BRANDWAGON, P9 COMPANIES, P5 BACK PAGE, P22 BATTLE FOR THE MORNING BOWL SALES JUMP 5-6 TIMES THE BIG PICTURE Marico is flexing its muscles with new breakfast offerings Impulse buys are now 30% of avg order value for q-comm players Tailor-made tariff policy for local value creation sought FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XLV 65, 22 PAGES, `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 UK FTATALKS: FIRST MAJOR MINISTERIAL VISITTHIS WEEK THE PARAMETERS OF the India-UK FTA talks are set to be defined this week as UK foreign secretary David Lammy is expected in India on Tuesday, the first high-profile visit under the newly elected Labour government in Britain, reports PTI. NIGAM APOLOGISES FOR COMMENTS ON JOB QUOTA BILL PHONEPE’S FOUNDER AND CEO Sameer Nigam issued a public apology on Sunday following controversy over his comments regarding Karnataka's proposed job reservation bill for locals, reports Anees Hussain. ■ PAGE 13 BANGLADESH TOP COURT SCRAPS MOST JOB QUOTAS BANGLADESH'S SUPREME COURT on Sunday scrapped most quotas on government jobs after nationwide action led by students spiralled into clashes that killed at least 139 people, but some organisers said the protests would continue, reports Reuters. ■ PAGE 3 FE S P E C I A L S Why startups want the angel tax to go DPIIT has also recommended the removal of angel tax ■ PERSONAL FINANCE, P7 Go for SIP in gold ETFs for higher returns Allocate 10% of portfolio to gold for diversification 265 -588 -211 Q3 Q4 FY24 FY25 Q1 FY25 GDP expands at fastest rate globally... Sample of 171 companies (Excluding Banks & financials) Source: Capitaline were lower by 2.3 % y-o-y with thecompanynotabletoexercise pricing power; analysts noted pricing was down 4% and that the product mix deteriorated, which negated highervolumes. Bajaj Auto’s revenues went up by 15% y-o-y as the company’s average selling prices were up during the quarter — both forthe home and overseas markets. At Asian Paints, Ebitda margins contracted by as much as 422 bps y-o-y, driving down the Ebitda by20.2%y-o-y. The muted revenue growth weighed on operating margins. UltraTech Cement’s operating profit was flat y-o-y and down 26% q-o-q, missing estimates. The Ebitda per RESULTS REVIEW IN THE FAST LANE PRIVATE RISK CAPITAL,whichhasstayedout of the highways sector since 2014, is finally returning. This follows the government's efforts to raise the comfort level of investors in the latest set of amendments to the model concession agreement (MCA). The changes in MCA provide for liberal construction support for projects, allow borrowingfromnon-bank lenders andenhanced compensation if the tariff projections are not met. It also has buyback provisions by the National HighwaysAuthorityof India (NHAI), in certain conditions, and enhanced liability by the government agency if the contract is terminated. Other developments over the years like improvement of the finances of the developers, emergence of infrastructure investment trusts (InVITs), new models of monetisation liketolloperatetransfer(TOT)andrisingglobal appetite of top global funds for revenue-generatingassets,too,haveledtodevelopersbeing morewilling nowto risk theircapital. “Built operate transfer (BOT) is back in favour and has witnessed renewed interest from private players. In the last BOT project awarded by NHAI, 7-8 players have submitted financial bids against 3-4 players in the past,” a spokesperson for IRB Infrastructure Developers said. However,the industry is waiting for more lucrative projects to come its way.