Latest news with #BoB
India Today
2 days ago
- Business
- India Today
How Iran-Israel conflict has brought back crude price worries
With the war between Israel and Iran continuing unabated, there is widespread concern that the conflict would draw in other countries, especially the US, widening its scale. If the US enters the war, it is feared that the devastation would be much more, which would throw the Middle East region into turmoil, at least in the short any major geopolitical crisis, the immediate casualty is oil prices. It has happened in this case too. Crude prices have been moving up significantly in just a week's time, from $69.7 per barrel on June 12 to $77.2 on June 20. Once prices cross the $80 per barrel threshold, which is a very likely proposition given the continuing tensions in the region, it is bound to have big repercussions on the world the war continues to escalate, then the impact of the ongoing crisis on the crude situation in India will be no different. As India imports over 80 per cent of its crude oil requirements, this will hike our import bill, widening the current account deficit (CAD). According to rating agency ICRA, every $10 per barrel increase in average crude oil prices could raise India's net oil imports by $13-$14 billion and widen the CAD by 0.3 per cent of the two other major geopolitical conflicts in the recent past have been Israel's Gaza war, which started in October 2023, and the Russia-Ukraine war that began in February 2022. Immediately after the Ukraine war started, crude prices peaked in March, and came down below the $100 mark by July. The Hamas conflict, however, did not create any big movement in crude prices. Rather, crude prices have been dropping and reached $60 per barrel in May. But with the Israel-Iran conflict, the prices have zoomed Iran is the ninth largest producer of crude in the world, and accounts for almost 4 per cent of global production. However, due to the US embargo on its crude, only China buys Iran oil. As much as 90 per cent of Iran's oil exports go to China, says a research report from Bank of Baroda (BoB). China is the second largest consumer of oil, using 15.15 million barrels per day (bpd), just behind the US (20 million bpd). India is ranked third, with a consumption of 5 million bought as much as 35.8 per cent of its crude from Russia in FY2024-25. The other major suppliers were Iraq (19.9 per cent), Saudi Arabia (13.6 per cent), the UAE (9 per cent) and the US (4.3 per cent). One of the reasons why India has been importing a large quantity from Russia is the concession it gets on crude from that FY25, India's import bill for oil reached $143 billion (Rs 12.4 lakh crore), says the BoB report, with crude oil imports of 244 million tonnes, at an average price of $586 per worry is the disruption of crude and gas supply through the Strait of Hormuz. This strait, between the Persian Gulf and the Gulf of Oman, is one of the world's most strategically important 'choke points', through which one-fourth of the oil for global consumption and one-third of the world's liquefied natural gas pass. Any disruption in the flow of vessels through the strait will have a direct effect on oil and gas supply and prices. A shutdown of the strait can put 20 million barrels per day of supply at risk, say any case, a long drawn-out war will have a dragging effect on the Indian economy, which already has been registering just a shade above 6 per cent to India Today MagazineTune InMust Watch
Mint
3 days ago
- Business
- Mint
Cracks in earnings of tile and plastic pipe makers may widen in Q1
Investors in shares of plastic pipe manufacturers and ceramic tile makers should keep expectations low for the ongoing June quarter (Q1FY26). The demand for plumbing pipes is likely to be weak, while slower government spending on construction projects is seen hurting demand for infrastructure pipes. Plus, early monsoon arrival could adversely impact demand for agricultural pipes. Moreover, the average realisation for major pipe companies is likely to remain under pressure sequentially in Q1FY26. 'Dealers indicated that pipe companies have taken a price hike of 2.5-5.0% in Q1FY26 (quarter-to-date) to pass on the impact of recent increase in poly vinyl chloride (PVC) resin prices. However, average pipe realization is likely to be almost at a similar level compared to March '25 end as PVC resin prices went up by ₹3.5/kg over the past one month versus correction of ₹4/kg seen in April '25," said BoB Capital Markets report dated 18 June. For this channel check, BoB interacted with 17 plastic pipe dealers across various regions. In the case of tile makers, domestic demand is moderate and oversupply in the industry is causing significant pricing pressure. 