BACK PAGE | PAGE 20 INTERNATIONAL | PAGE 5 Avenue Supermarts needs q-comm boost BRANDWAGON | PAGE 9 Trump swearing-in today; Ambanis among guests KOLKATA, MONDAY, JANUARY 20, 2025 Are brands ready to join the pickleball party? FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL 34 NO. 68, 20 PAGES, `12.00 (NORTH EAST STATES `12.00 & ANDAMAN `20.00) 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 FE BUREAU Mumbai, January 19 ■ EXPLAINER, P6 Shifting focus from outlay to outcomes While budgetary outlay for education is important, learning & employment outcomes are key Q3 Net profit Q2 FY25 11.1 31.9 Q1 11.7 Q3 RM to sales (bps, chg y-o-y) (% chg, y-o-y) 6.2 Q2 FY25 7.8 Q3 Q4 Q1 Q2 Q3 FY25 FY24 Sample of 142 companies including banks & financials) Source: Capitaline withInfosysandWiproexceeding market expectations but TCS and HCL Tech failing to do so.TCSattributedthemisseson both the revenue and profit frontstoaseasonallyweakquarter. However, all four firms reported strong deal wins indicatingthatdiscretionaryspends are looking up. Management commentary confirmed this. 208.9 Q4 Q1 Q2 Q3 FY25 FY24 71.3 Q4 FY24 3.4 Q1 23.4 Q4 FY24 (% chg, y-o-y) 8.7 -176.2 Operating profit -43.2 Q2 FY25 148.9 Q1 -43.7 Q4 FY24 171.3 0.9 (bps, y-o-y) Infosys CEO Salil Parekh said that discretionary spending in the US was recovering in the BFSI space and similar trends were visible now in Europe. According to Wipro CEO Srini Palliaclientsarecautiouslyoptimisticanddiscretionaryspending is graduallyrecovering. Continued on Page 17 India towork with EU to reduce China dependence FE BUREAU New Delhi, January 19 INDIA ON SUNDAY said it would work together with the European Union (EU) to reduce its dependence on non-market economies and develop cutting-edge technologies, secure criticalrawmaterialsupply,and build resilient supplychains. In his first meeting with European commissioner for trade and economic security MarošŠefcovicinBrussels,commerce and industry minister Piyush Goyal also outlined five otherprinciplesformutualeconomic growth and set a framework forstrongerpartnership. Bylaying stress on reducing dependenceonthenon-market economy, which indirectly means China, both sides seem to be looking for alternative partnersastheChinesegovernment takes an aggressive posture in trade and announces curbsonexportsofcriticalminerals and technologies. Both sides also agreed to fast-tracktalksonthefreetrade agreement (FTA) which have beenonsinceJune2022. Goyal said India would build a commercially meaningful trade agenda with the EU, which is fair and equitable, addressing thetariffandnon-tariffbarriers throughsimplificationandcost competitiveness. The two leaders also reviewed progress in the trade and investment group of the India-EU Trade and Technology Council and agreed to address legacy issues. Top realtors steer clear of affordable housing RAGHAVENDRA KAMATH & ANUPREKSHA JAIN Mumbai, January 19 WHILE AFFORDABLE HOUSING becomes the buzzword in every Union Budget, the space hasseenbignationaldevelopers movingout,leavingtheground to onlygovernment companies such as NBCC and state-level players in tierII and III cities. Signature Global, a Gurugram-based developer, which started on the plank of affordablehousing,has not launched a single such project in the last twoyears.PradeepAggarwal,its founder and chairman,told FE that while the company was keen to take up affordable housing,therewerechallenges. “Highlandcostsandincreasing construction expenses have made it difficult for private developers to sustain operations without compromising on quality,”Aggarwal told FE. Prestige Estates,which had set up a venture for affordable housing with HDFC Capital, abandoned its plans after the ON WEAK GROUND ■ Houses priced up to `45 lakh and measuring up to 60 square metres, in major cities, are considered affordable housing ■ Sales of affordable homes dropped to 18% of the total in 2024 from 38% in 2019 initialproject,asitfelt margins were thin at just 10-15%.This is in contrast to the margins of 20-30% that premium projects fetch. For bigger brands, the margins could be fatter. Sanjay Dutt, MD and CEO ofTata Realty& Infrastructure (TRIL),said taxes and delays in securing permissions make affordable housing projects too expensive for developers. Dutt said state governments ■ In terms of supply, share of affordable housing in top 7 cities fell to 16% of total in 2024, from nearly 40% in 2019 ■ Affordable homes generate margins of 10-15% compared to 20-30% in premium projects are in a dilemma: “They want affordable housing for votes but want developers to fund them.” Though Tata Value Homes pioneered the concept of low cost housing, nothing much came out of it.TRIL, the main company, is now mostly focusing on commercial properties and have reduced the share of residential projects. Continued on Page 17 Gazanscheeras Reliance FMCG Trumpbreathes ceasefirestarts set to expand lifeintoTikTok A CEASEFIRE BETWEEN Israel and Hamas began in the Gaza StriponSunday,usheringinan initial six-week period of calm and raising hopes for the release of dozens of hostages andanendtoadevastating15month conflict. Soon after, thousands of Palestinians burst into the streets. ■ PAGE 5 THE FMCG ARM of Reliance, which touched `8,000 crore in toplineforthefirstninemonths of FY25,will expand distribution into the north and west of India,sourcessaid.Thedistribution push is timed with the overall momentum the FMCG business is seeing, reports ViveatSusanPinto. ■ PAGE 4 PRESIDENT-ELECT DONALD TRUMP asked technology companies to “not let TikTok stay dark” and announced he would extend a deadline to sell the company after the video platform suspended its services in the US, and Apple and Google removed the platform from their app stores. ■ PAGE 5 increase,freeze on borrowings to stay GROWTH ENGINE Total Gross budgetary capex support Figures in ` crore *Budget estimates FY21 FY22 FY23 FY24 FY25* MANU KAUSHIK New Delhi, January 19 THE OUTLAY FOR the Indian Railways’ capital expenditure (capex) is likely to be close to `2.9 lakh crore for the next financial year, up around 8% over the estimated `2.65 lakh crore for the current year. This signals an annual rate of growth that is marginally lower than the likely nominal GDP growth. Of FY25’s capex budget for the national transporter, `2 lakh crore, or 76%, had been utilised byJanuary5. The railways makes little operational surplus and is reliantchieflyontheBudgetfor its capex, given the strict controls on fresh borrowings. Of 262,200 RailwayscapexforFY26 maybepeggedat`2.9Lcr 255,200 265,200 The male consumer has evolved, so it’s time for Smart and Handsome to flex OPM RUN-UP TO THE BUDGET 2025-26 the current year’s capex budget,`2.52lakhisthebudgetary outlay, with the balance being extra budgetary resources, including PPP financing.A little over `3,000 crore is being raisedbyIRFCfromthemarket. 245,600 A bigger playing field -1.7 Q3 -61.8 6.7 ● Just 8% annual ■ BRANDWAGON, P9 11.7 7.5 Q2 204,000 FE SPECIALS 10.1 Q4 Q1 REVIEW INDIA INC WILL likely report subdued results for the December 2024quarter,going by the numbers put out by the early birds. The first set of resultsindicatesbusinessesare struggling to grow their top lines and that they are reining in expenses to be able to shore up their bottom lines. Forauniverseof142companies, banks and financials, the top line in the quarter ending December2024 isflat,growing at less than 1% year-on-year. However,the total expenditure contracted by 1.7% y-o-y, resultinginanexpansion inthe operating profit margin of 209 basis points (bps). That has pushedupnetprofitsby7.8%yo-y.In the banking space,Axis disappointed with 4% earnings growth due to bigger provisions.Theslowerloangrowth of 9% y-o-y has been disappointing and suggests the operating environment for lenders is not an easy one. The numbers from the IT pack were somewhat mixed (% chg, y-o-y) 162,700 APROLONGED STOCK market volatility could dampen the investor appetite for unitlinked insurance plans (ULIPs), prompting firms to turn towards guaranteed income and pure protection plans, reports NarayananV. ■ PAGE 6 12.4 11.1 190,300 Market volatility may force rethink on ULIP strategy (% chg, y-o-y) RESULTS Total expenditure 119,200 THE BUDGET OUTLAY for the Centre's flagship affordable rural housing scheme -— Pradhan Mantri Awaas Yojana- Gramin — may be around `35,000 crore, much lower than the budget estimate (BE) of `54,500 crore for FY25, official sources said, reports Prasanta Sahu. ■ PAGE 2 Net sales 234,600 Spending on rural housing scheme to fall short of BE A SLOW START 112,200 IN A MOVE that could significantly impact tech giants such as Meta and Google, the department of telecommunications (DoT) has decided not to pursue the delicensing of new spectrum for Wi-Fi use, officials said, reports Jatin Grover. ■ PAGE 4 Early birds fail to catch the worm FY24 Blow to tech firms as Wi-Fi spectrum allocation shelved SELECT142 FIRMS’ TOP-LINE GROWTH BELOW1% FY25 IN THE NEWS The freeze on borrowings is likely to stay in FY26 as well. A senior official in the railwaysministrytoldFEthatsince investment in railway infrastructureisoneofthekeyfocus areas for the government, the ministry has recommended that the capex increase for FY26 should be greater than the annual inflation rate. Continued on Page 17 AshwiniVaishnaw leads India's biggest-ever contingent to annual gathering Davosturnsintofortressasworld leadersgatherforWEFmeettoday DAVOS 2025 BARUN JHA Davos, January 19 THIS HIGHEST TOWN in Europe has become synonymouswithanannualgathering of the most powerful people in the world and that requires someheavy-dutysecuritycover. Nearly 5,000 Swiss army personnel, including those equipped with the latest gadgets such as drones and AIpowered tools,have taken over this small skiingresort town to ensure the safety of its high- Swiss police personnel walk outside the Congress Center on Sunday ahead of the 55th annual meeting of the World Economic Forum in Davos, Switzerland REUTERS profile visitors for the next week and to ensure the successful completion of a rare annual confluence of biggest names in the world from busi- ness to government to civil societyto art and culture and a lot of others. Thethousands-strongarmy deployment is actually adding to a large number of police and civilian personnel tasked with securing this small Alpine resort town. Swiss Parliament has approved the deployment ofamaximumof5,000soldiers on these civil affairs support operations from 2025 until 2027.The 2025 WEF meeting will be held from January 2024, but the Swiss Army’s missionlastsfromJanuary14to30. Air traffic over Swiss, Austrian and Liechtenstein territorywithin a radius of 25 nautical miles (approximately 46 km) of the centre of Davos will be restricted. The Swiss Air Force will support the civilian authorities with air transport and surveillance flights using helicopters, propeller planes and combat aircraft. Continued on Page 17 Kolkata