Business News at 09:30 am on 13th October 2023

Let’s begin with the aviation sector. After announcing to the world that it would continue to steer Go First, the airline it set up in 2005, the Wadia group appears to have quietly deplaned. The erstwhile promoter of the airline has chosen to sit out of the bidding process, which kickstarted in July and was later expanded to September 28. So far, two entities – Naveen Jindal-led Jindal Power and Jettwings Airways, the country’s first airline based in the North-East, have put in expressions of interest – the first step towards making financial bids for Go First. A banker involved in the insolvency process confirmed that the Wadia group has not submitted an EoI so far.
On to industry. US-based IT major, Accenture, which last month reported a below estimate first quarter earnings, will not be paying out hikes to its employees in India and Sri Lanka this year, except in few critical skill areas and where it is legally mandated. In an internal email to employees accessed by Fe, country managing director Ajay Vij said that the company experienced a macro environment that was more challenging than anticipated at the beginning of the FY23, and growth was lower than planned. He said that because of this the firm needed to make some hard decisions around promotions and rewards. Accenture follows a September-August financial year, and its guidance for FY24 was the second-lowest among the beginning-of-year guidance in the past 16 years.
Meanwhile, The board of financial services company, Religare Enterprises, plans to approach the Securities and Exchange Board of India and the Reserve Bank of India with fresh valuation reports from two independent advisory firms, as it believes that the open offer price being offers by the Burmans of Dabur is below fair value. A source close to the development said the company’s trajectory has been up since 2018, and this is the first time that the share price has gone down from Rs 280 to Rs 230. The sourcse said, quote, “We are going to create two valuation reports and that will go to exchanges and regulators,” unquote. This comes close on the heels of Burman family making an offer to acquire additional 26% stake in Religare.
Moving on. An online system has been readied for implementing the new system of approvals for import of laptops, tablets and servers and this will kick in from next month, a senior official said Thursday. The licensing system now being proposed will be of the nature of import management system where companies would be issued an authorisation on application. There will be no further extension of the transition period for the shift to the licensing regime for import of these products, the official asserted. The government is not looking to put any overall limits on the quantum of imports. India already has an import monitoring system for many products like steel, coal and paper. The import management system for laptops and tablets would work on similar lines.
On to economy. Domestic consumption and investment demand will drive economic growth, but inflationary pressures may remain elevated warranting greater vigilance by the government and the Reserve Bank of India, Finance Minister Nirmala Sitharaman said on Thursday. The Finance Ministry and the RBI have projected India’s economic growth to be around 6.5% in FY24 compared with 7.2% in FY23. The Q1FY24 growth print has come in at 7.8%. Earlier this week, the International Monetary Fund raised its economic growth forecast for India from 6.1% to 6.3% for the current financial year. Given the recent spike in food inflation in July and August, the RBI has revised up its Q2 FY24 projection to 6.4% last week from its earlier projection of 6.2%.
Next up, banking. The banking sector is set to get boost from the upcoming festival season as banks are expecting high demand for retail loans. Large banks are expecting 20-25% growth in retail loans while mid and small size banks hope to see 30-35% increase. Within the retail segment, customers will be chasing personal, auto and home loans, say bankers. Higher loan growth will also help the lenders to post better third quarter earnings. Banks have sweetened the deal for customers by announcing festive offers. Lenders are offering complete waiver of processing fees, reduced rates on home and auto loans and cash back deals.
Lastly, stocks in focus. These include Infosys, HCL Tech, Mphasis, and Dr Reddy’s Labs among others. IT major Infosys on Thursday posted profit for the quarter ended September 2023 at Rs 6,212 crore, up 3.2% as against Rs 6,021 crore during the same period last year, missing estimates. ON the other hand, HCL Tech announced a 10% increase in second-quarter profits in Thursday. In Q2FY24, the company recorded a net profit of Rs 3,832 crore, a notable surge from the Rs 3,487 crore reported in Q2FY23.