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Listen to the latest business and finance news where we talk about Airtel accusing Jio of predatory prices, PLI investments crossing Rs 51k cr, TCS profit rising 5.03% in Q4, CPI inflation falling below RBI upper target band in March and PhonePe raising an additional $100 mn from General Atlantic. We also talk about Two-wheeler EV leaders getting show-cause notices.
Today’s Latest Business News Transcript at 9:30 AM on 13 April 2023
Let’s begin. Allegations relating to predatory pricing have returned to the telecom sector after a gap of seven years, with Bharti Airtel levelling such charges against Reliance Jio on its recent bundled broadband plan offering live TV channels. While Jio has countered the claim, pure-play DTH operator Tata Play has accused both telecom operators of predatory pricing in their broadband plans offering live TV channels. All three companies have made submissions to Telecom Regulatory Authority of India, which is examining the matter. The core of the dispute is convergence between telecom and broadcasting services, which is not directly addressed by existing regulations. While there are tariff regulations for both telecom and broadcasting services, they do not tackle what happens if broadcasting services are offered by telecom players through their apps or data connectivity plans.
Meanwhile, Companies have invested over Rs 51,200 crore under the 14 production-linked incentive schemes in the last one-and-a-half years, official data reviewed by FE showed. This is about a fifth of Rs 2.73 trillion investments committed by the 588 companies selected for the incentives, in an average period of less than four years. The trend is therefore barely par for the course. However, incentives worth only Rs 2,400 crore have been released by the government under all the PLI schemes so far, which is just 1.2% of the Rs 1.97 trillion envisaged over five to seven years. This is because only two schemes — mobile phones and pharmaceuticals — have reached the stipulated threshold of incremental sales to be eligible for incentives. This and the fact that bulk of the investments have been done by existing players, who would have anyway had capex outlays matching the number quoted above over the period since the respective PLI schemes have come into play, casts a bit of uncertainty over the schemes’ traction.
In some more industry news, Tata Consultancy Services, India’s largest software firm, has posted a 5.03% sequential rise in net profit at ₹11,392 crore in a seasonally weak quarter ended March 31, riding on large deals from across sectors and geographies. However, the IT major reported a muted revenue growth during the quarter as discretionary spends by clients were “on hold”. In comparison, the Tata Group company had posted a net profit of ₹10,846 crore during the quarter ended December 2022. During the reporting quarter, the company’s revenues rose by a meagre 1.6% to ₹59,162 crore from ₹58,229 crore recorded in the sequential third quarter. This was its slowest constant currency revenue growth in 11 quarters. A consensus estimate by Bloomberg had pegged the company to post a net profit of ₹11,540 crore on revenues of ₹59,418 crore.
Over to economy. Retail inflation, measured by the Consumer Price Index, fell to a 15-month low in March and below the 6% upper tolerance limit of the RBI after remaining above it for two months, as prices of most items, particularly in the food basket, moderated and a base effect came into play.Official data released on Wednesday revealed that retail inflation was at 5.66% in March 2023 against 6.95% a year ago. It was at 6.44% in February 2023. Inflation was lower than the March 2023 level in November 2021, at 5.54%, and but has since been higher than the latest number. CPI inflation remained elevated for much of last fiscal year but it was expected to start cooling from March. The pace of decline has been faster than anticipated and analysts expect it to ease further in the coming months.
Moving on. After stopping FAME-2 subsidy to electric two-wheeler companies for almost one year due to allegations of breach in guidelines, the government has issued show-cause notices to several leading firms, including TVS, Hero Motocorp, Ola Electric and Ather Energy, said sources close to the development. The notices have been issued asking why action should not be taken for their alleged involvement in price manipulation and failure to adhere to the guidelines over localisation of components leading to flouting of norms under the Phased Manufacturing Programme. The notices were issued 10 days ago and company representatives have held dialogues with government officials to explain their stand. There are around 50 E2W companies/brands in India and around 20-21 are certified to get subsidies under the FAME-2 scheme. And subsidies have been halted for 16-18 companies currently.
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