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Mint
3 days ago
- Business
- Mint
India's David vs Goliath profit story: Can smaller firms hold on to their share?
India's markets are dominated by large firms, with the top 10% by revenue generally commanding more than 90% of net profits. This started changing after the covid-19 pandemic, as smaller firms clawed their way up amid a wider business rebound. But this fightback is now running out of steam. In 2024-25, companies outside the top 10% bucket accounted for 7.3% of the aggregate net profit earned by the universe of BSE-listed firms, a Mint analysis of 5,096 companies showed. There was no improvement during the previous two years. Does this mean the repeat of the pre-pandemic pattern: David vs Goliath showdowns among Indian businesses? It's still early days to say so: These smaller firms—the long tail comprising 90% of listed companies—are still better off on this metric than they were before the pandemic-led disruptions. For context, their average share was 4.0% just before the pandemic, compared to 8.3% now. While larger companies enjoy the benefits of economies of scale and a competitive edge, mid-sized and smaller ones have managed to leave a deeper mark in recent years. 'India Inc. is still concentrated, but not more concentrated than five years ago," said Jayakrishnan Pillai, a partner at consulting firm Deloitte India. 'The peak in profit skewness during 2021 has since reversed." He also noted that smaller firms had shown stronger profit growth in recent years, thus broadening the earnings base. However, the struggles of smaller companies do not end here. Many sectors are still dominated by one or two companies, and the rising appetite for mergers and acquisitions (M&As) puts smaller companies at risk. Segment shifts The smaller companies are still taking a bigger slice of the profit pie than five years ago, but the huge sector-wise variation suggests that the trend is not broad-based. Of the 20 sectors as per Mint's classification, 11 actually recorded a smaller share in the profit pool in FY23-FY25 compared to FY17-FY19. Among the sectors in which space shrank for smaller companies were agriculture, financial sectors, construction and real estate, infrastructure and engineering, and logistics. A sharp increase in smaller firms' share in textiles, travel, and hospitality, and retail pulled up the overall share. This may have been driven by the sharp pent-up demand that India witnessed when the effects of the pandemic-induced lockdowns faded. Textiles and travel and hospitality are already less dominated by bigger companies (top 10% account for 41% and 56% of profits, respectively), leaving room for smaller companies to capitalize on the post-pandemic boom. Titans' take Despite the recent churn, the Indian listed companies' universe sees concentration in many segments and, in some cases, a heavy dominance of one or two players. For example, smaller companies have gained share in the travel and hospitality sector, but the sector is still ruled by Indian Railway Catering and Tourism Corp. Ltd (IRCTC), which takes home 60% of the sector's aggregate profit pie. In the packaged consumer goods segment, ITC Ltd alone commands about 50% of the share. Eight out of 20 sectors have one company alone accounting for more than 33% of the aggregate profit share of their respective sectors. Three of these are dominated by public sector undertakings—IRCTC, Container Corp. of India Ltd, and NTPC Ltd. If the bucket is expanded to include companies commanding 25-33% share, four more sectors—brokerages, consumer durables, construction and real estate, and oil and gas—will make the list. Further consolidation? As smaller companies are constantly fighting for survival, a rising appetite for M&As puts them at risk of being taken over by bigger companies. During the pandemic, several smaller companies faced losses, filed for bankruptcy, and were taken over by bigger players in the segment, analysts said. However, the recent uptick in M&A activity goes beyond distress buying of insolvent companies—it has more to do with strategic shifts to drive growth, especially since Indian corporations are sitting on a huge pile of cash. Mint reported on 6 July that 285 BSE-listed companies alone were holding ₹5.09 trillion in cash in 2024-25. 'There is hesitation to invest in new greenfield large projects due to the prevailing uncertainties and geopolitical scenario," said Jyoti Prakash Gadia, managing director of Resurgent India, a category I merchant bank. 'However, there is appetite for M&A as the consolidation process involves lesser risk and can help beat competition, create synergies, and improve efficiency and profitability."