'With issues in the export market in FY25, 5–10% of export volumes from Morbi have shifted to the domestic market. This diversion has resulted in dumping of excess inventory in the domestic market, leading to intense competition and additional stress on pricing," said a PL Capital report dated 14 June. Widespread expectations are that tile exports may remain weak in the near future due to the trade tariff impact, in the form of lower exports to the US market and a slowdown in global demand. While demand could get a push in H2FY26 from the anticipated recovery in the individual home building segment, the cracks on margin may not be repaired unless exports pick up. The March quarter (Q4FY25) was dull for companies in both these sectors. Volume growth for plastic pipe makers was muted; slipping PVC prices and channel destocking led to year-on-year margin contraction. For pipe companies, restocking/destocking decisions of dealers is highly influenced by movement in PVC prices. Listed tile makers grappled with margin pressure from weak retail demand and increased competition from tile companies in Gujarat's Morbi, India's ceramic hub. Also Read: Tile stocks are cracking as companies brace for a muted FY25 finish On an aggregate basis, pipe companies under the coverage of Nuvama Research saw Ebitda and PAT contract 10% and 7%, hurt by destocking and lower government spending. 'Tile players—hurt by weak demand— posted top-line growth of mere 2% year-on-year while Ebitda/PAT decreased 20%/52% year-on-year due to operating deleverage and one-offs in non-tiles," added Nuvama. PAT is profit after tax. Ebitda is earnings before interest, tax, depreciation and amortization. No wonder, stock performances of companies in these sectors have been quite disappointing. In the last one year, shares of Kajaria Ceramics Ltd and Somany Ceramics Ltd have declined by 24% each. Supreme Industries Ltd, Prince Pipes and Fittings Ltd, Finolex Industries Ltd and Astral Industries Ltd have shed around 30-50%. Apart from dismal earnings, the broader volatility in equity markets, where midcaps and small caps tend to see a steeper correction than large caps, may have also exacerbated the pain for these stocks. For more analyses, read Mark to Market
India Gazette
12-06-2025
- Business
- India Gazette
India's retail inflation likely declined further to 2.7% in May: BoB Report
New Delhi [India], June 12 (ANI): Retail inflation in India is expected to have eased to 2.7 per cent in May 2025, according to a report by Bank of Baroda (BoB). The Ministry of Statistics and Programme Implementation, Government of India, is likely to release the official Consumer Price Index (CPI) data later in the day. In April, CPI inflation was 3.16 per cent. The report highlighted that expected moderation was largely led by a decline in food inflation, offering some relief to consumers and policymakers alike. This projection signals continued stability in domestic price levels and reflects the impact of improving food supply conditions. The report said, 'In India, CPI inflation is expected to moderate to 2.7% in May'25 (BoB Estimate), led by softening food inflation'. The report noted that the moderation in India's Consumer Price Index (CPI) was in line with expectations and highlighted a positive trend in inflation control efforts. A softening in food prices contributed significantly to the drop, helping CPI inflation settle below the Reserve Bank of India's (RBI) medium-term target range. The report also highlighted that the retail inflation in the United States showed signs of cooling. The US CPI increased by just 0.1 per cent month-on-month in May 2025, lower than the estimated 0.2 per cent and down from 0.2 per cent in April. The decline was mainly driven by a sharp drop in gasoline prices, even as food and shelter prices rose. This softer inflation data from the US has fueled expectations that the Federal Reserve may resume interest rate cuts. The probability of a rate cut in September 2025 has now risen to 60 per cent, compared to about 53 per cent just two days ago on June 10. The report also highlighted 'Separately, investors also monitored comments from the US and China on the recently concluded trade talks, while awaiting the fine print of the agreement'. Market reactions have been mixed. US stocks on Wednesday reflected a cautious mood as the softer inflation figures raised concerns over the strength of future economic growth. On the other hand, Asian equities showed resilience, buoyed by the positive developments in US-China trade relations. Overall, the moderation in inflation in both India and the US provides some breathing space for central banks and sets the stage for potential shifts in monetary policy. (ANI)
