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Indian Banks: Growth Stalls, Margins Squeeze

State Bank of India, India’s largest bank by assets, posted lower net income after factoring in a 71-billion-rupee expense related to a wage bill increase…reports Asian Lite News

Indian banks face a slowdown in growth and profit margins as deposits lag despite higher interest rates.

In the 2023 October-to-December quarter, most major banks reported income gains, but net interest margins (NIM) declined due to tighter liquidity and rising funding costs.

Among large banks, only Punjab National Bank saw an increase in NIM for the fiscal’s third quarter, according to data compiled by S&P Global Market Intelligence.

State Bank of India, India’s largest bank by assets, posted lower net income after factoring in a 71-billion-rupee expense related to a wage bill increase.

The Reserve Bank of India (RBI) recently barred banks and non-bank financial companies from investing in AIFs holding the lenders’ customer assets. This move aims to prevent loan evergreening. Lenders must divest AIF holdings within a month or set aside provisions. Industry groups anticipate the directive will affect billions in bank investments and potentially hinder growth, the report said.

Indian bank deposit growth continues to lag behind credit growth. RBI data released in December 2023 shows an 11% deposit growth in fiscal 2022–2023, compared to 15% credit growth.

This widening gap has pushed the credit-to-deposit ratio to a 10-year high, a development attributed partly to the RBI’s use of macroprudential measures to tighten policy, according to Nomura analysts in a February 8 report.

Indian retail lending is likely to continue growing. Banks have seen an increase in retail lending despite central bank concerns about the rapid rise of unsecured loans. These reached 35% of bank portfolios in 2023, up from 25% in 2007, according to a January 18 research paper by RBI employees. In November 2023, the central bank increased risk weights on unsecured personal loans in response.

ALSO READ: India’s Smartphone Market Growth Slows in 2024

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Business Economy India News

‘FII Selling May Intensify on US Inflation Surge’

This expectation has received a jolt from the US CPI inflation numbers rising year on year to 3.1 per cent against expectation of 2.9 per cent….reports Asian Lite News

A major catalyst driving the rally in global equity markets has been on the expectations of a rate cut by the Fed, says V.K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

The Fed had indicated possibly three rate cuts in 2024 and markets had discounted up to five rate cuts. This was on expectations that inflation in the US will continue to trend down.

This expectation has received a jolt from the US CPI inflation numbers rising year on year to 3.1 per cent against expectation of 2.9 per cent. This means that the Fed will certainly not cut rates in March and the number of rate cuts in 2024 also will be lower, he said.

The bond market has quickly responded with the US 10-year yield shooting up to 4.31 per cent. The consequence in the Indian market would be heavy selling by FIIs. Banking stocks, which form the largest chunk of FII holding, will be under pressure. The broader market, which is overvalued, will also be impacted by the negative sentiment, he said.

Deepak Jasani, Head of Retail Research, HDFC Securities said January’s hotter-than-expected US inflation report threw the financial market into a tailspin on Tuesday and upended investors’ expectations about how soon and by how much the Federal Reserve might start cutting interest rates.

US stocks tumbled, with the Dow Jones Industrial Average finishing down by 524.63 points. Treasury’s sold off aggressively, pushing yields to their highest levels since December. And the ICE U.S. Dollar Index jumped 0.7 per cent to a three-month high.

For now, fed-funds-futures traders see a 75.8 per cent likelihood of at least a quarter-point rate cut by June, pushing out prior expectations for a move in May, according to the CME FedWatch Tool, he said.

BSE Sensex is trading at 71,169.05 points down by 386.14 points or 0.54 per cent. IT stocks are down with Infosys and Tech Mahindra down 2 per cent.

