Stock Radar: Balkrishna Industries stock breaks out from 1-year falling channel; what should investors do?
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Business Standard
21 minutes ago
- Business Standard
Navigating US tariffs: Strategic responses for building resilience
The US decision to impose an additional 25 per cent tariff on Indian goods—over and above the standard Most Favoured Nation (MFN) rates—is likely to make India's exports less competitive in the US market. Estimates suggest approximately 30 per cent of Indian exports, valued at $87 billion, and spanning sectors such as gems and jewellery, engineering, auto parts, textiles and apparel, leather, handicrafts and carpets will be affected. This move is expected to have a detrimental impact on production and employment across these industries in India. While one hopes for a more positive outcome to the negotiations that are likely to continue later this month, a strong need exists for us to build on alternative strategies that support growth, investments and employment. Hence, while the higher tariffs for US markets are a big economic challenge, they also create opportunities for innovative solutions that may take India on a higher growth trajectory. Export-market diversification: One clear strategy to offset the potential loss of trade earnings from the US market is to diversify India's export destinations. In this context, there are significant opportunities to step up our exports to alternative markets. Africa, for instance, is emerging as a fast-growing destination for India's pharmaceuticals, textiles, digital services, electrical and auto products, as well as agricultural and clean tech goods. Already at about $83 billion, India and Africa have set an ambitious goal of scaling bilateral trade to $200 billion by 2030. At the same time, expanding exports of gems & jewellery, as well as textiles & garments to the energy-rich economies in the Middle East and Central Asia presents another viable avenue. Trade agreements and Free Trade Agreements (FTAs) also offer scope for broadening India's export reach. Trade deals: The recently concluded FTA with the UK, along with the ongoing negotiations with EU – which are expected to conclude soon – offer significant opportunities to expand market access for Indian products. Early finalisation of FTAs with Canada and Australia, both major export destinations, would further help diversify India's trade portfolio and reduce overdependence on a limited number of markets. Additionally, expediting FTA with Gulf Cooperation Council (GCC) and pursuing a renegotiation of the existing FTA with ASEAN would provide a much-needed boost to India's trade strategy. Regional economic and tech integration: Another low-hanging fruit is strengthening regional trade ties and regulatory standards within the grouping of Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). Working with neighbourhood countries of Bhutan, Bangladesh, Nepal, Myanmar, Sri Lanka, and Thailand, would give a fillip to agricultural exports, besides to pharmaceuticals, textiles and garments, engineering goods, electronics, etc. In this context, India's leadership in scaling up the Unified Payments Interface (UPI) for cross-border financial settlements could be a game changer for regional trade. When coupled with enhanced regional connectivity projects, infrastructure development would be well-positioned to emerge as a key growth engine for the region – catalysing a virtuous cycle of investments, economic activity, employment and consumption across the region. Strength of services sector: Importantly, services are less vulnerable to tariffs and India remains a major global exporter in this domain - currently ranked seventh worldwide. IT and IT-enabled services constitute an estimated 50 per cent of India's services exports, followed by business services, medical and education tourism, transport, and logistics related services. To sustain and enhance this momentum, the development of high-value exports by Indian IT firms, particularly in areas such as Artificial Intelligence (AI), Machine Learning, cybersecurity, cloud-based solutions, and other innovation-driven software development, is imperative. This is also an opportune time to strengthen exports of telemedicine and online education through edtech platforms, promote greater medical tourism, and attract international visitors especially from Southeast Asia, Japan, S Korea, China, to culturally important destinations such as the Buddhist circuit. Value-addition in GCCs: An important offshoot of services sector exports is the growing contribution of Global Capability Centres (GCCs), which could play a key role in mitigating the adverse impact of higher tariffs. India has emerged as a global hub for GCCs, which are offshore units established by multinational corporations to carry out strategic business functions in a cost-effective and efficient manner. These functions range from R&D and product development to innovation in technologies and components. Attracted by India's young, English-speaking, and highly skilled workforce, more than 1,900 GCCs are currently operating in the country. Continued focus on enhancing value addition within these centres—particularly in IT-led innovation and cutting-edge areas such as AI—could contribute over $100 billion worth of innovative products and services by 2030. Global supply chains: Attracting greater investment into global supply chains remains a critical strategy to counter potential trade losses in the US market. This requires further regulatory easing under the Ease of Doing Business (EODB) framework, especially through targeted partnerships with industrialized Indian states. Strategic collaboration with member countries of the Indo-Pacific Economic Framework (IPEF) on supply chain alignment—particularly by engaging with the top 50 global multinationals—will also be essential. Integrating with global supply chains will help to build a domestic ecosystem of high-value manufacturing and exports, thereby giving India an edge in global markets. Overview: In conclusion, while the outcome of our negotiations with US is still evolving, it seems to be a defining moment for the country to expand its trade markets, focus on the FTAs to establish alternative yet stable markets for our export products, strengthen regional trade and connectivity – both financial and infrastructural. Besides, it is an opportune time to incentivise corporates to move up the value chain, and build domestic capacity for higher value-added goods, whether they be in electronics, pharma, biotech, fintech, AI-driven products, or green tech-based products. Continued growth in the services sector, along with policy reforms to attract global supply chains, will be critical components of the blueprint for transforming the Indian economy toward a higher-growth, higher-employment trajectory.
