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Writing Instrument Makers To Record 13-15% Rise In Revenue: Crisil

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According to the Crisil analysis, capacity expansion and expenditures in product innovation will encourage manufacturers to borrow. The operating margin will increase by 150-200 basis points (bps) year on year to 13 per cent this fiscal owing to decreasing raw material prices

India’s writing instruments business is likely to rise 13 to 15 per cent year on year this fiscal, with a continuing increase in demand from the education sector as students return to the physical method and increased exports due to rising demand from the US, according to a Crisil Ratings research. This follows on the heels of a 33 per cent increase in the previous fiscal year. In the long run, the sector will gain from India’s demographic dividend and an increased per centage of organised players.

According to the Crisil analysis, capacity expansion and expenditures in product innovation will encourage manufacturers to borrow. The operating margin will increase by 150-200 basis points (bps) year on year to 13 per cent this fiscal owing to decreasing raw material prices.

“Demand for writing instruments has surpassed pre-Covid levels, with a complete return to physical education from the interim online mode. The overall growth in the education sector, driven by government initiatives such as the National Education Policy and the Samagra Shiksha Scheme, which focus on integrated school education from pre-school to Class XII, bodes well for the growth of the writing instrument sector,” said Jaya Mirpuri, Director, Crisil Ratings.

Exports are expected to climb 15 to 20 per cent this fiscal year, aided by tie-ups with multinational brands for sales in the US as part of a plan to de-risk from China. Exports account for one-fourth of sector revenue.

Organised manufacturers’ market share increased from 65 per cent to 80 per cent of the Rs 10,000 crore industry during the last three fiscals. The organised part of writing instrument producers, which accounts for over 80 per cent of the business, will benefit from this upturn, the report added.

RBI

CBDC Can Play A Key Role In Cross-Border Payments: RBI’s Das

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We are even more sure that, aside from domestic transactions, CBDC will prove to be the most effective and efficient option for cross-border payments in particular, he stated earlier this month

Reserve Bank of India Governor Shaktikanta Das has stated that the central bank’s digital currency, the Central Bank Digital Currency (CBDC), can play a key role in cross-border payments without much trouble.

He stated that the Reserve Bank India (RBI) has conducted trial operations to promote the CBDC, with ‘great’ outcomes. The CBDC was implemented as a pilot in the wholesale and retail divisions and will now be expanded to the overnight money markets.

We are even more sure that, aside from domestic transactions, CBDC will prove to be the most effective and efficient option for cross-border payments in particular, he stated earlier this month during an engagement at the IMF Governor Talks.He underlined that, while paper currency will continue to exist, the CBDC will be the world’s future currency. CBDC is going to be the future currency of the world and it is necessary that every central bank, every country works on CBDC, he went on to say.

He also stated that the world is going towards technology and CBDCs play an important role since they can truly promote efficient, cost-effective and speedier payments across jurisdictions for cross-border transactions.

The governor also stated that the RBI does intervene in the market, but that ‘our intervention is both ways’. Das stated that the RBI sometimes buys and sometimes sells dollars depending on the direction of the market.

session 2 aarya

Navigating New Frontiers: India’s Growth Amid Geopolitical Crisis

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India’s economy is poised to grow between 6.1 per cent and 6.5 per cent, despite recent projections leaning towards the lower end of that spectrum at 6.1 per cent, says B. Thiagarajan

India, a country renowned for its resilience and adaptability, finds itself at the cusp of a significant economic transformation. In this era of global challenges and opportunities, the nation is redefining its role on the world stage. B. Thiagarajan, Managing Director of Blue Star, recently shared his insights on India’s evolving economic landscape at the BW CFO World Future of Finance Summit 2023 in Mumbai. His keynote address, titled “New Frontiers: Scale, Speed, Smart, Sustainable,” encapsulated the essential elements guiding India’s economic destiny. With optimism in economic growth, the challenges of deglobalisation and a renewed focus on manufacturing, Thiagarajan’s discourse provided a compass for India’s journey towards self-reliance and global competitiveness.

One of the highlights of Thiagarajan’s keynote was his optimistic outlook for India’s GDP growth. He said, “India’s economy is poised to grow between 6.1 per cent and 6.5 per cent, despite recent projections leaning towards the lower end of that spectrum at 6.1 per cent.” The consensus among various stakeholders, including government bodies and corporate leaders, underscores the belief that India is primed for significant economic growth, he added.

Thiagarajan addressed the profound shift to deglobalisation, which is challenging conventional notions of globalisation. While not a universal phenomenon, it demands that Indian businesses, particularly CFOs, adapt and unlearn established practices to navigate this changing landscape.

The MD highlighted the resurgence of manufacturing in India, marking the end of an era characterised by heavy reliance on the service sector. This shift presents both opportunities and challenges for businesses, with CFOs playing a central role in this transformation.