ALSO READ: India pivots to indigenous engines for Arjun tanks

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Business Economy India News

Moove Raises $10M for India Expansion

The fresh capital will be utilised to scale the Indian fleet to over 5,000 and expand into new markets including Delhi, Pune and Kolkata…reports Asian Lite News

Global mobility fintech startup Moove on Wednesday said it has raised $10 million in new debt funding from leading venture debt fund Stride Ventures to expand its India footprint.

The fresh capital will be utilised to scale the Indian fleet to over 5,000 and expand into new markets including Delhi, Pune and Kolkata, the startup said in a statement.

“Our vehicles have completed over 4.2 million trips, significantly impacting India’s mobility sector. With the robust support of Stride Ventures, we stand on the cusp of transforming vehicle ownership nationwide, propelling our mission forward,” said Binod Mishra, Regional Managing Director, India and South Asia, Moove.

Gurugram-headquartered Moove has established its presence in Bengaluru, Mumbai and Hyderabad.

“Our alliance with Moove is set to transform vehicle ownership accessibility throughout India, marking a significant leap towards social and economic advancement,” said Apoorva Sharma, Managing Partner at Stride Ventures.

Operating in nine markets across Africa, the Middle East, Europe and Asia, Moove has emerged as Uber’s top vehicle supply partner in Europe, the Middle East and Africa (EMEA) and its largest global fleet partner.

Currently, over 30 million trips have been completed in Moove-financed vehicles globally, said the startup.

The company uses technology and productivity data to build an integrated, revenue-based vehicle financing platform for mobility entrepreneurs in emerging markets around the world who have limited or no access to a vehicle or vehicle financing.

ALSO READ: Bosch posts 62% jump in net profit

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Business Economy Tech Lite

Cisco Plans Layoffs

The company employs about 85,000 people, meaning that the latest job cuts are expected to affect more than 4,000 employees…reports Asian Lite News

Global networking giant Cisco has announced that it plans to lay off 5 per cent of its global workforce, amounting to thousands of employees, as part of a restructuring exercise.

According to Cisco’s most recent annual report, the company employs about 85,000 people, meaning that the latest job cuts are expected to affect more than 4,000 employees, reports CNN.

In a filing with the US Securities and Exchange Commission (SEC), the company announced a restructuring plan in order to “realign the organisation and enable further investment in key priority areas”.

The networking giant mentioned that the layoffs would begin this year and continue till next year, with severance and other termination benefits costing the company approximately $800 million.

“We continue to align our investments to future growth opportunities. Our innovation sits at the centre of an increasingly connected ecosystem and will play a critical role as our customers adopt AI and secure their organisations,” Chuck Robbins, chair and CEO of Cisco, said in the company’s second-quarter earnings release.

The purge follows Cisco’s late 2022 cutbacks, which resulted in 5,000 layoffs, and comes ahead of the $28 billion acquisition of Splunk, which management is expecting to close by April 30.

The company also announced that its revenue dropped 6 per cent (year-over-year) in its fiscal second quarter and its earnings-per-share dipped 3 per cent over the same period.

In September last year, Cisco laid off 350 employees in the Silicon Valley in the US in its latest job cut round.

ALSO READ: Bosch posts 62% jump in net profit

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Business Economy Technology

Bosch posts 62% jump in net profit

Bosch.

The company said the net profit is 12.3 per cent of revenue from operations…reports Asian Lite News

Auto components major Bosch Ltd on Tuesday reported a 62 per cent jump in net profit at Rs 518 crore for the October-November quarter of the current financial year compared to the corresponding figure of Rs 318.9 crore in the same quarter of the previous year.

The company said the net profit is 12.3 per cent of revenue from operations.

The Board of directors in their meeting held on February 13, declared a special payout in the form of an Interim Dividend of Rs 205 per equity share of Rs 10 each.

The total revenue from operations of the company worked out to Rs 4,205 crores in the third quarter, an increase of 14.9 per cent over the same quarter of last year. This growth is driven by surging demand in the overall automotive market, mainly in passenger cars and heavy commercial vehicle (HCV) segment.