Time of India
12-06-2025
- Business
- Time of India
India's retail inflation likely declined further to 2.7% in May: BoB Report
Retail inflation in India is expected to have eased to 2.7 per cent in May 2025, according to a report by Bank of Baroda (BoB). The Ministry of Statistics and Programme Implementation, Government of India, is likely to release the official Consumer Price Index (CPI) data later in the day. In April, CPI inflation was 3.16 per cent. The report highlighted that expected moderation was largely led by a decline in food inflation, offering some relief to consumers and policymakers alike. This projection signals continued stability in domestic price levels and reflects the impact of improving food supply conditions. The report said, "In India, CPI inflation is expected to moderate to 2.7 per cent in May'25 (BoB Estimate), led by softening food inflation". The report noted that the moderation in India's Consumer Price Index (CPI) was in line with expectations and highlighted a positive trend in inflation control efforts. A softening in food prices contributed significantly to the drop, helping CPI inflation settle below the Reserve Bank of India's (RBI) medium-term target range. The report also highlighted that the retail inflation in the United States showed signs of cooling. The US CPI increased by just 0.1 per cent month-on-month in May 2025, lower than the estimated 0.2 per cent and down from 0.2 per cent in April. The decline was mainly driven by a sharp drop in gasoline prices, even as food and shelter prices rose. This softer inflation data from the US has fueled expectations that the Federal Reserve may resume interest rate cuts. The probability of a rate cut in September 2025 has now risen to 60 per cent, compared to about 53 per cent just two days ago on June 10. The report also highlighted "Separately, investors also monitored comments from the US and China on the recently concluded trade talks, while awaiting the fine print of the agreement". Market reactions have been mixed. US stocks on Wednesday reflected a cautious mood as the softer inflation figures raised concerns over the strength of future economic growth. On the other hand, Asian equities showed resilience, buoyed by the positive developments in US-China trade relations. Overall, the moderation in inflation in both India and the US provides some breathing space for central banks and sets the stage for potential shifts in monetary policy.
The Print
09-06-2025
- Business
- The Print
Bank of Baroda, HDFC Bank reduce lending rate by up to 50 bps, 10 bps
Pursuant to the Reserve Bank of India (RBI) reducing the policy repo rate, the bank has slashed its Repo Linked Lending Rate (RLLR) by 50 basis points with effect from June 7, BoB said in a statement. Meanwhile, private sector HDFC Bank reduced its Marginal Cost of Funds-based Lending Rates (MCLR) by 10 basis points across tenure, which will benefit borrowers whose loans are linked to this benchmark. New Delhi, Jun 8 (PTI) State-owned Bank of Baroda (BoB) on Sunday said it has cut its benchmark lending rate linked to repo rate by 50 basis points in line with the RBI's rate reduction. The bank's RLLR stands at 8.15 per cent, it said. With this, BoB has fully effected on the RBI rate cut in its RLLR, it added. According to HDFC Bank website, the new MCLR rates are effective from June 7. With the reduction, the overnight and one-month rates are down by 10 basis points to 8.90 per cent. The three-month rate has dropped 10 bps to 8.95 per cent, while the six-month and one-year rate is 9.05 per cent, down 10 bps. Both the two-year and three-year tenure lending rate have been reduced from earlier 9.20 per cent to 9.10 per cent. Earlier on Friday, the RBI cut interest rates by a larger-than-expected 50 basis points, and unexpectedly reduced the cash reserve ratio for banks to make available more money to lend in a bid to boost the economy. The RBI's six-member monetary policy committee, headed by Governor Sanjay Malhotra and consisting of three external members, voted five to one to lower the benchmark repurchase or repo rate by 50 basis points to 5.5 per cent. It also cut the cash reserve ratio by 100 basis points to 3 per cent, adding Rs 2.5 lakh crore to already surplus liquidity in the banking system. With the latest reduction, the RBI has now cut interest rates by a total of 100 basis points in 2025, starting with a quarter-point reduction in February — the first cut since May 2020 — and another similar-sized cut in April. PTI DP TRB This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
