BACK PAGE, P16 POLITICS, P11 INTERNATIONAL, P15 Ikea takes the small route to grow bigger ‘Have more children,’ Andhra CM tells state residents Boeing mulling asset sales to boost finances NEW DELHI, MONDAY, OCTOBER 21, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. L NO. 199, 24 PAGES, `12.00 (PATNA & RAIPUR `12.00) 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 BOMB THREATS RECEIVED FOR 25 FLIGHTS AS MANYAS 25 flights of Indian airlines got bomb threats on Sunday, causing hardships to thousands of passengers and forcing authorities to move scores of planes to isolation bays at airports for detailed checks, reports PTI. ■ PAGE 5 COMPANIES MAKE A BEELINE FOR GREEN STORAGE CAPACITY AS THE GOVERNMENT looks to set up 500 gigawatt (GW) of green capacity by 2030, a key challenge is to ensure its seamless access to the grid. Several private and public sector firms have lined up significant investments and set capacity targets in the space, reports Arunima Bharadwaj. ■ PAGE 2 ISRAELI STRIKE IN GAZA LEAVES 87 DEAD OR MISSING ISRAEL SAID IT had struck Hezbollah's intelligence headquarters in the Lebanese capital Beirut on Sunday, while officials in Gaza said they were still trying to recover bodies from the rubble after an Israeli strike that killed dozens, reports Reuters. At least 87 people were dead or missing following the airstrike in northern Gaza. ■ PAGE 15 TOTAL HEADCOUNT OF 6 TOP IT FIRMS DIPS 1% Y-O-Y IN Q2 THE COMBINED HEADCOUNT of the six top Indian IT firms dropped 0.96% yearon-year in the second quarter of the current fiscal, even as fresher hiring picked up resulting in 1.12% sequential growth, reports Urvi Malvania. The total headcount for the September quarter was 1,622,007. ■ PAGE 4 FE S P E C I A L How farmers can get better prices Price deficit payment scheme has its origins in Madhya Pradesh's Bhavantar Bhugtan Yojana ■ EXPLAINER, P6 Stars align for astrology Other income comes startups in festive spell OPERATING MARGINS OF 164 FIRMS SHRINK IN Q2 to early birds’ rescue FE BUREAU New Delhi, October 20 THE EARNINGS SEASON has got off to a subdued start, with virtuallyeveryheavyweight disappointing the Street.Net profits of a sample of 164 companies (including banks and financials) were up 7% year-on-year on the back of an 8% rise in revenues. But net profits would have fallen but for a 23% jump in other income. The across-the-board miss in estimates suggests the Street has been unable to gauge the extent of sluggishness in demand, whether for IT services or for consumer goods. Among the reasons the managements have attributed to the indifferent numbers include muted consumer demand, elevated commodity prices and higher advertising and promotion spends amidst competitive intensity. Also,some businesses were disrupted by heavy rains this season. Demand so farin the festive season has been low. For the sample companies, operating margins have contracted 63 basis points (bps). At Avenue Supermarts, the growth in same-store-sales (for stores that are of twoyears orolder) decelerated to 5.5% from 9.1% in Q1FY25.The management attributed the deceleration to height- RESULTS SUBDUED START Net sales Total expenditure (bps, chg y-o-y) (% chg, y-o-y) 14 14 12 Q3 FY24 Q1 Q3 Q2 FY25 OPM FY24 Q1 -63 -138 -155 Q4 FY24 Q1 Q3 Q2 FY25 (bps, chg y-o-y) 33 -17 -35 15 10 Q2 23 RM to sales 27 REVIEW Q2 FY25 89 Q4 (% chg, y-o-y) 14 Q3 Q1 (% chg, y-o-y) 108 Net profit (bps, chg y-o-y) Q4 Other income 86 Q4 9 FY24 8 Q3 17 17 11 7 -311 FY25 Q4 Q1 FY24 Q2 FY25 Q3 Q4 FY24 Q1 Q2 FY25 Sample of 164 companies (including banks & financials); Source: Capitaline ened competition from quickcommerce companies. The subdued rise in revenues resulted in a contraction in the Ebitda (earnings before interest, tax, depreciation and amortisation) margin of 40 basis points and a muted 10.3% increase in operating profits. Nestle reported poor volumes which fell 2% and weak domestic sales growth of just 1.2%, a big miss. The company’s Ebitda margin fell by 140 bps missing estimates and leaving the Ebitda growth at sub 5%. The management has attributed this to muted consumer demand and elevated commodity prices. Continued on Page 5 Engagements up 20-30% this year AUSPICIOUS TIME Temple services startup VAMA registers ■ S SHANTHI Bengaluru, October 20 CPP INVESTMENTS (CPPIB), Canada’s largest pension fund manager, has dropped its plans to sell stake in IndoSpace Core, its equal joint venture with IndoSpace, a developeroflogisticsparkspromotedbySoutheast Asia-focused EverstoneCapitaland US-based Realterm,people in the know said. CPPIB did not get the desired valuation from bidders,sources said.