Bank of America anticipates significant tariff hikes in India’s telecom sector following the general elections, driven by telcos’ willingness to participate, consumers’ ability to absorb the increase, and government support. The analysts wrote in a note Thursday that telecom networks — including Reliance Jio, Bharti Airtel and Vodafone-Idea — will increase their tariff plans by 20 to 25%.
-
Freshworks founder and chief executive Girish Mathrubootham has stepped down from the top role, handing over the position to Dennis Woodside. Woodside joined Freshworks in 2022 after stints at Dropbox, Motorola, and Impossible Foods.
“When I first proposed this next step to the Freshworks Board, we were starting to chart the next phase of our company’s journey. We brought Dennis on board to partner with me on crafting an ambitious growth plan, and my hope was that he could eventually lead the team of talented employees around the world to execute it, which would allow me to spend more time on the long-term product vision, innovation and AI strategy,” said Mathrubootham in a statement. “Dennis has a deep understanding of Freshworks’ business, customers and our employees, and a strong track record of building and scaling large global teams – he is the right leader to become our next CEO. I’m thrilled to announce this transition.”
Shares of Freshworks tumbled 25% in afterhours trading.
-
India’s services exports have witnessed a remarkable surge, reaching nearly $340 billion in 2023 and growing at a compound annual growth rate of around 11% from 2005-2023. This impressive growth has led to India’s share in global services exports rising from under 2% in 2005 to 4.6% in 2023, Goldman Sachs analysts wrote in a recent note, significantly outperforming its goods exports share.
The rise of global capability centres in India has been a key driver, with their revenues quadrupling over the past 13 years. The bank predicts that India’s services exports could reach around 11% of its GDP by 2030, helping maintain the country’s current account deficit at around 1% of GDP on average from 2024-2030. This resilience is expected to drive top-end discretionary consumption and real estate demand domestically, positioning India as a key player in the transforming global services landscape.
-
Vanita Bhatnagar, reporting for The Ken:
Srinivasan’s story is only a reflection of a larger trend in the country. Nearly half of India’s 200-million-strong workforce was over the age of 45 in 2022–23, per the Center for Monitoring Indian Economy (CMIE). For them, involuntary retirement is looming large.
These are the 40- or 50-something “consultants”, “freelancers”, “part-time executives”, or “self-employed” hustlers. They are what we cal “the unwilling retirees”—people forced to shift from traditional career paths into makeshift roles.
Dwindling growth prospects, mounting work pressures, and roles becoming redundant—all pushing seasoned professionals in tech, manufacturing, and retail/FMCG into earlier-than-planned career pivots or early retirements.
In tech, for example, only a tiny fraction (1–1.25%) are still working past 50.
To better understand the challenge, The Ken spoke with over 30 professionals from different industries like education, technology, manufacturing, retail/FMCG, and took a Career Longevity survey. About 258 of the 303 respondents aged 40 to 60 said they felt like their careers have been sliced in half—now spanning just 20–25 years instead of the traditional 40–45.
-
Shares of Kotak Mahindra Bank plummeted 10.7% on Thursday after India’s central bank barred the lender from onboarding new customers via digital channels and issuing fresh credit cards, citing concerns over the bank’s technology systems.
Morgan Stanley’s reaction:
We believe RBI’s move will weigh on the stock price in the near term. The impact on earnings will likely be limited over the next few quarters, as Kotak Bank is a diversified franchise and can accelerate growth in other segments to sustain earnings momentum. Key to track is how long will it take for Kotak Bank to resolve issues with RBI and get the ban lifted.
Goldman Sachs’ reaction:Having said that, management does not believe the action will materially impact the overall business. Additionally, the following reasons suggest that any immediate impact on earnings should be limited: 1) while credit cards have arguably been the fastest growing product with a c.70% CAGR over the last two years, from a low-base reaching 4% market share in FY24, contributing 10% of incremental lending growth YoY in 3QFY24 there has been a pick up of growth in commercial retail (CV/CE, MFI, MSME) which accounts for c.33% of total lending book which should still support ongoing growth; 2) our assumption already bakes in slower lending growth in credit cards/PL/other unsecured book to 25% YoY in FY25E vs. 30% CAGR in FY22-3QFY24 as we believe that we are in the middle of an asset quality cycle in unsecured loans as highlighted in our note here and here; and 3) we already bake in an elevated cost to income ratio at 47.1% in FY25E vs. 46.6% in FY24E, although we believe upside risk to this number could come from impact to fee income growth (GSe at 20% yoy in FY25) and a likely increase in non-employee operating expenses (GSe at 13.3% in FY25) as a result of a prolonged ban and/or increased investment in IT.
While the event raises near term uncertainty on loan growth and EPS, we believe the bank has sufficient levers to manage both growth and profitability subject to satisfactory resolution of the IT challenges as laid out by the RBI. We believe investors will be watching out for: 1) management commentary in the upcoming earnings release on 4th May, 2) response time by the bank to satisfactorily address RBI’s concerns and strengthen the IR architecture – we note that HDFC Bank took 8 months for its to be lifted while Bajaj Finance is still under embargo for its digital products and 3) visibility on loan growth and cost to income as a result of this action.