Mint
3 days ago
- Automotive
- Mint
EV owners aren't using public charging points much. Operators are changing tack
India's network of 26,000 public charging points for electric vehicles (EVs) across the country remains grossly under-utilized, prompting government and private operators to review their current installed units and examine available data on usage and traffic patterns before setting up new charging units. According to industry officials and experts, companies are now looking to leverage available traffic and EV penetration data to put up the chargers at locations where the usage of chargers can be maximized, which is currently estimated to be in the low-single-digit range. 'Most charging stations in India currently operate at 4% to 5% capacity utilization. This means the chargers are in use only for up to 2 hours in a day, which is significantly low and implies that on an average one car is charged using one charging point in operating hours," Atul Jairaj, Partner at Deloitte India, said. Experts have cited charging points being slow to juice up the EVs, their placements at unviable or inconvenient locations and the rise of home chargers among the key reasons for a low usage of public charging units. State-run companies like Indian Oil Corporation, Bharat Petroleum Corporation and private firms like Tata Power, Jio-bp and Statiq, among others, operate thousands of charging points in the country. Mint could not independently verify the utilisation of chargers run by each company. According to a reply by the Union heavy industries ministry in Parliament on 4 April, India had 26,367 public EV charging stations at the end of March. Utilisation of charging stations on a given day is measured using the total amount of energy consumed by vehicles against the total energy available at the charging station. Tata Motors, the country's largest EV maker and the first original equipment manufacturer (OEM) to get into the space in 2018, notes that the charger utilisation varies as per locations, with high-frequency spots like highways seeing greater usage. 'On a broader level, the average utilisation across the network remains in the single digits. That said, select locations, particularly those situated along key highways and in identified hotspots, are already achieving high utilization levels and have started generating positive Ebit returns," Balaje Rajan, chief strategy officer at Tata Motors Passenger Vehicles Ltd and Tata Passenger Electric Mobility Ltd, said. Tata Power, which has more than 5,400 public, semi-public and fleet charging stations, suggests that it is increasingly relying on data analytics to increase utilisation of chargers within the country. 'Recent trends show a steady rise in charger usage, driven by the accelerating adoption of electric vehicles," a company spokesperson said in response to Mint's queries. 'To optimize deployment, we harness real-time data analytics to identify underperforming sites for corrective measures and to prioritize high-demand areas for expansion. By aligning charger placement with actual usage patterns, we enhance network efficiency, minimize congestion, and deliver a seamless charging experience for EV users." Priyans Murarka, founder of a data analytics platform for EV chargers, suggests that all charging players have had to go through a learning curve about where to place the EV chargers. 'A few years back, lack of data on EV usage meant that there was a lot of guesswork on where to put chargers," Murarka said. 'However, all the charging players are now looking closely at EV data and placing charging stations in right locations such as malls, highways, and dhabas, etc." According to Murarka's analysis, a charging station needs utilization in the 12.5% to 15% range to break even at operational level and most fast-charging stations are already running close to the 10% level. With electric vehicle sales continuing to rise in the country, firms are rushing to get their strategies right. In FY25, over nearly 2 million electric cars, scooters, buses and trucks were registered in the country, a jump of 16% over the year prior. Automakers sold a total 25.6 million vehicles in the country in the year to March. Statiq, which claims to operate more than 7,000 charging stations, suggests that it is witnessing healthy trends on its EV charger network. However, Akshit Bansal, chief executive officer and founder at Statiq, points to a shift in strategy of how locations are being chosen for new public EV charging stations. 'There has been a marked shift in how locations for new EV chargers are being selected. The process is now far more data-driven and strategic, with decisions based on traffic patterns, user behavior, and partnerships with local utilities and infrastructure providers," Bansal said.