Overall product sales of the automotive segment have increased by 16.8 per cent compared to the same quarter of the previous year, according to a Bosch statement.

“Increased demand for vehicles has resulted in robust growth for Bosch Limited this quarter. With a sustained focus on localization in the mobility space and beyond, we are optimistic of the future.” said Guruprasad Mudlapur, President of the Bosch Group, India, and Managing Director, Bosch Limited.

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India pivots to indigenous engines for Arjun tanks

R-Day: Marching contingents display India's military might.

There are a few engines that are already with the development agencies and they would be used to produce the initial tanks for the 118 tank order placed by the Defence Ministry…reports Asian Lite News

India is now planning to go for developing an indigenous power plant for Arjun Mark 1A tanks as the German engines used for powering the indigenous tanks are likely to be delayed by around four years.

“The German engine manufacturers have communicated that they would require around 48 months to restart the production of the engines used by the Arjun Mark 1A tanks to be used by the Indian Army for deployment mainly in the desert sector,” defence sources told ANI.

The agencies concerned are now trying to use the period of delay in the project to develop an indigenous engine that can be used for powering the Arjun Matk1As, they said.

There are a few engines that are already with the development agencies and they would be used to produce the initial tanks for the 118 tank order placed by the Defence Ministry.

In 2021, the defence ministry placed an order worth Rs 7,523 crore with Heavy Vehicles Factory, Avadi, for 118 locally made Arjun Mk-1A tanks,

The Indian plans to develop a light tank also faced minor delays due to delays in the supply of engines from Germany, forcing Larsen and Toubro and the Defence Research and Development Organisation (DRDO) to go for an American Cummins engine.

“Indian agencies concerned have already started working on developing an engine for a futuristic main battle tank. The same engine may be utilised for the Arjun Mark 1A project but will need certain modifications and changes,” the officials said.

The Arjun Mk-1A is an upgraded version of the Arjun Mk-1 main battle tank (MBT) currently in army service.

The new tank is supposed to come with 72 upgrades over the existing variant, including 14 major improvements. The upgrades are set to enhance the tank’s lethality, mobility and survivability.

The Arjun features a 120 mm rifled main gun with indigenously developed armour-piercing fin-stabilized discarding-sabot ammunition, one PKT 7.62 mm coaxial machine gun and a NSVT 12.7 mm machine gun. Powered by a single MTU multi-fuel diesel engine rated at 1,400 hp, it can achieve a maximum speed of 70 km/h (43 mph) and a cross-country speed of 40 km/h (25 mph).[16] It has a four-man crew: commander, gunner, loader and driver.

In 2010 and 2013, the Indian Army carried out comparative trials in the Thar Desert of Rajasthan, pitting the newly inducted Arjun MK1 against the Indian Army’s frontline Russian-designed T-90 tanks, during which the Arjun reportedly exhibited better accuracy and mobility.

The fire-control system (FCS) originally developed for the Arjun main battle tank has been integrated into the T-90 tanks built in India under a transfer of technology (ToT) agreement by the Heavy Vehicles Factory (HVF) at Avadi. (ANI)

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Business Economy India News

India’s Smartphone Market Growth Slows in 2024

The second half of 2023 grew by 11 per cent, compensating for the sharp 10 per cent decline in the first half, according to the International Data Corporation (IDC)….reports Asian Lite News

India’s smartphone market shipped 146 million smartphones in 2023, with a nominal 1 per cent growth (year-over-year), a new report said on Tuesday, indicating a flat to low single-digit annual growth for the smartphone market this year.

The second half of 2023 grew by 11 per cent, compensating for the sharp 10 per cent decline in the first half, according to the International Data Corporation (IDC).

“Most brands chose to reduce prices and offer additional channel margins in the last quarter to manage the inventory levels from post festive cyclic dip. This will give a lukewarm start to 2024 with cautious stocking by the channels,” said Upasana Joshi, Research Manager, Client Devices, IDC India.

