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Smart TV shipments drop 16 pc as premium TVs drive growth in India: Report

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New Delhi, March 28 (IANS) India’s smart TV shipments declined 16 per cent (year-on-year) in 2023 but QLED smart TV shipments increased by 110 per cent YoY, a new report showed on Thursday.

The decline was attributed to a slow start in the first half of the year due to macroeconomic challenges and excess inventory, along with an increase in panel prices and reduced demand for smaller screen-size smart TVs due to which, certain long-tail brands exited the market in 2023, according to Counterpoint Research.

“The shipments of larger screen smart TVs (55-inch and above) increased by 29 per cent YoY in 2023 as consumers are starting to prefer premium models with better features for their living rooms,” said research analyst Akash Jatwala.

Display technology, screen size and 4K resolution are among the primary specifications that consumers looked for while making a new purchase.

Smart TVs are gaining popularity due to streaming of sports events, TV series, and movies, which creates stickiness among consumers.

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“Smart TVs are now equipped with enhanced display technologies and upgraded features like Google Assistant, and bezel-less display, along with Dolby Atmos and Dolby Vision which had a 21 per cent penetration in overall smart TV shipments in 2023,” said senior research analyst Anshika Jain.

QLED TVs are gaining popularity as leading brands such as TCL, Hisense, Acer, Kodak, Thomson, and other long-tail brands have started offering them in 43-inch screen size variants and at lower prices (sub-Rs 30,000), due to which its shipments more than doubled in 2023.

–IANS

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Indian corporates' large capex to need offshore funding amid steady economic growth

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New Delhi, June 12 (IANS) Indian corporates’ large capex will need to rely on offshore funding despite improving domestic liquidity and companies’ earnings growth, a new report showed on Wednesday.

As per Moody’s report, capacity expansion, inorganic growth, refinancing and working capital needs, along with shareholder payments, will keep capital requirements high for non-financial corporates in India.

“While India’s domestic liquidity and companies’ internal cash flow can largely cover their capital needs, offshore funding will remain key despite its share reducing to 12 per cent of India Inc’s total funding due to its higher costs and rising domestic liquidity,” said Vikash Halan, a Moody’s Managing Director.

The report also mentioned that Indian corporates have the capacity to incur additional debt to meet funding needs. Over the past decade, the corporate sector has steadily cut debt to 55 per cent of GDP from 72 per cent while leverage has remained stable.

Meanwhile, ICRA, a Moody’s affiliate in India, noted that the Indian corporate sector saw steady business momentum in the fiscal year (FY) ended March 31, 2024, supported by both consumption and investment activity.

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Still, rural areas have so far faced subpar monsoons and inflationary trends that have dampened consumption.

Conversely, urban-focused businesses such as residential real estate, hospitality, airlines, jewellery and automobiles have continued their robust momentum, the report noted.

“Despite the likely higher debt, India Inc. will continue to report stable credit metrics due to stabilising inflationary pressures and a steady interest rate regime. The forecast of a normal monsoon season should support a nascent recovery in rural markets,” said K. Ravichandran, ICRA’s Chief Ratings Officer.

ICRA expects the pace of private sector capex to be moderate in the first half of FY2025 due to the likely pause in infrastructure activities before the general elections.

–IANS

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Indian financial institutions well placed to ride on robust economic growth: Moody's

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Mumbai, June 12 (IANS) Indian banks and non-bank finance companies (NBFCs) are well placed to seize opportunities from the country’s strong economic prospects through lending growth in sectors such as infrastructure, energy transition, manufacturing, small businesses and retail, a Moody’s report said on Wednesday.

The credit quality of India’s financial system has strengthened over the past 3-4 years. Record-high profitability, low delinquencies and stable domestic-oriented funding underpin financial institutions’ stable credit ratings. Their capitalisation has also improved with healthy internal accruals and capital raising from buoyant debt and equity markets, the report mentioned.

“For India’s financial institutions, leadership in technology adoption as well as their risk management, governance, customers’ experience and balance-sheet buffers will separate winners from losers over the next 2-3 years,” said Amit Pandey, a Moody’s Vice President and Senior Analyst.

Moody’s expects loan growth of 12-14 per cent over the next 12-15 months as loans grow in line with deposits. According to the report, system-wide net interest margins will soften selectively as banks reprice maturing deposits at higher rates to reflect previous increases in interest rates. Still, the system-wide return on assets will remain healthy with low loan-loss provisions despite a slight increase from cyclically muted levels, while banks’ capitalisation will remain stable, said the report.

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The Reserve Bank of India’s (RBI) initiatives to pre-emptively manage credit growth in high-risk segments such as unsecured loans, along with tighter scrutiny on areas such as customer protection, risk management, cyber security and IT infrastructure, will enhance financial stability.

Meanwhile, ICRA, an affiliate of Moody’s in India, said the extent of growth of systemic liquidity and deposits in India will continue to remain a key driver for the credit growth for banks amid strong demand for credit. The estimates suggested that despite a moderation in growth, credit is set to increase from Rs 19 trillion to Rs 20.5 trillion in the fiscal year ended March 2025 (FY25), which would be the sector’s second-highest increase.

“Corporate asset quality continues to remain stable; however certain asset classes in retail unsecured segments are seeing increased stress. Reduced credit flow could further pressure asset quality in these segments, but overall fresh slippages and credit costs will remain benign for banks,” said Karthik Srinivasan, ICRA’s Senior Vice President and Group Head.

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The rating agency projected that growth in the NBFC sector will moderate, especially in the non-mortgage retail loan segment, on the back of expanded assets under management (AUM) following the high growth rates seen in the past two fiscal years.

