ECONOMY, P2 ASHOK GULATI Punjab’s anti-farmreform laws are 90% politics,10% economics INTERNATIONAL, P11 EDITORIAL COVID HEART ATTACK Parl panel questioning EPFO on investment decisions is the kind of second guessing that kills all initiative RBI governor Das tests positive, to continue work from isolation Lee Kun-hee, who made Samsung a global powerhouse, dies at 78 NEW DELHI, MONDAY, OCTOBER 26, 2020 WWW.FINANCIALEXPRESS.COM FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE READ TO LEAD VOL. XLVI NO. 204, 12 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) 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 0 -2 -4 -6 3.6 0.4 -1.2 Reliance Jio Bharti Airtel Vodafone-Idea -8 July 2019 July 2020 Source: Edelweiss take a final call — developing a low-cost smartphone in partnership with a device maker. Developingsuchasmartphone would ensure that its 2G customers upgrade to 4G and remain with it and do not migrate to Jio. Continued on Page 2 News channels in the spotlight Experts discuss how news channels can walk the tightrope between credibility and profitability ■ eFE, P8 Betting on health tech talent Siemens Healthineers’ new innovation hub in Bengaluru will work on precision medicine enabled by AI & cloud ■ PERSONAL FINANCE, P9 Rebalancing your portfolio Investors can now look at some profit booking and move money from equities to debt or gold to rebalance portfolio ■ INFRASTRUCTURE, P4 Asset recycling vital to growth It is imperative that hurdles in way of the asset monetisation agenda are removed if NIP’s stiff target is to be achieved ■ SCIENCE & TECH, P5 You can takeout, but can’t leave Google and others allow you to take out the data from their platform, but portability is still an issue TO ITS CREDIT, the government has been able to increase hospital capacity three-fold since April. The health ministry data released last week showed oxygen (O2) supported beds have increased from 57,924 to 2,65,046 between April and October 19 whereas the number of ICU beds and ventilator beds has increased 3.3 times. While the number of patientswhoneedoxygensupport may have risen to 57,357 on October 19, from 43,022 on September 1, it has come down from the peak of 75,098 on September 26, data from the ministry showed. If cases rise India will need more ventilators (assuming 3% of active cases require ventilators) At 6,68,154 20,045 active cases 39,000 78,000 39,527 As predicted by National Supermodel of Covid-19 study However, India could still run out ofventilatorbedsif the active infections go up sharply either during the festive season or in winter. Continued on Page 2 Hospitalisations in Kolkata are rising ISHAAN GERA NewDelhi, October 25 THE CALCUTTAHIGHCourt has done well to limit the crowdforDurgaPujacelebrations,givenhowinfectionsin West Bengalwere on the rise. However, early trends show the festival fervour seems to havecontributedtoaspurtin cases, at least in Kolkata. Indeed, Kolkata is the only major metropolis where the growth rate of infections has risen in October. Continued on Page 2 DEFENCE MINISTER Rajnath Singh on Sunday said India wants an end to the border tension with China in Ladakh but at the same time forcefully asserted that India will never allow even an inch of land to be taken away by anyone, reports PTI. He made the remarks after performing 'Shastra Puja' at the Indian Army's 33 Corps headquarters in Darjeeling, West Bengal. PAGE 12 Facebook demands academics disable ad-targeting data tool ACADEMICS, JOURNALISTS and First Amendment lawyers are rallying behind New York University researchers in a showdown with Facebook over its demand that they halt the collection of data showing who is being micro-targeted by political ads on the world's dominant social media platform. PAGE 11 (in %) Sector Chinese loss in global Top 3 Increase in mkt share gainers market share Ceramics Apparel 7.5 Vietnam Germany Belgium 6.0 Spain Italy India 5.8 Vietnam Bangladesh Spain 3.4 Footwear Vietnam Italy France Leather Iron & steel 2.7 5.9 1.4 0.7 0.1 1.2 1.1 1 1.0 2.9 2.8 0.7 2018 2019 76,153 73,034 Chg 4% 2020: 20% decline expected over 2019 Top 7 cities include Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR), National Capital Region (NCR) and Pune Source: PropEquity Quarterly property sales trend in Top 7 cities (Indexed) 160 120 80 40 0 . No. of units indexed to 2016 = 100 Sales Launches 4QFY16 Source: Anarock, JLL, Jefferies 2QFY21 Tata Realty & Infrastructure, said customers are looking at benefits which reduce their down payment. “They are also scouting for festive offers with big discounts,”Dutt said. Continued on Page 2 2.5 Pradesh,Telangana,Maharashtra,Gujarat and Karnataka. THE CENTRE HAS asked the centralpublicsectorenterprises (CPSEs) to make a quantum jump in their capital expenditure in this financial year and the next, as it is hamstrung by budgetconstraintstostimulate economic activity. The Prime Minister’s Office (PMO) has directed 13 petroleum sector CPSEs to double their capex to `2 lakh crore in FY21 from the initial target of `1 lakh crore , and scale it up furtherto`3lakhcroreinFY22. This is despite the fact that the H1 capex performance of thesecompanieswerelessthan athirdoftheyearlytarget.Similarly, Coal India’s (CIL) capex target has been raised by 30% to `13,000 crore for FY21 and to `20,000 crore for FY22. The nudge by the government to augment capex may necessitate a significant increase in market borrowings by these firms,considering that in thelast3-4years,manyofthem haveuseduptheircashreserves to support the economy hit by a prolonged sluggishness in private investments. Continued on Page 2 Continued on Page 2 1.6 1.5 0.2 0.4 3.5 2.3 India Israel US 1.1 1 2.2 Poland Vietnam Czechia 0.9 0.8 0.4 3.5 0.1 *China’s loss is measured as the difference between the peak market share (post-GFC) and the average of the share in the last three years Deep depression, deep sorrow Likely size of output after crop damage (lakh tonne)* Change from first Kharif 2020 estimate (%) Source: Traders, sector experts -10 paddy have suffered serious damagesduetotheunexpected heavy rains amid the monsoon’s withdrawal in Andhra PMO asks 13 oil PSUs to double FY21 spend to `2 lakh cr PRASANTA SAHU New Delhi, October 25 0.2 India 0.4 Belgium 0.3 Indonesia 0.3 Pearls, gems, etc. Furniture India's gain in global market share Farm returns to be hit by crop damage LARGE-SCALE CROP DAMAGES in about half a dozen states,duetorecentunseasonal showerscausedbydeepdepression in the Bay of Bengal, are causing serious concern.Anecdotal data and information gatheredbyFEfromtradersand farmers indicate harvest-ready crops such as cotton, groundnut,moong,tur,maizeandeven Launches during Sept-Nov in top 7 cities Total 335.75 70.04 -131.16 3.11 -1.53 -2.21 2.28 2.77 -18.01 Major beneficiaries of China’s loss in global market share* ● SURPRISE FLOODS PRABHUDATTA MISHRA & NAYAN DAVE New Delhi/Rajkot, October 25 Realty project launches to remain subdued in festive season ● CAPEX Post-GFC, China vacated about $140 billion in exports in unskilledlabour intensive sectors, including apparel, clothing, leather and footwear. India did not take advantage of this opportunity, created by China’s organic process of becoming richer and hence less competitive in unskilled labourintensive activities. Now, postCovid a second opportunity stemming from geo-politics has been created and that is India’s big prize waiting to be seized. In fact, India still enjoys large export opportunities, especially in labourintensive sectors such as clothing and footwear. But exploiting these opportunities requires more openness and more global integration. Abandoning export orientation is thus akin to killing the goose that lays golden eggs. (occupancy rates, in %) 100 82.6 79.1 75 61.7 53.7 50 25 0 ICU beds Ventilators Delhi Mumbai At 26 lakh active cases* Current capacity Continued on Page 2 Chance for India to boost exports Cities are still a problem At 13 lakh active cases* theStreetwithan11%increase in volumes that drove up revenues 6% y-o-y.Again, BritanniaIndustriespostedarevenue growth of 12.1% y-o-y, on the back of robust volumes increases at 9% y-o-y,albeit on a low base.Nestle,too,reported agoodgrowthinslaesof10.2% y-o-ywhilerevenuesatCrompton Greaves were up a smart 13% y-o-y. Ambuja