Strengthening Of The Commercial Real Estate Sector In 2023

 “Commercial Real Estate has remained steadfast with many large corporations- domestic and international brands making a great return to the workplace. The momentum to bring back the workforce had begun at the start of 2022, which continued to gather pace as the year progressed. On one hand, the post pandemic phase took off to a promising start with office spaces filling up fast paving way for the new normal. On the other hand, leading global asset management firms joined hands with established Indian realty players that kept the investment market busy. Heading into 2023, the overall picture for the Indian economy is looking extremely positive. In the year 2023, with overall expected growth, pick-up in job creation and ready-to-move-in housing will continue to drive demand. We are also expecting some rapid change in the workplaces, which means that it will also favour greater flexibility. All these factors are expected to drive demand for A-Grade office space. As captured by a leading industry consultant in its report, the market for A-Grade space is expected to touch 1.2 billion sq. ft. by 2030 buoyed by consistent demand. Another significant observation made by such a report opines that in the metro and non-metro cities, adoption of office space will breach the 60 million sq. ft. mark by 2023.  With companies taking significant steps toward sustainability, they are increasingly on the lookout for commercial spaces that align with their sensibilities. Taking this into consideration, certain established players are addressing this growing need of sustainable structures. At SATTVA, we are in the forefront of building commercial spaces that meet the highest standards of sustainability, where all our buildings come with LEED certification. Right from our futuristic tech park SATTVA Knowledge City, which is touted to be Asia’s best tech park to many more, which is home to fortune 500 companies to home grown tech giants.” – Mr. Bijay Agarwal, MD, Sattva Group.

About Sattva Group

With 3 decades of expertise, the Sattva Group has grown into one of the most trusted builders in the country today. Headquartered in Bengaluru, India, it is also a well-known name in Hyderabad, Kolkata, Pune, Coimbatore, and Goa. The Group will soon be expanding its presence in Mumbai. With 66 million sq.ft spaces completed, 28 million sq.ft under construction, and 39 million sq.ft in the planning stage, the Group is one of the most premium builders in India today. The Group’s cutting-edge marquee projects in Hyderabad include Knowledge City, Knowledge Capital, Knowledge Park, and Image Towers (Innovation in Animation, Multimedia, Gaming, and Entertainment), a PPP-based model with the Telangana State Government. By further expanding into various verticals such as co-working, co-living, education, hotels, facilities management, and warehousing, the Group today stands tall as a frontrunner, shaping India’s growth story. The Group’s unwavering adherence to quality has given it the “trusted” tag among builders in the country, renowned for its “A Stable” CRISIL rating for over a decade. 

Shubhabrata Saha Appointed As New MD & CEO Of AJAX Engineering

-          Company aims to touch revenue of Rs 3000 crores by 2026

-          Ajax Engineering invests Rs 100 crore in the 5th manufacturing facility under construction in Bengaluru

Ajax Engineering, a leader in Concreting Equipment sector in India, today announced the appointment of Shubhabrata Saha as the new MD & CEO of the company. Shubhabrata served over two decades at Mahindra & Mahindra in various leadership roles. His last assignment at Mahindra was as CEO in Farm Division. He has delivered consistent and sustainable profitable growth while enhancing the brand and network. Shubhabrata comes to Ajax from the $ 3 billion Adventz group where he served as the MD & CEO of Mangalore Chemicals and Fertilisers and the Deputy CEO of their Agri business.

The appointment of Shubhabrata will enhance Ajax’s leadership position as a technology driven, innovative and 360-degree concrete solutions provider.

Mr Vijay, Chairman, AJAX Engineering, commenting on the appointment, said “We are delighted to welcome Shubhabrata on board. Ajax has the aim of “Make in India -make for the World” in concrete and allied technologies. His focus on operational excellence, customer centric wins and inclusive leadership will enable us to accelerate our journey and establish us as a premier player in concreting equipment, both nationally and internationally.

Shubhabrata Saha, MD & CEO, AJAX Engineering said, “I eagerly look forward to embark on the new journey with Ajax Engineering. I see the strong brand recognition AJAX has achieved in the Indian market which will provide me a platform to drive rapid growth. Our target is to drive the revenue up to Rs 3000 Cr in next 3 years through a judicious mix of organic and inorganic growth.”

Shubhabrata is an accomplished leader with proven record of achieving outstanding financial outcomes and build strong brand recognition. Over an extensive experience of three decades, he has developed deep understanding of critical business drivers in both consumer and industrial sectors. He has been highly successful in building stakeholder relationships, seizing control of critical problem areas and delivering customer commitments. He has demonstrated entrepreneurial mindset to deliver turnarounds and has also leveraged the triad of data, digital and technology to solve complex problems. 