“Contractors arewaiting to do someworthwhilework. Afterchanges in MCA,thewait is fornewprojects,” said PC Grover, director general, National Highways Builder Federation. Against the 5-7% BOT award in the past several years,it is expected that the pie of the awards for the model will increase meaningfully,IRB Infrastructure Developers said. “Improvementofthebalancesheetofcon- RAGHAVENDRA KAMATH Mumbai, July 21 tractors also supports the revival of interest in BOT,” said Vinay Kumar, group vice-president and sector head,Icra. Kumar said that the BOT projects that are open for bidding now have good toll revenue. Bids are open for 517.4 km of roads to be developed through BOTwith the total cost of around `30,975 crore. Continued on Page 5 Continued on Page 5 ■ Investors are returning after recent changes to the model concession agreement ■ Against the 5-7% ■ In the last award in the past several years, BOT pie of the awards set to jump BOT project, 7-8 players submitted against 3-4 players in the past ■ Bids are open for 517.4 km of BOT road projects with a total cost of around `30,975 crore ■ NHAI's BOT pipeline: 53 projects of 5,214 km with total cost of `2.1 trillion % of GDP 10 9.2 Fiscal deficit 9 No. of entities No. of workers (In crore) 2015-16 ` trn 5.1 20.2 6 7.3 3 Revenue 2.0 deficit 0 FY25 FY21 (BE) … and the informal sector is in the doldrums Clean energy firms press the hybrid button to cut costs LEADING RENEWABLE ENERGY (RE)playersarescalinguptheirexposure to the“hybrid”segment as part ofastrategytominimisetherevenue risks.Hybridplantscanensure“more stable” power generation and revenuestreamsduetotheirdiversified nature.They also help cut costs and address the issues of intermittency andgridconnectivityassociatedwith single-source RE projects. Mahindra Susten,Adani Green, ReNewareamongthefirmsthathave firmed up plans to expand the share of hybrid powerin theirportfolios. Mahindra Susten envisages about a fourth of its portfolio to comprise hybrid and complex projects.Thecompanyisbuilding a150 MW hybrid project at a cost of `1,200 crore in Maharashtra. This will be one of the company's largest co-located solar and wind hybrid project in the state to deliver clean energy to commercial and industrial (C&I) customers. “Weare,onanongoingbasis,evaluating utilitytenders in this (hybrid) domain as also assessing land/connectivity for same,” said Deepak Thakur,managing director and CEO at Mahindra Susten. Thakur said sharing of power evacuationinfrastructure(transmission lines, etc) for co-located hybrid projectswouldreducecapitalexpenditure and operational costs. Private risk capital has stayed out of the highways sector since 2014 *Provisional estimate by NSO **RBI forecast Continued on Page 5 Private capital to amp up road projects again MUKESH JAGOTA New Delhi, July 21 GDP % chg, y-o-y tonne dropped 7% y-o-y and 19% q-o-q. RIL reported a sequential contractioninitsEbitdamargin at 16.4%, down from 17.7%. Whilethetelecombusinessput up an ordinary show, the retail division'sperformancewasreasonablygood. JSW Steel’s operating profit contractedby350basispointsy-o-y,driving down the Ebitda by 22% y-o-y. Avenue Supermartsreportedan18.4%y-o-yrisein revenues, but this was largely driven by a 14.4% increase in store area and a 4.2% increase in revenue throughput. ...thanks to robust receipts ...but GDP..even as fiscal consolidation is sharp Gross tax consumption % chg, y-o-y gap is large 2022-23 Tax and non-tax revenue may see large upward revisions from Interim Budget 33.7 12.7 12.5 Net tax receipts Non-tax revenue Capital expenditure Revenue expenditure PFCE: Private final consumpation expenditure 14.7 11.8 -0.5 -14.4 17.1 4.7 4.6 86.9 Apr-May, FY25 FY25 (IBE) Will the budgeted fiscal deficit of 5.1% of GDP be revised down? It looks feasible unless consumption/welfare gets substantial additional outlays BUDGET MADE EASY FE SPECIAL ON WEDNESDAY 0.8 PFCE % chg y-o-y 34.4 27.1 30.5 FY24 Q2 Q1 FY23 -10 -5.3 11.7 6.8 4.0 Q3 Q4 FY24 89 FY21 FY22 Q2 (bps, chg y-o-y) FY24 Q1 FY25 0 RM to sales FY22 15 -9 Q4 (% chg, y-o-y) Q1 FY25 FY21 Q3 FY24 28 Net profit 48 (% chg, y-o-y) 53 23 Q2 Q1 FY25 Q3 Q4 FY24 7.2 Tax Q4 -20 -201 Q2 FY25** Q3 FY24 7 7 -6 Q3 Q4 Q1 FY24 FY25 8.2 Q2 4 Q2 173 (bps, chg y-o-y) FY24* 2 (% chg, y-o-y) 6 OPM 504 7 Net sales (% chg, y-o-y) FY23 16 Top industry leaders from diverse sectors, economists and tax experts will analyse key Budget numbers and policy directions in FM's speech HDFC Bank targets to lower CD ratio quickly PIYUSH SHUKLA Mumbai, July 21 factors — higher outflow from current account balances and running down of `16,000 crore of erstwhile HDFC’s nonHDFC BANK IS aiming to lower its credit- retail deposits.