Apple store in Mumbai, AI’s revised salary package, hike in thermal power production
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Apple store in Mumbai, AI’s revised salary package, hike in thermal power production


The Federal brings you the key business and economic events that are creating a buzz in the business world on Tuesday (April 18), starting with the Apple opening its first store in Mumbai.

Apple opens its first store in Mumbai

Apple opened its first store at BKC in Mumbai on Tuesday, marking 25 years of its presence in India.

What it implies: It has taken Apple a quarter of a century to open its first store in India. It could not set up a store in India primarily because of regulatory restrictions on single-brand retail. With the store’s opening, Apple will become a full-stack participant in India, handling everything from manufacturing to retail.

Also read: Tim Cook opens gates to India’s first Apple store at Mumbai BKC, greets customers

The first Apple Store appeared at Tysons Corner in McLean, Virginia, and the Glendale Galleria in California in 2001. As of now, there are 500 Apple stores across the globe. The new store will be more of an experience centre, signalling Apple’s commitment to growing its India business. More stores nationwide, including in Bengaluru, are expected to open soon.

Air India revamps the pay structure for pilots and crew

Air India has announced a new pay structure for pilots and crew with a guaranteed allowance of 40 hours per month.

What it implies: Air India’s new salary structure for pilots and crew has not found favour with the pilots. According to them, pre-pandemic, they were given a guaranteed flying allowance of 70 hours, which has now been reduced to 40.

As per the new salary structure, a Trainee Pilot will receive Rs 50,000 as stipend; the Junior First Officer will receive Rs 2.35 lakh per month; First Officer Rs 3.45 lakh per month; Captain Rs 4.5 lakh per month; Commander Rs 7.5 lakh per month; and, Senior Commander Rs 8.5 lakh per month.

A trainee cabin crew will get between Rs 25,000 and Rs 30,000. A cabin crew member will get Rs 53,000 per month; a senior cabin crew member will get Rs 64,000 per month; and a cabin executive will get Rs 78,000.

The new structure will apply to 2,700 pilots and 5,600 cabin crew members.

The airline believes it can retain the pilots and the crew with such huge salary increase, but this will eventually trigger a war for talent as there is a shortage of pilots across countries.

India to increase thermal power production

A Mint report has said the Centre plans to add 14.56 gigawatts of coal-fuelled power this year, which is part of the 27 GW capacity at Rs 1.89 trillion.

What it implies: With monsoon expected to be delayed in India, the power demand is expected to increase. According to S & P Global Commodity Insight, during January and February 2023, electricity prices in the spot market remained high, with an average price of Rs 6.18 per kilowatt-hour. This marks a 58 per cent increase compared to the same period last year.

The price rise is attributed to the tightening of demand supply in the country and the high coal prices in the international market. Historical trend indicates a strong correlation between price spikes and buys and sells volumes on the power exchange. Whenever there is a supply constraint in the spot market, the power prices are pushed up as marginal fuel changes from domestic coal to imported coal (or LNG). In addition, an unusual rise in temperature in February 2023 raises the alarm for an upcoming heat wave.

Based on projections from the World Meteorological Organization (WMO), 2023 will be a “triple-dip La Niña” year, with the potential for widespread warmer-than-average sea surface temperatures during spring and summer.

From March to June, all-India electricity demand is expected to grow between 8.5 per cent and 11.5 per cent, driven by improved economic activity and an unusual temperature rise. Peak demand is also expected to grow 9-12 per cent during the first half of 2023, reaching 235-240 GW and surpassing the coincidental peak demand of 216 GW in April 2022 (registering a year-on-year growth of 6.3 per cent).

Out of the total installed capacity for power generation of 416.06 GW, coal-based capacity is nearly half or about 205 GW. In April, there was a shortage of 5GW, with an available capacity of 211.89GW. The Centre aims to buy 1,500 coal-fired electricity capacity using imported coal to meet the deficit during the peak summer months.

Adani repays $3 billion in pledges and bonds

The Adani Group paid back at least $3 billion in the March quarter, according to a LiveMint report. Analysts claim this is possibly the largest ever spend in a single quarter by an Indian group to lower the promoter pledge.

Also read: Adani Power begins electricity supply from Jharkhand plant to Bangladesh

What it implies: Post-Hindenburg report, the Adani Group has been cleaning up its balance sheet, reducing pledged shares and has held several road shows to rebuild investors’ confidence. But a Bloomberg report said on Tuesday that Adani Group’s debt increased by nearly 21 per cent over the past year, and the proportion held by global institutions rose to almost a third. At the end of March, approximately 29 per cent of the Indian conglomerate’s borrowings were with global international banks.

Centrum Research Report: Rural regions on a steady recovery

Rural regions of India have been on a slow but steady economic recovery path. Given tapering food inflation and commodity costs, macroeconomic headwinds are expected to wane off. Therefore, starting Q1FY24 with solid visibility on monsoon (also improved irrigation systems) and the revival in the economy should show up in demand recovery.

Though high inflationary pressure pushed companies to increase product prices, the rural consumer saw a substantial impact on lowering the share of wallet allocated to staples and discretionary products.

On the other hand, demand across consumption categories was primarily driven by ‘essential items” and “necessity”, also echoed by Tractor and 2‐Wheeler dealers. Consumer demand continued to be under strain in retail, especially in the clothing and footwear segment, due to high food inflation and the GST rate hikes.

However, distributors believed that the competition from new entrants in the value retail appears negligible as extended credit acts as a barrier, especially in the footwear industry. In addition, demand for building materials witnessed a softer growth in the current quarter.

In the two‐wheeler and tractor segment, dealers witnessed a divergence between robust two-wheeler sales and stable tractor volumes. Demand for the tractors was driven by lower HP tractors as revised emission norms pushed prices, making them expensive and beyond their budgets. However, keeping given price hikes, the auto financing companies held the interest rates, despite RBI hiking repo rates.

While the consumption trend in the FMCG sectors was a mixed bag, distributors pointed out that the beauty and personal care categories saw a marginal uptick in demand. Detergents and food categories, such as biscuits, fared well as consumers continue to prefer purchasing miniature packs amid companies hiking prices in response to broader inflationary pressures. However, most of the distributors confirmed that the near-term outlook appears to be positive. They expect visibility on monsoon to lift rural consumer sentiments and reflect a pick‐up in demand.

Also read: Normal southwest monsoon expected in India, says IMD

Within agriculture, fertilizer segment prices have ebbed. Experts indicate an increase in fertilizer consumption, leading to volume growth in the near term. In addition, adopting new-age technology (nanotechnology) will offer an opportunity for Indian farmers to improve crop yields in the medium term.

Notably, in the rural financing segment, it was highlighted that larger banks had witnessed losses leading to an increase in the market share of their smaller peers (NFBCs, SFB and RRBs). Further, according to an interaction with the MFI player on collection efficiency and loan growth, there were no visible signs of slowdown or cracks despite the rural economy’s headwinds (inflationary pressures).

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