Vedanta’s Iron Ore Karnataka Bags Two Awards At The ‘CII Challengers Trophy 2022’

- Vedanta IOK’s Digitized Hauling Operations won the ‘Jury Challenger’ award while its Fuel Management Systems won the ‘Star Challenger’ award respectively

Vedanta Sesa Goa’s- Iron Ore Karnataka (IOK) operations bagged two awards in the technology category at the prestigious CII’s ‘The Challengers Trophy 2022’. The company won the ‘Jury Challenger’ award for Digitized Hauling Operations and the ‘star challenger’ award for Fuel Management Systems. On behalf of Vedanta’s Iron Ore Karnataka, Mr. Ramesh B.R , Mr. Stanley W, Ms. Harshita Rathore, Mr. Yashwanth H A and Mr. Lalith Nandan received these awards during the ceremony held at Bangalore. 

Vedanta’s Iron Ore Karnataka has implemented several Business excellence initiatives aimed at Asset Optimization, Green technologies and digitization such as training of workmen and staff using technologies like Virtual Reality (VR) modules, truck driving simulators, Digitalization of Laboratory sample management system, GPS tracking for water tanker governance, Mine pit survey using Drones and Manless weighbridge operation, etc. 

Mr. Shrishaila Gouda, Dy. COO- Mining, Sesa Goa Iron Ore Business, Vedanta Limited Said “I congratulate my Iron Ore Karnataka team on these prestigious recognitions, which are testaments of our best-in-class Business excellence initiatives. Continuous improvement and innovation are at the core of our philosophy which is instrumental in driving our growth journey in a most sustainable way. I thank CII for honouring our initiatives, which will further motivate the team to take our asset optimization & Green operations initiatives to the greater heights.”

Vedanta’s Sesa Goa Iron Ore Business has always emphasized upon adoption of best-in-class sustainable business practices. Vedanta’s Iron Ore Karnataka has been recently certified with 5-star rating by Indian Bureau of Mines (IBM) for the scientific and sustainable mining operations.

ICRA And CRISIL Enhances Commercial Paper Limits Of Godrej Properties Limited To INR 1750 Crore

Godrej Properties Ltd. (GPL), (BSE scrip id: GODREJPROP), one of India’s leading real estate developers, today announced the enhancement in the Commercial Paper(CP) limits to INR 1750 crore from INR 1500 crore by ICRA and CRISIL.

Highlights:

Credit Rating for Commercial Paper(CP) limits enhanced to INR 1,750 crore from INR 1,500 crore by ICRA and CRISIL. Ratings have been reaffirmed/assigned at [ICRA]A1+ and CRISIL A1+ respectively. Instruments with these rating are considered to have a very strong degree of safety regarding timely servicing of financial obligations. Such instruments carry the lowest credit risk.

Credit rating limits for bank facilities of INR 4,500 crore reaffirmed at [ICRA]AA+/[ICRA]A1+. Outlook on the long-term rating is "Stable". Instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.

Long-term rating for INR 1,000 crore NCD borrowing program reaffirmed to [ICRA] AA+. Outlook on the long-term rating is "Stable". Instruments with this rating are considered to have a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk.

About Godrej Properties Limited: 

Godrej Properties brings the Godrej Group philosophy of innovation, sustainability, and excellence to the real estate industry. Each Godrej Properties development combines a 125-year legacy of excellence and trust with a commitment to cutting edge design, technology, and sustainability. In FY 2021, Godrej Properties emerged as the largest developer in India by the value and volume of residential sales achieved. 

Godrej Properties has deeply focused on sustainable development. In 2010, GPL committed that all of its developments would be third party certified green buildings. In 2020,2021 and again in 2022, the Global Real Estate Sustainability Benchmark ranked GPL #1 globally amongst listed residential developers for its sustainability and ESG practices. In 2017, GPL was one of the founding partners of the Sustainable Housing Leadership Consortium (SHLC), whose mission is to spread sustainable development practices across the Indian real estate sector. In recent years, Godrej Properties has received over 300 awards and recognitions, including the Porter Prize 2019, The Most Trusted Real Estate Brand in the 2019 Brand Trust Report, Builder of the Year at the CNBC-Awaaz Real Estate Awards 2019, and The Economic Times Best Real Estate Brand 2018. 

BMW Group India Records Best-Ever Year 2022 In A Decade

Best-Ever Sales - BMW, MINI and BMW Motorrad.

Best-Ever Growth in a Decade.

Highest-ever car deliveries (BMW + MINI) of 11,981 units with 35% growth.

Leading e-mobility offensive with the most diverse range of electric vehicles in the luxury segment.

Highest-ever motorcycles deliveries of 7,282 units with 40% growth.

Highest-ever BMW 360? by BMW India Financial Services with attractive monthly outflow and assured buyback plan.

