Weakness In India's Economy Is Showing In Quarterly Corporate Earnings - Bloomberg

https://www.bloomberg.com/news/articles/2024-11-04/india-market-buz...

It's raining earnings downgrades as economy slows

Read more at: https://www.ndtvprofit.com/markets/india-inc-faces-mounting-earning...

This is the highest proportion since early 2020, when the Covid-19 pandemic upended economic activity for months. Jefferies now forecasts that the earnings of Nifty companies will grow at just 10% in the year ending March.

India Inc. Faces Mounting Earnings Downgrades As Growth Slowdown Weighs Jefferies has cut fiscal 2025 earnings estimates for over 60% of the 98 companies it covers which reported second quarter earnings.

Global brokerage firm Jefferies has cut fiscal 2025 earnings estimates for over 60% of the 98 companies it covers which reported second quarter earnings. This is so far the highest downgrade ratio since early 2020, Jefferies said in a note on Oct. 30. "Above normal rains and weak government spending has impacted earnings outcomes," Jefferies said. A clear trend should emerge in the December quarter

For the 98 September 2024 quarter results that Jefferies analysed from their coverage universe, earnings downgrades (63%) were more than earnings upgrades (32%). Meaningful earnings per share downgrades were seen in most cement, oil & lending financials, mid-caps, auto and consumer staples players, it said.

The rising downgrades come as a result of a slowing economy with companies facing severe pressure from weakening urban demand. In recent post-earnings commentaries, heads of these companies have rued the slowing consumption of essentials such as food and shampoo to cars and bikes. Contrary to the Reserve Bank of India's optimistic forecast, Nomura Global Markets Research believes that India's economy

"This is probably the worst earnings cycle that we have seen going into Diwali in a long, long time," according to Rahul Arora, chief executive officer at Nirmal Bang Institutional Equities "What is very evident is that the rural economy is in a mess." Hindustan Unilever Ltd. coming with 2–3% volume growth, a low number from two-wheeler manufacturers, and even certain consumer discretionary company

Here's why India's shiny new metros are just costly white elephants | India News - Business Standard

https://www.business-standard.com/india-news/here-s-why-india-s-shi...

By Mihir S Sharma

Above ground, New Delhi is one of the world’s most unwelcoming capitals. Traffic is chaotic, air quality abysmal, and the crowds overwhelming. Underground is a different story: The Delhi Metro’s air-conditioned efficiency makes you feel like you’re in a completely different city.

It is easy to understand why everyone in India now wants a similar system. The government announced this month that 1,000 kilometers (621 miles) of metro lines have been built across the country. This is indeed remarkable, given that Indian towns have long struggled to build world-class public infrastructure. But the Delhi Metro is now one of the longest in the world — only Moscow, London and New York have larger networks outside mainland China — and 22 other Indian cities have metros in various stages of completion. Authorities promise that another 1,000 kilometers will be finished soon.

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What went wrong? Everyone has different answers. The parliamentary committee that oversees urban development argues that the problem is last-mile connectivity: If you leave a metro station, you can’t connect to buses or any other form of public transport. They are 21st-century islands, cut off from their host towns’ 20th-century infrastructure.

The government’s official auditor, meanwhile, says some were built too soon, years or decades before they were needed. Yet others point out that a focus on getting metros to too many cities works against expanding any one of them — and only when a network reaches a certain minimum threshold does ridership take off. If there are too few stations, or trains don’t come often enough, it’s hard to get riders to switch modes.

Even the Delhi Metro, in my experience, is hard to switch to. From my study window, I can see elevated trains pulling into my local station less than 150 meters away, and there’s a direct line from there to my workplace. But the stations themselves are so badly designed — vast, concrete monstrosities squatting above the roads, with oddly placed entrances – that trudging from my door to the platform takes 20 minutes. In that much time I could hail an electric three-wheeler and get to work, paying just over twice the metro fare.
The Delhi Metro has succeeded because it isn’t really a metro. Its stations are far apart, unlike other systems worldwide where people can hop in and out to make quick journeys across town. It works because it functions as the suburban rail connection the city never had. People can get into the big city in comfort from the endless satellite townships that have sprung up in the dusty plains around the capital.
Some metropolises — Kolkata and Mumbai — have working light or suburban rail. Most were built pre-independence, and haven’t been updated in decades. Other, newer urban centers never had a suburban rail network at all, even as their populations exploded. The real lesson from Delhi is that India needs better local train services, not shiny new metros.

