Business
RBI’s monetary policy meet: Here’s some of the expectations
Though the RBI’s raising policy rates in the ongoing monetary policy committee meeting is a “no-brainer”, as its Governor Shaktikanta Das said in a recent interview, investors, however, await the actual degree of percentage hike before taking fresh positions and future course of action in the financial markets.
Besides policy rates, investors also eye other macro-economic forward-looking guidance from the central bank.
The three-day meeting started on Monday.
In early May, the RBI, in a surprise off-cycle meeting, hiked the repo rate, the rate at which the central bank lends short-term funds to banks by 40 basis points (bps) to 4.40 per cent, amidst rising inflation concerns in the economy.
In the same off-cycle meeting, the cash reserve ratio was hiked by 50 basis points to 4.5 per cent essentially to squeeze out some liquidity from the system.
India’s retail inflation accelerated to 7.79 per cent in April, remaining above the tolerance limit of the central bank for a fourth month in a row. It is highly likely that the retail inflation will remain above 6 per cent for another few months.
Besides, wholesale inflation in the country rose to 15.08 per cent in April 2022 from 14.55 percent in March, which has been in double digit for over a year now.
Below are some of the expectations by analysts, market observers, and real estate players on the possible outcome of the ongoing monetary policy meeting:
Deepak Jasani, Head of Retail Research at HDFC Securities
MPC’s off-cycle policy meeting in May clearly pivoted its focus on inflation over growth as a policy priority. The MPC is likely to increase the benchmark repo rate in its ongoing monetary policy review as inflation shows no signs of abatement.
The RBI is likely to follow a nuanced and calibrated approach to rate hikes once it reaches its pre-Covid neutral accommodation (5.15 per cent vs current 4.40 per cent). We expect a 40 basis points rate hike in the upcoming policy meet and see the RBI raising policy rates to 5.15 per cent by calendar year end.
Any further rate hikes will be contingent on the inflation-growth dynamics and would be data dependent.
Hence, equity markets and debt markets have for the most part discounted this rate hike and market reaction would depend more on the statement of the RBI Governor hinting about the future course of action.
Ashish Chaturmohta, Director, Research Group at JM Financial Services
India is currently facing the heat of “imported inflation” owing to rising crude prices, supply chain disruption and global liquidity absorption.
Hence, to control the same, the government has played its role by reducing petrol and diesel prices, bringing in restrictions for exports in order to keep the domestic market stable etc, and on the other hand, the RBI has been very proactive in their actions, which was clearly visible from their 40 base points surprise rate hike.
It’s been the first time in the last several years that the RBI and the Government are both working in a synchronised way. We believe the rate hike would be 30-40 basis points along with a stable outlook on the GDP.
Mohit Batra, Founder and CEO of MarketsMojo
The RBI will try to tackle two issues in its upcoming monetary policy – tackle inflation and ensure that the rupee does not depreciate too much against the dollar. The last time when the RBI revised its inflation target, crude was at $100 per barrel, and now it’s trading at $120 per barrel, suggesting a risk of inflation flaring up is high.
Keeping these facts like rupee depreciation and high inflation rate, I expect RBI to hike the interest rate by 50 basis points.
Satish Kumar, Research Analyst at Choice Broking
We are estimating a repo rate hike of 40 basis points by the central bank in the coming monetary policy to contain the inflation which rose to 8-year high of 7.8 per cent in April. Upside risks to inflation remain elevated given the prevailing high crude oil and commodity prices amidst supply side concerns.
Pushpender Singh, MD of JMS Group
The outcome of the MPC meeting is pretty obvious, most probably leading to an inevitable hike in the repo rate in lieu of a concerted effort to lower the inflation rates, which perhaps is becoming a huge aberrant in the growth parameters of the economy. I do not expect to see a massive increase in the repo rate but definitely, a slight rise will be announced to curb the dwindles and shift the radar of growth in the right direction.
Aman Sharma, Director at Spaze Group
There are great chances of a repo rate hike yet again in a bid to control the inflationary rates that grow unabated despite direct attempts to stop it. It has to be accepted with a pinch of salt by the industries across the segments which will face teething troubles due to the probable hike after the RBI’s MPC meeting.
A surge in the repo rate is almost certain, I do not think there will be a sharp insurgence but somewhat a marginal increase to let the inflationary challenges deflate and the numbers drop.
Mohit Nigam, Head, PMS, Hem Securities
The repo rate is anticipated to be raised by another 40-50 basis points by the MPC. This decision is influenced by rising price levels as a result of ongoing geopolitical tensions and supply-chain pressures, which are driving inflation higher. The primary goal of the RBI would be to keep inflation under control and minimise its second-round impacts.