#BMW #MINI #BMWMotorrad #SheerDrivingPleasure

Creating a new milestone of success, BMW Group India has posted the highest-ever annual customer deliveries in its history. The company sold 11,981 cars (BMW and MINI) and 7,282 motorcycles in calendar year 2022. BMW India registered sales of 11,268 units and MINI India of 713 units. BMW Motorrad delivered 7,282 motorcycles.

Mr. Vikram Pawah, President, BMW Group India said, “BMW Group is tremendously proud to have delivered its best-ever year in India since its inception. We have been working relentlessly on our strategy which has given this unabated and dynamic growth in the premium car and motorcycle segment. This achievement is a direct result of an unwavering focus on bringing the most exclusive products, offering the best services and our deep engagement towards meeting customer expectations. Now, our next goal is to meet the high demand for our products throughout the country and to change the game in the premium automotive segment.”

BMW achieved 37% growth as compared to the same period last year by delivering 11,268 units. The Sports Activity Vehicle (SAV) range including cars like BMW X1, BMW X3, BMW X5 and BMW X7 grew at an exponential rate of over 60%. At the same time, the luxury sedans such as the BMW 3 Series, BMW 5 Series and BMW 6 Series continued their strong run. Due to high demand, most BMW models now have a waiting period of up to six months.

MINI continued its dominance in the niche compact premium segment by posting growth of 11% with 713 units. The locally produced MINI Countryman had a share of 41% in sales while the MINI Hatch contributed 38% and MINI Convertible 21%.

BMW Motorrad India saw remarkable growth of 40% with 7,282 units. The BMW G 310 R, BMW G 310 RR and BMW G 310 GS commanded a share of 90% in motorcycle sales. Other popular models were BMW S 1000 RR, BMW R 1250 GS / GSA and BMW C 400 GT scooter.

BMW Group India entered a strong electric offensive with a full electric range – the BMW iX electric SAV, the BMW i4 electric sedan and the MINI 3-Door Cooper SE electric hatch. All three models were sold out on launch. BMW Group offers the best charging infrastructure in the premium segment at BMW Group Dealer Network in 32 cities across India.

BMW India Financial Services played an instrumental role by providing customised and flexible financial solutions which are significantly valuable to premium clientele of BMW, MINI and BMW Motorrad.

MADAME 2022 Wrap: India’s Leading Women’s Western Fashion Brand Launches 18 Exclusive Stores In Last 12 Months

2022 has been an exciting year for women’s western wear brand MADAME. The homegrown brand launched 18 new stores across the country in 12 months, a testimony to MADAME’s growing popularity and acceptance among consumers.

MADAME, the brand under Jain Amar Group, has been trying to cater to the untapped market segment in India through its store expansion strategy.

“Indians love fashion and people living in Tier 2 and 3 cities are equally aware of the global fashion trends. They are looking for brands to offer them western fashion options at affordable prices. MADAME wants to cater to this segment as a commitment to fulfil the fashion needs of modern Indian women across the country. We are satisfied with our performance this year and look forward to further expand in the coming year,” said Akhil Jain, Executive Director of the Jain Amar Group.

With the opening of the two new stores, MADAME now has more than 155 Exclusive Brand Outlets across India. The brand has launched in the states like Himachal Pradesh, Punjab, Madhya Pradesh, Maharashtra, Assam, and many more. At the same time, MADAME is trying to cater to a larger customer base through its exclusive e-commerce platform – Glamly.com

The brand has also witnessed a 12% YOY growth in sales in the July to September quarter this year. In the October to December quarter, MADAME has achieved a 25% sales growth. The brand is hoping to achieve big number in Q4 of the year.

The brand offers daily, casual, party and quick fashion catering to diverse needs of its customers. Apart from this, MADAME also offers a wide selection of women’s bags, accessories, shoes, etc. The brand’s latest collection is available on popular e-commerce platforms like Flipkart, Myntra, Amazon, AJIO etc. For exclusive discounts and offers, customers can also visit nearest MADAME store.

Q3FY23 IT Preview: Soft Quarter; Margin Recovery To Continue

Emkay Global Financial Services has released a note on the earning expectations for the Indian IT companies for Q3FY23. The research house expects revenue growth momentum to likely moderate in Q3 due to furloughs, lower number of working days, deferred spending by few clients, and increased cautiousness among clients amid macro uncertainties.

Emkay Global expects revenue growth of 0.8-3.7% in constant currency QoQ for Tier-1 companies and of -0.4% to 3.4% for mid-cap companies. Emkay Global expects Infosys and HCL Tech to retain their guidance of 15-16% CC YoY revenue growth, 21-22% EBIT margin and 13.5-14.5% constant currency revenue growth, 18-19% EBIT margin for FY23, respectively.

