Business
Heatwave, reduced wheat production credit negative for India: Moody’s Investors Service
High climatic temperatures affecting northwest India curbing wheat production and possible extended power outages exacerbating already high inflation and hurting growth is credit negative, said Moody’s Investors Service on Monday.
The credit rating agency in a report said: “Over the longer term, India’s highly negative credit exposure to physical climate risks — which contributes to the country’s highly negative environmental risk issuer profile score and credit impact score — means its economic growth will likely become more volatile as it faces increasing, and more extreme, incidences of climate-related shocks,” Moody’s said.
The Indian government has revised down its estimates for wheat production by 5.4 per cent to 105 million tonnes for the crop year ending June 2022, given lower yields amid higher temperatures, Moody’s said.
The lower production, and fears that a surge in exports to capitalise on high global wheat prices would add to inflationary pressures domestically, has prompted the government to ban the export of wheat and to divert it toward local consumption instead.
Although the move will partially offset inflationary pressures, it will hurt exports and subsequently growth. The ban comes at a time when India — the world’s second-largest wheat producer — could have been capitalising on the global output gap from wheat following the Russia-Ukraine military conflict, Moody’s said.
Global wheat prices have jumped 47 per cent since the conflict began in late February.
According to Moody’s, the wheat export ban is likely to induce further surge in wheat prices in importing countries like Bangladesh, which absorbed 56.8 per cent of India’s wheat exports in fiscal 2021, Sri Lanka-8.3 per cent, UAE – 6.5 per cent and Indonesia – 5.4 per cent.
Additionally, elevated power demand amid the heatwave and an uptick in economic activity — resulting in higher domestic power prices — prompted India’s Central Electricity Regulatory Commission (CERC) to cap power prices at Rs 12 per kilowatt-hour in the electricity exchanges.
With suppliers importing coal at market rates to fill the shortfall and inadequate supply to meet peak demand, at least 16 out of 28 states experienced 2-10 hours of power outage per day in April, Moody’s said.
After the price ceiling was introduced on April 1, India’s total domestic coal actual stock fell 23 per cent by mid-May, with days of actual stock declining to 7.8 days from 10 days.
Further drawdowns in coal inventory could lead to prolonged power outages in industrial and agricultural production, leading to significant cuts to output and weighing further on India’s economic growth — particularly if the heatwaves continue beyond June.
Inflation will be partially alleviated by keeping wheat production for domestic consumption and the cap in power prices in exchanges, as well as the Reserve Bank of India’s 40-basis-point policy rate rise in early May.
However, given the prominence of cereals and food more generally in India’s consumption, elevated food prices could add to social risks if they persist.
Business
Kawasaki Introduces KLX 230 in India with Rs 3.30 Lakh Price Tag
Kawasaki KLX 230 has been officially launched in India, priced at Rs 3.30 lakh (ex-showroom). Bookings for the dual-purpose motorcycle, which were opened after its unveiling in October, are now live. Customers who pre-booked the bike can expect deliveries to begin in January 2025. The KLX 230 has generated a lot of excitement, having been spotted several times undergoing tests prior to its India debut.
Kawasaki KLX 230, the brand’s first road-legal dual-sport motorcycle in India, combines rugged off-road capabilities with essential road-legal features. It boasts a slim, tall profile with long-travel suspension and wire-spoke wheels, designed to handle diverse terrains. For urban legality, the bike comes with an LED headlamp, turn indicators, rear-view mirrors, a saree guard, and dual-purpose tyres. Available in two vibrant colour options, Lime Green and Battle Grey, the KLX 230 is built for riders who seek both adventure and practicality.
Kawasaki KLX 230 is designed for versatile riding, featuring a high-tensile steel perimeter frame and robust suspension system with 240mm travel at the front and 250mm at the rear. The motorcycle is equipped with a 37mm telescopic fork in the front and a Uni-Trak-linked mono-shock at the rear, ensuring excellent handling across varied terrains. It comes with wire-spoke wheels sized 21 inches at the front and 18 inches at the rear, fitted with dual-purpose tyres.