Thiagarajan emphasised the need for businesses to find a delicate balance between self-reliance, as promoted by the “Make in India” initiative and international trade agreements. “The ongoing debate centres on the business case for this approach, given the presence of tariffs and non-tariff barriers from trading partners,” he said.

The keynote session recognised that India’s future growth hinges on consumption, primarily driven by the aspirational middle class residing in Tier 3, 4 and 5 cities, as well as rural areas. To thrive in this new landscape, businesses must pivot toward providing affordable products and services tailored to this evolving consumer base. In the context of innovation, research and development and breakthrough technologies, Thiagarajan urged businesses to differentiate themselves and compete on a global scale.

The session acknowledged a significant shortage of finance professionals, with Thiagarajan projecting a substantial demand-supply gap. He encouraged finance professionals to embrace versatility by rotating roles to meet the evolving demands of the market.

As businesses experience rapid growth, maintaining high governance standards is imperative. Governance issues often accompany expansion, making it crucial for companies to prepare for such situations.

solar

Corporate Investment In Global Solar Business Up By 55% From Jan-Sept: Report

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The sector’s resilience can be attributed to a strong global push to achieve energy transition objectives, as well as substantial demand created by the Inflation Reduction Act, which has helped the sector weather perils,” said Raj Prabhu, Group CEO, Mercom Capital

Corporate investment in the global solar business increased 55 per cent to USD28.9 billion between January and September 2023 primarily owing to pressure to satisfy energy transition goals, Mercom Capital said in its latest report. According to the latest estimate from the U.S.-based research agency, global corporate funding in the sector was USD 18.7 billion in the first nine months of 2022.

“The sector’s resilience can be attributed to a strong global push to achieve energy transition objectives, as well as substantial demand created by the Inflation Reduction Act, which has helped the sector weather perils,” said Raj Prabhu, Group CEO, Mercom Capital.

The report highlighted that Juniper Green Energy received a USD 350 million investment from AT Capital Group and Vitol in India’s venture capital segment to help it meet its aim of tripling its operational capacity to 2.5 GW by 2026 and move forward with its ambitious development plans. Furthermore, Waaree Energies has raised USD 120.8 million in a second round of equity funding headed by ValueQuest to assist boost its current manufacturing capacity by 6 GW.

In the debt funding category, Adani New Industries acquired a USD 394 million trade finance facility from Barclays PLC and Deutsche Bank AG to meet the company’s working capital needs.

Serentica Renewables completed the financing for its future hybrid renewable energy projects in Karnataka. REC Ltd, a power industry lender, has provided the total loan funding of USD 370.6 million. In addition, the company has reached financial close on another hybrid renewable energy project in Karnataka, with a total loan funding of USD 313.3 million acquired from power sector lender Power.

 

inflation

India Set To Overtake Japan As Asia’s Second-Largest Economy By 2030, Says S&P Global

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“The near-term economic outlook is for continued rapid expansion during the remainder of 2023 and for 2024, underpinned by strong growth in domestic demand,” said S&P Global

India, the fifth-largest economy in the world, is anticipated to pass Japan and become the third-largest economy in the world by 2030 with a GDP of USD 7.3 trillion, acccording to S&P Global Market Intelligence’s most recent issue of PMI.

The Indian economy showed two consecutive years of strong, sustained growth in 2021 and 2022, and it has continued to do so in 2023.

The fastest-growing global economy in this fiscal year is likely to be India, whose gross domestic product (GDP) is predicted to increase by 6.2 to 6.3 per cent in the fiscal year that ends in March 2024. The third-largest economy in Asia experienced a stunning 7.8 per cent growth in the April-June quarter.

“The near-term economic outlook is for continued rapid expansion during the remainder of 2023 and for 2024, underpinned by strong growth in domestic demand,” said S&P Global.

The recent acceleration of FDI into India is a reflection of the country’s positive long-term growth prospects, which are supported by a youthful population profile and fast expanding urban household incomes.

“It is projected that India’s nominal GDP, expressed in USD, will increase from USD 3.5 trillion in 2022 to USD 7.3 trillion in 2030. By 2030, the size of the Indian GDP would surpass that of Japan due to the country’s strong economic growth, making India the second-largest economy in the Asia-Pacific region, according to the report.

By 2022, the Indian GDP was already larger than the GDPs of France and the UK combined. India’s GDP is anticipated to exceed Germany by 2030.

The long-term forecast for the Indian economy, according to S&P Global, is underpinned by a number of important growth factors.

“India’s sizable and rapidly expanding middle class, which is assisting in driving consumer expenditure, is a significant positive aspect. India is becoming an increasingly important investment destination for a wide range of multinationals in several industries, including manufacturing, infrastructure, and services,” according to the report. This is due to the country’s rapidly expanding domestic consumer market as well as its sizable industrial sector.

