India's economy is expected to see a boost in Q4FY25, supported by a sustained increase in government spending and capital expenditure (Capex), alongside a pickup in consumption driven by the Maha-Kumbh and wedding season, according to a report by Union Bank of India.
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The Confederation of Indian Industry (CII) recommends reducing excise duty on fuel and lowering personal income tax rates to boost consumption and tackle inflation. CII also suggests increasing benefits and unit costs under key government schemes like MGNREGS and PM-KISAN, and introducing consumption vouchers for low-income groups to stimulate demand.
The rupee closed at 86.58 against the dollar, slightly weaker than the previous day, as early gains were erased due to a rebound in the dollar following tariff threats by US President Trump. Most emerging market currencies weakened, with the Mexican peso and Canadian dollar experiencing significant declines.
While softer economic conditions, tighter bank funding, and asset quality concerns are expected to affect the sector's credit growth and profitability in the near term, larger NBFIs with robust operations and diversified funding channels are expected to maintain steadier performance.
HDFC Bank reports a standalone net profit of Rs 16,735 crore for the quarter ended Dec 2024, up 2.2% from the previous year, despite a slight decline from the preceding quarter. Margins remain stable, and asset quality is robust. The bank accrues significant loan sales and maintains substantial growth capital.
Stocks in India are expected to stabilize after a significant drop, with Nifty futures showing a slight increase. Despite record equity investments in real estate, analysts warn of potential future earnings issues for developers. Kotak Securities highlights the risk of overvalued 'narrative stocks,' while further losses for the rupee are anticipated due to a less active RBI.
RBI has injected over Rs 5 lakh crore into the banking system since mid-Jan to ensure surplus liquidity and support its rate cut's transmission to borrowers. Despite this, corporate borrowing costs remain unchanged due to firm MCLR rates and year-end demand for funds.
IndusInd Bank disclosed that an external review quantified the impact of discrepancies in its derivatives portfolio, resulting in a Rs 1,979 crore hit to its net worth as of June 2024. This translates to a 2.27% reduction by December 2024. Following initial reports of derivative losses, the bank's stock experienced significant volatility, although it rallied nearly 7% on Tuesday.
Indians are shifting towards premium wines and spirits, creating growth opportunities for companies like Moet Hennessy. High taxes and varying state regulations complicate the market, making foreign liquor expensive. Ongoing FTA discussions, particularly with the UK, aim to reduce duties and boost consumption. Domestically produced wines, like Chandon, are also gaining popularity.
Axis Securities recommends buying V-Mart Retail, anticipating an 8% growth, while Yes Securities sees a 33% potential rise for Godawari Power following its acquisition in the metal recycling sector. Elera Securities suggests investing in Indigo Airlines due to expected demand increase by FY26. ICICI Securities maintains a positive outlook on Emami, citing acquisitions as a growth driver.
Chinese telecom equipment company TP-Link has entered into a partnership with Optiemus Electronics for local production. Optiemus, based in Noida, will manufacture a range of TP-Link's networking devices and smart home products, including GPON, security cameras, home Wi-Fi routers, enterprise routers, modems/gateways, and network expansion devices.