OPINION, P6 ECONOMY, P2 ASHOK GULATI Agri-food policies must be demand-driven & focus on sustainability INTERNATIONAL, P4 SUNIL JAIN FARM LAWS PRESIDENT PICKS SC's farm panel is a chance for Punjab to negotiate a central package for crop diversification Tomar to farmers: Give up stubborn stand, come for discussion tomorrow Biden ropes in 20 Indian-Americans in his administration NEW DELHI, MONDAY, JANUARY 18, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 276, 14 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 IN THE NEWS FinMin looks at BIC model for bank recap THE FINANCE MINISTRY is looking at other avenues for affordable capital infusion, including setting up of a Bank Investment Company, as the RBI has raised concern over the issuance of zero coupon bonds for recapitalisation of public sector banks, sources said, reports PTI. Excise duty collection jumps 48% this fiscal WHILE THE PANDEMIC pummelled tax collection across the board, the excise duty mop-up jumped 48% in the current fiscal on the back of a record hike in taxes on petrol and diesel, reports PTI. Excise duty mop-up during April-November 2020, was at `1,96,342 crore, up from `1,32,899 crore during the same period in 2019. MeitY DRAFT PLI outlay for laptops, servers at `7,500 crore KIRAN RATHEE New Delhi, January 17 120 India $ billion 100 THE OUTLAYFORproductionlinked incentives to make laptops,tablets,personalcomputersandservershasbeenpegged at `7,500 crore with the benefits expected to be in the range of 2-4%.Much like it didwhen it rolled out production-linked incentive (PLI) scheme for manufacturers of mobile phones, the government is likelytosetdifferentqualifying targets for domestic and overseascompanies,officialsources told FE.While overseas players wouldbeeligibleforincentives if laptops are priced over `30,000 and tablets cost more than `15,000, local players would not be subject to this condition. MeitY is hoping to Vietnam (-8 years back) 60 40 20 0 15 8 3 8 4 9 4 12 7 13 FY-4 FY-3 FY-2 FY-1 F0 22 F1 roll out the scheme by April 1 followinganin-principleclearance bythe Cabinet. The investment targets for overseasplayerswouldbefixed at around `500 crore spread over a period of four years (`125 crore per year) while for PRASANTA SAHU Big jump in CPSE capex, Q3 matches H1 Large CPSEs achieved about 30% of their capex target for FY21 in Q3, almost matching their investments in the first two quarters. State governments have slowed down investments significantly and the Centre' budget capex also looks constrained 50,000 59 52 F4 F5 F6 F7 F8 local companies it would be `20 crore (`5 crore per year). The annual production targets over the base year, that would makefirmseligibleforthebenefits,are yet to be decided. Continued on Page 2 IOC NTPC EARLY BIRDS Rivals Vietnam, China IT firms take the lead far outpace India in strong Q3 show BANIKINKAR PATTANAYAK New Delhi, January 17 AS INDIA’S MERCHANDISE exports limp back to normalcy, two of its key rivals in global marketshavesurgedaheadwith greatervigour,beatingtheCovid blues.While China has pipped India in scripting a resurgence in exports to the US and the EU (excluding the UK),New Delhi’s largest destinations that accountforathirdofitsoverseas despatches,Vietnam outpaced even China in the recovery. This suggests India’s export contraction may have been accentuated by factors other thanjustaCovid-induceddemand slowdown, mainly in the West. Forget China, in absolute term, even Vietnam has now beaten India in exports to the EU,having already surpassed it in supplies to the US in 2018. BetweenJanuaryandNovember Exports to the US (% change, y-o-y, Jan-Nov 2020) India China -13.3 -5.8 19.5 Vietnam Source: USTR office Exports to the EU* (% Change, y-o-y, Jan-Nov 2020) India -17.2 China Vietnam -0.5 4.3 *Excluding the UK Source: Eurostat (EC) DRIVEN BY STUNNING numbers from IT majors, especially TCS and Infosys, as also a good set of results from HDFC Bank, earnings from the early birds have been strong. Expenditure forthe sample of 61 companies andbanksroseatamuchslower pace than revenues resulting in a big jump in operating profit margins.IndiaInchadcutcosts 20 Continued on Page 2 10 0 QuickPicks DHFL resolution: Lenders India’s Covid vaccination approve Piramal’s bid drive hits app glitch bump INDIA’S COVID-19 vaccination drive hit a bump on the first day due to glitches in an app called Co-Win that is being used to coordinate the campaign, reports Reuters. Co-Win is supposed to help by alerting healthcare