OPINION, P6 COMPANIES, P5 CLIPPING ITS WINGS Big reforms must to go past new Hindu rate of growth of 7% Farmers need more reform, Fadnavis’ APMC U-turn shows govt not ready as yet IN WRITING Goyal-led Jet Airways to opt out of 7 Gulf routes EDITORIAL COMPANIES, P5 WhatsApp seeks RBI nod to expand payment services to all users PUNE, MONDAY, DECEMBER 3, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL.IX NO. 225, 14 PAGES, `6.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E EXPRESS IT AWARDS JURY MEET The best of Indian IT pick the winners Siddharth Pai, founder & managing partner, Siana Capital FE SPECIALS Total 618,473 Travel bookings 58,929 Payment systems -167,774 slug it out for the top spot in India’s e-retailing arena, profit andloss(P&L)statementsacross the sector remain a sea of red. Lossesforaclutchof30companies in the year to March 2018 nudged `17,000 crore. That’s about a 100% rise over the losses of `8,000 crore or so reported in 2014-15. If that seems somewhat smaller than anticipated, analysts at Kotak Institutional Equities (KIE), who did the analysis point out,it’s because some accounts are yet to come in; once added,the losses,they believe,would comfortablyhit `19,000 crore or thereabouts. Food kitchen+ delivery PBT -18,091 EVEN AS AMAZON and Flipkart E-tail Revenue 30,581 ASMITA DEY New Delhi, December 2 (` million; 2018) -16,010 Losses for a clutch of 30 firms in 2017-18 could be as high as `19k cr Source: MCA, Tofler, Companies, Bloomberg, Kotak Institutional Equities ■ Revenues rose 250% plus in 3 years to around `62,000 cr in March 2018 ■ PE/VC funding is fairly robust until October 2018 ■ Food tech attracted $2.3 bn in last 5 years ■ Hyperlocals switched to inventory-led model from aggregatororiented one The top line is a lot less troubling. Revenues jumped an impressive 250% plus in three years to around `62,000 crore inMarch2018.Nonetheless,the rising losses,at a timewhen the pace of revenue growth is slowing, should have discouraged investorsgivencustomeracquisitioncostsremainhighasplayers tryto growmarket share. But they aren’t put off and arewilling towait it out till they see money as can be seen in the fairlystronginfusionsthisyear. “Datapertainingtofundsraised bye-commercecompaniesindicates that PE/VC funding is fairly robust until October, 2018,” analysts at KIEwrote. According to data sourced from Tracxn, PE and VC firms invested a chunky$7 billion in online ventures between January and September. That may be a little less than the $8 billion they bet during this time lastyearbut it’s nonetheless impressive. Continued on Page 2 cussed, a PwC team was on standby, in different parts of the country,to give a brief presentation and to answer the jury’s queries. The team looked at how novel an idea was, how exclu- Besides leveraging blockbusters, theatres are turning to brand tie-ups and activations to boost revenue this holiday season ■ eFE, P8 A maniacal focus on clients Genpact leverages automation, analytics and AI to help drive the competitive advantage for its clients ■ PERSONAL FINANCE, P9 Realising 3 life goals with MFs Strategic investments in mutual funds can help buy a house, build retirement corpus & finance child’s education ■ INFRASTRUCTURE, P11 Smooth sailing on the Ganga Launch of the first multi-modal terminal at Varanasi is part of a `5,369-cr project to make the Ganga navigable for commerce ■ SCIENCE & TECH, P12 A moment for reflection A maverick researcher claims to have created GM children. His stated aim is to protect them from AIDS (%) 30 25.7 25 4 20 9.4 15 FE BUREAU New Delhi, December 2 3.4 Apr ‘18 Oct ‘18 0 12 8 1 5 needs to fork out about half the telecom industry’s annual deferred spectrum payments between now and 2031, it’s not surprising that chairman KM Birla is calling on the government for some relief. Nearly half or `10,579 crore of the `21,218 crore to be paid out in 2018-19 is Vodafone Idea’s share. In comparison, Bharti Airtel’s annual outgo is smaller at `5,573 crore. 