Wipro is expected to guide for 1-3% CC QoQ revenue growth for Q4. Nifty IT index gained ~6% in the last 3-month, largely in line with the broader market indices. Risks of recession and potential cut in FY24 revenue remain; however, margin resilience and weak rupee would limit earnings cut.

Seasonal factors and macro uncertainties to weigh on growth: Emkay Global expects revenue growth momentum to moderate in Q3 on account of furloughs, lower number of working days, deferred spending by few clients, and increased cautiousness among clients amid macro uncertainties and high inflationary environment. Within the coverage, they expect the constant currency revenue growth of 0.8% to 3.7% for tier-1 companies (cross-currency impact of 20-50 bps on reported USD revenue) and of -0.4% to 3.4% for mid-cap firms (cross-currency impact of 10-30 bps on reported USD revenue). Emkay expects the usual seasonality in H2 growth to be amplified by slower decision making and weak discretionary spending due to macro uncertainties.

As per Emkay Global Infosys is likely to retain its 15-16% CC revenue growth and 21-22% EBIT margin for FY23. HCL Tech is also likely to retain its 13.5-14.5% constant currency revenue growth and 18- 19% EBIT margin guidance. Wipro is expected to guide 1-3% constant currency QoQ revenue growth for Q4FY23. Coforge is likely to increase its CC revenue growth guidance to at least 21% (currently at least 20%) while retaining its adjusted EBITDAM guidance of 18.5-19% for FY23. Deal intake is likely to reflect the elongated sales cycle and is more skewed towards cost efficiency and takeout deals.

Rupee depreciation and moderation in attrition to help improve margin sequentially: Except for LTIM, EBIT margin is likely to expand by 20-100 bps sequentially for Tier-1 companies and 20- 50bps for Tier-2 companies on account of operating efficiencies, employee pyramid rationalization, moderation in attrition, and rupee depreciation. LTIM margin is expected to be impacted by one-off costs related to merger integration. The EBITM has a further scope of upside in Q4FY23 for most companies on account of flattening employee pyramid, better utilization, sub-con optimization, and weak rupee.

Key monitorables: 1) CY23 IT budget; 2) FY23 revenue growth/margin guidance; 3) deferment or cancellation of projects due to macro uncertainties, high inflation, and supply-chain disruptions; 4) management commentary on the changing nature of deals (cost takeouts vs. business transformation) and potential impact on tech spending from high inflation and economic slowdown; 5) demand trends in key verticals such as BFSI, retail, manufacturing, and communications; 6) segments exhibiting weak demand trends; 7) deal intake/pipeline; 8) pricing environment; and 9) attrition.

Deal intake may moderate a bit amid macro uncertainties: Emkay Global expects the deal intake to reflect the elongated sales cycle and be more skewed towards cost efficiency and takeout deals with a focus on faster ROI projects. Management commentary on the deal pipeline, decision-making cycle, re-prioritization of spending, softness in discretionary spending, and CY23 IT budgets should be important to gauge confidence on near-term growth visibility. Deterioration in the macro situation may drive vendor consolidation and cost takeout deals, which may drive lumpiness and volatility in deal TCV in the coming quarters.

Earnings revision and valuation: Emkay Global expects IT companies to report growth moderation in Q3 on account of seasonal weakness and increasing caution among clients due to macro uncertainties. Client budgets, incremental commentary on the key vertical, deal pipeline composition, and pace of conversion will be keenly observed for assessing the near-term demand outlook. The hiring is expected to moderate due to the focus on improving utilization, deploying freshers post training, and possible demand moderation. Improved talent availability with significant fresher intake over the past few quarters and lower backfilling costs with reduced churn rate should aid in margin recovery. Rupee depreciated by 3% in Q3 against the USD; this along with less severe cross-currency impact in Q3 as compared to Q2 should aid in margin improvement.

Emkay Global has revised their earnings estimates for the coverage universe, factoring in revised forex assumption for H2FY23 (~Rs81.6/$), weaker consumer spending, and lower advertising/promotional spending. Nifty IT Index gained ~6% in the past 3 months, largely in line with broader markets.

Accenture’s results and management commentary have indicated demand moderation in the near term due to deterioration in macros, but management commented that medium-term growth drivers are intact, which should alleviate any structural growth concerns. Risks of recession and potential cut in FY24 revenue growth remain; however, increasing confidence on margin resilience and weak rupee would limit the earnings cut.

Emkay Global rolls forward the target price to December 2023 across their coverage universe. The pecking order is Wipro, Infosys, Tech Mahindra, HCL Tech, and TCS among Tier-1 players, and Zomato, Mphasis, Birlasoft, Firstsource, and Persistent among mid-caps.