workers who are first in line to get shots, and by allowing officials monitor and manage the entire drive. -5 (% chg y-o-y) ● RECOVERY Franklin MF's shut schemes generate near `14,000 crore since closure Continued on Page 2 E-retailers must scale up to become profitable Profit/ loss FY19 FY20 (` crore) Amazon -1,624.4 -1,936.6 -3,959.64 -2,833.18 -940.46 -2,451.17 -1,904.72 -1,771.48 -1,160.8 -1,868.5 -932.69 -162.72 -539.2 -744.3 a unit economics challenge for some of the scaled-up players,” observes Arpit Mathur, partner, Kearney. Mathur explains it is about what is the pace at whichtheywantto continueto acquire new customers because that is the key determinant of their overall prof- Flipkart Paytm Zomato PhonePe Amazon Pay First Cry Myntra Designs 7,593.5 10,847.6 4,233.8 5,916.3 3,049.87 Revenue 3,115.1 1,162.87 2,336.34 184.22 371.76 806.5 1,315.7 507.83 805.49 1,041.1 1,675.4 itability. He believes that attaining profitability in the next 18-24months shouldnot be a challenge because on a per transaction basis, the companies can still make money. Of course, companies are taking a closerlook at costs and losses,asAnkurPahwa,partner Source: company filings/Tofler WHILEE-RETAILINGCONTINUED to gain momentum in 2019-20,mostplayersreported lossesfortheyear.Foraclutchof e-commerce companies — Amazon, Flipkart, Myntra, Paytm,Zomato,PhonePe,Amazon Pay and First Cry — losses rose to `17,617.15 crore from `16,747 crore in 2018-19. Combined revenues, however, grew at a brisk pace, increasing by over 40% to around `26,384 crore. Asexpertspointout,it’snot as though the business models are in themselves unviable,it’s merely that companies continue to invest in acquiring customers.“Itisnotsomuchof -5,685.4 -5,849.2 Q4 FY20 at EY, observes. Discounts are smaller, procurement is more efficientandmanyarecharging for delivery. Pahwa points out several players are rolling out privatelabels,whichthenhelps improves theirgross profits. Continued on Page 2 New Delhi 18.12 Operating profit 7.57 10.84 Net sales 0 GROWTH PANGS ASMITA DEY New Delhi, January 17 9.2 5 FRANKLIN TEMPLETON MUTUAL Fund on Sundaysaid its six shut schemes have received `13,789 crore from maturities, pre-payments and coupon payments since closing down in April. Franklin Templeton MF shut six debt mutual fund schemes on April 23, 2020, citing redemption pressures and lack of liquidity in the bond market. “The six schemes have received total cash flows of `13,789 crore as of January 15, 2021 from maturities, pre-payments and coupon payments since April 24, 2020,” the fund house said in a statement. Over the latest fortnight (January 1-15), these schemes received `669 crore, of which `617 crore was as pre-payments,it added. 20 15.45 15 2020,whileIndia’sshipmentto the US shrank 13.3% onyearto $46.3 billion, China’s dropped by only 5.8% to $393.6 billion despiteatradewarandgrowing criticism of Beijing’s mishandling of the Covid outbreak. sharplyinQ1andQ2asrevenue growthwasverymuted. Commentary from the managements at IT firms post the Q3 results has been more than encouraging; most believe the dealpipelinewillcontinuetobe strong and that they are wellpositionedtoexploitssegments like digital and cloud. Avenue Supermarts postedbetter-thanexpected revenue growth of 10%y-o-yonnear-normalstore operationsandfestivedemand. FE BUREAU New Delhi, January 17 PRESS TRUST OF INDIA New Delhi, January 17 40 0 Railways NHAI ONGC DHFL ON Sunday said the committee of creditors has approved resolution plan submitted by Piramal Capital and Housing Finance, reports PTI. This was approved by the CoC in its 18th meeting concluded on January 15, 2021. Piramal's bid received 94% votes compared to 45% for the US-based Oaktree Capital. PAGE 3 F3 60 60 21,000 1,00,000 F2 36 80 71 15,000 1,50,000 68 25,084 15,000 (*Data of CPSEs and departmental undertakings with annual capex plan of at least `500 crore) 2,00,000 Actuals in Apr-Dec as % of annual target (RHS) 32,921 17,000 `1.4 lakh cr Capex in Q3FY21 FY21 target Actuals in Apr-Dec (` crore) 1,07,500 75,000 Capex by these entities in H1FY21 TOP INVESTORS 1,60,792 95,000 `2.9 lakh cr `1.5 lakh cr Capex by CPSEs* in April-Dec, this was 60% of the target for FY21 32 47 57 India aspiring to repeat what Vietnam achieved in electronics exports over last decade Source: ITC Trade Map Push from FM GREAT PICK-UP 87 75 80 97 EXPORT RECOVERY -1.53 Q1 FY21 7.44 3.6 Q2 FY21 Q3 FY21 Sample of 61 companies Source: Capitaline
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