16 4 3 GIVEN THAT VODAFONE IDEA 20 2 10 0 (y-o-y,%) 18 5 4.5 Q3FY18 Q4FY18 Q1FY19 Q2FY19 4 0 Source: DGCA ARUN NAYAL New Delhi, December 2 UNABLE TO COPE with falling yields,allairlinesexceptIndiGo areslowingdown.WhileIndiGo topped up capacity by 30% year-on-year in October, the increase for the rest of the sectorwasashadeabove9%y-o-y. This was way slower than the 18.9% y-o-y rise seen in June and 12.3%y-o-yinAugust. AnalystssayIndiGoisleveraging a strong balance sheet to gain market share and remains unfazed by falling yields. The low cost carrier’s share rose to an enviable 42.8% in October 2018. In contrast, SpiceJet reported a share of 11.7%, its lowest in more than two years. GoAir had just 8.8% compared withanaverageof9%for2018. JetAirwaysanditslow-costsubsidiary JetLite commanded a share of 14.9% and national carrierAirIndia had 12.2%. JetAirwaysandAirIndiacontinuetosufferfrombasicworking capital like payroll spend; Vistara and AirAsia are still in deep losses and SpiceJet and Go struggle to prevent balance sheet erosion,” analysts at ICICI Securitieswrote recently. Deferred payment FY19 instalment (` cr) Bharti Airtel Vodafone Idea RJio 5,573 10,579 2,969 RCom 439 MTS 360 Aircel 225 TTSL Continued on Page 2 1,074 Source: Industry Continued on Page 2 MPC: Rates to hold China, US announce 90-day halt to new tariffs Detailed report on Page 4 Spectrum outgo to stress B/S Industry capacity growth SpiceJet’s capacity growth slows down (ex-IndiGo) Yield (`/km) Capacity growth Low food inflation reins in CPI, exposes chinks in RBI forecast Inflation has trailed initial RBI forecasts (%) RBI forecast 10 5 4 3 2 CPI Core CPI CPI food 6.4 6 4 4.9 6.2 3.31 0 0 2016-17 2017-18 2018-19 (H1) -0.86 -2 -4 April 2016 Forecast made in April each year Drivers protesting against higher fuel taxes face a police water canon near the Arc de Triomphe in Paris Report on Page 4 8 2 5.47 1 Unrest in Paris Core sticky, food keeps a lid on headline CPI (% rise, y-o-y) Actual CHINA AND THE US agreed to Cinemas: Binging on advertising ● VODAFONE IDEA IndiGo flies on as others slow down REUTERS Buenos Aires, December 2 ■ BRANDWAGON, P10 Continued on Page 2 TURBULENCE ● TRADE WAR halt additional tariffs in a deal thatkeepstheirtradewarfrom escalating as the two sides try again to bridge their differences with fresh talks aimed at reaching an agreement within 90 days. The White House on Saturday said that US President Donald Trump told Chinese President Xi Jinping during high-stakes talks in Argentina that he would not boost tariffs on $200 billion of Chinese goods to 25% on January 1 as previously announced. Beijing forits part agreed to buy an unspecified but “very substantial” amount of agricultural,energy,industrial and other products, the White House said in a statement. The two sides would also launch new trade talks to addressissuesincludingtechnology transfer, intellectual property, non-tariff barriers, cyber theft and agriculture,it said. If no deal is reached within 90days,bothpartiesagreedthat the 10% tariffs will be raised to 25%,theWhite House said. Would the base product stay strong enough and evolve in the manner needed? After all, anyproduct orservice must be amenable to continuous improvements. For a category like Cloud Solutions, they tried to evaluate how quickly and smoothly the transition from physical to cloud could take place using the solutions on offer,and how inter-operable it was. The potential ease of scalability was a big factor where the products and services in the mobility category were concerned, as was market potential.Withaconsiderablepart of Indians still using feature phones,one of the factors considered was whether the solution could be used across both smart- and dumb- phones. sive it was. In categories such as analytics, for instance, they believed it was important to also gauge how easily the product or service could be deployed. The jury also went into how the service is performingcurrentlyandtried to assess whether it has a future. How would it evolve in the next four or five years? 