Business Today 9-Aug-20

Kishore Biyani, India’s best-known retailer, is in trouble. Deep, deep trouble. Already drowning in ₹13,000 crore of debt, Biyani’s Future Group was dealt a deathly blow by the coronavirus lockdown, bringing revenues to nil, and crippling its finances. The prolonged slowdown and lockdown double whammy has by now made the business entirely unsustainable. Future Group is struggling to even service debt. On the verge of bankruptcy, Biyani got a lease of life when Centre first allowed EMI moratorium on loans and then deferred the insolvency and bankruptcy code by a year. But with uncertainty staring in the face, Biyani has been forced to get to the negotiating table to attempt a sell-off. A deal is as close as the end of the month. Potential suitors: Rival Reliance Retail and two…

India Petrol Prices at Global Median Level Petrol/Diesel Prices Rise; Diesel Turns as Pricey as Petrol… …Despite Crude Oil Being Far From Highs 70% The proportion of taxes in retail price of petrol/diesel Taxes Form a Big Chunk of Retail Price Consumption Dips Sharply… …But So Does Production…

Central government finances came under heavy strain during April and May. Revenue receipts during these two months, at ₹44,667 crore, were merely 2.2 per cent of budget estimate for FY21 Net tax collections shrank 70 per cent year-on-year to ₹33,850 crore, 2.1 per cent of budget estimate, compared to 7 per cent in April-May 2019 Fiscal deficit touched ₹4,66,343 crore, 58.6 per cent of annual budget estimate UNION GOVERNMENT ACCOUNT April-May 2020…

Demand for automobiles rose sharply in June compared to May as states eased the coronavirus-induced lockdown The rise was led by rural and semi-urban areas. People bought vehicles to commute as public transport remained dysfunctional; Hero MotoCorp sales rose nearly four times Tractor demand remained strong due to partial economic recovery in rural markets; Escorts reported a rise in sales Sales, however, were substantially down yearon-year. This shows it will be months before demand returns to pre-Covid levels…

The exodus of companies from China is not new. It’s been happening since the start of the trade war between China and the US in 2018. The only difference this time is that India has a fair chance of attracting companies leaving China. This is in sharp contrast to the earlier situation where almost all companies which moved out of China went to CLMV (Cambodia, Laos, Myanmar, and Vietnam) countries as they were cost efficient and better connected to the global supply chain. The Covid-19 pandemic has changed everything. As companies look at diversifying away from China, they are looking for not just cost savings but also a captive market for their products and services. India, with its big market, is asking companies to set up base here, reportedly developing…

Economic Prospects As many as 63% respondents expect improvement Order Book Just 4% expect things to worsen Financial Situation 37% say they see a ray of hope Sales Pickup 65% see higher sales in current quarter Hiring Pickup More than half see no change Profit Pickup Half expect profits to rise from here on Has India Done Enough to Revive Economy? What Kind of Intervention Could Help Revive Economic Growth for FY21 and Beyond?…