The average selling price (ASP) hit a record of $255, rising 14 per cent YoY in 2023. This also marks the third consecutive year of double-digit ASP growth restricting smartphone market recovery.

The high ASP can be attributed to the increasing share of the premium-segment ($600+) from 6 per cent in 2022 to 10 per cent in 2023, along with a rapid uptake in 5G shipments to a record 55 per cent share.

Apple had a stellar year, finishing at 9 million units, despite having the highest ASP of $940.

This was led by previous-generation iPhone models and its push for local manufacturing. Its iPhone 13 and 14 were among the top 5 shipped models annually.

Samsung remained in the leadership position, with a record high ASP of $338, although with a 5 per cent shipment decline YoY. Its Galaxy A14 was the highest shipped device of 2023, according to the IDC.

Vivo (excluding iQOO) climbed to the second slot as shipments and ASPs grew by 8 per cent and 9 per cent, respectively. It was the only brand to register growth amongst the top five brands.

Realme, despite facing challenges in the beginning of the year, maintained its third position, led by affordable launches, the report mentioned.

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Business Tech Lite Technology

Karnataka Tech Startup Funding Dips 72%

The state has more than 18,000 startups and is home to 39 per cent of the unicorn companies in the country….reports Asian Lite News

Total funding into Karnataka-based tech startups sharply fell 72 per cent to $3.4 billion in 2023, from $12.2 billion in 2022, a new report said on Tuesday.

This decline can be attributed to the prevailing macroeconomic conditions and geopolitical issues as the total number of $100 million and above rounds fell to 8 in 2023 from 26 in 2022, according to the report by Tracxn, a data intelligence platform.

The state has more than 18,000 startups and is home to 39 per cent of the unicorn companies in the country.

The startups in the state attracted late-stage investments worth $2.3 billion in 2023, a 74 per cent decline compared with $8.9 billion in 2022.

Early-stage funding in 2023 stood at $784 million in funding, a drop of 71 per cent from the $2.7 billion raised during the previous year.

Seed-stage funding fell 54 per cent to $294 million from the $643 million raised in 2022.

Only eight $100 million and above funding rounds were observed in this space in 2023, as against 26 and 44 such rounds in 2022 and 2021, respectively.

PhonePe and Udaan secured the highest funding in 2023, raising $623 million and $377 million in Series D and Series E funding rounds, respectively.

Further, no new unicorns emerged from this space in 2023, a sharp contrast from seven unicorns in 2022 and 18 in 2021, according to the report.

Fintech, retail and enterprise applications were the top-funded segments in 2023.

The fintech sector in Karnataka secured a total funding of $1.15 billion in 2023, a decline of 51 per cent compared with $2.4 billion raised during the previous year.

In 2023, the Karnataka tech sector witnessed 35 acquisitions, significantly lower than 48 acquisitions in 2022 and 57 acquisitions in 2021.

Accel, Wellfound, and LetsVenture are the top investors in the state of Karnataka to date.

ALSO READ: Samsung Chairman Advocates Bold Investments

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Business India News

6% Rise in Freshers’ Hiring Intent

The top three industries with the highest hiring intent for freshers are e-commerce and technology startup…reports Asian Lite News

The intent for hiring freshers in India has increased to 68 per cent in the first half (HY1) of 2024 (January-June 2024), up six per cent from HY1 2023, with e-commerce and tech startups leading, a new report revealed on Tuesday.

According to learning and employability solutions provider TeamLease EdTech, the overall hiring intent for all categories of job seekers has increased marginally to 79.3 per cent, implying a positive job market in the coming months for freshers.

The top three industries with the highest hiring intent for freshers are e-commerce and technology startups (55 per cent), engineering and infrastructure (53 per cent), and telecommunications (50 per cent).

