Data recap: IT results, PMI readings, air traffic

Both TCS and Infosys reported strong deal wins, but the persistent gap between these deals and actual revenue growth indicates slow conversions.
Both TCS and Infosys reported strong deal wins, but the persistent gap between these deals and actual revenue growth indicates slow conversions.

Summary

  • News and developments from the week gone by, through numbers and charts.

Every week, Plain Facts publishes a compilation of data-based insights, complete with easy-to-read charts, to help you delve deeper into the stories reported by Mint in the week gone by. 

Top software services firms that declared their latest earnings painted a subdued outlook for the fiscal year 2024-25, while the seasonally adjusted HSBC flash composite purchasing managers’ index (PMI) output index for India surged to nearly a 14-year high of 62.2 in April.

Gloomy numbers

The corporate earnings season began with information technology (IT) majors Infosys, Wipro and Tata Consultancy Services (TCS) releasing their results for the March quarter. The results seem to have dampened investors’ spirits as they offered little reassurance about the sector's near-term prospects, a Mint report said. 

Both TCS and Infosys reported strong deal wins, but the persistent gap between these deals and actual revenue growth indicates slow conversions. While TCS's management is confident about the new financial year, Infosys and Wipro have provided unimpressive guidance for the near future.

Price pinch

Soaring inflation in India was a key political issue in the 2014 elections, and seems to be an issue once again. After the BJP came to power in 2014, inflation slid below 10% – and even dropped below 5% for a while — until it entered a phase of severe volatility owing to successive food price shocks in the past three years, a Mint analysis showed. 

A pre-poll survey by CSDS-Lokniti showed that nearly one in four Indians see rising prices as the most important issue influencing their voting decision in these elections.

 

Flying high

470,751: That's the number of passengers who took domestic flights on 21 April, a new record, data from the ministry of civil aviation showed. According to industry experts, the growth in air-travel demand is due to rising income levels, first-time flyers, competitive airfares, and an increase in the number of airports to 140 from 70 a decade ago. India is now the world's third-largest aviation market after the US and China. It is also the world's fastest-growing air-travel market.

Water woes

Bengaluru is grappling with a severe water shortage. A Mint analysis of 45 large BSE-listed companies headquartered in the city revealed that the collective water consumption rose 11% during FY23. (This includes their offices and plants elsewhere in India and abroad.) The top five of these companies by revenue saw a 12.3% surge in consumption during the same period. 

Firms in the IT and real-estate sectors reported the sharpest rise in water use during FY23. The analysis was based on companies’ annual reports.

Upbeat growth

The seasonally adjusted headline HSBC flash composite PMI output index for India surged to nearly a 14-year high of 62.2 in April, up from 61.8 in March. The manufacturing PMI stood at 59.1 in April, the same as in March, while the services PMI rose to 61.7 from 61.2 in March. 

The expansion was due to buoyant demand from both domestic and external clients. However, despite continued strong readings, India is not immune to downside risks. Geopolitical uncertainties and their impact on inflation, as well as potential disruptions in trade could weigh on India's growth momentum.

Energy push

$500 million: That's the maximum amount Adani Green Energy plans to raise from at least two European funds, Mint reported. The company will need to sell new shares totalling a 1.5% stake to raise the amount, going by its current market cap. 

Adani Green has so far raised about $3 billion, mainly from promoters and consortium lenders. If the deal is successful, it will be the first time it has raised a large sum from global funds. The company plans to use the funds mainly to build new solar, wind and hybrid power projects in Rajasthan, Gujarat and other places.

Cocoa crisis

Adverse weather conditions and a serious disease that affects cocoa plant roots in Ivory Coast and Ghana—the largest producer countries—have led to a sharp rise in global cocoa prices. 

Since June 2023 the price of cocoa beans—essential for chocolate production—has surged 133% in international markets, an analysis by howindialives.com showed. India's average import prices of all three cocoa variants—cocoa beans, cocoa butter and cocoa powder—have risen in recent months. In Kerala, a primary cocoa-producing centre in India, the per-quintal price is as high as 30,000.

Chart of the week: Defence outlay

India is the fourth-largest military spender globally, with expenditure of $83.6 billion in 2023, according to a report by the Stockholm International Peace Research Institute. Spending is up 4.2% from 2022 and 44% since 2014. The US is the top spender at $916 billion, followed by China and Russia.

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