The big news of the week was the fall in India’s economic growth. New fourth quarter GDP numbers out on Thursday were worse than most expectations. GDP growth for the three months to March was a meager 5.3%. That brings the overall GDP growth for the full fiscal to a mere 6.5%.
The poor GDP numbers were caused primarily by a dismal performance from manufacturing. That sector saw a 0.3% contraction for the quarter. Other sectors also fared badly, with electricity growing just 4.9% and construction going up by 4.8%. Agriculture did worse, with a growth of just 1.7%.
Your executive summary of the top business stories from the week that was, from the fall in GDP growth to the latest corporate earnings
And the plunge in economic growth has prompted several downgrades of India. Morgan Stanly has cut its GDP forecast to 5.7% from 6.3%. And Standard Chartered has slashed its forecast to 6.2% from 7.1%. The slowdown has also heightened expectations of a rate cut when the Reserve Bank meets on18 June.
And in other news, India’s telecom industry could be up for an overhaul. On Thursday the cabinet approved the National Telecom Policy. The new policy will separate licenses from spectrum. And the government plans to review the Trai Act and retain the policymaking function. Also, the policy authorizes the Department of Telecommunications to finalise the Unified Licensing Regime.
Moving to earnings, Tata Motors has ended a lucrative year with a bang. On Tuesday the company posted bumper earnings for the fourth quarter. Net profit for the three months to March raced ahead 136% to 6,234 crores. And revenue climbed 44% to 50,907. Tata Motors benefited from a deferment of tax assets. But the company also got a boost thanks to its UK arm, Jaguar Land Rover, which saw robust sales in emerging markets.
But despite the impressive volume growth, investors were disappointed with JLR’s profitability. The unit’s fourth quarter margins fell to less than 15% from about 20 in the previous quarter.