LG Display’s net income falls nearly 80% in Q1 - Business Guardian
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LG Display’s net income falls nearly 80% in Q1

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LG Display, a major display panel maker, said on Wednesday its firstquarter net income fell nearly 80 per cent from a year ago, driven by lower demand for IT products and falling TV panel prices. Its net income for the three months ending in March came to $43 million, down 79.6 percent from a year earlier, the company said in a regulatory filing. The company posted 38.3 billion won in operating profit for the JanuaryMarch period, compared with 523.4 billion won a year ago. Sales fell 6 percent to 6.47 trillion won. The operating profit was 62.5 percent lower than the average estimate surveyed by Yonhap Infomax, the financial data firm of Yonhap News Agency. The company blamed the poor performance in the quarter on the traditionally low season for IT products, coupled with difficulties in securing parts and delivering set products, especially amid the prolonged lockdowns in China. Prices of 55-inch liquid crystal display (LCD) panels for TVs have fallen about 47 percent from August last year. The LCD panel business takes up around 60 percent of its total sales, while organic light-emitting diode (OLED) panels account for around 30 percent. But the company said it expected its profitability to begin improving in the second quarter with the increased adoption of its newest OLED TV technology, OLED.EX. The company, the world’s sole supplier of large OLED panels for TVs, said the new panels can deliver better picture quality by enhancing brightness up to 30 percent compared with conventional OLED displays.

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PepsiCo India investing Rs 1,266 cr in Madhya Pradesh facility

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PepsiCo India on Tuesday announced an investment of Rs 1,266 crore to build a new flavour manufacturing facility in Ujjain, Madhya Pradesh.

PepsiCo India has announced plans to invest Rs 1,266 crore in the construction of a new flavor manufacturing facility in Ujjain, Madhya Pradesh. This initiative aims to boost the company’s beverage production capacity in India. The Ujjain facility will be PepsiCo India’s second manufacturing site in the country, focusing on producing beverage flavors tailored specifically for the Indian market. Currently, PepsiCo operates a similar plant in Channo, Punjab.

Construction of the Ujjain plant is set to commence in 2024, with completion expected by the first quarter of 2026. PepsiCo’s beverage bottling operations in India primarily rely on Varun Beverages Ltd, one of the company’s largest bottlers globally.

Jagrut Kotecha, CEO of PepsiCo India & South Asia, emphasized the company’s commitment to the “Make in India” vision and sustainability. He stated that the new flavor manufacturing facility aims to contribute to the comprehensive development and welfare of the communities they serve.

This announcement aligns with PepsiCo’s broader strategy to enhance its production capabilities in India’s growing packaged food and beverage sector. In recent years, other multinational corporations like Nestle and Mondelez have also increased their investments in India in response to rising demand for their products. For example, Nestle inaugurated a food processing unit in Odisha worth Rs 894.10 crore last year, while Mondelez committed to investing Rs 4,000 crore in India over four years.

PepsiCo India has been actively investing in the country as well. Last year, the company announced a Rs 778 crore investment to establish a food manufacturing plant in Assam, expected to become operational in 2025. Additionally, in 2022, PepsiCo India announced a Rs 186 crore investment to expand its largest greenfield food manufacturing facility in Kosi Kalan, Mathura, Uttar Pradesh, which produces Lay’s potato chips.

In the fiscal year 2023, PepsiCo India reported a surge in profit to Rs 255 crore from Rs 27.8 crore in the previous year, according to filings with the Registrar of Companies. Revenue also increased by 28.5% year-on-year to Rs 8,128 crore, driven by robust sales of both its food and beverage products, including Lay’s chips and the Pepsi, Mirinda, and Tropicana beverage brands.

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Over 150,000 jobs created in Apple’s Indian ecosystem since Aug 2021, says report

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In a recent development, it has been reported that Apple has significantly bolstered employment opportunities within India’s tech sector since its participation in the country’s production-linked incentive (PLI) scheme for smartphones in August 2021. According to insights from an Economic Times report, Apple’s direct employment within its ecosystem in India has surged to an estimated 150,000 individuals. Remarkably, the majority of these employed individuals are young first-time job seekers aged between 19 and 24 years, as highlighted by estimates from government officials and industry experts.

Moreover, the report indicates that an additional 300,000 individuals have found indirect employment opportunities through companies benefiting from the PLI scheme. Apple’s direct employment within India currently stands at 3,000 individuals, with its iOS application development alone supporting over 1 million jobs, as per officials familiar with the matter. This signifies a substantial contribution to the Indian job market over the past 32 months, with the Apple ecosystem estimated to have created over 400,000 jobs, both directly and indirectly.

