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Hans India
6 hours ago
- Business
- Hans India
India's hospitality sector expected to clock 8 pc growth in FY26: Report
India's hospitality sector is expected to post a revenue growth of 6-8 per cent in FY2026 on the high base recorded after three years of double-digit revenue expansion seen by the industry over FY2023 to FY2025, according to an ICRA report released on Monday. ICRA estimates pan-India premium hotel occupancy to hold at 72-74 per cent in FY2026, slightly higher than the 70-72 per cent levels witnessed in FY2024 and FY2025. The average room rates (ARRs) for premium hotels are projected to rise to Rs 8,200-8,500 in FY2026, after a healthy Rs 8,000-8,200 in FY2025 amid lagging supply additions and several hotels undergoing renovation, refurbishment, and upgradation. Jitin Makkar, Senior Vice President ICRA Limited, said: "After three years of strong demand, driven by favourable domestic leisure travel, demand from meetings, incentives, conferences and exhibitions (MICE), including weddings, and business travel, the growth in the Indian hospitality sector is forecast to normalise at 6-8 per cent year-on-year in FY2026." "While the terror attacks in April 2025 and consequent heightened uncertainties in North and West India in May 2025 had led to a surge in cancellation of travel/MICE, the impact has been largely temporary and localised. In recent weeks, there has been a healthy recovery in sentiments following the abatement of the conflict," he added. Foreign tourist arrivals (FTAs) to India are expected to remain muted in the next few months in the aftermath of the terror attacks, but are estimated to witness a gradual recovery thereafter. However, domestic tourism has been the prime demand driver so far and is likely to remain so in the near term, the report states. Factors like improvement in infrastructure and air connectivity, favourable demographics, and anticipated growth in large-scale MICE events, with the opening of multiple new convention centres in the last few years, among others, shall support the growth over the medium term, according to the report. ICRA's sample set, comprising 13 large hotel companies, is likely to report range-bound operating margins of 34-36 per cent for FY2026, despite a lower revenue growth. The margins will remain supported by factors like cost rationalisation measures and asset-light expansions in recent periods. However, within the sample, it is likely to be a mixed bag, depending on renovations and an increase in employee expenses amidst growing demand. De-leveraging of balance sheets has led to lower interest costs and is likely to support net margins, as well as improvement in credit metrics, the report observes. 'The demand uptick over recent years led to an increase in supply announcements and resumption of deferred projects in the past 24-30 months. However, supply growth is expected to lag demand over the next 12-18 months." "ICRA's premium room inventory database (12 key cities) across the country indicates a compound annual growth rate (CAGR) of 4.5-5 per cent in room inventory addition during FY2023-FY2026. A large part of the new supply is through management contracts and operating leases. Land availability issues currently constrain supply addition in the premium micro-markets in metros and larger cities. The addition to premium hotel supply in these areas is largely on account of rebranding or property degradation, and the greenfield projects are largely being initiated in the suburbs," Makkar added.
Time of India
27-05-2025
- Business
- Time of India
'Melt and Pour' rule notified for govt steel projects
(You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel New Delhi: The Centre has notified the revised Domestically Manufactured Iron & Steel Products Policy 2025, focusing on steel procurement from public sector units (PSUs) for government the revised policy, domestically produced steel that meets the stringent 'melt and pour' condition will be preferred in government procurement. Earlier policies prescribed a minimum domestic value addition requirement for steel to be procured, but the revised policy makes it difficult for any steel used in government projects to be manufactured anywhere but India."Minimum value addition requirement has room for steel to be imported and converted to downstream finished products, and still be able to participate in government procurement projects. With melt and pour, the participant has to manufacture crude steel starting from the basic raw materials in India," said Ritabrata Ghosh, vice president & sector head-corporate ratings, ICRA Limited
United News of India
13-05-2025
- Business
- United News of India
Odisha's GSVA highest among all states: Naveen
Bhubaneswar, May 13 (UNI) Former Odisha Chief Minister and BJD supremo Naveen Patnaik on Tuesday thanked the people of the state for their support in its transformative journey, as Odisha registered the highest industrial Gross State Value Added (GSVA) in the country. Taking to his X handle, Patnaik wrote, 'Glad to share that #Odisha's industrial Gross State Value Added (GSVA) grew at a Compound Annual Growth Rate (CAGR) of 10 per cent between FY2015 and FY2024 — the highest among all states, according to a report by @ICRALimited.' The Leader of the Opposition stated that this growth was primarily driven by the manufacturing sector. He added that consistent efforts to attract investment through the #MakeInOdisha initiative and the careful nurturing of the industrial ecosystem have resulted in the industry's share in the GSVA reaching 51 per cent in 2024 — among the highest in the country. Odisha also recorded the second-highest growth in GSVA at constant prices, registering over 7 per cent growth compared to the national average of 5.8 per cent. Naveen said that Odisha's sustained industrial growth has not only transformed the state's economy but has also brought prosperity to its people — a feat made possible by the support of its 4.5 crore citizens. 'I thank the people of Odisha for being partners in this transformative journey. #OdishaLeads #Transformation,' Patnaik tweeted. UNI DP ARN
