Business News at 9:30 am on 21st April

“You are listening to the Expresso Business Update. Here is the latest news from the world of Indian and International business brought to you by The Indian Express and The Financial Express.
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Let’s begin. Finance minister Nirmala Sitharaman has called for a coordinated, global action plan to not just expedite post-pandemic recovery but also build resilience to future shocks. Participating in the G20 Emerging Market Economies meeting in Washington, organised by the International Monetary Fund, the minister also flagged near-term policy challenges for emerging economies, including food and energy security and the tightening of global financial conditions. Stating that the Russia-Ukraine conflict has set back worldwide economic recovery, the IMF on Tuesday trimmed its forecasts for Indian as well as global growth by 80 basis points each from its January projections. It reduced its Financial Year 23 India growth forecast to 8.2% and its global projection to 3.6% for 2022.
Speaking of Russia-Ukraine conflict, Domestic exporters are rushing to firm up deals with Russia, as a surge in Moscow’s interest in Indian goods —mainly farm commodities, pharmaceuticals and marine products — has somewhat revived bilateral trade momentum that was disrupted by the war in Ukraine. Senior executives with export bodies told FE that they have received a lot of enquiries from Russia. This has prompted them to step up engagement with Russian importers so that, in the event of a cessation of violence in Ukraine, goods can be dispatched swiftly.

Meanwhile, Tata Steel said on Wednesday that the company will stop doing business with Russia and for business continuity, its sites in India, the UK and the Netherlands have sourced alternative supplies of raw materials. This is the first time an Indian business conglomerate has taken such a firm stand against doing business with Russia in light of the escalating war between Russia and Ukraine. TV Narendran, CEO and MD at Tata Steel had told FE recently that the company has not had to put any further capital in the Europe business and with all the actions taken the UK and Dutch businesses have been able to stand on their own.
Next up, the UK-India Free Trade agreement. India and the UK will pledge to further bolster their economic engagement through a trade deal, apart from taking defence and strategic ties to new heights, when British Prime Minister Boris Johnson kicks off a two-day visit to this country, starting today. Both the sides have been negotiating since January for a trade agreement, under which New Delhi is seeking special arrangements to facilitate freer movement of its skilled professionals. Sources told FE that the countries are keen to hammer out a pact, the scope of which could be more expansive than what was previously assumed, in late 2022.
Moving on. With its earnings trajectory tipped to move up over the next 12 months, supported by strong refining margins, hikes in telecom tariffs and market share gains in the retail business, the Reliance Industries stock has been gaining steadily. In the last two sessions alone, it has put on 7% and is moving closer to its life time high of Rs 2,731.50 which it hit in October last year. On Wednesday, the RIL stock closed at Rs 2,718.4, gaining 3.03%. The conglomerate’s revenues for the current year are expected to come in at close to Rs 7.5 trillion, a big jump over Rs 4.66 trillion reported in Financial Year 22. The operating profits are estimated to nudge Rs 1.5 trillion while the net profits could top Rs 60,000 crore compared with Financial Year 22’s Rs 49,128 crore.

On to aviation. Data from the Directorate General of Civil Aviation released on Wednesday showed that domestic air passenger traffic in the January-March period surged to 24.8 million, marking a 6.1% growth compared to the corresponding period last year. The traffic in March was 37% more at around 10.6 million domestic passengers, compared to 7.69 million in February. The passenger load factors were above 80% for all Indian private carriers in March. In terms of passenger load factor, Indigo witnessed a decline, as its PLF came down to 81% in March, as compared to 85.2% in the preceding month. SpiceJet’s PLF dropped to 86.1% as against 89.1% in February. Air India’s PLF, however, marginally improved from 84.1% in the preceding month to 85% in March, according to a Moneycontrol report.
And lastly, let’s hear what to expect of the stock market today. Domestic stock markets saw the return of bulls on Wednesday as benchmark indices soared higher. Sensex and Nifty closed with more than 1% gains while broader markets ended mixed. Entering the weekly F&O expiry session, SGX Nifty was up more than 100 points, suggesting a continuation of yesterday’s up-move. Global markets were largely in the green. Wall Street closed and most Asian markets were up in the green.

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