“I know that most important deposit (CD) ratio from 104% part of our strategy is as quickly as possible,said MD deposits. Are we happy SASHIDHAR JAGDISHAN, & CEO Sashidhar Jagdishan in with the numbers that MD & CEO, HDFC BANK an analyst call. have been reported? “We have not received any Not really. It has fallen regulatory prescription (from ARE WE HAPPY WITH short of our expectathe Reserve Bank of India),but tion,” he said. THE NUMBERS THAT the thought process is that His comments come HAVE BEEN we will try and get this done a day after RBI governor (lower CD ratio) as quickly Shakitkanta Das, at the REPORTED? NOT as possible and still maintain FE Modern BFSI SumREALLY. IT HAS the objective of profitable mit, said banks’ credit growth,” he said in an analyst growth should not run FALLEN SHORT OF call post the bank’s June quarmiles ahead of deposit. OUR EXPECTATION ter results. “Deposit mobilisation The country’s largest has been lagging credit private bank’s overall growth for some time advances grew at 53% yearnow. This may potenon-year (y-o-y) to `24.86 triltially expose the system lion whereas deposits grew to structural liquidity 24% to `23.79 trillion in the issues,” Das said. June quarter, thereby leading Continued on Page 13 to credit exceeding deposit growth. Sequentially, deposits growth INSIDE declined 7%. Jagdishan acknowledged Kotak Bank on that the overall growth in expansion mode deposits was lower than ■ PAGE 6 expected in Q1 due to two APOLLO TYRES' KANWAR SAW THE BIGGEST JUMP IN PAY PACKAGE IN FY24 Munjal first auto promoter to join `100-cr salary club SWARAJ BAGGONKAR Mumbai, July 21 ■ EXPLAINER, P6 Opt profit 43 10.96 TVS Motor Company went full throttle on increasing its headcount in FY24, reports Narayanan V. The company added over 3,300 people, bringing its total headcount to 16,239, up from 12,907 in FY23. ■ PAGE 4 THE EARNINGS SEASON has got off to a poor start with subdued top line growth weighing on operating margins. Most heavyweights, so far, have turned in very mediocre numbers. While consolidated profits at Asian Paints fell 26%year-on-year,JSWSteel saw a 64% decline y-o-y. Reliance Industries' (RIL's) net profits for the June quarter were down5.5%year-on-yearand20%quarteron-quarter. Although there weren’t too manybigdealwins,Infosys’higherrevenue guidance fortheyearcheered the Street. For a sample of 171 companies (excluding banks and financials) net sales have risen 7%y-o-ywhile net profits have fallen 10%y-o-y.Operating margins have contracted by200 basis points.Financials have pulled up India Inc’s performance; for a sample of 206 companies, the top line has gone up 9% y-o-y while the net profits have risen 4% y-o-y. Companies struggled to grow their top lines in Q1FY25 with managements attributingthesluggishnesstotheelections, extremeweatherconditionsandashortage oflabour.Themuteddemandrobbedmany businesses of pricing power. RevenuesatUltraTech,forinstance,grew just 2% y-o-y in the wake of falling realisations that were down about 5.5% y-o-y.At JSWSteel,althoughvolumeswentupby7% y-o-y,weakerexports hurt revenues. At Asian Paints,net operating revenues 6.5 TVS MOTOR RAMPS UP HIRING AMID RECORD SALES PERFORMANCE METRICS 9.8 GIVEN THE SURPLUS rice stocks and robust kharif sowing, the government is considering relaxing the export restrictions, reports Sandip Das. It may allow increased shipments of rice varieties from its stocks. ■ PAGE 2 As Nirmala Sitharaman presents the Union Budget FY25 in the Lok Sabha on Tuesday, she will set a record as the first finance