monday • 25 august 2025

18 pages in 1 section
mumbai
~14.00
volume xxx number 12
• published simultaneously from:
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• kolkata • lucknow • mumbai • new delhi • pune

how markets performed last week - www.business-standard.com

% chg over Dec 31, ‘24
Aug 22 One-week Local currency in US $
Sensex 81,307 0.9 4.1 1.8 companies 2 > world 8 > back 16 >
Nifty 24,870 1.0 5.2 2.9
Dow Jones 45,632 1.5 7.3 7.3
RMG ban could Corporate America’s IAF: Gaganyaan crew
Nasdaq 21,497 -0.6 11.3 11.3 send ad sector into newest activist selection standards
Hang Seng 25,339 0.3 26.3 25.6
Nikkei 42,633 -1.7 6.9 14.3 brief cold spell investor is US Prez among world’s best
FTSE 9,321 2.0 14.1 23.3
DAX 24,363 0.0 22.4 38.5
*Change (%) over previous week Source: Bloomberg
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Pvt capex now substantial Festival cheer on

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IN BRIEF
Bond issuances by firms
hit lean patch in August
Companies have slowed down on bond
issuances in August after raising a record
in order book: L&T chief hold as auto buyers
~4.07 trillion through debt in the first four
months of the current financial year
(FY26). With no major issuances seen so
far amid elevated yields, participants said
Subrahmanyan says firm’s order book is worth 2.5-3 years of sales
dev chatterjee & vishal chhabria
await GST relief
the bond market was currently in a wait- Mumbai, 24 August shine jacob & sohini das
and-watch mode due to multiple Chennai/Mumbai, 24 August
uncertainties amid supply pressures Larsen & Toubro (L&T), India’s largest (barring any black swan
from state and central government engineering and construction company, events, with the government Automobile dealers are bracing for a hesi-
bonds. The key concerns include the is entering a “highly exciting phase,” enabling reforms like gst tant start to the festival season, with book-
expectation of additional borrowing for Chairman and Managing Director S N rationalisation and private ings and showroom visits slipping by 25
fiscal deficit management due to goods Subrahmanyan said, citing record capex reviving, the indian per cent in the latter half of August. Many
and services tax (GST) rate cut, and global orders, reviving private sector capex, and customers, they said, are delaying pur-
economy is poised for strong
risks like US tariffs and trade tensions. 6 > a market value nearing $100 billion. chases in anticipation of a cut in goods and
growth — and so is l&t)
“We are in a positive atmosphere,” services tax (GST), prompting some
Subrahmanyan said in an interview. S N Subrahmanyan dealers to roll out extra discounts in a bid
“Barring any black swan events, with the Chairman and managing director, L&T to draw them in.
government enabling reforms like goods Last Wednesday, members of the Fed-
Bracing for a rough ride
SPECIALS and services tax (GST) rationalisation eration of Automobile Dealers Associ- n Auto dealers met Union minister
and private-sector capex reviving, the ations (Fada) met Commerce and Industry Piyush Goyal last week and raised con-
ON MONDAY Indian economy is poised for strong Minister Piyush Goyal, raising concerns cerns over proposed cut in GST rates
growth — and so is L&T.” ‘Decision to rationalise GST is very positive’ P2 > that buyers could postpone purchases n Concerns revolve around customers
Subrahmanyan L&T’s order backlog until tax changes are confirmed and come delaying purchases till new rates come
banker’s trust (order book) of over ~6 trillion is equiv- chemical producers. Order inflows from want to ensure salaries and obligations into effect. into effect
alent to 2.5-3 years of sales. “These are international markets are also strong. are never at risk, even in a crisis,” he said. The GST Council, meeting for two days
The first decade of PMJDY quality contracts from credible clients, The upbeat outlook has propelled L&T’s international business is gain- from September 3, is expected to consider n Dealers indicate that sales during
While there are challenges, no one can Ganesh Chaturthi and Onam are down
and this gives us the confidence to L&T group’s market capitalisation close ing momentum, particularly in West the plan to cut slabs from four to two: 5 per
deny the scheme's success as a cata- 10–15% in some cases
execute well and be selective about the to $100 billion, making it one of India’s Asia, where the company has secured cent and 18 per cent, with a 40 per cent rate
lyst for financial inclusion in India,
projects we take on.” most valuable conglomerates. Subrah- large hydrocarbon and infrastructure reserved for sin and luxury goods. That n OEMs may dole out heavy discounts in
writes tamal bandyopadhyay 15 >
L&T has benefited from a surge in manyan highlighted that the group’s contracts. Recent orders from Qatar would mean GST on many car models fall- September to boost sales
government infrastructure spending market value has grown 3.3 times, profit Energy and Saudi Arabia include mass- ing from 28 per cent to 18 per cent, though n Nomura expects prices of Maruti
statsguru and a revival in private-sector capital ex- after tax 2.7 times, and cash flows three- ive offshore platforms fabricated at its a cess could still apply depending on cat- Wagon R, Baleno and Hyundai Creta to
Deflators may offset corporate penditure. Orders are flowing in from fold in recent years. “All of this ulti- yards in India and Oman. “These are egory, size and engine. drop by ~60,000, ~75,000 and ~55,000,
sectors like steel, automobiles, and con- mately belongs to shareholders,” he said. dream projects, the kind every engineer The new structure is expected to take respectively
results’ impact on Q1 GDP 15 > sumer products, while multilateral and The firm is also strengthening its bal- aspires to work on,” Subrahmanyan said, effect sometime in October. Turn to Page 6 >
public-sector projects continue to ance sheet. It is now net debt-free, with adding that hydrocarbons, power trans-
underpin demand. more than ~50,000 crore in cash re- mission, and renewables are now the PAGE 4
money manager “Private capex, which was nearly zero serves. Subrahmanyan said the group focus areas overseas. n Proposed GST
A time to handhold during the pandemic, is now substantial maintains cash equivalent to six months At the same time, L&T is reshaping its
GST Council may discuss ITC for tweak keeps bond
As MSME tariff woes increase, lenders in our order book,” Subrahmanyan said, of profit across businesses to safeguard portfolio. L&T Finance has been trans- corporate group insurance yields elevated 6 >
have to work closely with them even as citing new projects from steelmakers, against shocks, after the pandemic formed into a near pure-play retail The GST Council may deliberate on extending input tax credit
demand for a lifeline grows, automakers such as Hyundai, Toyota underscored the need for resilience. lender after divesting its mutual funds, (ITC) to corporates providing health and life insurance cover n Rate relief may
reports raghu mohan 14 > and Maruti, and consumer goods firms, “The most important thing for an organ- wealth management, and infrastructure to their staff, even as these policies will remain outside the drive growth in life,
including paint manufacturers, and isation is to take care of its people. We loan businesses. Turn to Page 6 > ambit of GST exemption, a senior government official said. health policies 4>

