Business
Generation Income Properties amends Series A preferred unit redemption terms
Business
Seattle could lose $750M as Starbucks expands in Tennessee, adds 2,000 jobs
Independent journalist Brandi Kruse joins ‘Varney & Co.’ to discuss Seattle mayor-elect Katie Wilson’s struggles with business as her ‘progressive tax revenue’ and jobless pay for striking workers have citizens worried about the economy.
Seattle could lose hundreds of millions of dollars in tax revenue as Starbucks expands operations in Tennessee, a local outlet estimates.
Fox 13 Seattle reported Tuesday that the Emerald City “could lose up to $750 million in tax revenue in the coming years as Starbucks expands in Tennessee instead of Washington.”
In a press release Tuesday, Starbucks announced it will invest $100 million and bring 2,000 new jobs to Nashville.

A worker at a Starbucks coffee shop makes a drink at the Detroit Metro Airport in Michigan. (Jim West/UCG/Universal Images Group via Getty Images / Getty Images)
“Starbucks has major plans for its newest business location, where it will employ up to 2,000 people over the next several years to serve in a variety of corporate-related operations,” the announcement said.
“The Nashville office will directly support continued coffeehouse expansion and rising customer demand, particularly in the southeastern U.S., while working closely with the company’s global headquarters in Seattle.”
Tennessee Gov. Bill Lee welcomed the announcement Tuesday, writing in a post on X, “Great to welcome @Starbucks’ continued investment in TN as it establishes its new Southeastern hub in Music City.
“This iconic global company’s $100 million investment — a testament to our strong economy & unmatched workforce — will create 2,000 new jobs for Tennesseans.”
Fox 13 Seattle called Lee’s attitude “sharply different from Seattle Mayor Katie Wilson when she encouraged a crowd to boycott the company shortly after she was elected mayor,” noting that Wilson’s remarks were given to a crowd during a Starbucks union workers rally in November.
“I am not buying Starbucks, and you should not too,” Wilson said.

A closed Starbucks location at 505 Union Station as demonstrators protest nearby in Seattle July 16, 2022. (David Ryder/Bloomberg via Getty Images / Getty Images)
In a statement to Fox 13 Seattle, Wilson said, “Starbucks is a core part of Seattle’s identity. We’re proud to be home to its first store, its headquarters and so many of the workers who make the company what it is. We’re focused on maintaining a strong partnership with leadership and with employees, so Starbucks continues to succeed in the city where it all began.”
The Tax Foundation ranked Washington state sixth overall in the nation for doing business in its 2014 State Business Tax Climate Index.
In 2026, the Tax Foundation ranked the state as 45th overall.
In March, Washington state Democrats passed the “millionaires tax,” which Democratic Gov. Bob Ferguson signed March 30.

Starbucks employee Charlie Grandos leads a rally as part of a collective action over a Pride decor dispute outside the Starbucks Reserve Roastery in Seattle June 23, 2023. (Reuters/Matt Mills McKnight / Reuters Photos)
The “millionaires tax” is the state’s first-ever income tax, supported by progressives and socialists and opposed by conservatives. The Wall Street Journal editorial board called it a “con” after its passage that will “inevitably capture the middle class.”
It will impose a 9.9% income tax on households earning more than $1 million each year. The tax applies to any money earned after the first $1 million of someone’s annual income. It will take effect Jan. 1, 2028, with the first payments due in April 2029, KOMO News reported.

The Seattle skyline (Juan Mabromata/AFP via Getty Images / Getty Images)
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Fox News Digital reached out to Starbucks and Wilson for comment but did not immediately receive responses.
Business
Redwire Stock Surges 11% as New NFL Drone Partnership Fuels Defense and Space Momentum
NEW YORK — Redwire Corp. shares jumped sharply in morning trading Wednesday, rising 11.36 percent to $11.46 as investors reacted positively to the company’s announcement of a multi-year marketing partnership with the Washington Commanders NFL team to highlight military appreciation and drone technology.