minister to have made seven consecutive Budget speeches. Corporates, markets, MSMEs, rating agencies, households, taxpayers and job-seekers are looking for signals that will address their concerns in the first Budget of the Narendra Modi 3.0 government. While the Opposition is seeking a course correction, the ruling dispensation may choose to assert that it's been on the right path. Here's a snapshot of what to look for in the Budget. FY22 RICE EXPORT CURBS MAY BE EASED AS STOCKS SURGE FE BUREAU New Delhi, July 21 11.13 IT FIRMS, LED by giants such as TCS, Infosys, Wipro, HCLTech and LTIMindtree, saw high employee utilisation rates in the quarter ended June, reports Padmini Dhruvaraj. This necessitated major recruitment plans across the sector, while revenue from Europe declined for most companies. ■ PAGE 4 Early birds fail to fly -5.8 HIGH UTILISATION FUELS MAJOR HIRING PLANS OF IT FIRMS WHATTO WATCH FOR IN BUDGETTOMORROW FY21 NEWS 171 COMPANIES SEE NET PROFIT DIP 10% IN Q1 6.34 IN THE FY23 CHENNAI/KOCHI, MONDAY, JULY 22, 2024 IN TOP GEAR HERO MOTOCORP EXECUTIVE chairman Pawan Munjal has become the first automobile company promoter to join the `100crore paypackage club in FY24.The 69-year-old promoter of the country’s largest two-wheeler company tookhome`109.41crorelastfiscal, a growth of 10% overFY23,according to the company’s annual report. Munjal is the latest to enterthe elite club featuring N Chandrasekaran, Sajjan Jindal andThierryDelaporte. Munjal’s final pay package is after a reduction of 20% in both his fixed salary and his annual commissionwith effect from January 1, 2024. This was voluntarily done by him after he relinquished CHAIRMAN, HERO MOTOCORP JAYADEV GALLA, CHAIRMAN, RAJIV BAJAJ, MD AND CEO, AMARA RAJA ENERGY & MOBILITY PAWAN MUNJAL, EXECUTIVE FY23 99.55 FY24 109.41 (in ` cr) 20% 10% jump jump 63.3 52 MANAGING DIRECTOR, BAJAJ AUTO 13% jump 53.75 47.6 NEERAJ KANWAR, VICE CHAIRMAN AND MD, APOLLO TYRES FY23 FY24 28.41 64.28 (in ` cr) the post of CEO last year. While Munjal has remained the highest paid in the automobile sector for several years, the biggest jump in remuneration was seen by Apollo Tyres' vice chairman and 126% jump FY23 FY24 managing director Neeraj Kanwar. Kanwar leapfrogged to the second spot from seventh in FY23, with his pay package more than doubling to `64.28 crore in FY24 from `28.41 crore, a 126% jump, (in ` cr) FY23 FY24 (in ` cr) mainly due to the payment of higher commission linked to a sharp rise in profits. Apollo’s consolidated net profit surged 65% in FY24 even as its revenues grew by only 3%.The perfor- mance last fiscal surpassed several of its long-term targets set forFY26 well ahead of schedule. JayadevGalla,chairman,managing director and CEO, Amara Raja Energy & Mobility, slipped to the third spot with a pay package of `63.3 crore, an increase of 20% over FY23. His nephews, Harshavardhana and Vikramaditya, received identical raises to close the year at `31.65 crore each. DespiteagoodFY24,BajajAuto’s managing director Rajiv Bajaj took home 13% more than he did in FY23.The 58-year-old promoter of the country’s most valued twowheelercompanysawhis remuneration rise to `53.75 crore. Bajaj Auto’s consolidated net profitjumped33%year-on-year(yo-y) to nearly`7,500 crorewhile its net sales increased by 23% y-o-y to around`43,600croreduringFY24. Traditionally, pay packages of executives from promoter families in the senior most positions enjoya significantleadoverthepackagesof professional CEOs. But according to Deloitte India Executive Performance and Rewards Survey 2024, the average CEO compensation was 40% higher than pre-pandemic levels at `13.8 crore. Anish Shah, MD and CEO, Mahindra & Mahindra, who is not relatedtotheMahindrafamily,took home `24.22 crore in FY24,a 47% increase compared to FY23. Rajesh Jejurikar, executive director and CEO(AutoandFarmSectors),M&M, saw a 51% rise in remuneration to `19.25 crore. CHENNAI/KOCHI