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The costs are beginning to add up. More than 40 per cent of India’s urban development budget is being spent on metros, according to parliament; that’s money that could be spent on new electric bus networks or charging stations for three-wheelers.

In general, India’s the opposite of China: If Beijing built too much infrastructure, New Delhi built too little. But the flashy new metro systems in smaller cities are an exception. Their empty, expensive carriages and echoing stations are the nation’s white elephants, and one day the bill will come due.

@javedhassan
Ashoka Mody’s article is a model of clarity: sharp, jargon-free, and unflinching in exposing how flawed statistics distort India’s economic reality and undermine democratic accountability.

Three key takeaways:

1. India’s reported GDP growth is substantially overstated due to methodological flaws, especially poor measurement of the unorganised sector (∼90% of employment) and persistent large discrepancies between income and expenditure estimates. Adjusting for these would reduce the past decade’s average growth to modest levels, far below the “fastest-growing major economy” claim.

2. The jobs crisis is severe but hidden: low official unemployment masks widespread underemployment, stagnant real wages, and reliance on low-productivity informal work. Mass consumption is weak, increasingly driven by a narrow elite importing luxury goods, while rental and living costs erode purchasing power for most.

3. Most seriously for democracy, misleading data allow governments to proclaim success amid mass distress, depriving citizens of the factual basis to hold power accountable. When statistics cease to reflect lived experience, democracy itself is weakened—a warning that extends beyond India.

Mody’s lucid linkage of technical critique to political consequence is outstanding. This is not just an Indian story; it is a warning for any country trying to manufacture flattering numbers as substitute to honest assessment of citizens’ welfare.

https://x.com/javedhassan/status/2013425545908805632?s=20

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Democracy damned by doctored data
When growth numbers flatter power, hide job scarcity, and mute rising costs, bad data stops disciplining policy and democracy pays a hefty price.

Ashoka Mody

https://frontline.thehindu.com/economy/india-gdp-growth-myth-data-i...

India’s GDP growth in the second quarter of 2025-26 (8.2 per cent) was greeted with the familiar ritual of celebration. A Bloomberg columnist described it as “growth that the world envies.” It did not matter that, nearly simultaneously, tucked away as Appendix VII of its Article IV report (the annual health check) for India, the International Monetary Fund gave India’s GDP estimation process a C grade. Translation: Indian GDP is poorly measured. Yet, the IMF—without a hint of irony and with no reference to its own data critique—stipulates in the main body of the report: “Real GDP growth has remained robust following a strong post-pandemic recovery.”

We have a problem, one that is systemic and corrosive. This is no longer just about GDP; it is about an India dominated by elite power, reinforced by resurgent nationalism and a media that has subordinated itself to an assertive official vision of the country. Global elites have their own geopolitical reasons for applauding the Indian narrative.

All of India’s macroeconomic data—GDP, employment, and prices—are seriously flawed. India scores a C in all categories the IMF covers, except trade data, which are difficult to fudge or spin. Curated use of flawed data feeds a seductive storyline: India, soon a developed nation; a superpower, perhaps.

Even these flawed data, read carefully, reveal a consistently sobering reality. The GDP data bear a clear signature of the breathtaking lifestyles of India’s rich—driving a surge of import-intensive consumption. The flip side is weak consumption of mass consumer goods, echoed in waning domestic investment. The reason for this suppressed demand is also clear: much-publicised low unemployment rates and understated inflation conceal the scarcity of dignified jobs and the daily struggles of ordinary people. Meanwhile, the narrative of a glorious India flatters elite vanity while leaving both the economy and democracy exposed to peril.