Despite facing challenges in key markets such as the United States and China, Apple has strategically intensified its focus on India, which ranks as the world’s second-largest smartphone market. Since commencing iPhone manufacturing operations in India back in 2017, Apple has steadily expanded its local production activities in alignment with the PLI scheme. Collaborating with renowned suppliers such as Foxconn, Wistron, and Pegatron, Apple has played a pivotal role in enhancing manufacturing capabilities within the country.

According to the report, Apple has cultivated a robust supplier ecosystem across various states in India, generating over 77,000 direct jobs. Leading collaborators include Foxconn, which has created 41,000 jobs, followed by Wistron with 27,300 jobs and Pegatron with 9,200 jobs. Additionally, other significant contributors such as Tata Electronics and Salcomp Technologies have played integral roles in the production of essential iPhone components, resulting in the creation of over 70,000 direct jobs.

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India Inc’s credit boosted by Domestic demand, govt investment: ICRA

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ICRA’s latest report highlighted India Inc’s credit profile in the 2023-24 fiscal year, citing domestic consumption demand and infrastructure.

ICRA, a leading rating agency, reported on Monday that India’s domestic consumption demand, government infrastructure spending, and robust balance sheets provided vital support to the credit profiles of businesses in the fiscal year 2023-24. Despite challenges such as increased borrowing costs, sluggish exports, and global uncertainties, the credit landscape remained relatively stable. Throughout the fiscal year, ICRA observed a trend of upgrading two entities for every one downgraded, extending the momentum initiated in the previous fiscal year.

Notably, sectors such as aviation, hospitality, automotive, and banking witnessed rating upgrades, primarily driven by favorable industry conditions. Despite facing numerous challenges including inflation, higher borrowing costs, adverse weather conditions, and global conflicts, Indian businesses navigated through the obstacles with resilience. The sustained domestic consumption demand, government investments in infrastructure, and strong financial positions of companies provided a buffer against external pressures.

K Ravichandran, ICRA’s Chief Rating Officer, highlighted that most rating upgrades were attributable to company-specific factors such as market expansion, improved cost structures, and strengthened balance sheets through equity infusion. ICRA expressed optimism about the hospitality sector’s prospects for 2024- 25 while identifying challenges in sectors like chemicals, diamonds, and bulk tea. Moreover, the fiscal health of businesses showed significant improvement, with instances of defaults declining to five in FY24 from 22 in FY23 and 42 in FY22.

Despite projecting a slightly lower GDP growth of 6.5% for the current fiscal year compared to the previous year’s 7.6%, ICRA remains positive about corporate resilience amid rising borrowing costs. The asset quality of banks and non-banking financial companies (NBFCs) reached a decade-long peak, with profitability and capitalization indicators expected to remain robust in the near term. Ravichandran emphasized the importance of regulatory measures taken by RBI and Sebi in strengthening the financial system and capital markets. However, uncertainties related to monsoon patterns and geopolitical dynamics could pose challenges moving forward.

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Tech

Tech Giants investing bn in startups due to generative AI FOMO

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Due to regulatory challenges, tech giants have reduced their acquisition activities but are still pouring billions into promising ventures. Amazon’s recent $2.75 billion investment in AI startup Anthropic exemplifies this trend, showcasing the ongoing rush towards AI investments among major tech players. Anthropic is the developer behind the AI model Claude, which competes with GPT from Microsoft-backed OpenAI, and Google’s Gemini. Along with Meta and Apple, they’re all racing to integrate generative AI into their vast portfolios of products and features to ensure they don’t fall behind in a market that’s predicted to top $1 billion in revenue within a decade.

In 2023, investors pumped $29.1 billion combined into nearly 700 generative AI deals, an increase of more than 260% in value from the prior year, according to PitchBook. A significant chunk of that money was strategic, in that it came from tech companies rather than venture capitalists or other institutions. Fred Havemeyer, head of U.S. AI and software research at Macquarie, said a fear of missing out is one factor driving their decisions.

“They definitely don’t want to miss out on being part of the AI ecosystem,” Havemeyer said. “I definitely think that there’s FOMO in this marketplace.” The hefty investments are necessary because AI models are notoriously expensive to build and train, requiring thousands of specialized chips that, to date, have largely come from Nvidia. Meta, which is developing its own model called Llama, has said it’s spending billions on Nvidia’s graphics processing units, one of the many companies that’s helped the chipmaker bolster year-over-year revenue by more than 250%.

Whether going the building or investing route, there are a finite number of companies that can afford to play in the market. In addition to developing the chips, Nvidia has emerged as one of Silicon Valley’s top investors, taking stakes in a number of emerging AI companies, partly as a way to make sure its technology gets widely deployed. Similarly, Microsoft, Google and Amazon sometimes offer cloud credits as part of their investments. In the Amazon-Anthropic deal announced on Wednesday, the two companies said they’ll work closely together in a variety of ways.