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PAGE 4
Royalties hit 16-year low in Banks draw up plans
to help exporters
FY25 amid regulatory heat navigate tariff threat
Banks are devising strategies for
exporters, especially those in
sachin p mampatta * Data for 2024-25 is micro, small, and medium enter-
Mumbai, 24 August Losing sting based on numbers from prise clusters, to overcome the
Royalties & tech knowhow fees, etc # 855 available listed non- possible challenges the tariffs
finance companies out of
Companies may have cut (in %) the over 3,500 for which imposed by the US could create.
back on royalty payments data is reported. Previous Banks are offering interest rate
amid increased regulatory years cover all listed non- discounts, flexible repayment
scrutiny and an institutional finance companies. The options, and ensuring better
expenses here are relative
pushback in 2024-25 (FY25). to the total value of
access to export insurance and
Royalties and technical goods produced . This credit guarantee schemes.
knowhow payouts relative to includes both goods sold
the value of goods produced (sales) and goods added
have fallen to their lowest to inventory (change in
since FY10, shows the data
stock) # (as % of sales PAGE 7
and change in stock)
from the Centre for Monitor- Source: CMIE States rejig policies,
ing Indian Economy (CMIE). seek Centre’s help to
The value of such payouts
was 0.43 per cent of sales and
How it panned out counter Trump tariffs
changes in stock in FY25 Royalties, Sector 2023-24 2024-25* The government of Tamil Nadu,
compared to 0.88 per cent in technical Manufacturing 0.67 0.47 which exported 31 per cent of its
FY24. Fees for technical knowhow total shipments worth $52.1 bil-
Mining 13.93 10.47
knowhow are for expertise fees, etc lion to the US in FY25, fears
passed on from parent to a Electricity 0.34 0.01 massive job losses once the addi-
(as % of sales
group company, but some and change in Non-financial services 0.36 0.36 tional 25 per cent tariff takes
entities make such payouts stock) Construction and real estate 0.55 0.17 effect on August 27. The state has
under “royalty”. sought the Centre’s help, as have
Both have been taken to- several other states, including
gether here to give a broad years reflect the full listed The Securities and Ex- Andhra Pradesh.
sense of payout for support non-financial segment. The change Board of India (Sebi)
from parent companies. expenses are relative to the has sought to improve disclo-
The data is based on 855 value of goods produced, in- sures on related parties in- n The

listed non-financial firms, for cluding both goods sold and cluding royalty payments importance
which the FY25 data is avail- goods added to inventories or with effect from September 1. of being
able. The numbers for earlier changes in stock. Turn to Page 6 > Sergio Gor

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Vibe coding flips the script on IT hiring

IT cos seeking talent from non-tech backgrounds to tap into AI expertise
avik das illustration: ajay mohanty
Bengaluru, 24 August
What is vibe
Artificial intelligence (AI) is reshaping
the software development lifecycle
coding?
(SDLC), with machines now writing People with no knowledge of coding
thousands of lines of code once handled or computer languages can use vibe
by engineers. In response, information coding using plain English com-
technology (IT) ser- mand with AI-assisted software
vices companies are development. It was a term coined
EDIT: increasingly seeking by Andrej Karpathy, co-founder of
India on talent from non- OpenAI and former head of AI at
technology back- Tesla. Firms such as Cursor and
the AI grounds to tap into Windsurf are some examples of
map P9 > their domain ex- firms using vibe coding.
pertise.
While these
hires are not trained engineers and can- code is now machine-generated, up from other domain expertise and train them
not write code themselves, companies 20 per cent earlier this year, said Ravi for the future. We could be hiring char-
are unconcerned because code-gener- Kumar, its chief executive officer (CEO). tered accountants and MBAs in finance
ation (often referred to as code-gen) “We will continue to need deep pro- to agentify the finance and accounting
startups can autonomously handle grammers who build platforms and functions of a company,” Kumar said
coding tasks. write AI algorithms. But as SDLC during an earnings press meet last
At Cognizant, nearly 30 per cent of evolves, we will also hire people with month. Turn to Page 6 >