The New York Stock Exchange-listed stock (RDW) gained $1.17 by 11:10 a.m. EDT on elevated volume, continuing a pattern of strong moves tied to Redwire’s expanding footprint in defense, unmanned systems and space infrastructure. The partnership positions Redwire as the “Proud Drone Technology Partner” of the Commanders, focusing on community events and programs honoring U.S. service members, veterans and their families.
Redwire Corporation, a global leader in space infrastructure and defense technology, develops advanced components and systems for satellites, spacecraft, uncrewed aerial vehicles and mission-critical applications. The company has built a diverse portfolio through organic growth and strategic acquisitions, including Edge Autonomy, which has strengthened its unmanned systems capabilities.
The Commanders partnership, announced early Wednesday, underscores Redwire’s growing emphasis on public engagement and brand visibility in the defense sector. While not a direct revenue contract, the deal aligns with Redwire’s broader strategy of showcasing its drone and autonomous systems technology while supporting military communities. The timing coincides with a series of recent contract wins that have bolstered investor confidence in the company’s 2026 growth trajectory.
Just last week, Redwire secured more than $20 million in follow-on orders from the U.S. Navy and Marine Corps Small Tactical Unmanned Aircraft Systems Program Office for its Stalker UAS advanced navigation and standard systems. These orders highlight demand for reliable, production-ready unmanned platforms in tactical environments.
Redwire has also expanded internationally. On April 7, the company announced the opening of a new office in the United Kingdom to better support programs for the UK Ministry of Defence. The move strengthens Redwire’s European presence and positions it for additional defense opportunities across NATO allies.
Earlier in April, Redwire won a contract to deliver a quantum-secure spacecraft for the European Space Agency’s QKDSat program under the ARTES Partnership Projects. The company will provide its Hammerhead spacecraft platform and ADPMS-3 avionics suite as part of a Honeywell-led consortium, advancing quantum key distribution technology for secure satellite communications.
These wins build on a robust 2025 performance. Redwire reported full-year revenue of approximately $335 million, up more than 10 percent, with a fourth-quarter surge of 56 percent driven by defense and space contracts. The company ended the year with a record backlog of $411 million and a book-to-bill ratio above 1.3, providing visibility into 2026 growth. Analysts project 2026 revenue between $450 million and $500 million, supported by production ramps and new programs.
Redwire’s technology portfolio spans multiple high-growth areas. In space, it supplies solar arrays, cameras, sensors and docking systems for NASA’s Artemis program, including contributions to the Orion spacecraft for Artemis II — the first crewed flight of the program. The company also develops very low Earth orbit platforms and quantum-secure satellites.
On the defense side, Redwire’s Edge Autonomy division delivers uncrewed aerial systems for intelligence, surveillance and reconnaissance missions. The Stalker UAS orders reflect increasing adoption of these platforms by U.S. forces. Redwire has additionally secured positions in larger programs, including the Missile Defense Agency’s $151 billion SHIELD IDIQ contract for homeland defense solutions.
Despite the positive momentum, Redwire faces typical challenges of a growth-oriented aerospace and defense firm. The company has reported ongoing operating losses as it invests in scaling production and integrating acquisitions. Recent Form 144 filings have shown large share sales by affiliated holders, including AE Red Holdings and Edge Autonomy entities, which contributed to periodic selling pressure.
Analysts maintain a generally bullish outlook. Consensus price targets hover around $13 to $14, implying meaningful upside from current levels, with a Buy rating from most covering firms. The investment thesis centers on Redwire’s role as a “picks and shovels” provider in the expanding space economy and defense modernization efforts. Increasing global demand for resilient satellite infrastructure, autonomous systems and secure communications plays directly into the company’s strengths.
Wednesday’s stock surge reflects renewed enthusiasm for these themes. The NFL partnership adds a unique public-facing element, potentially raising Redwire’s profile among broader audiences while reinforcing its commitment to supporting the military community.