We remain constructive on Kotak Mahindra Bank’s long-term prospects and forecast it to deliver a 19% core PPOP CAGR over FY24E-FY26E, on the back of (1) loan growth at an ~18% CAGR on utilization of excess capital (c.500bps vs. PVT banks); (2) being well-positioned in terms of loan book mix with commercial retail forming 33% of loan book, which should be supportive of margins; and (3) best-in-class PPOP-ROA at c.3.6% over FY24E-26E while cost to income may have upside pressure, we also note that this could be negated by customer acquisitions in the near term. Valuation looks attractive with the stock trading at a steep discount to its 5-year average on forward book value. A key potential catalyst for the stock is its pick up in deposit and lending growth coupled with improving loan book mix, which should give the market confidence in management’s willingness to grow high yielding book, which in turn should translate into a re-rating of the stock.
-
Madhav Chanchani, reporting for The Arc:
Premji Invest, the family office of Wipro founder chairman Azim Premji, has rapidly added assets under management over the past few years. The tally is conservatively pegged at over $10 billion, though it would exceed $14 billion on a mark-to-market basis.
Philanthropic entity Azim Premji Foundation is the sole limited partner of Premji Invest and has provided an estimated $2-3 billion for its various bets, the sources added. Profits or proceeds from Premji Invest are utilised to support the foundation.
Premji Invest has grown to roughly one-third the size of Wipro’s $30-billion market cap.
-
General Catalyst has pushed out Anand Chandrasekaran, its India-focused partner, from the firm over lacklustre performance and poor feedback from founders, seven sources familiar with the matter told Indiadispatch.xyz.
Neither of the parties have commented on the situation, but Chandrasekaran’s profile has been wiped out from the GC site.
-
From October 1, 2023, a 28 percent Goods and Services Tax was imposed on the full face value of online gaming bets by the GST Council, which promised to review the levy after six months. The industry has been seeking to have the 28 percent GST calculated on the gross gaming revenue instead of the face value of bets.
[…] In the October-December 2023 quarter, GST from online gaming touched Rs 3,470 crore, a more than five-fold jump from the Rs 605 crore collected in the previous quarter.
-
From the quarterly earnings presentation (PDF) Reliance made on Tuesday evening:
While RIL hasn’t disclosed; Op A is Airtel, Op B is Vodafone-Idea, Op C is BSNL Jio, with more than 480 million subscribers, commands about 40.1% of the Indian wireless market, up from 37.6 million 11 months ago. Airtel has also gained market share, but Vodafone-Idea and BSNL continue their bleed.
-
Sneha Shah, reporting for Mint:
The venture capital (VC) arm of Saudi Aramco is building an India team and scouting for early-stage deals in the country, two people aware of the plans said, in a move to leverage India’s startup story and widen the fund’s global reach.
Prosperity7 Ventures, a unit of Saudi Arabia’s largest conglomerate, is also in talks to hire a head for the India business, the people cited above said on condition of anonymity. The fund has more than $3 billion in assets under management globally.
-
Data and research: RBI, Jefferies, IndiaDispatch.xyz -
Goldman Sachs Asset Management, writing in a post:
Key Takeaways
- Growth Momentum
India continues to outperform major economies. Its strong growth story is underpinned by reform efforts across sectors, favorable demographics, and supply chain shifts.
- Investment Appeal
Increasing digitization and maturing capital markets, supported by technical tailwinds like global bond index inclusion, are strengthening its appeal as an investment destination.
- Opportunity Amid Complexity
Investors should be selective and use on-the-ground expertise to navigate India’s complexity, including an upcoming general election, and rapid economic and societal change.
- Growth Momentum
-
Note from a recent meeting between Goldman Sachs analysts and the Gupshup leadership:
Financial Positioning: Gupshup currently generates ~80% of its revenue from India. While the company expects India to remain as the largest geographic revenue segment, as they look toward the next 3-5 years Gupshup is targeting a 60-40 split in revenue between India and other emerging markets including Southeast Asia and LATAM. Gupshup invested a significant amount of capital in 2021/2022 on marketing & R&D (i.e. Generative AI), and made multiple acquisitions, doing so at ~breakeven profitability. As they turn to this year, Gupshup expects profitability to improve and aims to return to mid-to-high teens % in the longer-term. Lastly, regarding growth, Gupshup has seen revenue grow at a CAGR of ~40% over the past 4 years.
Customer Experience: Many of Gupshup’s customers started with the SMS product. However, as Gupshup has observed the shift from SMS to IP messaging, they now generate over 60% of revenue from their non-SMS segment. Gupshup’s ability to grow with their customers during this transition has resulted in an NRR in excess of 120%. From a value proposition perspective, Gupshup drives increased engagement for customers of their marketing products (particularly vs. other communication vehicles such as email), while commerce customers observe higher revenue and retention rates, and support customers realize lower support costs. These segments allow Gupshup to support businesses through the entire purchase process, from initial marketing to post-purchase support.
-
Samidha Sharma and Digbijay Mishra, reporting for Economic Times:
Office sharing company WeWork India, promoted by Bangalore-based Embassy group, is in the midst of buying the stake held by its US parent through a secondary transaction, multiple people in the know said. The Rs 1,200 crore secondary sale of WeWork’s stake is being bought out by the Enam group’s family office, investment fund A91 Partners, and CaratLane founder’s Mithun Sacheti, sources aware of the matter said.
“The deal involved the sale of WeWork Inc’s shareholding in the Indian business which is being run by the Embassy group. While most of the Rs 1,200 crore is through secondary sale of shares, there may be a primary component… For now, the company is awaiting a clearance from the Competition Commission of India (CCI),” said a person familiar with the situation.
-
India’s economy has soared under Prime Minister Narendra Modi, becoming the world’s fifth largest. But the South Asian giant still faces challenges, including high youth unemployment and the need to create jobs for its largely impoverished population as it aims to become an economic superpower. (CNN)