4.3 4.7-5.1 OVERSEAS INVESTORS have pumped in `12,260 crore into the Indian capital markets in November, making it the highest inflow in 10 months due to falling crude oil prices and sharp rupee appreciation, reports PTI. The inflow comes following a net withdrawal of close to `60,000 crore from the capital markets (equity and debt together) in the preceding two months (September and October). High cash burn but the bets are getting bigger 9,084 -5,036 FPI inflows hit 10-month high of `12,260 cr in Nov gories — business impact,scalability, robustness, societal impact, market potential — it was not always easy to decide which solution or product really stood out. In each of the 50+ entries that were dis- E-COMMERCE 519,879 THE GOVERNMENT has constituted a six-member committee to look at selling as many as 149 small and marginal oil and gas fields of state-owned ONGC and OIL to private and foreign firms to boost domestic output, reports PTI. The panel is headed by NITI Aayog vicechairman Rajiv Kumar and includes Cabinet secretary PK Sinha, DEA secretary SC Garg, oil secretary MM Kutty, NITI Aayog CEO Amitabh Kant and ONGC chairman and MD Shashi Shanker. plus entries had been whittled down to just 50 orso byknowledge partner PwC, the task was nonetheless challenging. While the keyparameters used to judge the entries may have been similar for most cate- -128,636 IN THE NEWS Sale of ONGC, OIL fields to pvt firms: Govt sets up panel afternoon in Bengaluru, not one meant to be spent indoors. But with the Sixth Express IT Awards around the corner, there was no time to lose. So,chairman Mohandas Pai and the other members of the jury settled down, with some strongcoffee,todecidewhothe winners of the contest were — other jury members were Sharad Sharma, former R&D head at Yahoo! and co-founder iSPIRT;RaviGururaj,chairman, Nasscom Product Council, and technology consultant Sid Pai who founded Siana Capital. Although the list of 400 TV Mohandas Pai, jury chairman, former Infosys CFO 3.6 4.5-5 IT WAS A lovely November Sharad Sharma, co-founder, iSPIRT 4.5 5.0 FE BUREAU Bengaluru, December 2 Ravi Gururaj, chairman, Nasscom Oct 2018 Retail inflation may average 4.6% this fiscal. Excess supplies have kept food inflation low. Expect status quo in the MPC meeting next week — DK JOSHI, chief economist, Crisil ● FARM STRESS Agri portfolios see spike in NPAs SHRITAMA BOSE Mumbai, December 2 DELINQUENCIES IN THE agri loan portfolios of some banks areseeingaspike.AtStateBank of India (SBI), the gross nonperforming asset (NPA) ratio forits agri loan book shot up to 11.43% at the September-end this year from 9.93% on September 30, 2017; slippages or accretion of fresh bad loans were `2,700 crore. The largest private bank by assets, HDFC Bank, too, admitted to facing repayment pressure in agri loans,even as it didn’t disclose the quantum of slippages. Paresh Sukthankar, deputy MD, had told analysts aftertheJunequarterresults,the valueofagriNPAshadmovedup by about 40% year-on-year (y-o-y) to `2,100 crore. Over the same period, the bank’sKisangoldcardportfolio had expanded byabout 20% to `38,458crore. “There are impacts, of course, some of which are related to the intrinsic abilityof thosecustomers,butalotofitis also linked to the uncertainty which tends to come in when they believe they may get a waiver,” Sukthankarhad said. Continued on Page 2 Incrementally, price pressures in food could see a moderate build-up as kharif MSPs come into play... Anticipate 70 bps impact from this spread over H2FY19 and H1FY20 — SHUBHADA RAO, chief economist, Yes Bank Cost-push inflation is a passing phase, while the economy is transitioning towards a lower-growth-lower inflation path. Monetary policy to stay on prolonged pause — SONAL VARMA, chief India economist, Nomura
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