“Also,not manyin the marketwant to buyjust 50%.Most of the investorswant to buythewhole stake,”one of the sources added. Marquee global investors like the UAE’s sovereign wealth fund Mubadala, Dutch pension fund APG, Canadian investorOxford Properties,and Ivanhoe Cambridge, the real estate arm of Canadian pension fund CDPQ, had put in bids to buy CPPIB’s 50% stake in IndoSpace Core. The deal was expected to be around $700 million (`5,810 crore) and CPPIB had given the mandate to Morgan Stanley to run the sale process,sources said,adding the portfolio matured and CPPIB was looking to exit its investment after holding it for six years. When contacted,the CPPIB spokesperson declined to comment on the matter. IndoSpace Core was formed in 2017 to DEAL UNDONE No surge in airfares this holiday season Capex target of Centre may fall short by `50K cr MD: HDFC Bank stares at slower credit growth IF YOU HAVE not booked flights for the upcoming peak holiday season around ChristmasandNewYearyet,itwouldbea good time to do it now.Airfares on popular holiday routes this year have not seen the usual surge till now, reports Swaraj Baggonkar. According to tour operators, the additionalholidaydemandusually pushes the fare up by at least 25-30%. ■ Page 4 WITH THE GENERAL election-induced slowdown on asset-creating spending continuing to weigh in, the Centre’s capital expenditure may be lower by around`50,000crorethisfiscalas against the target of `11.11 lakh crore, reports Prasanta Sahu. In the first five months of FY25, the Centre’scapexwaslowerbyaround `73,000 crore compared with the year-ago period. ■ Page 2 HDFC BANK’S CREDIT growth is expected to be slower than the banking sectorgrowth rate in the current financial year, its MD and CEO Sashidhar Jagdishan said during an analyst call, reports SachinKumar.However,thebank’s creditgrowthisexpectedtoaccelerate in the next financial year,likely matching with the banking system’s growth rate,and maysurpass it in FY27. ■ Page 6 total funding of $31.8 million this year $700 mn 17 industrial and logistics parks ■ CPPIB initially committed about $500 mn in the joint venture focus on acquiring and developing modern logistics facilities in the country. CPPIB initially committed about $500 million in the venture. IndoSpace Core has 17 industrial and logistics parks,housed under 22 special purposevehicles (SPVs), across five keymarkets of Bengaluru, Chennai, Hyderabad, NCR, and Pune. Continued on Page 5 L&T’s free skill training offer for blue-collar workers goes abegging CONSTRUCTION MAJOR LARSEN & Toubro (L&T), which had earlier talked about an acute shortage of engineers and skilled blue-collar workers at its sites hitting project implementation schedules, has since embarked on a plan to address the issue on its own byoffering free training to willing persons.However,even this doesn’t seem towork beyond a point,with at least one-fifth of seats lying vacant. L&T intends to give free training to 15,000youtheveryyeartohelpthemhone their construction skills.The programme is funded out of the company’s corporate social responsibility(CSR) budget. In June, L&T group chairman SN Subrahmanyan said that the firm was faced with a shortage of over 25,000-30,000 labourers and 20,000 engineers across its businesses. With its massive project pipeline — the target is `9 lakh crore for the current financial year and 40% at REALITY CHECK These institutes currently train about 12,000 youth every year as against total capacity of 15,000 ■ ■ L&T faces shortage of 25,000-30,000 labourers and 20,000 engineers ■ It has a project pipeline of `9 lakh crore ■ The company spends about `65 crore every year on these institutes for this financial year ■ L&T runs nine construction skills training institutes overseas sites — the manpower challenge continues to be serious. The lack of enough demand for construction-siteworkisareflectionofthelow labourforceparticipationamongtheyouth, evenastheunemploymentrateishigh.“The bottleneck is in terms of attracting people to join the training programme.The prob- is expected to grow tenfold by FY30 ■ Startups in the space have raised a YOUTH HESITANT TO TAKE UP CONSTRUCTION JOBS MANU KAUSHIK New Delhi, October 20 $102-106 mn, week-on-week revenue growth and a 70% growth in its e-puja segment this festive period. Launched in 2020, the startup offers services such as e-puja and e-darshan by partneringwithmorethan300registered temples. increase in new users in 2017, IndoSpace Core has to be worth around astrology market, currently at their ventures, relationships, and finances with auspicious dates, leading to a significant increase in platform usage,” Meena Kapoor, founder and managing director, Astroyogi, told FE. Similarly, temple services startup VAMA is seeing a 20-25% increase in new users, over 20% 20-25% ■ Formed ■ Deal was expected ■ India’s online STARS ARE SHINING for startups offering online astrology consultations this festive season. Engagements have surged 20-30% this yearcomparedtothelastone,ascustomersseekguidanceforauspicious timings,rituals,vaastuandfinancial planning for the year ahead. AI-powered astrology startup Astroyogi, for instance, has recorded a surge of 15% in consultations compared to the last festive season. Vaastu and financial consultations by businesses in particular have seen a surge of over 50% for the startup. “Customers rely heavily on astrological advice during festivals to align Canada fund drops plan to sell IndoSpace JV stake RAGHAVENDRA KAMATH Mumbai, October 20 AI-powered astrology startup Astroyogi records 15% rise in consultations ■ lemisaboutmindsetoftheyoungergeneration,”AnupSahay,head(corporatestrategy and special initiatives),L&T,told FE.Sometimes, inclement weather at construction sites becomes a deterrent.Also, some sites are at remote locations. Continued on Page 5 New Delhi Continued on Page 5