Anthropic will be using Amazon Web Services for its computing needs as well as Amazon’s chips. Anthropic’s models will be distributed by Amazon to AWS customers. Earlier this month, Anthropic launched Claude 3, its most powerful model and one that it says lets users upload photos, charts, documents and other types of unstructured data for analysis and answers.

Microsoft got into the business of generative AI investing earlier, putting $1 billion into OpenAI in 2019. The size of its investment has since swelled to about $13 billion. Microsoft heavily uses OpenAI’s model and offers open source models on its Azure cloud. Alphabet is playing the part of builder and investor. The company has refocused much of its product development on generative AI, and its newly rebranded Gemini model, adding features into search, documents, maps and elsewhere. Last year, Google committed to invest $2 billion in Anthropic, after previously confirming it had taken a 10% stake in the startup alongside a large cloud contract between the two companies.

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China’s manufacturing up for first time in 6 months

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China’s manufacturing activity expanded in March for the first time since September, a sign that the world’s second-largest economy is stabilizing. The official manufacturing purchasing managers index this month rose to 50.8 from 49.1 in February, the National Bureau of Statistics said in a statement Sunday. That beat the median forecast of 50.1 by economists in a Bloomberg survey and was the best reading since March last year. A gauge of non-manufacturing activity climbed from the previous month to 53, compared with an estimate of 51.5. A reading above 50 suggests an expansion from the previous month, while a figure below that denotes contraction.

The PMI figures are the first official data available each month to provide a snapshot of the health of the Chinese economy. The readings suggest that the country’s growth recovery has maintained traction after a solid start to the year. They may give policymakers more time to assess the impact of previous stimulus measures before taking further easing action. China has set a target to increase gross domestic product by about 5 per cent this year, which many economists regard as elusive, given the protracted slump in the property sector and persistent deflationary pressures.

The authorities have released more long-term liquidity into the banking system this year to spur lending, with central bank officials hinting at a potential further cut to the amount of cash banks have to keep in reserve. They have also expedited central government spending to support infrastructure investment and pledged to provide funds to encourage consumers and businesses to replace old goods, including cars and home appliances.

Chinese President Xi Jinping acknowledged challenges the domestic economy faces in a Wednesday meeting with a group of US business leaders in Beijing but expressed confidence in overcoming them. The sit-down with executives including Blackstone Inc.’s Stephen Schwarzman and Qualcomm Inc.’s Cristiano Amon was part of officials’ efforts to restore foreign investors’ confidence in the Asian giant as inbound investment slowed.

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Business News

IndiGo CEO: Indian aviation market sees robust competition

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There is healthy and tough competition in the Indian market, which is also price sensitive, the country’s largest airline IndiGo’s chief Pieter Elbers said and emphasized that there is an enormous demand for travel. At the helm of the airline having a domestic market share of little over 60 per cent and more than 360 aircraft in its fleet, Elbers also mentioned that overall price levels in India are “very very competitive”, something that he thinks one should take “as part of the change in India itself and the diversity of India”.

While air traffic continues to rise and airlines expand their operations by connecting new destinations, there are also concerns in certain quarters about airfares being higher, especially during peak seasons. Air ticket prices in the country are deregulated, and fares are mostly a function of supply and demand. In a recent interview with, Elbers said there is healthy and tough competition in the Indian market.

“Indian consumers are really eager to travel, but it is also a price-sensitive market. What I see is that whenever a new route is announced, there is enormous demand from consumers to travel,” the IndiGo CEO said. The country is one of the world’s fastest-growing civil aviation markets. On average, the number of daily domestic air traffic is around 4.3-4.5 lakh, and domestic airlines carried more than 15.20 crore passengers in 2023. “India is indeed a price sensitive market, and we see some fluctuations in the prices… the natural fluctuation of fares, we see it for hotels, we see it for other businesses and airlines as well.

“If you look at the overall price level in India, it is very very competitive, if not low, compared to some other parts of the world. I think you should take it as part of the change in India itself and the diversity of India,” Elbers said. According to travel portal Cleartrip, airfares are likely to remain higher in the short term and up to 15 per cent higher till May compared to the year-ago period. “Due to the ongoing supply chain and engine issues, there is a muted outlook on the capacity addition. This will lead to a high-fare environment for domestic travel. We’re running at 15 per cent higher fares than last year in March. A similar trend is expected in April. Both are compared to last year,” Cleartrip CEO Ayyappan Rajagopal said. Earlier this month, Akasa Air Founder and CEO Vinay Dube said that airfares in India are incredibly affordable.

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