The week in charts: Q3 earnings, India’s economic downturn, UK trade talks

Revenue-profit paradox

India Inc. recorded a slower year-on-year revenue growth of 4.4% in the December quarter, down from 7.3% and 9.1% in the two previous quarters, according to a Mint analysis of 3,577 BSE-listed companies. Meanwhile, net profits grew 12.4%, outpacing about 9% growth in the preceding quarters.

Companies maintained profitability thanks to favourable input costs, with raw material expenses as a share of revenue falling to 37%—the lowest in six quarters. However, experts caution that robust revenue expansion is essential to maintain profits.

Also read: India’s elusive private investment boom: Why animal spirits remain shackled

India-UK trade talks

India and the UK have resumed free-trade negotiations after a year's pause, bringing some optimism amid rising fears of protectionism globally, news agency PTI reported. The talks will address the Free Trade Agreement, a Bilateral Investment Treaty, and a deal on social security. Commerce minister Piyush Goyal said the proposed FTA could nearly triple India-UK trade within a decade. India’s trade with the UK grew from $14.5 billion in FY18 to $21.34 billion in FY24, with the UK ranking as India's 11th largest trade partner.

Government's next monetisation goal

₹2.5 trillion: That’s the annual asset-monetisation target the union government plans to set for 2025-26, Mint reported. The plan will focus on power transmission, mining, petroleum sectors, and opening high-value assets like transmission lines for private participation. 

In the Budget earlier this month, finance minister Nirmala Sitharaman announced a ₹10 trillion assent monetisation target for 2025-2030, with the proceeds earmarked for new infrastructure projects. The first asset monetisation plan (2021-25), with a target of ₹6 trillion, will be completed in March 2025.

India's economic downturn

India slipped to fifth place in January from the first in December, primarily on account of a weakening rupee and sluggish exports, according to Mint's emerging-market tracker. China emerged as the top performer, followed by the Philippines, Brazil and Indonesia. Competition among the top five (out of nine economies analysed) remained tight. A detailed breakdown of key indicators showed the Indian rupee was down 1.5% month-on-month against the US dollar in January, while the country's export growth declined 2.4% year-on-year.

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Liquidity issues for high-risk investors 

Strong returns last year attracted investors to the equity markets. However, the sharp correction since September 2024 is causing a bloodbath in India’s India's small cap and mid cap space. Investors who bet heavily on them may struggle to exit free-falling, low-float stocks, Mint reported. Nearly 56% of mid caps and 73% of small caps have plummeted more than 30% from their 52-week highs. Nearly three-fourths of these companies had less than 50% free-float stocks. Despite the significant correction in stock prices, valuations remain elevated, potentially leaving investors trapped in illiquid positions.

Hospitality beyond the metros

47,500: That’s the number of hotel rooms that were signed across non-metro cities in 2024, marking a record year for expansion, Mint reported. With 74% of signings in tier-II, III and IV cities in 2024—up from 65% in 2019—hospitality growth is expanding notably beyond metros cities. About 40% of India’s population lives in urban areas, of which nearly 45% lives in tier-II and tier-III cities. This transformation is driven by shifts in economic activity, improved connectivity, and government support for tourism infrastructure in smaller cities, the report noted.

Gender imbalance in unpaid work 

Indian women continue to dedicate nearly a fifth of their time every day to unpaid work such as domestic chores and caregiving, far more than men, who spend only 3% of their day on such activities, according to the statistics ministry’s latest Time Use Survey (TUS) released earlier this week. Men spend a fifth of their time (19.9%) on work and related activities, while women spend only about 5%. Experts have often noted that the disproportionate burden of household chores on women limits their employment opportunities.

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Chart of the week: Reality check on US aid 

The US has been scrutinising funds given to other countries by the United States Agency for International Development (USAID), including $21 million for "voter turnout" in India. However, US government data shows India has been receiving significant funding over the years, not just from USAID but other US organisations as well.

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