Industry Analysis ' Manufacturing' - Part 1

Morning Otter community. Today’s edition brings to you: Navigating current market volatility; China-India territory dispute heats; Elections fervor rises; IPOs coming up

TODAY’S HIGHLIGHTS

• Mumbai Surpasses Beijing as Asia's Billionaire Capital: Hurun Report

• RBI expected to maintain steady interest rates until July, longer than US Central Bank

• Tiger Global, SoftBank Revive Funding with $300 Million Round in Meesho, even as it loses 3 CXOs

• Perfios, a Fintech SaaS Company, Raises $80 Million in Funding Led by Ontario Teachers' Venture Growth

• Adam Neumann Proposes $500 Million+ Buyback of WeWork

THE BIGGER PICTURE

Unveiling India’s Manufacturing Future: A Look at Trends & Opportunities

Part 1

India’s manufacturing sector expanded by 11.6% in Q3, becoming a key contributor to our momentous GDP growth and inching the country closer to becoming one of the 🌎 big 5 world economies!

This sector is an amalgamation of automotive 🚃, consumer goods 🥫🧶👚, construction 🏗️, pharmaceuticals 💊, chemicals 🧪🧬🧫, and electronics manufacturing 📱🔌 . Presently, manufacturing contributes an impressive 77% of the total industrial production.

Current State of Manufacturing in India:

Post-pandemic, India has been a picture of steady economic growth with an unchanged month-on-month industrial output growth at 3.8% driven by increased production catering to domestic and global demand of 

• Manufacturing of vehicles, trailers, and semi-trailers,

• Transport equipment

• Basic metals

• Pharma

Trends Shaping India's Manufacturing Future:

Industry 4.0 and Automation: 🏭

• AI & IoT Integration through smart factories is bringing production efficiency - reduced downtime, increased productivity and reduced operational errors. 

• Real-time data sharing also provides quality control insights.

• Cobots 🦾🤖, or collaborative robots, have led to workforce efficiency, further fuelling manufacturing growth.

Digitalization:

At present, approx. 70% of enterprises are undergoing 🌐 digital transformation in their operations. The projected growth rate of Industry 4.0 in India is expected to reach INR 774.90 billion by FY 2027, expanding at a rate of 13.32% during FY 2023 – FY 2027

Green Manufacturing: 🔋🔋

• India launched 8 major initiatives supporting its environmental protection laws, to increase energy efficiency by 20% in 2030. 

• Recently, stricter compliance laws led to companies being denied permissions or given conditional approvals for certain sustainability conditions

Infrastructural Development: 🛤️🛣️

• 6 Dedicated Freight Corridors, a network of freight railways 🚂 to connect key industrial centers and ports, are under various stages of completion through a PPP model and aim to facilitate cost and operational efficiency.

• Several projects, under Sagarmala Programme, are underway for 🚢🚢 port modernization, connectivity, and coastal shipping development. This will significantly reduce logistics time while maximizing cargo capacity to reach global markets.

• Improved road connectivity via tunnels, highways and road networks 🚛 is further accelerating regional development for inclusive growth. Establishing Public-Private Partnership (PPP) projects and allowing 100% Foreign Direct Investment (FDI) have allowed international companies to invest in the road sector.

Supply Chain Resilience:

Global supply chain disruptions from the Covid outbreak and geopolitical conflicts led India to build resilient supply chains 🚚, making it an integral link 🔗 in the value chain amongst global players looking for supply diversification.

With critical raw materials, components, and products available across sectors,🇮🇳 India is methodically striving to become a one-stop outsourced production hub for new markets.

Skilled, young workforce at competitive wages: 

The government’s initiatives to provide vocational training and skill development education like the Skill India Mission 👨‍🎓 have created a manufacturing sector-ready employable workforce.

Capital Inflows 💸💸💸

Heightened M&A and PE/VC-led investments along with increased public apex activities have injected much-needed domestic and international investments for manufacturing expansion. Last year alone, Indian firms bagged at least 90 M&A deals, cumulatively worth more than $32 billion.

Pro-Manufacturing Government Initiatives and Policies:

If this intrigues you, we weigh in on opportunities available for the manufacturing sector in the next newsletter, what’s currently plaguing it, and the way to move forward.

THE MARKET MOVEMENT

1. Airlines: IndiGo Shares Ascend to All-Time Highs on Robust Growth Outlook at Rs. 3429.90, Brokerages Boost Price Targets by 20%

2. Chemicals: Paradeep Phosphates Slides 4% Following Closure Notice for Odisha Plant

3. Healthcare: Dr. Lal Pathlabs Surges 5% on Double Upgrade by Kotak Institutional Equities

4. Cement: Ambuja Cements Shares Gain as Company Offloads 2% Stake in Sanghi Industries

GEOPOLITICS SPOTLIGHT

1. UK government investigates Electoral Breach, suspects voter data Misuse Linked to China

2. Hamas rejects latest cease-fire proposal, citing Israel's failure to address its key demands

3. Florida Governor signs controversial bill restricting social media for users aged 16 and below

4. BRICS New Development Bank targets $5 Billion in loans for 2024

5. Indian Refiners increase purchases of US Crude amid tightening Russia Sanctions

TECH NEXUS

1. DMA launches first formal “non-compliance” probes on Big Tech under EU’s new anti-competition rules

2. New Web3 Network ‘The Graph’ Aims to Disrupt Big Tech's Data Control

3. OKX Crypto Exchange Halts Services in India Amid Regulatory Uncertainty

4. Bitcoin Reaches New All-Time High at $72,500, as Solana's Price Soars

5. Yes Bank and Axis Bank Join Paytm's UPI Platform, Ola Money to Transition from Full KYC to Limited KYC Wallet