Redwire CEO Peter Cannito has emphasized the company’s transformation into a more production-focused organization capable of delivering repeatable, high-margin programs. The combination of government contracts, international expansion and innovative technologies such as quantum-secure systems positions Redwire for potential margin improvement as backlog converts to revenue.
Market reaction has been volatile but directionally positive in recent weeks. Shares have climbed significantly year-to-date, though they remain well below the 52-week high reached earlier in 2026. Elevated trading volume on positive news days suggests strong retail and institutional interest in the AI-adjacent space and defense narrative.
As Redwire prepares for its first-quarter 2026 earnings in early May, investors will watch for updates on backlog conversion, margin trends and new contract momentum. Positive execution could sustain the rally, while any delays in production ramps or integration challenges could introduce renewed volatility.
For now, the 11 percent gain on the Commanders partnership news highlights Wall Street’s appetite for stories linking defense technology with national pride and community impact. Redwire’s ability to deliver on its ambitious pipeline will determine whether today’s momentum becomes a lasting re-rating or another chapter in its volatile trading history.
The company continues to navigate a dynamic environment shaped by increased defense spending expectations, growing commercial space opportunities and geopolitical tensions that elevate demand for resilient infrastructure. With a diversified technology base and expanding global footprint, Redwire appears well-placed to capitalize on these tailwinds in the years ahead.
Business
FIFA Releases Fresh World Cup 2026 Tickets as 50-Day Countdown Sparks Last-Minute Frenzy
ZURICH, Switzerland — With exactly 50 days until the opening whistle of the expanded 48-team FIFA World Cup 2026, soccer’s governing body unleashed a fresh wave of tickets Wednesday for all 104 matches, giving fans one more shot at securing seats in the largest tournament in the event’s history.

AFP
FIFA announced the new inventory drop as part of its ongoing Last-Minute Sales Phase, which began April 1 and runs through the final on July 19. Starting at 11 a.m. ET (5 p.m. CET) on April 22, tickets across every category became available on a first-come, first-served basis via FIFA.com/tickets. Purchases are processed in real time, with immediate email confirmations for successful buyers, FIFA said.
More than 5 million tickets have already been sold for the tournament co-hosted by the United States, Canada and Mexico, FIFA reported. The 2026 edition features 104 matches over 39 days — a significant jump from the traditional 64-game format — with venues stretching from Estadio Azteca in Mexico City to MetLife Stadium in New Jersey.
The April 22 release coincides precisely with the 50-day countdown to the June 11 kickoff, when host nation Mexico faces South Africa in the tournament opener at Estadio Azteca. Additional tickets will continue to be released periodically until the end of the competition, including options available up to 20 minutes after kickoff for individual matches, subject to availability.
This latest drop offers seats for every one of the 104 fixtures, including group-stage clashes, knockout rounds and the highly anticipated final on July 19 at MetLife Stadium in East Rutherford, New Jersey. Fans can select specific seats rather than just ticket categories, a change introduced in the last-minute phase.
The Last-Minute Sales Phase marks the fourth and final official sales window after earlier lottery-style draws and random selection periods. Unlike previous phases that required applications and waiting for results, this stage allows direct purchases as inventory becomes available. A resale and exchange marketplace also operates for fans looking to buy or sell tickets from other holders, subject to host country regulations.
Demand has been intense since ticket sales opened in 2025. Early phases included a Visa cardholder presale, general draws and a post-draw window following the December 2025 group-stage draw. Some fans reported technical glitches and long virtual queues when the last-minute phase launched April 1, while others noted rising prices for premium seats.
Category 1 tickets for the final have climbed above $10,000 in recent releases, drawing criticism from some supporters who say costs have escalated sharply. FIFA has defended the pricing, pointing to the unprecedented scale of the event and efforts to make some lower-priced options available, including supporter tickets for national teams.