Inflationary pressures on food and fuel remain high, and supply-chain disruptions continue to put upward pressure on input costs. The biggest issue is that if rates are raised further, urban demand, which was formerly a major concern, may dwindle. Agricultural output will be supported by favourable weather conditions, thus rural demand may not be affected as much.
Ashish Khandelia, Founder of Certus Capital
We expect the repo increase to be between 40-50 basis points in upcoming MPC meeting with future increases leading to 5.75 per cent (where we were exactly 3 years ago) or upwards by the end of FY23. 40 basis points increase in May caused homes loans to move in to 7 per cent +/- range from 6.5 per cent earlier.
And by the end of this financial year, home loan rates will likely touch 8 per cent. This is unlikely to derail the housing momentum, but it will certainly soften it. Coupled with increasing prices, the growth may slow down a bit in FY23, after a record FY22.
Business
Adani Power Q2 profit jumps 141 pc to Rs 7,019 crore on strong demand

Adani Power Ltd — India’s largest private thermal power generator — on Friday reported a 141.5 per cent year-on-year jump in consolidated profit after tax (PAT) to Rs 7,019.32 crore for the second quarter of FY27, compared to Rs 2,906.46 crore in Q2FY26.
Total reported revenue rose 39.4 per cent to Rs 19,950.60 crore from Rs 14,307.79 crore a year ago, while reported EBITDA jumped 45.7 per cent to Rs 8,743.22 crore.
On a continuing operations basis, revenue from operations grew 29.8 per cent to Rs 17,014.06 crore, while continuing EBITDA was up 18.5 per cent to Rs 6,320.97 crore.
Apart from that, PAT nearly doubled to Rs 11,885.92 crore from Rs 6,211.59 crore in H1 FY27, while reported revenue rose 36 per cent to Rs 39,272.90 crore.
Commenting on the results, CEO S B Khyalia said, “Adani Power continues to grow from strength to strength, achieving newer milestones in profitability and project execution. The primacy of domestic coal-based power in meeting India’s long-term power needs has become clearer every day.”
On industry trends, the company said India’s power demand grew 11.5 per cent to 502 BU in Q2 FY27, with coal and lignite-based generation accounting for 66 per cent of supply. Peak demand reached 270 GW, up 18 per cent year-on-year.
The company sold 26.4 billion units (BU) in Q2 FY27, up from 23.7 BU a year ago. Plant Load Factor (PLF) improved to 70.1 per cent from 62.8 per cent, while operating capacity stood at 18,150 MW.
Meanwhile, power sales under PPAs grew 29.7 per cent to 23.4 BU, with tariff realisation improving 12.7 per cent to Rs 6.4/kWh.
Merchant and short-term realisation improved 33.1 per cent to Rs 7.2/kWh, though volumes were 43 per cent lower due to incremental tie-ups of open capacity in medium-term contracts.
Business
Centre expects anti-cancer drug prices to fall 20-70 per cent under proposed trade margin cap

The Centre has told the Supreme Court that capping trade margins on anti-cancer medicines at 30 per cent of their maximum retail price (MRP) is expected to save patients around Rs 2,500 crore annually, with the proposed measure likely to reduce the MRP of such drugs by 20 to 70 per cent.
In an affidavit filed before the apex court in a pending plea seeking regulation of medicine prices, the Union government, through the Department of Pharmaceuticals, said it had decided to rationalise trade margins on anti-cancer drugs after extensive consultations with stakeholders and an assessment of the potential impact on the availability and affordability of medicines.
The proposed cap was intended to curb excessive trade mark-ups while retaining a reasonable margin for distributors and retailers, adding that an expert committee had been constituted to recommend the list of anti-cancer medicines to which the measure would apply, it said.
The Ministry of Health and Family Welfare constituted the committee on October 9 under the chairmanship of the Director General of Health Services, and it is expected to submit its report within 10 to 15 days.
“The trade margin is to be capped at 30 per cent of the MRP, on the same lines as was done in the TMR of 2019. The objective is to retain a reasonable trade margin while preventing excessive margins,” the affidavit stated.
The Centre said the list would cover drugs approved for the treatment of cancer, except inexpensive medicines, and could be periodically updated in view of market developments and public health considerations.
According to the affidavit, the National Pharmaceutical Pricing Authority (NPPA) would place the committee’s recommendations before its authority for deliberation and appropriate directions, following which it would issue a price notification and instructions to manufacturers to ensure that the benefits were passed on to patients.