The present digital transformation of India is predicted to drive the rise of e-commerce, altering the retail consumer market landscape during the next decade. According to S&P Global, this is bringing global multinationals in technology and e-commerce to the Indian market.

The report states, “India’s strong FDI inflows have been boosted by large inflows of investments from global technology MNCs such as Google and Facebook that are attracted to India’s large, fast-growing domestic consumer market, as well as a strong upturn in foreign direct investment inflows from manufacturing firms.” 

Overall, India is expected to continue to be one of the world’s fastest-growing economies over the next decade.

 

coal

Mineral Production Goes Up By 12.3% In August 2023: Report

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At the same time, the cumulative growth for the period April- August 2023-24 over the corresponding period of the previous year is 8.3 per cent

The index of mineral production of the mining and quarrying sector for the month of August 2023 (Base: 2011-12=100) at 111.9, is 12.3 per cent higher as compared to the level in the month of August 2022, As per the provisional data of the Indian Bureau of Mines (IBM).

At the same time, the cumulative growth for the period April- August 2023-24 over the corresponding period of the previous year is 8.3 per cent. The production level of important minerals in August 2023 were: Coal 684 lakh tonne, Lignite 28 lakh tonne, Natural gas (utilised) 3110 million cu. m., Petroleum (crude) 25 lakh tonne, Bauxite 1428 thousand tonne, Chromite 148 thousand tonne, Copper conc. 10 thousand tonnes, Gold 113 kg, Iron ore 181 lakh tonne, Lead conc. 30 thousand tonnes, Manganese ore 233 thousand tonnes, Zinc conc. 132 thousand tonnes, Limestone 365 lakh tonne, Phosphorite 107 thousand tonnes, and Magnesite 10 thousand tonnes,.

Important minerals showing positive growth during August 2023 over August 2022 include Gold (46.8 per cent), Phosphorite (40.7 per cent), Manganese Ore (36.9 per cent), Copper Conc. (18.9 per cent), Coal (17.8 per cent), Iron Ore (14.9 per cent), Limestone(13.8 per cent), Natural gas (U) (9.9 per cent), Magnesite (4.5 per cent), Petroleum(crude) (2.1 per cent), Chromite (1.4 per cent ). While minerals like Bauxite (-1.5 per cent), Zinc Conc.(-4.1 per cent), Lignite(-5.4 per cent ) and Lead Conc. (-15.1 per cent) show negative growth.

 

 

parag desai

Wagh Bakri’s Parag Desai Dies In Tragic Road Accident

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Desai played a significant role in leading industry platforms like the Confederation of Indian Industry (CII) and other international organisations

 
 
 

The Executive Director of the famous tea brand Wagh Bakri, Parag Desai passed away in a tragic road accident on Sunday. Desai was also 4th generation entrepreneur at the Wagh Bakri group. 

Desai was a famous tea tester and a leading international businessman who had also years of experience in sales & marketing. He had a turnover of more the Rs.1500 crores (USD 200 million).

Desai played a significant role in leading industry platforms like the Confederation of Indian Industry (CII) and other international organisations. Apart from being an entrepreneur, he was also a prolific speaker and led many business groups to their utmost heights by suggesting innovative marketing, branding and packaging strategies to them. Desai was also awarded by the Ahmedabad Management Association.

 

 

RBI

Interest Rate To Remain High For Now: Shaktikanta Das

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Since May 2022, the Reserve Bank has also increased the short-term benchmark lending rate (repo) by a total of 250 basis points however, it has stopped raising rates and has kept the repo rate at 6.5per cent since February of this year

Shaktikanta Das, governor of the Reserve Bank India (RBI), stated that only time will tell how long interest rates will continue to be high for the foreseeable future, on Friday.

Major central banks around the world have increased their key policy rates in response to the ongoing geopolitical crises in order to combat excessive inflation.

Since May 2022, the Reserve Bank has also increased the short-term benchmark lending rate (repo) by a total of 250 basis points. However, it has stopped raising rates and has kept the repo rate at 6.5per cent since February of this year.

Only time will tell how long interest rates will stay high, the governor remarked in response to a question at the Kautilya Economic Conclave 2023.

Das stressed that the monetary policy is always challenging and there is no room for complacency in his speech at the Conclave, saying that it must remain actively disinflationary to ensure that the decline in domestic inflation from its peak of 7.44 per cent in July continues smoothly.

economic growth.jpg

Deloitte Projects India’s GDP Growth To 6.5% For FY24-25 Amid A Positive Outlook

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The Indian economy, according to International Monetary Fund (IMF) estimates, will emerge as the world’s third-largest economy by 2027

Projecting a positive outlook for the domestic economy, Deloitte India in its latest economic outlook has estimated India’s growth rate between 6.5 to 6.8 per cent primarily due to festive spending and higher government spending in the coming months. 