Cements reported very strong volumes, up 8% y-o-y, resulting in a rise in revenues of 9% y-o-y; ACC’s volumes,however,were up 1% y-o-y,leaving revenues flat. Carpe diem QuickPicks ‘India wants end to tension but will not cede an inch to China’ Revenues were expectedly subdued for most companies; for 173 firms, they rose just 2.8% y-o-y. HUL’s organic volumes increased byjust 1%y-oyinthequarterandrevenuesby just 3% y-o-y. And with most malls closed, Shoppers Stop stand-alone revenues fell 65% y-o-y. Avenue Supermarts reported a 12.3% y-o-y drop in revenues largelyonaccountofa slow recovery in footfalls and partial store shutdowns. Although net selling prices at Bajaj Auto were up 5% y-o-y, revenues fell 7% y-o-y, thanks toa10%y-o-ydropinvolumes. But Asian Paints stunned Festive, winter spike a problem ISHAAN GERA New Delhi, October 25 ■ BRANDWAGON, P10 Sample of 173 companies (excluding banks & financials) Source: Capitaline COVID Not enough ventilators if active cases double Q4 Q1 Q2 FY20 FY21 Source: Chatterjee and Subramanian 4 2.5 2 Q3 -30 -15 -10 -20 7.4 4.4 6 Q4 Q1 Q2 FY20 FY21 Urad: Madhya Pradesh (million) Q3 1.2 8.5 Q4 Q1 Q2 FY20 FY21 Moong: Karnataka Wireless broadband subscriber additions Q3 17 Q1FY21 -186.36 Q4 (bps, chg y-o-y) Tur: Maharashtra, Karnataka 8 Q3 RM to sales (% chg y-o-y) 38.25 10 994 Q4 Q1 Q2 FY20 FY21 IN ANOTHER DULL festive season the numberof residential units launched is expected to fall by 20% over last year’s tallyof 73,034.Fewdevelopers are unveiling new projects. Some like Sunteck Realty, which is looking to roll out apartments in Mumbai’s central and western suburbs, are awaiting RERA approvals. Godrej Properties and Oberoi Realty told FE they’re staying with the properties alreadyin the market and have nothing new this time.Others such as the Runwal group are merely offering new phases in existing locations. Experts saytransactions in the ready-to-move-in segment, where developers are offering good deals, could see traction.“ManyGradeAdevelopers are offering flexible payment options which are more back-ended,” Samir Jasuja,founder and CEO, Prop Equity, said. Tata Housing,for instance, is asking customers to pay a flat interest rate of 3.99% for one year while it will bear the rest. A buyer can pick up a home in any of ten projects across Mumbai, Bengaluru, Kochi,Delhi-NCRand Kasauli. He can choose between a ready- to- move- in place oran under-construction unit. Sanjay Dutt, MD and CEO, Groundnut: Gujarat Q2FY20 965 Q3 SHUBHRATANDON Mumbai, October 25 104 898 848 AS THE HINDUSTAN Unilever management observed post the company’s earnings announcement, the worst is behindus.Indeed,theearnings season has got off to a good, even a flying start, if one considersthatmuchofthecountry wasunderalockdownbetween July and September.With revenuessubded,itwaslowercosts — especially smaller other expenses — that helped companies protect their margins; foranaggregateof173companies (excluding financials), expenditure fell 1.53% y-o-y pushing up operating margins byawhopping336bpsy-o-y. A jump in other income boosted net profits by11% y-o-y. The IT pack reported spectacular numbers but so have a good many others. In general, consumer-facing companies appeartohavebenefittedfrom the relatively high purchasing powerin tier2 and tier3 towns even as urban demand has stayed muted and consumer continue to downtrade. Tax (% chg y-o-y) FE BUREAU NewDelhi, October 25 Q4 Q1 Q2 FY20 FY21 -737.89 Per customer (minutes) PBT Q3 -319.05 Voice usage Q4 Q1 Q2 FY20 FY21 -87.21 Q4 Q1FY21 (bps, chg y-o-y) 114.10 13,116 13,928 14,972 16,655 Q2FY20 Q3 Q3 -24.11 (per customer, MB) -48.45 Data usage -17.28 Q1FY21 -3.75 157 Q4 Few festive treats for home buyers OPM (% chg y-o-y) Soybean: MP, Maharashtra FE SPECIALS 154 Q3 Total expenditure 1.21 TELECOM GIANTBHARTI Airtelwillfurtheritsinitiativesvia the partnership model and has ruled out working with an ownership model, a senior executive told FE. Rather than create content and seek strategic investments from overthe-top and technology majors, Bharti will work with all players in the digital space on a commission basis. The telco believes that while its model may be different from that of Reliance Jio, which has focussed on ownership and received equity investments from global technology majors like Facebook and Google, there is room for both telcos to grow given the Indian market now has only three telecom players. Ofthese,twoarestrongplayers while the third — Vodafone Idea — does not offermuch of a challenge.