News18
6 days ago
- Business
- News18
India-UK trade pact to help boost exports from number of sectors: Experts
Agency: PTI New Delhi, Jul 25 (PTI) The free trade agreement between India and the UK will help boost the country's exports to Britain in sectors such as consumer goods, cosmetics, and apparel, experts said on Friday. They said that the biggest beneficiary will be UK-based scotch brands, with high import tariffs seeing a sharp reduction. 'Given India's evolved whisky-drinking market, this will encourage both established players and new entrants to expand their global portfolio offerings here," Anand Ramanathan, partner, consumer products and retail sector leader, Deloitte India, said. Aditi Nayar, Chief Economist, ICRA, said India's trade surplus with the UK has grown marginally over the past decade. 'The Free Trade Agreement (FTA) is expected to significantly enhance the bilateral trade relationship," she said. In the realm of services trade, Nayar said India stands to gain from the UK's commitments under the FTA in sectors such as IT/ITeS, financial services, professional services, other business services, and educational services. It is also expected to ease professional mobility and exempt Indian workers from social security payments for three years, she added. Pooja Ramchandani, Partner, Shardul Amarchand Mangaldas & Co, said that the social security agreement between the two countries will make cross-border mobility more viable by eliminating the burden of double social security contributions, benefitting business and employees alike. 'The pact reflects a growing recognition of the need for portable social protection in a globalised economy," she said. Abhishek Khaitan, Managing Director, Radico Khaitan, said that the reduction in import duties on Scotch whisky and gin will not only enhance consumer access to premium international spirits but also enable Indian companies to strengthen cross-border collaborations. Agneshwar Sen, Trade Policy Leader, EY India, said that the agreement will also eliminate tariffs on key Indian exports from textiles and auto parts to seafood and jewellery boosting MSMEs, job creation, and growth in labour-intensive sectors. 'UK firms will gain access to India's vast consumer market. It is not just merchandise trade but in services trade as well Indian professionals will benefit from relaxed visa norms and a landmark social security deal," Sen said. Bipin Sapra, Partner and Indirect Tax Trade Leader, EY India, added that in the current global landscape marked by tariff-related uncertainty, the India-UK FTA is a timely and strategic move. Suresh Nair, Indirect Tax Partner – Consumer Products and Retail, EY India, said that the agreement will reduce tariffs on nearly all Indian goods, enabling UK consumers to access more affordable textiles, food products, and a wide range of goods like leather, footwear, and jewellery. PTI JD HVA view comments First Published: July 25, 2025, 18:45 IST Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Mint
24-07-2025
- Business
- Mint
India-UK FTA promises firmer pour for scotch and gin
NEW DELHI : A landmark free trade agreement (FTA) signed between India and the UK is set to shake up the Indian alco-bev market, slashing steep import duties on whisky and gin and opening the doors wider for premium foreign spirits. Industry leaders say the move could accelerate premiumization, benefit both global and Indian liquor companies, and reshape consumer choices in the world's largest whisky market. Once the agreement comes into force, customs duty on imported whisky and gin from the UK will be halved from 150% to 75% immediately and then gradually reduced to 40% over the next decade. The revised duties will apply to both bottled-in-origin (BIO) and bulk imports. BIO spirits are entirely produced and bottled outside India before import, such as whisky made and packaged in the UK. Bulk imports, on the other hand, are used for making bottled-in-India (BII) products and for blending with Indian Made Foreign Liquor (IMFL). Anand Ramanathan, partner, consumer products and retail sector leader, Deloitte India, said that the tariff reduction will benefit UK-based Scotch brands the most. 'Given India's evolved whisky-drinking market, this will encourage both established players and new entrants to expand their global portfolio offerings here," he said. Also Read: India, UK sign landmark free trade agreement after years of negotiation Sanjit Padhi, CEO of the International Spirits and Wines Association of India (ISWAI), welcomed the development and said the FTA could become a trendsetter. 