The report predicted a 6.5 per cent gross domestic product (GDP) growth rate for the economy during 2024-25, which could further increase with a stronger global economic bounce back.  

The Indian economy, according to International Monetary Fund (IMF) estimates, will emerge as the world’s third-largest economy by 2027 by surpassing Japan and Germany as its GDP crosses the USD 5 trillion mark. 

However, India will need to grow at least 6.5 per cent to reach this milestone by 2027. The current buoyancy in economic growth gives confidence that the economy is likely to achieve these numbers without hurdles. 

“Navigating geopolitical uncertainties and the slowdown in the global economy, undoubtedly, would not be easy.  India will have to rely on its own domestic demand to firepower its growth, specifically, private consumption and investment spending. What works in India’s favour on the private consumption front are the size of its consumer base, the rising income, and the aspirations of its young population, which is the largest in the world,” said Rumki Majumdar, Economist, Deloitte India.

Majumdar added that as for investments, with the size and scale of operations it offers to global companies, the availability of skill and talent, and technology and innovation capabilities, India continues to be an attractive investment destination. 

The outlook further highlighted the crucial role of India’s micro, small and medium enterprises (MSMEs) in the country’s economic growth. The past two quarters have seen an uptick in the MSME sector. Out of the shadow of the pandemic, the steady revival of this sector will likely help India achieve broad-based growth at the grassroots levels, which is needed to ensure sustained economic activity. 

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India’s FY24 GDP Forecast: 6.3% Growth Fueled By 5.6% Industry And 7.3% Services Expansion, Survey Reveals

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The survey reveals ongoing obstacles to this trajectory of progress. Potential hindrances include geopolitical unrest, China’s economic slowdown, the sluggish impacts of monetary tightening, and poor monsoon patterns

 
 
 

The latest findings from the FICCI’s Economic Outlook Survey have projected a median annual GDP growth rate of 6.3 per cent for the fiscal year 2023-2024, encompassing a range from a minimum estimate of 6.0 per cent to a maximum estimate of 6.6 percent.

The median growth prediction for agriculture and related activities during the same time period is 2.7 per cent. This reflects a moderated rise when compared to the about 4.0 per cent growth seen in the preceding fiscal year of 2022-2023. The El Nino effect, which altered the distribution of rainfall throughout the monsoon season, is blamed by the survey for this decline.

“The key factors contributing to the GDP growth projection of 6.3 per cent for 2023-24 are anticipated growth in the industry and services sectors. This growth is supported by improved consumption and investment activity, especially in the non-industrial sector, thanks to the government’s focus on capital expenditure. Additionally, the contact-intensive services sector is expected to play a crucial role in driving growth,” stated economists participating in the survey.

The industry and services sectors are anticipated to grow by 5.6  per cent and 7.3  per cent, respectively, in the current fiscal year.

“The primary drivers of this growth are the industry and services sectors, with expected growth rates of 5.6  per cent and 7.3  per cent, respectively. The growth in these sectors is fueled by improved consumption and investment activities, particularly in infrastructure and non-industrial areas,” added experts from the survey.

Prominent economists from the banking, financial services, and industrial sectors participated in the Economic Outlook Survey, which was conducted in September 2023. These experts were asked for their opinions on the most important macroeconomic factors for 2023-24 as well as for the second and third quarters of the same fiscal year.

As a result, after a strong 7.8 per cent rise in the first quarter, the median GDP growth is forecast to fall down to 6.1 and 6.0 per cent in the second and third quarters of 2023-24.

The survey reveals ongoing obstacles to this trajectory of progress. Potential hindrances include geopolitical unrest, China’s economic slowdown, the sluggish impacts of monetary tightening, and poor monsoon patterns.

“While India continues to shine on the global economic stage, the survey findings emphasise the need for vigilance due to persistent challenges. Geopolitical tensions, the deceleration of growth in China, the delayed impact of monetary tightening, and below-average monsoons all pose significant downside risks to India’s economic growth,” as mentioned in the survey.

Survey participants also highlighted that the CPI inflation rate is expected to remain above the Reserve Bank of India’s targeted level for the remainder of the financial year. Regarding policy action by the Reserve Bank of India (RBI), economists believe that a repo rate cut is unlikely until the end of the first or second quarter of the next fiscal year, 2024-25.

The statement from the survey underlined, “The government and RBI can collaborate to control inflation through coordinated measures such as supply-side management and ensuring uninterrupted supply of essential commodities. This suggests that, given the supply-side-driven nature of inflation, monetary policy might have a limited role, and the focus should be on managing supply-side factors.”

In terms of investments, the survey noted the government’s emphasis on capital expenditure, which has positively influenced private investments and bolstered growth. Nevertheless, a complete recovery in private investments is expected to take more time and will likely be led by increased consumption activity, both domestically and externally.

 

 

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