Amazon delivered, Forex boost and Chips come cheap.

🗓 Morning, folks! Monday is here.

Despite a much awaited RBI rate cut on Friday, markets weren’t exactly thrilled. The Sensex slipped 0.25%, Nifty dipped 0.18%. But markets did finish the week in the green, thanks to positive earnings.

With HDFC Bank and Bharti Airtel leading the charge, six of India’s top ten most valuable firms add ₹1.18 lakh crore in market cap last week.

💡 Spotlight: a new report from Bain & Co says India’s pharma exports are set to explode to $350 billion by 2047, up nearly 10-15 times from today. Expansion into biosimilars, specialty drugs, and API manufacturing and helping diversify and grow India’s supply chain.

Let’s hit it.

1 Big Thing: RBI cuts rates 🚨

For nearly five years, the RBI held interest rates steady despite concerns over economic slowdown, inflation swings, and global volatility.

But 2025 is different. Growth is visibly stalling, markets are losing steam, India corporate profits weren’t that good for last six months, and consumption is under pressure.

At the same time, foreign investors have been pulling money out, and the US Federal Reserve is keeping rates higher for longer. Trump 2.0 is proving a curveball and the rupee is at record lows.

To sum it, India’s GDP is projected to slow to 6.7% this year, the lowest in four years.

Against this backdrop, the pressure to stimulate economic growth was on, and the RBI finally cut its repo rate by 0.25%, from 6.5% to 6.25%—a move widely expected by economists.

• Simply put, the repo rate is the interest rate at which the central bank lends money to commercial banks. Those banks then add a small margin and lend money to consumers. A lower repo rate means cheaper credit, making borrowing more attractive and stimulating economic activity.

But the trick is to not cut too much… or inflation could spike, and everything becomes expensive because people have too much money easily available.

Bottomline: the markets will decide if yesterday’s cut was enough. Rate-sensitive sectors like real estate, auto, and banking will likely see a short-term boost. But the real win is in sentiment. The RBI is signaling it’s ready to act, and that’s a confidence game in itself.

What to watch out for: if inflation rises or the rupee weakens further, expect the RBI to slow down future cuts. But if growth continues to lag, another 0.5 to 1% cut this year might not be off the table.

2. Amazon tells a mixed story 💰

The last of big tech giants to report was Amazon, and much like its peers, Q4 was a mixed quarter for the ecommerce and cloud giant.

Sales and profits both climbed, thanks to holiday shopping in December. But AWS growth was a bit soft, despite robust AI demand, and guidance for the next quarter didn’t excite markets much.

By the numbers: Amazon made $187.8 billion in revenue for the quarter, up 10% YoY. Operating profits surged to $21.2 billion, nearly double last year, underlining the scale of these businesses.

The real winner was Amazon’s cloud business, which grew 19% to $28.8 billion and drove half the company’s operating profit. For the full year 2024, AWS made $107.6 billion in revenue for Amazon!

Zoom out: Big Tech giants have been carrying the markets on their shoulders for the last few years. Investors are now starting to worry as growth begins to peter out. Amazon was down 4.5% on Friday.

While we are on earnings,

Back home, Mahindra & Mahindra (M&M) had a solid quarter, fueled by SUV strength and record farm segment sales.

Net profit jumped 19% YoY to ₹2,964 crore, with revenue up 20% YoY to ₹30,538 crore.

M&M’s SUV volumes hit 1.4 lakh units, keeping M&M at No. 1 in revenue market share, while tractor sales surged 20%, pushing farm market share to a record 44.2%.

With the renewed product line-up resonating well with a new generation of buyers, stock has been on an absolute tear recently.

3. Major deals in focus 🚀

Va Tech Wabag has secured a $371 million contract to develop a 200 MLD sewage treatment plant in Saudi Arabia.

The deets: the project, part of Saudi Arabia’s Vision 2030, aims to improve sewage treatment services and overall quality of life. Wabag will lead engineering, procurement, and construction while Mutlaq Al-Ghowairi Contracting Company will handle transmission pipelines and reservoirs.

This follows Wabag’s recent 20 MLD industrial wastewater treatment project at Saudi’s Ras Tanura Refinery, reinforcing its Middle East footprint.

Shares of Va Tech Wabag ended flat on Friday.

2. Hitachi Energy and BHEL have received a Letter of Intent for a renewable energy transmission project connecting a location in Rajasthan to Uttar Pradesh.

The deets: the project involves setting up a 6,000 MW HVDC link to transport renewable energy across states. Execution will roll out over the next few years.

Hitachi Energy’s Q3 results were strong, with profit soaring 5x YoY to ₹137.4 crore and revenue rising 31% YoY to ₹1,672 crore.

Shares of Hitachi Energy India closed 0.2% higher Friday, while BHEL finished down 1.2%.

4. Too many chips, not enough cars 🤷‍♂️

The auto industry, once a powerhouse for chip demand, is now hitting the brakes, as per ET.

For the first time since the pandemic, semiconductor consumption by automakers is shrinking, with companies grappling with excess inventory after overestimating post-Covid demand.

Global chipmaking giants are feeling the pressure. NXP Semiconductors reported a 6% dip in automotive chip sales for Q4, while STMicroelectronics recorded a sharp 22.8% revenue drop in key auto segments. Texas Instruments echoed the trend, citing mid-single-digit declines outside China.

This slowdown reflects miscalculations in post-pandemic demand. Volkswagen has exited markets like China, while slower EV adoption and transitions like ADAS have further muddied forecasts.

China, however, remains a bright spot, with the overall EV market. Nearly 60% of all global EVs are sold in China. Nearly $375 billion were spent on EVs by the Chinese in 2024.

Big picture: the global semiconductor industry is notoriously cyclical. While markets like Automotive and even manufacturing slow things down, AI chips and Data Center equipment are driving growth.

5. Chart of the day 📈- Flipkart Leads India's E-commerce Game

Flipkart has been silently gaining dominance in India's booming e-commerce market. With 48% market share, the Flipkart Group, which includes Myntra, easily beats out Amazon India at 26%. The key to this dominance? Unrivaled rural penetration.

What else are we snackin’ 🍿

💰 Forex boost: India’s forex reserves rose by $1.05 billion to $630.61 billion in the week that ended on 31 Jan.

🚇 Costly commute: Bengaluru now has India's priciest Metro fare, with max tickets soaring 50% to ₹90, while Kolkata Metro remains the cheapest.

🥤Straw wars: President Trump vowed to bring plastic straws back with an executive order that would undo Biden’s push for paper straws.

🚗 Full throttle: India’s auto retail sales jumped 7% YoY in January, with PV sales up 16% and two-wheelers rising 4%, per FADA.

📡 BSNL boost: The Indian government is pumping ₹6,000 crore into BSNL’s 4G expansion, aiming to speed up network upgrades and improve connectivity.

That’s a wrap! Don’t let the Monday scaries get to you.

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