Finding OPEC’s alternatives, talent war in IT space, and RIL AGM 2021: Three things Teji Mandi investors should know on June 24, 2021
Finding OPEC’s alternatives, talent war in IT space, and RIL AGM 2021: Three things Teji Mandi investors should know on June 24, 2021

Finding OPEC’s Alternatives

India's oil imports from Middle Eastern countries have fallen to a 25-month low in May. It is due to the country's efforts to reduce its dependence on OPEC for crude supply.

While India's overall oil import grew by 31.5% YoY, the share of Middle Eastern countries dropped to 52.7%. It is the lowest since April 2019.

While imports from Saudi Arabia and UAE declined, refiners hiked imports from the United States, Latin America, and the Mediterranean.

The government worked on this major policy shift when India couldn't leverage its position as the third-largest oil importer and failed to get waivers from OPEC and its allied countries.

OPEC countries continued with the supply curbs despite the request of New Delhi. It prompted the Indian government to diversify its crude sources and find alternatives to OPEC.

The Talent War

Post pandemic, there has been a growing urge for digitization among the major global companies. It has increased demand for the IT services as their order books have swelled to record levels.

However, it has also intensified the talent war among the top-tier Indian IT firms. They are seeing a relentless rise in wage costs due to the high demand for skilled talent.

TCS, for instance, saw employee benefits expenses rising to Rs 91,814 crore in FY21. It was at Rs 85,952 crore in the previous financial year.

Similarly, Infosys' employee cost went up to Rs 55,541 crore in FY21 vs Rs 50,887 crore YoY. And for Wipro, it grew to Rs 33,237 crore in FY21, from Rs 31,657 crore in the previous year.

IT companies are seeing a consistent rise in wages as they are fighting to acquire and retain employees. And, this could well eat into their margins in quarters to come. However, the wage increase cycle is here to stay, as companies have large order books to fulfil and skilled talent will continue to stay in high demand.

RIL’s AGM

Reliance Industries 44th Annual General Meeting will keep the market hooked up. The widely covered event is followed not just by the company investors but the overall market participants to get a queue about the company and economy in general.

The company's annual report has given a hint on its increasing preference for retail businesses. And they are hugely seen as the next growth engine of the company.

The market is expecting announcements on the 5G roadmap, new Jio Fiber plans, updates on the Saudi Aramco deal, and retail business. The company is also expected to reveal its plans to tackle climate change and modify its energy business to become net carbon-zero by 2035.

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