ET NEWS

Mahantesh Sabarad, Independent Market Expert, says the market expects a continuation of the government and better monsoon forecast. If these two things happen, there will be solid earnings growth. We might expect a little bit of moderation in valuation, but the market momentum will not get disturbed and will not see a great fall. We will probably see a steadier growth in the market. We will not see the likes of FY24 with a 30% rally in largecap and a 60% rally in midcaps and smallcaps; we will probably see that moderated down to around 15-20%, which is good enough. A part of the Street expects the bulk of the rally in FY25 to come from largecaps and a bit of an underperformance from midcaps and smallcaps after 70% gain in FY24. Would you buy that argument? Mahantesh Sabarad: It depends on what we see in terms of earnings growth going ahead because one of the key factors for the earnings is obviously the upcoming monsoon and the focus thereof, as well as what is likely to be the outcome of the general elections. These two key events will determine the earnings path for most of the companies and therefore it depends on how you will see these events play out. If both these events play out as the market expects, we will have a continuation of the government and have a better monsoon forecast. There will be solid earnings growth to come in. We might expect a little bit of moderation in valuation, but the market momentum will not get disturbed and will not see a great fall. We will probably see a steadier growth in the market. We will not see the likes of FY24 with a 30% rally in largecap and a 60% rally in midcaps and smallcaps; we will probably see that moderated down to around 15-20%, which is good enough. What is your take on the consumption theme? FMCG has been a stark underperformer in the year gone by and I am talking about staple consumption factors. Do you see anything that makes you believe that FY25 will be different for FMCG?Mahantesh Sabarad: Multiple reasons can be attributed to lesser performance of FMCG companies. There has been starkly lower volume growth. I would say very tepid volume growth. The premiumisation effect is somewhere stalled and commodity prices are eating out the profits of most of these companies. Now on all these three factors as we move into the year ahead, we can expect things to be a lot better. With a better monsoon forecast, probably we will see volumes resurging once again for the FMCG companies. Commodity prices are likely to moderate ahead and can add to the bottom line effect or margin effect of many of these FMCG companies and quite frankly, most of these FMCG companies are under-owned in terms of the overall portfolios of either the institutions or generally speaking the market. All these factors, when they come together, should make for a better year ahead for FMCG companies because from the perspective of steady growth, most of these FMCG companies are well-managed. The only thing that they need to get back in terms of their mojo is the volume growth. If that happens, all other pieces will fall in line and the companies will start doing better. Of course, the under-ownership would mean we could see a valuation uptick.

Bulgaria and Romania have finally entered Europe's expansive Schengen area, marking a significant moment in their 13-year journey towards greater integration. This move, effective as of Sunday, facilitates seamless air and sea travel, eliminating the need for border checks within the Schengen zone. However, a veto by Austria has limited this status solely to air and sea routes, citing concerns over potential asylum seekers.With this move, tourists who are flying into these countries will not be needing a separate visa and can use their Schengen visas. Those travelling by road, however, will need additional documentation.With Bulgaria and Romania joining, the Schengen zone now includes 29 members, including various European Union states, Switzerland, Norway, Iceland, and Liechtenstein. Romania plans to implement Schengen rules at four sea ports and 17 airports, with Otopeni airport near Bucharest serving as a key hub.However, challenges remain, particularly concerning border security and combating illegal migration. Both countries are committed to full integration into Schengen by year-end, though Austria's concession thus far only extends to air and sea routes. Croatia, having joined the EU after Bulgaria and Romania, preceded them in becoming Schengen's 27th member in January 2023.While the milestone is cause for celebration for many, it has left truck drivers feeling neglected, grappling with prolonged border queues and financial losses. Road transport unions, such as Romania's UNTRR, advocate for urgent measures to address these issues, emphasizing the significant economic toll faced by hauliers.Despite these challenges, both Bucharest and Sofia affirm their commitment to irreversible progress. Romanian Interior Minister Catalin Predoiu asserts the necessity of completing the integration process by 2024, extending it to land borders. As Bulgaria and Romania take this significant step forward, the path towards a more unified Europe continues, albeit with hurdles yet to overcome.108331369

Mumbai: Carmakers in India are increasingly navigating a mix of powertrain technologies from petrol to hybrids to electric, driven by policy initiatives, tougher emission norms and changing customer preferences, among others.Automakers said alternative fuel technologies such as electric, hybrids, compressed natural gas (CNG), biogas and flex fuel need to coexist with traditional fuel options of petrol and diesel to support the transition to cleaner and more sustainable transport options.This fragmentation has led to different auto companies dominating different emerging segments even as most automakers have a sizeable portfolio of petrol and diesel models.Maruti Suzuki, for example, leads in CNG and hybrids but has no presence yet in electric while homegrown Tata Motors leads in electric vehicles (EVs) and has a strong presence in CNG but lacks hybrids, data collated by Jato Dynamics show.108906066Mahindra & Mahindra has electric and mild hybrid models but no CNG while Korean carmakers Hyundai and Kia have a presence in CNG and electric but no presence in hybrids.“The Indian car market’s powertrain landscape is not a one-size-fits-all scenario; it’s a complex interplay between established technologies like petrol and diesel, the strategic adoption of alternatives like CNG and hybrids, and the ongoing development of electric vehicles,” said Ravi Bhatia, president of Jato Dynamics.“As the market evolves, carmakers that can adapt and offer a diverse range of powertrain options are likely to be the ones that thrive in this multi-gear future,” he said.There is a growing demand for cleaner, greener powertrains both from urban and upcountry areas, industry insiders said. Customers are increasingly choosing alternate fuel options with the intent of economical as well as more eco-friendly drive. Customers are starting to prefer electric and hybrid vehicles because of their lower running costs, they said.Additionally, regulatory nudges — the central government, for example, has set a target of 30% EV contribution to sales across vehicle segments by 2030 — are pushing manufacturers to launch more models in these segments.Maruti Suzuki will be producing its first EV in 2024-25 with the introduction of eVX in the mid SUV category, its senior executive director Shashank Srivastava said. It plans to have six EV models by 2030-31, he said.Growing charging network is helping boost customer confidence in EVs. However, supply chain, battery costs and charging infrastructure have to significantly improve before fully electric cars can take off in a big way, industry insiders said.HYBRIDS BRIDGE TRANSITIONHybrids are seen as a bridge for the transition from traditional fuels to electric. Toyota and Maruti Suzuki are pitching strong hybrids to retail as well as fleet customers, who may not be ready to make the shift to fully battery-powered vehicles.According to Srivastava, Maruti’s powertrain break-up in 2030 will be 15% electric, 25% hybrid, and the balance a mix of gasoline, CNG and flex fuel, or flexible-fuel vehicles that can run on more than one type of fuel. Currently, CNG vehicles account for about 26% of total sales of the country's largest carmaker. As many as 14 out of its 17 models have CNG options, Srivastava said.The Indian market now boasts of a diverse range of CNG models, with more than 20 variants available across different body types and price points, offered by various OEMs.The proliferation of CNG refuelling stations across the nation has also been a game changer, industry insiders said.