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Impact Analysis |
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- India FY26 fiscal deficit as of December 2025 stood at 54.5% of full-year target
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- The month of December 2025 saw cumulative fiscal deficit falling by ₹1.21 lakhs due to front loading of advance tax flows
- That only indicates that the fiscal deficit could spike rapidly in the last 3 months of FY26, amid relatively tepid net tax flows
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- US Fed held its benchmark rates in the Jan-26 meeting at 3.25%-3.50% range
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- The status quo decision saw a favourable vote in ratio of 10:2; with only Miran and Waller (Trump nominees) dissenting
- However, with US Q3 GDP growth at 4.4%, Q4 growth likely at 5.4%, and 2.9% PCE inflation in Q3; rate cuts were ruled out
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- The finance minister tabled the 2025-26 Economic Survey in both Houses
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- The Survey broadly highlighted the achievements of the Indian economy under fairly trying global economic conditions
- However, the Economic Survey has identified some clear risks on the geopolitical front, which could disrupt the India story
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- It is not just gold and silver; but even Brent crude prices have risen sharply
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- Brent is now above $68/bbl, with WTI crude close to $64/bbl; and this has been largely driven by concerns over Iran
- Markets are apprehensive that any US aggression with respect to Iran could lead to the blockade of the Straits of Hormuz
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- CPI inflation will see a sharp reduction in food weightage to reduce volatility
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- The weightage of food in the CPI basket is likely to be reduced from 45.86% to 36.75% to reduce effect of food volatility
- This move is also in sync with the consumption reality, where food has reduced as a share of the overall household budget
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- The IIP rebounded to a 26-month high of 7.78% for December 2025
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- This comes on top of the November 2025 IIP being positively upgraded by 48 basis points to 7.16%, a positive indication
- While manufacturing did see robust growth in December 2025; mining and electricity also expanded at over 6%
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- The much talked-about FTA between India and the EU was signed on 27-Jan
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- The idea is to boost the current Indo-EU trade by $75 billion from the current total trade level of $137 billion
- India currently runs a $15 billion surplus with EU, and the FTA is likely to make most labour-intensive exports duty free
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- Bajaj Auto reported 19% spike in net profits to ₹2,503 crore for Q3FY26
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- The growth should have been better had it not been for a ₹62 crore one-time write-off due to the new Labour Code
- Quarterly revenues also grew 19% at ₹15,220 crore as the company saw EBITDA margins expand to 20.8% in Q3FY26
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- NSE gets approval for IPO; settlement will be a part of the overall deal
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- Now, NSE can start its IPO process and it is estimated that the actual IPO launch may take upward of 8 months from now
- The first step will be to engage with investment bankers for the IPO, which will entirely be an offer for sale (OFS)
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- Donald Trump has picked Kevin Warsh as the next Fed chief to replace Powell
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- Warsh is known to be a monetary moderate; and not too inclined to aggressive rate cuts; which should balance ideas
- Kevin Warsh is from the blue-blooded Morgan Stanley, so he should bring a balance of markets and regulation to the Fed
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- Indian PM Modi highlights $500 billion opportunity in the Indian energy sector
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- The idea here is to raise the refining capacity beyond 300 million tonnes per annum (MTPA) and boost exploration
- India already has refining capacity of 260 MTPA and is among the top-5 exporters of refined products; reaching 150 nations
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- IPO-bound Phone Pe is scaling up its lending and insurance business
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- Insurance and lending are just 11.55% of its total business today, and this will reduce the pressure on payments business
- Insurance and lending has grown 3-fold in last 1 year, but it needs to diversify its 80% dependence on payments business
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- AI has its downsides, and it was evident when Microsoft fell 7% on results day
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- While analysts liked the growth in its Azure business, markets are worried about its aggressive AI and cloud spending budget
- Globally, markets are worried about how companies are going to practically justify their massive spends in the AI initiatives
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- HDFC Capital Advisors allies with CLS to set up rental housing platform in India
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- The idea is to develop, own and operate institutional grade rental housing to meet growing demand of professionals
- Curated Living Solutions (CLS) brings extensive experience in co-living, student accommodation and worker housing
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- Bharat Electronics Ltd (BEL) reported 20.4% higher net profits at ₹1,580 crore
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- This was largely supported by a 24.0% growth in top line revenues in the quarter at ₹7,154 crore amidst rising orders
- While the new labour code hit was ₹1,662 crore; what is truly gratifying is the ₹73,015 crore order book position of BEL
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- Akasa Air expects 40% of its flights to fly international in next 4 years
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- Currently, Akasa Air serves 26 domestic destinations and just 6 international destinations; so, we are talking of a big growth
- In terms of domestic strategy, Akasa Air is likely to continue its focus on connecting the Tier-2 and Tier-3 cities in India
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- Vodafone Idea lines up ₹45,000 crore for 3-year expansion and growth plan
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- The capital infusion will target double-digit revenue growth and tripling the EBITDA from the current levels
- More importantly, Vodafone Idea has to regain its mojo of adding to its customer base; like Jio and Bharti Airtel
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- Vedanta demerger to take effect in April; listing of entities by May 2026
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- The demerger of entities has already been approved by NCLT (National Company Law Tribunal), despite centre pushback
- Vedanta will split, steel/ferrous metals, oil, aluminium, and power into 4 distinct verticals and list each one of them
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- Swiggy reported widening of net loss to ₹1,065 crore despite 21% GOV growth
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- Even the Consolidated Adjusted EBTIDA (before ESOP) reported an operating loss of ₹712 crore in the quarter
- Quick commerce may be boosting valuations and funding options, but it is surely draining cash flows of the company
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- Indian GCCs have been showing rapid growth as well as creating jobs
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- The quality of work done in Indian global capability centres (GCC) in India has gone up the value chain in recent years
- The GCCs currently contribute about $68 billion to the Gross Value Added (GVA); and account for 1.8% of India’s GDP
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- India’s nuclear submarine program is to have several spillover business benefits
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- Currently 51 large ships are under construction at Indian dockyards with an estimated value of ₹90,000 crore
- This program will benefit companies like MIDHANI, PTC Ind, CFF Fluid Controls, Quest Fluid Controls, GRSE, Kirloskar etc
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