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Mint
09-05-2025
- Business
- Mint
Economists predict short-term impact of rupee depreciation, but border tensions may worsen impact
New Delhi: Economists expect the impact of the Indian rupee's sharp drop against the US dollar to be short-lived, despite concerns over inflation, foreign investment, and fiscal stability, as escalating India-Pakistan tensions, a strengthening US dollar, and a market sell-off drive the currency's decline. At the same time, they warned that things could take a turn for the worse if the conflict with Pakistan lingers. The rupee's 88-paise drop on Thursday marked its steepest single-day fall in more than two-and-a-half years. On Friday, it opened 0.2% lower at 85.85 against the US dollar, and thereafter depreciated 15 paise to 85.869 in early trade. In comparison, the rupee stood at 83.51 against the dollar a year ago (9 May 2024), according to Bloomberg data. 'The rupee is echoing the turmoil in the political space, as well as the limited gains made by the dollar,' said Madan Sabnavis, chief economist at the Bank of Baroda. 'This will continue until the situation stabilises. The dollar can strengthen as agreements are reached on tariffs with other countries.' Sabnavis noted that while a falling rupee may slightly increase import costs, weaker global commodity prices—particularly oil—should help offset this effect. 'Investors would compare this with changes in other countries, but the impact is more of a short-term nature,' he added. The currency's sharp decline is linked to the latest flare-up in India-Pakistan tensions that followed from a terrorist attack in Kashmir's Pahalgam. Tensions have since escalated with India targeting terror infrastructure in Pakistan, after which both countries have been targeting each other's military facilities in different locations. According to Debopam Chaudhuri, chief economist at Piramal Enterprises Ltd, the rupee's depreciation against the US dollar is driven by a stronger dollar that has been boosted by optimism over US-China tariff talks, and rising India-Pakistan tensions. 'Despite these dual pressures, USD-INR has so far held above its record low of 87, last seen in March 2025,' said Chaudhuri, adding that this would suggest the weakness in the rupee is temporary, provided the military situation stabilizes. 'However, if the conflict escalates further, the USD-INR could once again fall to 87 or below in the near term,' he added. In a report on Friday, Bajaj Broking Research said a short-term geopolitical crisis could disrupt investor sentiment and slow economic activity. 'However, India's structural growth drivers—such as domestic consumption, digital transformation, and policy reforms—are likely to sustain momentum,' it said. 'Unless prolonged instability affects key sectors, any setback would be temporary rather than a derailment of India's long-term trajectory.' Abhay Tilak, director and secretary, Institute of Political Economy, said there needs to be constant monitoring of the cost of any expenses incurred in military exercises. 'If the current situation escalates to a full-blown war, the impact on the fiscal deficit as well as the current account deficit would be immense,' he said. 'Due to the depreciated rupee, the import bill will swell and in the face of dismal scenario on the export front, it will eventually lead to widening of the current account deficit.' Tilak added that the colloquial theory of exports benefiting out of rupee depreciation is unlikely to be followed in the current scenario. 'That is because of the global shift towards protectionist measures. Exports simply have not attracted enough demand,' he said. Earlier this week, ratings agency Moody's said that India's macroeconomic stability may hold firm even if tensions with Pakistan escalate, citing India's minimal economic relations with Pakistan. 'However, higher defence spending would potentially weigh on India's fiscal strength and slow its fiscal consolidation,' the ratings firm had said. To be sure, the Pakistani Rupee's exchange value against the US dollar depreciated to ₹ 281.15 on 9 May from ₹ 278.04 a year ago (10 May 2024). Diplomatic ties between the two nations have deteriorated sharply since the Pahalgam massacre, where tourists were gunned down by terrorists. Following this, India suspended the 1960 Indus Waters Treaty, prompting Pakistan to scrap the 1972 Simla Agreement and close its airspace to Indian carriers. Thereafter, India struck terror infrastructure in nine cities in Pakistan and Pakistan-occupied Kashmir under Operation Sindoor, which were 'focused, measured and non-escalatory', the defence ministry has maintained. According to the Indian Army, Pakistan's armed forces launched multiple drone and artillery attacks along the western border on the night of May 8-9, which were 'effectively repulsed'. Pakistani troops have also carried out numerous ceasefire violations along the Line of Control in Jammu and Kashmir, the Army said. However, despite strong rhetoric from both sides and a wider military confrontation, the conflict has yet to escalate into a full-scale war. India and Pakistan, both nuclear-armed, have fought four wars—in 1947, 1965, 1971, and 1999—mostly over the disputed Kashmir region. The latest flare-up marks another chapter in their long history of recurring confrontations. Manas Pimpalkhare in New Delhi contributed to this story.
Business Upturn
07-05-2025
- Business
- Business Upturn
Piramal Enterprises share price jumps 4% as Q4 revenue rises 15% YoY to Rs 2,854 crore
By Aman Shukla Published on May 7, 2025, 09:29 IST Piramal Enterprises Ltd (PEL) shares rose over 3% in early trade after the company announced its Q4 FY25 results, showing a mixed financial performance. As of 9:27 AM, the shares were trading 4.37% higher at Rs 1,004.90. Despite a 25% year-on-year (YoY) decline in net profit to ₹102.44 crore from ₹137.09 crore, revenue from operations grew 15.35% YoY to ₹2,853.55 crore. Net interest income (NII) for Q4 FY25 stood at ₹846.91 crore, up 15.41% from ₹733.80 crore in the same quarter last year. On a sequential basis, net profit surged 165.5% from ₹38.56 crore in Q3 FY25, while NII rose 5.6%. For the full year, PEL reported a turnaround with a net profit of ₹485.45 crore, compared to a loss of ₹1,683.53 crore in FY24. Annual revenue rose to ₹10,269.56 crore from ₹10,020.27 crore. Full-year NII grew 7.05% to ₹3,179.49 crore. The company also announced a final dividend of ₹11 per equity share (face value ₹2), or 550%, for FY25. The dividend is subject to shareholder approval at the upcoming 78th Annual General Meeting. Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information. Aman Shukla is a post-graduate in mass communication . A media enthusiast who has a strong hold on communication ,content writing and copy writing. Aman is currently working as journalist at
Mint
06-05-2025
- Business
- Mint
Piramal Enterprises Q4 Results: Net profit down 25% YoY to ₹102 crore, dividend declared. Check details here
Piramal Enterprises Q4 Results: Piramal Enterprises Ltd announced its January to March quarter results on Tuesday, May 6, 2025. The company recorded a 25 per cent fall in its net profit to ₹ 102.44 crore in the fourth quarter of the financial year 2024-25, compared with ₹ 137.09 crore in the same period a year ago, according to the consolidated financial statements. Piramal Enterprises on Tuesday also announced a 550 per cent final dividend of ₹ 11 per equity share of the face value of ₹ 2 apiece for the financial year ended 2024-25, according to the filing data. 'The Board has recommended a Final Dividend of ₹ 11 per equity share of face value of ₹ 2 each (i.e. @ 550%) for the financial year ended 31st March, 2025, which shall be paid/dispatched after the 78th Annual General Meeting, subject to approval of the shareholders of the Company,' said the company in the BSE filing. This means that every eligible shareholder will receive ₹ 11 per share for every share they hold of the non-banking financial company. This upcoming final dividend will mark the second dividend issue of the 2024-25 fiscal, with the first one issued on July 5, 2024, a dividend of ₹ 10 per share. (This is a breaking story. The story will be updated soon) 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. First Published: 6 May 2025, 06:16 PM IST