The KLX 230 also boasts a dual-channel ABS system with disc brakes at both ends for superior stopping power. With a ground clearance of 265mm, a seat height of 880mm, and a kerb weight of 139kg, it strikes a balance between agility and stability. The 7.6-litre fuel tank ensures that riders can enjoy longer journeys without frequent refuelling.
Business
Railways completes trial run on J&K’s cable-stayed Anji Khad Bridge
New Delhi, Dec 26: Indian Railways has successfully carried out a trial run of a tower wagon on the Anji Khad Bridge, the country’s first cable-stayed rail bridge, located in Jammu and Kashmir’s Reasi district.
The achievement is a major step forward in enhancing railway connectivity in Jammu and Kashmir, with services expected to commence in January 2025.
Railways Minister Ashwini Vaishnaw shared a video of the trial run on the social media platform X, highlighting the progress of the crucial project.
“The trial run on the Anji Khad Bridge, a key component of the Udhampur-Srinagar-Baramulla Railway Link (USBRL) project, has been successfully completed,” according to the Ministry of Railways.
Completed last month, the Anji Khad Bridge is an engineering marvel featuring a single pylon that rises 331 metres above the riverbed. It is supported by 48 cables on its lateral and central spans and stretches 473.25 metres in total length. The viaduct measures 120 metres, while the central embankment spans 94.25 metres.
This is the second-highest railway bridge in India after the Chenab Bridge, which is the highest in the world at a record 359 metres above the riverbed. Both bridges are part of the ambitious USBRL project aimed at increasing connectivity in Jammu and Kashmir.
The USBRL project stretches across 272 kilometres, of which 255 kilometres have already been completed. The remaining portion between Katra and Reasi is expected to be completed by the end of this month.
The Udhampur-Srinagar-Baramulla Rail Link (USBRL) is a 272 km railway project that connects Jammu and Kashmir to the rest of India. It is considered one of the most challenging railway projects in the Indian subcontinent.
The project will reduce travel time between Srinagar and Jammu from six hours to 3.5 hours. The railway projects have been constructed after overcoming natural challenges such as extreme temperatures, major earthquake zones, and inhospitable terrain.
Prime Minister Narendra Modi is expected to flag off the Vande Bharat train to provide a fast link for passengers travelling between Kashmir and Delhi in January 2025.
Business
Indian telecom industry’s revenue doubled in 5 years, Bharti Airtel biggest gainer
New Delhi, Dec 25: The revenue of India’s telecom industry increased 8 per cent (quarter-on-quarter) to Rs 674 billion (13 per cent growth year-on-year) in the second quarter of FY25, mainly driven by tariff hikes, according to a new report.
Driven by three rounds of smartphone tariff hikes, India’s quarterly telecom revenue has almost doubled (up 96 per cent) since September 2019, implying 14 per cent five-year industry revenue CAGR, according to the report by Motilal Oswal Financial Services Ltd.
Given the consolidated market structure in the Indian telecom industry, higher data consumption, lower ARPU, and inadequate returns generated by telcos, “we expect tariff hikes to be more frequent. We build in 15 per cent tariff hike in December 2025.”
The telecom industry’s average revenue per unit (ARPU) has almost doubled from Rs 98 in September 2019 to Rs 193 in September 2024, driven by tariff hikes.
However, as a result of sharp tariff hikes, the industry’s subscriber base at 1.15 trillion in September 2024 is lower than September 2019 levels (1.17 trillion).
Among telcos, Bharti Airtel has been the biggest beneficiary of tariff hikes with a 2.2 times increase in implied ARPU, registering a 17 per cent five-year CAGR.
“We believe the significant improvement in the data subs proportion has also been a key driver for Bharti’s industry-leading ARPU,” said the report.
Over the reporting period from 2019-2024, Bharti’s revenue has increased 2.6 times, implying 21 per cent five-year revenue CAGR, with incremental revenue market share significantly higher at 48 per cent.
“With Vi’s (Vodafone Idea) large capex plans, we believe the pace of market share gains may slow down. However, RJio and Bharti are still likely to continue gaining market share at Vi’s expense, in our view,” the report noted.
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