Vittal highlighted a strong performance in Africa and a 6.7 million increase in smartphone users in India. However, despite the good news, Airtel's stock dipped 1.6% to ₹1,469. 

Tata Power splashes ₹830 crore for a hydro-boost in Bhutan

Tata Power is diving into the hydro-power pool with a splashy ₹830 crore investment to snag a 40% stake in Khorlochhu Hydro Power Limited. This deal propels Tata to help build the 600 MW Khorlochhu Hydropower Project in Bhutan, with a grand total investment of ₹6,900 crore.

The acquisition, unfolding over six months, will transform Khorlochhu into a Tata Power associate, making it a new member of the Tata family.

BUSINESS

Tata Sons Goes (Almost) Debt-Free 

What happened?

Tata Sons, the boss of all Tata companies, has pulled off a feat that would delight all stakeholders. They’ve chopped their debt down to a mere ₹5 crore! How? Thanks to a mammoth ₹42,536.2 crore infusion from Tata Consultancy Services (TCS). By June 30, Tata Sons had cleared all loans from banks and financial institutions, a dramatic drop from the ₹18,809 crore they owed last year. 

Why it matters

So, why all this tamasha about debt? By becoming almost debt-free, Tata Sons is playing a smart game of avoiding an RBI-mandated stock listing for upper-layer Non-Banking Financial Companies (NBFCs).

If listed, they'd have to share a lot more with the public, including their intricate financial secrets. Tata Sons, which gets its bread and butter from the dividends of 26 listed Tata companies, really wants to keep things as is. 

• TCS alone brought in a mind-boggling ₹33,174.2 crore through dividends and buybacks in FY24, plus ₹9,362 crore from selling a tiny slice of its shares.

Zoom out

Tata Sons has played its card beautifully, clearing nearly all its debt to dodge an RBI rule. This move keeps the mighty Tata Sons in control of its empire, which includes heavyweights like Tata Steel, Tata Motors and TCS. 

• With total assets now standing at a hefty ₹1.6 trillion, up from ₹1.3 trillion last year, Tata Sons is in a strong position. 

Will this be the masterstroke Tata Sons needed, or are more twists and turns ahead? Stay tuned, kyunki picture abhi baaki hai mere dost!

BIG PICTURE

Foreign airlines caught in ₹10,000 crore tax turbulence

Ten foreign airlines, including Emirates and Lufthansa, are in hot water over ₹10,000 crore in unpaid taxes. The Directorate General of Goods and Services Tax Intelligence (DGGI) has issued show-cause notices, arguing these airlines owe GST on services imported by their Indian branches from their headquarters.

In a twist, only four airlines have complied, while the rest are still digging for explanations.

Magnificent Seven takes a $900 billion hit

The Magnificent Seven stocks (Apple, Nvidia, Alphabet, Amazon, Meta Platforms, Microsoft and Tesla) took a nosedive on Monday, losing nearly $900 billion in market value. Apple and Nvidia led the plunge, with concerns about a potential U.S. recession, a lukewarm payroll report and  Warren Buffett’s Berkshire Hathaway cutting its Apple stake frightening investors.

Despite doubling this year, Nvidia and its peers saw shares drop by as much as 6.5%. The Philadelphia Semiconductor Index fell nearly 3%, with AMD, Intel and others slipping up to 7.8%.

BUSINESS

Titan and Kalyan Jewellers Take a Hit

What happened

In the recent Budget 2024, Finance Minister Nirmala Sitharaman announced a significant cut in the import duty on gold from 15% to 6%. This move, while welcomed by many, has left Titan Company and Kalyan Jewellers reeling from substantial losses. The losses stem from the jewellers' existing inventory, purchased at higher prices before the duty reduction.

Why it matters

So, what’s the big deal? Titan’s CFO Ashok Sonthalia predicts a potential short-term loss between ₹500-₹550 crore, depending on how gold prices and market discounts play out. Kalyan Jewellers' Ramesh Kalyanaraman expects a similar short-term hit, but he’s betting on increased foot traffic as the lower gold prices entice more customers to the stores.

Meanwhile, unorganised players might struggle more due to their inability to hedge inventory. But fear not—these losses could be offset by a surge in demand as the price of gold drops.

Final words

While it’s a rough start, there’s a silver lining (or should we say, gold lining?). Both Titan and Kalyan Jewellers are gearing up for a comeback, with plans to open dozens of new stores and tap into the growing market.

Titan is eyeing 40 to 50 new stores and Kalyan is set to debut 80 new showrooms, plus its first international outlet in New Jersey. As they navigate these choppy waters, expect them to shine brighter as the golden opportunities unfold.

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