'For the alco-bev sector, the immediate tariff reduction on Scotch whisky and gin imports from 150% to 75%, and subsequent reduction to 40% over the decade, will open up and expand market opportunities for the industry," Padhi said, adding that the deal would benefit Indian consumers and accelerate the trend of premiumization. Why this matters for India India is one of the world's largest alco-bev markets, selling over 400 million cases of Indian alcoholic spirits annually, according to estimates from ISWAI. However, imported spirits—both BIO and BII—account for just 2.6% of that market. The imported category is dominated by whisky, with Scotch whisky accounting for approximately 81% of the overall 10.9 million cases of alcoholic spirits imported. According to Padhi, the duty reduction will also significantly benefit manufacturers in the IMFL industry, as 79% of the Scotch imported into the country comes in bulk form. Radico Khaitan Ltd, an importer of Scotch whisky in bulk for its own brands, anticipates significant cost advantages from the deal. 'We have estimated our scotch requirements valued at over ₹250 crore in FY26, and this treaty represents a substantial opportunity for value creation," said Abhishek Khaitan, the company's managing director. Khaitan added that the reduction in import duties will enhance consumer access to premium international spirits and also 'enable Indian companies to strengthen cross-border collaborations and accelerate premiumization in the domestic market". Also Read: India, UK set wide-ranging strategic course with Vision 2035 roadmap Radico Khaitan sells brands such as Jaisalmer gin, Magic Moments vodka, 8 PM Whisky, and Rampur Indian Single Malt Whisky. Potential for mutual growth ISWAI's Padhi said that as Indian single malts gain global recognition, improved market access can create mutual benefits, allowing Indian whiskies to expand their footprint abroad just as Scotch whiskies gain better accessibility in India. India is the world's largest spirits and whisky market, with 20 million people added annually above the legal drinking age. According to International Wine and Spirits Research (IWSR), India's alcohol market grew 9% by value in 2024, reaching just under $40 billion. The domestic alcohol market is expected to top $50 billion by 2031. Praveen Someshwar, managing director & CEO of Diageo India (United Spirits Ltd), the local arm of British spirits major Diageo Plc, lauded both governments, saying that it 'will boost bilateral trade and positively impact the accessibility of premium Scotch whisky in India, reigniting growth and increased choice for Indian consumers". Diageo India sells brands such as Johnnie Walker, Ketel One, Tanqueray, Captain Morgan, and McDowell's No1, with a portion of its portfolio made locally and another part imported. Contrarian voice Meanwhile, the Confederation of Indian Alcoholic Beverage Companies (CIABC) raised concerns that lower import duties on Scotch and other BIO spirits could lead to dumping of cheap foreign alcohol in India, hurting the growth of premium Indian brands. It has urged the government to monitor imports using technology, flag underpriced shipments, and impose a minimum import price to prevent unfair competition. CIABC also called on state governments to end concessions for imported brands, such as lower registration fees and excise duties, which make foreign products cheaper than Indian ones. Also Read: India-UK FTA: Experts are bullish on these stocks and sectors. Do you own any? 'The lack of reciprocal market access for Indian spirits in the UK and EU, saying non-tariff barriers continue to block Indian exports and could hamper the government's $1 billion export target for the Alcobev industry by 2030," said Anant S. Iyer, Director General, Confederation of Indian Alcoholic Beverage Companies (CIABC), in a statement. The deal Overall, the FTA is anticipated to significantly boost bilateral trade between India and the UK by an estimated $34 billion annually, and the two countries aim to take that to $120 billion by 2030. The agreement will see tariffs eliminated on nearly 99% of Indian exports to the UK, including textiles, pharmaceuticals, and gems and jewellery, while India will significantly reduce duties on products like whisky, electric vehicles, and cosmetics.