“Our recent survey reveals employer confidence in India’s growth story. Organisations are more confident about their future path which reflects in their high confidence to recruit fresh talent and strengthen their talent pool,” said Shantanu Rooj, Founder and CEO, TeamLease EdTech.

As per the report, roles such as Graphic Designer, Legal Associate, Chemical Engineer and Digital Marketing Executive are in high demand across industries for freshers.

The report also deep dived into the impact of generative Artificial Intelligence (AI) on freshers’ job landscape.

Roles such as Software Developers, Technical Writers, Legal Assistants, Market Research Analysts, and Graphic Designers are expected to be transformed.

The report said that freshers need to proactively upgrade their skills and be open to working alongside generative AI to remain relevant and harness its potential.

“With generative AI automation set to transform workflows, freshers need to be prepared to collaborate effectively with AI systems,” said Jaideep Kewalramani, Head of Employability Business & COO of TeamLease EdTech.

Among cities, Bengaluru led the way with a hiring intent of 69 per cent, followed by Mumbai at 58 per cent and Chennai at 51 per cent. Delhi stands at 45 per cent, an increase of 2 per cent from HY2 2023.

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Business India News Technology

Govt eMarketplace Achieves Milestone

GeM, a pioneer in public procurement, was conceptualised by PM Narendra Modi as a mission to foster ‘Minimum Government, Maximum Governance’ through digital platforms….reports Asian Lite News

The Government eMarketplace (GeM) has registered a record gross merchandise value of Rs 3 lakh crore in 11 months of the current financial year, surpassing the figure of Rs 2 lakh crore achieved for the entire year in 2022-23, the Commerce and Industry Ministry said on Monday.

The integrated digital platform has also seen a notable increase in the daily average GMV transaction value during this period from Rs 504 crore in financial year 2022-23 to Rs 914 crore as of February 12, 2024.

GeM, a pioneer in public procurement, was conceptualised by PM Narendra Modi as a mission to foster ‘Minimum Government, Maximum Governance’ through digital platforms.

Since its inception in 2016, GeM has revolutionised the landscape of public procurement, providing a transparent and efficient online infrastructure for the procurement of goods and services by Central/state ministries, departments, public sector undertakings, panchayats, and cooperatives, the ministry said.

As of February 12, 2024, GeM directly links over 20 lakh sellers and service providers across the country with more than 3 lakh Government buyers (primary as well as secondary buyers).

By digitally integrating all stakeholders in the public procurement process, GeM has eliminated harmful practices like collusion, corruption and bribery in government spending, thereby inculcating greater transparency in public finances. The platform currently showcases more than 12,200+ products and services categories with offerings covering all complex and dynamic requirements of government buyers across the country.

In particular, the services segment on GeM has experienced an unprecedented surge, proving to be a pivotal force behind GeM’s success and its exponential growth. Over the past 3 years, GeM has strategically expanded its services bouquet, resulting in a remarkable increase in services procurement – from approximately Rs 66,000 crore in FY 22-23 to Rs 1,30,984 crore in FY 23-24 (as of February 12, 2024). Notably, the services sector’s contribution to GeM’s GMV has surged by 98 per cent from last year, with services procurement expected to exceed Rs 1.5 lakh crore by the end of this fiscal year, according to the ministry.

In this financial year, concerted efforts were made to reach out to various government bodies and maximise their participation in public procurement processes through GeM. While central entities have contributed to 82 per cent of the current GMV, increased engagement from states has propelled the platform’s growth. States have cumulatively placed orders worth Rs 49,302 crore in FY 23-24, reflecting a 56 per cent increase compared to the corresponding period in the previous fiscal year.

This is indicative of the immense trust placed by various states like Uttar Pradesh, Gujarat, Maharashtra, Madhya Pradesh and Delhi, in the platform’s capabilities to achieve cost-efficiency in their public procurement. These states have emerged as the top procurers on the platform, in terms of order value, during this period, the official statement added.

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