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Business Standard
21 minutes ago
- Business Standard
'A good step': Trump welcomes reports of India halting Russian oil imports
US President Donald Trump has praised what he described as indications that India may stop importing crude oil from Russia, calling it a 'good step' if verified. His remarks come at a time of growing American pressure on India over its energy and defence ties with Moscow. Speaking to reporters on Friday, Trump remarked, 'I understand that India is no longer going to be buying oil from Russia. That's what I heard—I don't know if that's right or not—but that would be a good step.' The comment follows Washington's recent imposition of a 25 per cent tariff on Indian goods, effective August 1, with an undisclosed penalty. This is because of India's protective trade policies and continued engagement with Russia in the defence and energy sectors. New Delhi clarifies stance The Ministry of External Affairs responded to Trump's Russia comments by reaffirming that the country's energy sourcing decisions are based on market conditions and national interest. Spokesperson Randhir Jaiswal stated there had been no government directive to halt Russian crude imports. He added that India's ties with Russia are longstanding and resilient, while also noting that India–US relations continue to deepen across strategic and economic dimensions. Oil PSUs pause Russian crude buys While there has been no official order from the government, several state-run oil companies—Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL), and Mangalore Refinery and Petrochemicals Ltd (MRPL)—have reportedly not placed fresh orders for Russian crude in recent days, according a report by news agency Reuters. The report suggests that the decision is more commercial than political, indicating that purchases of Russian oil from the spot market were paused around August 1. Reasons behind the halt The import halt comes as the economic advantage of Russian crude appears to be diminishing. Discounts on Russian oil have reportedly fallen to their lowest levels since 2022. Energy security amid geopolitical troubles India remains one of the world's top oil importers, and Russian crude has played a critical role in keeping domestic prices stable amid global volatility. However, tighter discounts, logistical challenges, and external diplomatic pressures appear to have prompted a quiet recalibration in the sourcing strategy.
Mint
21 minutes ago
- Mint
Tata Power vs Adani Power: Which stock to buy after Q1 results 2025? EXPLAINED
Tata Power vs Adani Power: Indian power majors, Tata Power and Adani Power, declared their Q1 results 2025 on Friday. Both companies reported a strong set of numbers. Adani Power boasts a strong PAT 9Profit After Tax) and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation), while Tata Power reported its 23rd consecutive quarter of PAT growth, with a strong focus on clean energy, manufacturing, and distribution expansion. This is expected to put Adani Power and Tata Power shares under the bulls' radar on Monday, as these companies have reported strong Q1 results despite weak power demand. Speaking on the Q1 results 2025 reported by these Indian power majors, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said, "During Q1FY26, Adani Power boasts a strong Profit After Tax of ₹ 3,305 crore and Continuing EBITDA of ₹ 5,744 crore, showcasing its resilience. Its strategic focus on swift project execution, strategic acquisitions, and sustainability positions it for future growth towards its 30 GW target by 2030. On the other hand, Tata Power has a 6% YoY growth in Profit After Tax, marking its 23rd consecutive quarter of PAT growth, with a strong focus on clean energy, manufacturing, and distribution expansion." Speaking on Adani Power Q1 results, Gaurav Goel, Founder & Director at Fynocrat Technologies, said, "Adani Power has reported a strong profit of ₹ 3,305 crore, which is slightly lower than last year's ₹ 3,912 crore but still solid, especially considering weaker power demand due to early monsoons and lower merchant tariffs. Revenue also dipped a bit to ₹ 14,167 crore. But despite that, their operating margins stayed healthy, and EBITDA came in at ₹ 5,744 crore, which is a good recovery from last quarter." "What stands out is their focus on scale and efficiency. Even in a low-demand quarter, they remained stable, mainly because of their strong base of long-term PPAs and good cost control. Of course, recent acquisitions have added to depreciation, which is putting some pressure on profits," Goel said, adding, "Tata Power reported higher revenue at ₹ 17,464 crore, but a much lower profit of ₹ 1,262 crore. It looks like underperformance compared to Adani POWER, but there's more to the story." "Tata Power is clearly in a transition phase, shifting focus to clean and green energy. Around 44% of their current capacity is now renewable, and they're aiming for 70% by 2030. That kind of shift requires a lot of investment, and that's showing up in the short-term earnings. But they're building long-term value. They're also growing in areas like EV charging and rooftop solar, which could become strong drivers in the future," Gaurav Goel of Fynocrat Technologies said. On which stock to buy after the announcement of Q1 results 2025, Seema Srivastava of SMC Global said, "For a long-term perspective, Adani Power appears more attractive due to its higher growth potential and lower P/E ratio of around 10-15, compared to Tata Power's P/E ratio of around 32-40. Adani Power's aggressive expansion plans and strategic partnerships, like regular payments from Bangladesh, underscore its core strengths and competitive edge. However, Tata Power's diversified portfolio and strong brand reputation make it a stable choice." Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