“The market is ideal for all the three to compete and thrive,” the executive said. However,thereisoneaspect which Bharti is still examining closely and on which it is yet to 135 Net sales (% chg y-o-y) 28.73 RISHI RAJ New Delhi, October 25 128 Q2FY20 With revenues subded, it was lower costs that helped companies protect their margins -21.07 AMAZON ON SUNDAYwon an interim award against its partner Future group selling retail business to Reliance Industries for`24,713croreafteraSingapore-basedsinglejudgearbitration panel put the deal on hold. AmazonhaddraggedFuture to arbitration after the Kishore Biyanigroupfirmhadagreedto sell businesses to billionaire MukeshAmbani’s Reliance. Passing an interim award in favour of Amazon,VK Rajah — the sole arbitrator in the Amazon vs Future vs Reliance arbitration matter — has asked the Future group to put the deal on hold and said that the deal cannot go through until it finally decides the matter. Confirming the development, an Amazon spokesperson said that the arbitration panel has granted the reliefs sought by it and expect an expeditious conclusion of the arbitration process. “We welcome the award of the Emergency Arbitrator.We are grateful forthe orderwhich grants all the reliefs that were sought.We remain committed toanexpeditiousconclusionof the arbitration process,” said Amazon spokesperson. Rather than adopt an ownership model like Jio’s, the telco will prefer partners Arpu (`) DULL DIWALI Off to a flying start -22.02 PRESS TRUST OF INDIA New Delhi, October 25 Bharti opts to work with all players EARNINGS Q2FY21 2.32 Arbitration panel says Future can’t sell biz to RIL STRATEGY -1.79 ● INTERIM RELIEF « OPINION, P6 ADVERTISING REVENUES Digital, OTT stealing the show, television channels losing appeal ASMITA DEY New Delhi, October 25 THEY MAY ENJOY an enviable reach of 830 million viewers but with streaming platforms becomingincreasinglypopular, thebusinessoftelevisionchannels could be under pressure. BetweenFY16andFY20,advertising revenues grew at a compounded 9% but this year they will touch just about `21,700 crore.That’s a shade lowerthan the `22,300 crore which the digital-OTT sector is expected Television viewership is over 830 m over 183 m households Ad revenues for TV pegged at `21,700 crore in FY21 toearn.Thestorylineisunlikely to change nextyear; analysts at KPMG estimate digital ad revenues will shoot up to `29,200 ■ But with varied content, OTTplus digital becoming popular Ad revenues for Digital-OTT pegged at `22,300 crore in FY21 ■ TV channels a lot more cost-conscious Deep pockets of OTT help create rich programming, buy films crore in FY22, ahead of the `25,800 crore that television channelswill make. Although there are an esti- mated 183 million television households in India, experts point out that the original programmingcreatedbyOTTplat- formsisvariedandenormously popularandiswinningthembig audiences.As such,they believe it is worth acquiring new films eveniftheseareexpensivesince it could help cement the relationshipwithaudiences.Onthe other hand,the bulk of the programming on entertainment channels comprises soaps and serials.AsJehilThakkar,partner at Deloitte India, points out OTTscurrentlyareinacustomer acquisition mode and may not belookingforreturnsfromvariouspropertiesbutTVchannels New Delhi will typically measure if they wereabletoconvertafilmintoa profitableventure ornot. OTT players have acquired and streamed many of the new films during the lockdown. Reaching into their deep pockets,Netflix,AmazonPrimeVideo and Disney+Hotstar have offered producers a good price for their films; few television broadcasters have the financial wherewithal to acquire content at these prices. Continued on Page 2
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