Profit Squeeze

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INDIAN COMPANIES’ earnings were hurt in the quarter ended September because of persistent inflationary pressures even as there was strong growth in revenues. Profits fell 25% year-on-year in the July-September quarter, according to a Mint analysis of 2,923 companies excluding financials and banks. During the same period, raw material costs increased 45%. This decline came despite net sales increasing 29% from a year ago suggesting a strong consumer demand.

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Credit Uptick

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AFTER THE disruptions caused by the covid pandemic and lockdowns eased, credit growth saw a quick recovery on the back of a low base in FY22. Credit growth had come down dramatically from around 30% since FY05, but showed some recovery in FY22 compared with the previous financial year, rising to 10.7% from 5.3%. Region-wise data released by the Reserve Bank of India showed that the central region posted the highest growth at 14.1%, while the northern region lagged at 8.7%.

Fiscal Deficit Aim

THIS IS the target of fiscal deficit as a percentage of GDP the central government plans to set for the upcoming financial year despite higher spending pressures and growth slowdown, Mint reported. The end of the free foodgrain scheme and lower subsidy outgo may help the government set a lower fiscal deficit target to 4.5% by FY26 even as the current year’s fiscal deficit is widely expected to overshoot the Budget target of 6.4% of GDP.

Hiring Difficulty

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AS THE pandemic-fuelled recruitment frenzy for mid-level workers cools with a recession looming, headhunters are scrambling to secure hiring mandates from companies, particularly technology firms. Hiring in technology companies in the ongoing December quarter is more than 50% below last year’s levels, Mint reported. A decline in hiring has come against the backdrop of erosion of covid-time recovery, Christmas holidays and furlough period in the West.

Taking Off

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INDIA’S DOMESTIC air passenger traffic grew 10.2% month-on-month in October to 11.4 million, data from the Directorate General of Civil Aviation showed. This is the fastest sequential growth in passenger traffic since March on the back of the festive season. However, in absolute terms, the traffic was highest only since June and lower than the pre-pandemic level of 12.3 million seen in October 2019. However, air traffic may rise because of the festive, wedding and holiday seasons.

Road Map

THAT’S THE average length of highways the National Highways Authority of India (NHAI) will have to construct each day in the remaining months to achieve the target of 12,000 km for the full year, Mint reported. Only a third of the target has been achieved so far for various reasons, including disruptions from prolonged monsoon. The NHAI constructed 4,060 km of national highways in April-October, about 10% less than in the same period last year.

Corporate Lull

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THE INCORPORATION of companies in India has steadily declined since May, suggesting a slowdown in entrepreneurship amid looming slowdown in growth. Over 15,905 companies were incorporated in April, which rose to 16,513 in May, before gradually declining every month, Mint reported. In October, the number had come down to 10,725. Experts said it was mainly due to growth slowdown as there were no regulatory changes to disrupt the incorporation of companies otherwise.

Chart of the Week: Tech Layoffs

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US TECHNOLOGY companies are indulging in mass layoffs as the demand for digital services has waned from the pandemic-time boost. The firings began rising sharply from April-June, with the current quarter seeing higher average layoffs per company.

(Curated by Manjul Paul)

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Elsewhere in Mint

In Opinion, Jaspreet Bindra reveals what’s common between the Roman empire and Twitter and Facebook. Sudipto Mundle writes on the visible hand of the state joining the invisible hand of the market. Devina Sengupta dwells on the difference between a job and a career for women. Long Story finds the baraat is back with a bang.