Time of India
29-04-2025
- Automotive
- Time of India
US tariffs may erode Rs 2700-4500 cr of operating profits of Indian auto component exporters: ICRA
The Indian auto component industry faces fresh headwinds as newly imposed US tariffs threaten to dent exporters' earnings significantly, according to ICRA . The rating agency estimates that the tariff-related impact could erode operating profits by Rs2,700-4,500 crore, equivalent to 10-15 per cent of the operating profits of auto component exporters and 3-6 per cent of the overall industry's operating profits. ICRA projects that revenue growth for the Indian auto component sector, represented by a sample of 46 key players with combined annual revenues of over Rs3 lakh crore in FY2024, could moderate to 6-8 per cent in FY2026, down from the earlier forecast of 8-10 per cent. This downgrade is largely attributed to a potential mid- to high-single-digit decline in exports to the US, following a sharp escalation in import tariffs. Operating margins for the industry are expected to soften by 50-100 basis points (bps) to 10.5-11.5 per cent in FY2026, while the impact on exporters could be even sharper, with a projected margin contraction of 150-250 bps. Despite these pressures, ICRA maintains that debt metrics and liquidity are likely to remain comfortable for most exporters in its sample, although margins could decline and working capital requirements may rise. Shamsher Dewan , Senior Vice President and Head - Corporate Ratings Group, ICRA Limited, "While the auto component suppliers with whom ICRA has interacted indicate that most of the incremental costs would be passed on, however, as in any buyer-supplier negotiation, the extent of pass-through would depend on the supplier's criticality, share of business, competition, and technological intensity of the components supplied." However, Dewan cautioned that rising economic uncertainty, declining vehicle sales volumes, and tepid replacement demand in the US pose additional risks, alongside intensifying competition in other export geographies such as Europe and Asia. Roughly 65 per cent of India's auto component export basket is estimated to be affected by the new tariffs. Although a reciprocal tariff by India was temporarily paused for 90 days, an ad valorem duty of 10 per cent remains applicable. Despite the short-term challenges, ICRA believes India could benefit in the medium term if its cost competitiveness improves relative to China, particularly as global OEMs reassess their sourcing strategies. Some Indian players have already reported increased inquiries from US importers in recent weeks, indicating potential future opportunities.
Hans India
28-04-2025
- Automotive
- Hans India
Debt, liquidity of auto parts exporters to stay comfortable despite US tariff hikes: Report
New Delhi: Debt metrics and liquidity are likely to remain comfortable for most auto component exporters despite potential decline in margins and increase in working capital requirements in the wake of the US tariff hikes that have been announced by President Donald Trump, according to an ICRA report released on Monday. The Indian auto component industry demand continues to benefit from a diversified mix of end-user segments and geographies, with over 70 per cent of its revenues coming from domestic sales. The US constituted only 8 per cent of the overall industry revenues in FY2024, the report states. Export of auto components to the US grew at a Compounded Annual Growth Rate (CAGR) of 15 per cent during FY2020-FY2024. Factors like rising supplies to new platforms because of vendor diversification by global original equipment manufacturers, higher value addition, and favourable Forex movement, among others, have benefited Indian auto component manufacturers, despite muted new vehicle registration growth in the US vis-a-vis pre-Covid levels, according to the report. Shamsher Dewan, senior vice president at ICRA Limited, said: "The auto component suppliers indicate that most of the incremental costs would be passed on. However, as in any buyer-supplier negotiation, the extent of pass-through would depend on the supplier's criticality, share of business, competition, and technological intensity of the components supplied.' 'If an average 30-50 per cent of the incremental tariff costs are to be absorbed by the Indian auto component exporters, we estimate an earnings impact of roughly Rs. 2,700-4,500 crore, which is 3-6 per cent of the operating profits of the auto component industry and 10-15 per cent of the operating profits of the auto component exporters,' he added. Select entities have manufacturing facilities in the US and supplies from those units would be shielded from the cost impact of the tariff. "Nevertheless, given the increased economic uncertainty, decline of automobile sales volumes and tepidness in the replacement market in the US remain the key downside risks. Pricing pressures can also arise in other export geographies such as Europe and Asia where Chinese competition would likely increase,' he said. A 25 per cent tariff was imposed on imported key automobile parts (engine, transmission, powertrain, and electrical components) vide an order dated March 26, 2025 effective not later than May 3, 2025. About 65 per cent of India's auto component export basket is estimated to fall under the 25 per cent import tariff category. ICRA believes that loss of business share with customers is unlikely in the near term as switching costs are high and product development, testing, and approval cycles are reasonably long. Further, there could be incremental opportunities for India arising from cost competitiveness vis-a-vis Chinese components (if the same level of tariff continues), albeit over the medium term. Some players have indicated additional enquiries from US importers in the last few weeks.