The 2026 World Cup will showcase soccer across 16 host cities — 11 in the U.S., three in Mexico and two in Canada. Iconic venues include SoFi Stadium in Los Angeles, AT&T Stadium in Arlington, Texas, and BC Place in Vancouver. The expanded format features 12 groups of four teams, with the top two from each group plus the eight best third-place finishers advancing to a 32-team knockout stage.
All 48 qualified teams are now known, heightening excitement as the countdown accelerates. Host nations automatically qualified, while others earned berths through grueling continental qualifiers. The presence of traditional powerhouses alongside debutants promises a mix of high-stakes drama and fresh storylines.
For fans still hunting tickets, FIFA urges regular checks of the official site, as new inventory can appear without warning. Single-match tickets are the primary product available in this phase. Buyers should ensure they purchase only through authorized channels to avoid scams or invalid tickets.
Travel logistics add another layer of planning. Fans heading to U.S. venues may benefit from the FIFA PASS system for visa appointments. Organizers have emphasized sustainable transport options and fan zones in host cities to manage the expected influx of international visitors.
The tournament arrives at a time of growing global interest in soccer, with record viewership projected for matches broadcast across dozens of languages and platforms. Broadcasters in major markets have already secured rights, promising extensive coverage from group stage to final.
Some lower-demand matches may see more availability, while marquee fixtures — such as those involving defending champion Argentina, Brazil or European heavyweights — could sell out rapidly in this drop. Tickets for the opening match and final have been among the hottest commodities throughout sales.
FIFA has stressed that the last-minute phase provides a genuine opportunity for fans who missed earlier windows. “This is the final pathway to be part of history,” officials said in earlier announcements about the phase launch.
As teams finalize preparations and host cities put finishing touches on infrastructure, the ticket release injects fresh momentum into the pre-tournament buzz. Hotels, flights and fan experiences in cities like Miami, Toronto and Guadalajara are seeing increased bookings from supporters locking in plans.
Critics have raised concerns about affordability and accessibility, particularly for local fans in host countries. FIFA points to various ticket categories and occasional releases of more affordable seats as ways to broaden access.
Security and ticketing technology have been upgraded following lessons from previous tournaments. Digital tickets linked to buyer accounts aim to reduce fraud and improve entry processes at stadiums.
With just 50 days remaining, anticipation is building not only for on-field action but also for the cultural celebrations surrounding the event. The 2026 World Cup is billed as a celebration of soccer’s global reach, uniting three nations in a shared hosting effort.
Fans who secure tickets in Wednesday’s drop will join what promises to be a record-setting crowd across the expanded schedule. Whether chasing a group-stage upset or a seat at the final, the latest release keeps the dream alive for thousands more supporters.
FIFA officials encouraged fans to act quickly but purchase responsibly, reminding them that additional drops will follow. The governing body also highlighted its commitment to a smooth ticketing experience as the tournament nears.
As the clock ticks down toward June 11, the combination of new ticket availability and mounting excitement underscores why the World Cup remains the planet’s most-watched sporting event. For those still on the fence, Wednesday’s release may be the moment that turns hope into a confirmed seat in the stands.
Business
Grocery staple recall gets urgent warning over risk of severe illness
Check out what’s clicking on FoxBusiness.com.
A Florida produce distributor has recalled thousands of cantaloupes due to a potential risk of Salmonella contamination – and now the U.S. Food and Drug Administration (FDA) is warning of an increased risk.
The recall was first initiated last month, but the FDA upgraded it to Class I on April 20, meaning consuming the affected cantaloupe could lead to severe health consequences or death.
According to an FDA enforcement report updated earlier this week, Ayco Farms Inc., based in Pompano Beach, Florida, recalled 8,302 cartons of its fruit.
Although the recalled cantaloupes are no longer sold in stores, the FDA’s upgrade underscores a lingering risk: consumers who purchased the fruit earlier this year may still have it stored in their freezers, where contamination can persist.