The Hindu
21-07-2025
- Business
- The Hindu
At FTA's heart, the promise of Global Capacity Centres
As the United Kingdom and India move steadily toward signing of their historic Free Trade Agreement (FTA), there is growing recognition of the FTA's potential to redefine bilateral economic engagement. Among the most promising areas of collaboration is the rapidly evolving ecosystem of Global Capability Centres (GCCs) — a sector where India leads, and the U.K. can be a pivotal partner. India is already home to more than 1,500 GCCs, employing over 1.9 million people and contributing significantly to the global innovation and digital transformation agendas of multinational corporations. Increasingly, British companies are looking to India not just as a cost-effective back office, but as a strategic partner for research and development, analytics, cybersecurity, and emerging tech solutions. The FTA could be a catalyst for deeper engagement in this space. By easing regulatory barriers, facilitating smoother movement of professionals, and harmonising digital and data governance standards, the agreement can support the expansion of GCCs that serve U.K.-headquartered businesses — or leverage British expertise to serve global markets from India. Much potential The U.K.'s Foreign Secretary David Lammy visited India within weeks of his taking office, demonstrating commitment towards the partnership with the U.K. The Business and Trade Secretary, Jonathan Reynolds' visit ahead of resuming FTA negotiations, following suit. At the UK India Business Council (UKIBC), we think that there is real potential to further increase our trade, investment, and wider partnership. Prime Ministers Keir Starmer and Narendra Modi also had an extremely productive meeting at the G-20 Summit in Brazil, in 2024, agreeing to take the relationship to new heights. From the U.K.'s perspective, the FTA is a timely opportunity to secure access to one of the world's fastest-growing digital economies, while reinforcing its global services and innovation footprint post-Brexit. For India, greater U.K. investment and collaboration in the GCC space aligns perfectly with its digital economy ambitions, skilling objectives, and goal of becoming a global hub for high-value services. The UKIBC has long championed the idea that the future of trade lies not just in goods but also in the services, skills and technology that power the new global economy. The GCCs stand at the intersection of all three. The FTA can pave the way for easier cross-border collaboration, robust intellectual property frameworks, and smart mobility solutions that allow talent to move where it is most needed. A well-crafted agreement can also address the practical challenges businesses face such as double taxation, data localisation mandates and misaligned standards, that often inhibit the scaling of GCCs. Addressing these through the FTA, or individually, will send a strong signal to investors and businesses in both nations. According to a white paper released by Deloitte India, the country is making strides in the global GCC game, as India-based GCCs have emerged as strategic hubs for multinational companies to manage complex global tax operations, including corporate tax, indirect tax, transfer pricing, and litigation, India's current policy environment is highly conducive for GCC growth, even without a dedicated national GCC policy at the moment. The Ministry of Electronics and Information Technology (MeitY) has formed an industry-led panel — including the National Association of Software and Services Companies (NASSCOM), Zinnov, KPMG, and Invest India — to design the national GCC framework outlined in Budget 2025. Its goal is to guide States in promoting GCCs, improving talent, infrastructure, innovation, and legal facilitation. State government policies Other than central government endeavours, we also see State governments rolling out landmark policies. Uttar Pradesh hosted its first 'GCC Conclave' under Invest UP, bringing together policymakers and industry heavyweights (Microsoft, TCS, HCL, Standard Chartered). The event showcased U.P.'s infrastructure, incentives, and intent to host GCCs beyond National Capital Region cities, in Lucknow, Varanasi, Kanpur and Prayagraj. In this context, the UKIBC recently held a closed-door consultation to bring together a distinguished group of leaders and experts to explore the expanding role of GCCs in driving innovation and economic growth in India. The group deliberated on a set of recommendations including global best practices from a governance perspective to help India achieve its economic ambitions set for GCCs. It also discussed these: whether there is a need for a dedicated national GCC policy now; whether organic growth from the past is best achieved in the absence of any such policies; or if having multiple State-level policies create unwanted competition instead of overall national progress. The need for honing talent diversity as well as skilfully managing the diversity of GCC's themselves, was also underscored. Some of the legal hurdles and the market outlook was touched upon, with some practical experiences of Indian and U.K. companies being shared. Additionally, the overall impact of India's economic diplomacy efforts through FTAs on the Indian GCC ecosystem was touched on. These included aspects of how the U.K.-India FTA can be leveraged to help Indian GCCs climb up the global value chain, with a focus on talent diversity in terms of professional mobility across the two countries. A knowledge corridor As the two governments fine-tune the final provisions, industry leaders must continue to voice the importance of services, digital trade and mobility — the lifelines of modern commerce. GCCs, in particular, stand to gain from — and contribute to — this evolving partnership, shaping a resilient, knowledge-based corridor between the U.K. and India. Kishore Jayaraman is OBE, India Chair, UK India Business Council (UKIBC)
