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- Bit by Bit 10th Oct. || HUL, Godrej Consumer cut soap prices||Ola, Uber cab aggregators to face action if autorickshaw services not dropped by 10 Oct: Karnataka govt & more
Bit by Bit 10th Oct. || HUL, Godrej Consumer cut soap prices||Ola, Uber cab aggregators to face action if autorickshaw services not dropped by 10 Oct: Karnataka govt & more
BGS Committee
October 10, 2022
Good morning! It's Monday, which is almost Tuesday, not so far from Wednesday, which is super close to Thursday, which is practically Friday. You've got this.
So, here are:
"5 amazing stories in 5 minutes to make you future ready"
Happy reading!
WEEK AHEAD
Global cues have been sending mixed signals to India, while the stress in the US and European markets had worried investors. IMF chief Kristalina Georgieva voiced concerns about the growing possibility of a worldwide recession and has urged countries to take coordinated action.
Monday (10/10/2022): The IPO of Tracxn Technologies will open for subscription, and the price band for that is Rs. 75-80 per share. We will be closely watching the Earnings report from Tata Consultancy Services (TCS).
Tuesday (11/10/2022): On this day, we will be looking at the unemployment rate data released for the United Kingdom.
Wednesday (12/10/2022): Data for the CPI in India for the month of September will be released. CPI rose to 7% in August from 6.8% in July. Minutes of the US FOMC (Federal Open Market Committee) meeting held in September will be released. In that meeting, the Fed decided to raise the federal funds rate by 75 basis points. OPEC will release its monthly oil market report. We will be looking forward to the Earnings report from HCL Technologies and Wipro.
Thursday (13/10/2022): The September inflation data for the United States will be released, The International Energy Agency (IEA) will release its monthly oil market report. Earnings reports for Infosys and MindTree will be released.\
Friday (14/10/2022): The Wholesale Price Index (WPI) in India for the month of September will be released. The minutes of the Monetary Policy Committee (MPC) meeting held in September will be released. India’s final exports and imports data for September will be released. Bajaj Auto and Shree Cement will release their Earnings report.
ECONOMY
Mission Divestment for Finance Ministry in the pre-Budget meet.
The Story:
During the pre-budget consultations, which started on October 10, the Finance Ministry has asked several ministries and departments to report on the status of Asset Monetization. The Department of Economic Affairs requested an explanation from the ministries about the asset monetization rate on September 6.
The Centre achieved Rs 96,000 crore in FY22, exceeding its target of Rs 88,222 crore, primarily due to mining auctions, NHAI highways, and power sector assets. The Center aims to raise Rs 1.62 lakh crore from asset monetization for the current fiscal year. Achieving this target remains critical to push for the Capex and to stick to the fiscal path.
The Finance Ministry recommended aggressive asset monetization at all levels last month in its Monthly Economic Report to combat the global economic headwinds and rising spending. However, by September 15, ministries had only been able to raise Rs 26,800, far less than what the Center had anticipated.
The Finance Ministry will encourage ministries to accelerate their monetization push during the pre-budget meeting. Yesterday was the first day of the pre-budget meeting, which discussed the fund demand for 2023–24 and the revised estimates (RE) of expenditures for the current fiscal year.
AUTOMOTIVE
Key Facts:
On October 1, 2022, Mahindra & Mahindra surpassed all other SUV producers in India in terms of sales volume and income. The company's annual sales for FY22 are greater than the 270,000-strong booking list.
The EV firm owned by M&M raised $250 million at a $9.1 billion value and intends to invest $1 billion to meet its 2027 sales goal of 200,000 vehicles.
The market share of the flagship SUV segment has virtually halved to 13% over the past three years as newcomers MG and Kia have made a strong start. Volumes are down 27% to 1.87 lakh in FY20, marking the fifth year in a row that sales have decreased.
The Story:
The fact that Mahindra & Mahindra's turnaround was carried out during the tumultuous years of the Covid-19 outbreak makes it all the more amazing that it has propelled the domestic manufacturer into the premium passenger market.