–IANS

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India's industrial production clocks 5 pc growth in April

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New Delhi, June 12 (IANS) India’s Index of Industrial Production (IIP) recorded a 5 per cent year-on-year growth during April this year compared to the corresponding figure of 4.6 per cent in April 2023, according to the latest data released by the Ministry of Statistics on Wednesday.

The growth rates of the Mining, Manufacturing and Electricity sectors in April 2024 are 6.7 per cent, 3.9 per cent and 10.2 per cent respectively over the same month last year.

Within the manufacturing sector, the growth rates of the top three positive contributors to the growth of IIP for April 2024 are — ‘Manufacture of basic metals’ (8.1 per cent), ‘Manufacture of coke and refined petroleum products’ (4.9 per cent), and ‘Manufacture of motor vehicles, trailers and semi-trailers’ (11.4 per cent), the figures showed.

Data on use-based classification shows that the output of consumer durables such as refrigerators, washing machines and TVs grew by 9.8 per cent which appears to be a positive sign of demand for these goods picking up in a growing economy.

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The output of construction goods also grew by a robust 8 per cent indicating the investments being made in the infrastructure structure.

The production of capital goods, which comprise machines that produce goods and thus reflect the real investment taking place in the economy, grew at 3.1 per cent.

–IANS

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India's 500 GW renewable energy target to require investment up to $215 bn in 7 years

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Mumbai, June 12 (IANS) India’s target of 500 gigawatts (GW) of renewable energy capacity by 2030 will require $190 billion-$215 billion of investment over the next seven years, a Moody’s report said on Wednesday, adding that solid growth in India’s renewable energy capacity will continue.

Another $150 billion-$170 billion of investment will be required for electricity transmission and distribution as well as energy storage, the report stated.

Government policies and stable regulatory frameworks will support credit quality.

“The sizeable pipeline of announced projects will keep the financial leverage of renewable power companies rated by Moody’s high over the next 2-3 years – a credit negative – but the leverage of government-related issuers will remain moderate over the same period, given their relatively strong balance sheets,” said Abhishek Tyagi, a Vice President and Senior Credit Officer with Moody’s.

Strong policy support has helped India increase the share of renewable energy in its power capacity mix to around 43 per cent in fiscal 2023 (which ended March 2023) and fiscal 2024. Continued policy support will help the country make significant progress toward its 2030 transition targets and 2070 net-zero goals, the report mentioned.

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“We expect the strong growth in India’s renewable energy capacity to continue, although coal will remain a major source of electricity generation over the next 8-10 years,” Tyagi said.

Union Minister for New and Renewable Energy and Consumer Affairs, Food and Public Distribution Pralhad Joshi said on Tuesday the government is committed to advancing renewable energy initiatives to meet the country’s rising energy demands and environmental goals. “Achieving self-reliance in terms of fuel and energy by 2047 is our conviction,” he said.

–IANS

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India's CPI inflation eases to 12-month low of 4.75 per cent in May

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New Delhi, June 12 (IANS) India’s consumer price inflation eased to a 12-month low of 4.75 per cent in May, compared to the same month of the previous year as declining fuel and cooking oil prices helped to bring down the burden on household budgets, figures released by the Ministry of Statistics on Wednesday showed.

CPI inflation had come down to 4.83 per cent in April, which was an 11-month low and the declining trend is continuing.

“Spices has shown a considerable decline at sub-group level in year-on-year inflation as compared to April 2024. Among the groups, inflation corresponding to ‘Clothing & Footwear’, ‘Housing’, and ‘Miscellaneous’ has decreased since last month,” the Ministry said.

The declining trend in cooking oil prices continued in May with a 6.7 per cent fall during the month. The price rise in spices slowed to 4.27 per cent from 11.4 per cent in April.

The inflation in pulses, however, stayed high at 17.14 per cent.

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Vegetable prices, too, shot up by as much as 27.33 per cent, albeit a tad lower than 27.8 per cent in April which remains a pain point for consumers. The prices of cereals also increased by 8.65 per cent during the month.

Food inflation, which accounts for nearly half of the overall consumer price basket, rose 7.87 per cent in April, compared with an 8.52 per cent rise in the previous month.

The country’s CPI inflation has been showing a declining trend in recent months as it fell to 4.85 per cent in March from 5.09 per cent in February and 5.1 per cent in January this year.

However, it is still above the RBI’s mid-term target of 4 per cent and is the main reason why the central bank has not gone in for a cut in interest rates to rev up growth.

The RBI is keen to keep inflation under control to ensure growth with stability and held the repo rate steady at 6.5 per cent for the eighth consecutive time in a row in its bi-monthly monetary policy review on Friday.

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While the RBI has raised its projected GDP growth estimate to 7.2 per cent for 2024-25 from 7 per cent earlier, it has kept its projection for retail inflation at 4.5 per cent.

RBI Governor Shaktikanta Das said the forecast above-normalmal monsoon bodes well for the kharif season and could bring respite to food inflation pressures, particularly in cereals and pulses. However, the outlook on crude oil prices remains uncertain due to geo-political tensions. Assuming a normal monsoon, CPI inflation for 2024-25 is projected at 4.5 per cent as the risks are evenly balanced, he added while making the monetary policy announcement last week.

“At the current juncture, the uncertainties related to the food price outlook warrant close monitoring, especially their spillover risks to headline inflation. In parallel, the behaviour of the core component also needs to be watched carefully. We need a descent of inflation to the 4 per cent target on a durable basis, while supporting growth,” Das said.

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–IANS

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