The government said the proposed measure was expected to reduce out-of-pocket expenditure for cancer patients, improve affordability and accessibility of medicines, and bring greater transparency to the prices actually paid by consumers.
The affidavit was filed in response to a public interest litigation by Dr Sanjay Kulshrestha, which raises concerns over medicine pricing and the need for effective regulation of trade margins in the pharmaceutical sector.
The Centre maintained that a comprehensive statutory and policy framework was already in place to regulate drug prices, including the Drugs (Prices Control) Order, 2013, and that the government had been taking calibrated steps to address excessive margins without compromising the availability of essential medicines.
The government also referred to its earlier intervention in 2019, when the NPPA imposed a 30 per cent trade margin cap on 42 selected non-scheduled anti-cancer medicines.
According to the affidavit, the measure resulted in a reduction in the MRP of 526 brands and generated annual savings of approximately Rs 984 crore for patients, based on information provided by companies.
The Centre said the earlier intervention provided a policy precedent for extending trade margin rationalisation to a broader range of non-scheduled anti-cancer medicines.
However, it stressed that such interventions required careful consideration of their impact on different stakeholders, including small and medium pharmaceutical manufacturers, distributors and retailers, particularly those operating in remote areas.
The affidavit said some industry associations had expressed concerns that extending the cap could affect employment and medicine distribution in remote regions, given the dependence of smaller manufacturers on local traders and multiple distribution channels.
“Implementation of Trade Margin Rationalisation (hereinafter TMR) affects different stakeholders differently and, hence, requires extensive consultation with all stakeholders and a well-calibrated approach,” the affidavit stated.
The Centre said higher trade margins could sometimes be necessary for low-value medicines, drugs requiring specialised storage or handling, fragile products and medicines with low turnover, as retailers might otherwise find it commercially unviable to stock them.
It added that differences in distribution costs and market conditions had to be taken into account while framing a broader regulatory approach.
The government further referred to measures taken under its extraordinary powers under Paragraph 19 of the DPCO, 2013, including the capping of prices of certain diabetes and cardiovascular medicines, the fixation of ceiling prices for coronary stents and knee implants, and the regulation of trade margins on oxygen concentrators and other medical devices during the Covid-19 pandemic.
It also highlighted initiatives such as the Pradhan Mantri Bhartiya Janaushadhi Pariyojana, which provides generic medicines through around 19,000 Jan Aushadhi Kendras, and AMRIT pharmacies, which offer discounts on essential and life-saving medicines.
The affidavit said the government remained conscious of the need to balance affordability, accessibility and availability while regulating medicine prices.
“The Government has, in the public interest, been taking calibrated and consultative steps, including by invoking its extraordinary powers under Paragraph 19 of the DPCO, 2013, to curb excessive trade margins without compromising the availability of medicines,” it stated.
Business
Indian equity markets open higher amid buying in IT sector shares

Indian equity benchmarks opened higher on Friday tracking positive domestic cues and buying in information technology (IT) sector stocks despite weak global signals.
Sensex opened at 73,665.64, an increase of over 400 points or 0.57 per cent, while Nifty started at 22,742.20, up 54.55 points or 0.24 per cent.
Sectorally, the market rally was driven by the technology sector as Nifty IT rose nearly 3 per cent in morning trade, followed by Nifty MidSmall IT & Telecom which surged 1 per cent.
Meanwhile, Nifty Pharma and Nifty Healthcare indices also traded marginally higher.
On the other hand, Nifty Metal, Nifty Realty and Nifty MidSmall Financial Services was decreased by up to 1 per cent.
Analysts said Brent crude spiking to $114 is a major negative for the economy and markets. However, the sharp decline in US 10-year yield to 4.96 per cent and rupee appreciation to 94.70 against the dollar are positives that can restrain FII selling significantly.
They further said more than Rs 3 lakh crore of the IPO money out of Rs 3.73 lakh crore that went into the Jio Platform IPO in the last two days will come back into the system after allotment by next Monday. “This potential liquidity surge can lift the market next week.”
For Nifty, RSI stood at 43.98, above its average of 38.86, while PCR eased to 0.82. Immediate support is placed at 22,600-22,650, with resistance seen at 22,900-23,000, analysts said.
On Thursday, FIIs remained net sellers and offloaded equities worth Rs 3,459 crore, while DIIs provided buying support with net purchases of Rs 2,891 crore.
In US markets on Thursday, Nasdaq closed lower by 2.6 per cent amid an AI-led technology sell-off.
Similarly, Asian markets opened lower with Japan’s Nikkei falling around 1.7 per cent.
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