The two architects, Jejurikar and Pawan Goenka (former MD), who created a turnaround strategy for the first-generation Scorpio in 2000, were back at the drawing board. along with the new MD, Anish Shah. M&M would remain away from automobiles, fleets, and MPVs and return to its history of innovative products like the Scorpio, Bolero, and XUV.
M&M, however, had to contend with supply issues and angry consumers who had to endure protracted wait times. The overall customer experience at dealerships needs to be addressed," the author writes. "There are multiple appointments, and cancellations, and occasionally the model's waiting duration lowers dramatically on improved supplies. Not to mention its main rivalry with Tata Motors, particularly in the area of EVs where the manufacturer of Nexon and Safari already enjoys a significant advantage. It is time to deliver on the road in order to live up to high valuations on the EV front as well. So far, it has only demonstrated potential on paper.
FMCG
Key Facts:
In the western region, HUL has cut pricing on its products sold under the well-known soap brands Lifebuoy and Lux by 5% to 11%
Godrej Group arm GCPL, which owns soap brand Godrej No 1, has also decreased prices of soaps by 13 to 15 percent.
The Story:
The costs of some soap products have been reduced by up to 15% by FMCG companies Hindustan Unilever Ltd. and Godrej Consumer Products Ltd. (GCPL) as palm oil and other raw materials become cheaper.
Analysts believe that the price cut would contribute to volume growth in the second half of the current fiscal year, particularly given that overall demand is still weak due to rising inflation.
In response to the news, GCPL CFO Sameer Shah said: “GCPL is one of the first FMCG firms to pass on the price reduction benefit to customers.”
According to Edelweiss Financial Services Executive Vice President Abneesh Roy, HUL's price reduction is a top focus for the company as it attempts to hold onto market share in a period of declining raw material costs. "Regional players typically reappear when raw material prices decline"
TECH
Key Facts:
The base fare of autos in Karnataka should be INR 30 for two kilometers and INR 15 per km after that
Aggregator Platforms were operating in the range of INR 60 for four km because of the increase in petrol prices
The Story:
A few days ago, Economic Times covered a story about the auto-rickshaw aggregator platforms like Ola, Uber, and Rapido was ordered to stop the services in the state. But the fact that the companies did not stop their auto from running on the roads of Karnataka has now led the transport and home minister to speak about seizing three-wheelers running on online platforms.
The other issue is the licensing on which aggregator platforms are allowed to operate; from the Karnataka govt. side, it has stated that motor cabs were allowed to use and auto-rickshaws were not part of the license. Whereas, Online platforms say that three-wheelers were part of the license provided by the government. But ultimately, it all boils down to the fact that fares charges from the online platform were observed to be higher last month due to the rise in petrol prices.
Want More Bits?
The Story:
Taxi aggregators like Ola and Uber have disobeyed the Karnataka government's order to cease autorickshaw services within its jurisdiction with immediate effect even after getting a notification. The state transportation agency has now issued a warning that the enforcement will begin on Monday.
Ola, Uber, and other cab aggregators received a notice from the state government on Thursday for operating illegally and in violation of the Karnataka On-demand Transportation Technology Aggregators Rule 2016.
However, there has been no indication that the taxi aggregators will comply with the government directive.
"Three days were allotted to them to halt their services. Additionally, we had requested that they provide us with any information they may have during this time in our notice. They still haven't replied. The enforcement will therefore begin tomorrow "According to a senior transport department official, PTI.
The autorickshaw services were still available on Sunday, but the prices were still astronomically high compared to the regular, meter-based rates.
Manjunath, an autorickshaw driver affiliated with a cab aggregator company, stated he wanted to see the government take action.
"Just before the elections, a similar notice was given to the cab aggregators, but nothing further happened. Similar notice has now been issued as the assembly elections draw near. I desire to see the government act " he said.