GENERAC RECALLS PORTABLE GENERATORS SOLD AT COSTCO OVER FIRE RISK

More than 8,000 cartons of whole cantaloupes were recalled, according to an enforcement report published by the FDA. (iStock / iStock)
The recalled fruit was sold in cardboard cartons containing between six and 12 melons wrapped in food-safe bags and distributed to retailers across California, Florida, New York and Pennsylvania.
Ayco Farms said in a press release that the recall listed in the FDA’s enforcement report is no longer active.
“The listing reflects a previously completed, voluntary recall of fresh whole cantaloupes that were distributed between December 12, 2025, and January 16, 2026, due to ‘potential’ Salmonella contamination,” the press release reads.
“The recall was initiated earlier this year as a precautionary measure in coordination with the U.S. Food and Drug Administration. On March 24, 2026, Ayco Farms issued formal notifications to its customers, as agreed with the U.S. Food and Drug Administration, as part of the agency’s standard recall reporting process.”
MACY’S RECALLS POPULAR KITCHEN ITEM OVER BURN RISK

According to the produce company, the affected fruit was distributed to retailers between December 12, 2025, and January 16, 2026. (Getty / Getty Images)
This recall follows a prior cantaloupe recall in 2024, when Arizona-based Eagle Produce LLC recalled 224 cases of whole cantaloupes sold under the Kandy brand, according to an FDA report at the time.
There have been no reports of illnesses from consuming the affected cantaloupes, but the FDA warns that Salmonella can be deadly to certain age groups.
Consumers who purchased the recalled melons are encouraged to dispose of the products immediately.
FOX Business’ Andrea Vacchiano contributed to this report.
Business
JAL Case: NCLAT reserves ruling on Vedanta plea
A two-member bench comprising Chairperson Ashok Bhushan and Member Technical Barun Mitra concluded hearings after arguments from Vedanta Ltd and respondents, including the Resolution Professional, Committee of Creditors (CoC) and Adani Enterprises.
Business
Perseus Mining Limited 2026 Q3 – Results – Earnings Call Presentation (OTCMKTS:PMNXF) 2026-04-22
Seeking Alpha’s transcripts team is responsible for the development of all of our transcript-related projects. We currently publish thousands of quarterly earnings calls per quarter on our site and are continuing to grow and expand our coverage. The purpose of this profile is to allow us to share with our readers new transcript-related developments. Thanks, SA Transcripts Team
Business
Our commitment for press freedom, and autonomy of public broadcast is absolute: Prakash Javadekar
He spoke to ET on the Bharatiya Janata Party government’s approach towards media, social media, media controls and much more. Edited excerpts…
In terms of communication and messaging, the BJP’s electoral campaign has been termed an object lesson in the field. How can you translate that into the governmental structure?
All communication needs of the government will be handled in our ministry through a social media hub. I am offering this service to all ministers. Their facebook, twitter and other social media outreach will be handled by the new media wing, and the social media and communication hub.
The advantage that the party saw in reaching out through all communication media has been tremendous, and it was felt that the government too use the available platforms. Therefore, this new hub will provide all the help needed by various ministers and ministries for setting up and operating their facebook pages, twitter handles and the outreach throughsocial media. Traditional media is important, of course, but social media vehicles have to be spruced up.
What are your priority areas as far as this (I&B) ministry is concerned?
We have to ensure transparency, make our vehicles more effective. We want to be accessible and accountable too. Now there is a stage three and stage four of digitisation, we will take a call on this only after taking all things into account. The issue is that digitisation increases the revenue of paid channels, but customers want fewer advertisements.
Now 11 crore new settop boxes are required, which provides a great case for indigenisation, rather than just import them. I will take it up with the finance and commerce ministers on how this could be done.
During the elections, an interview of Prime Minister Narendra Modi set off questions on the autonomy of the public broadcaster. As I&B minister, how will you deal with it?
Right off the bat, I would like to say that our commitment for press freedom, and the autonomy of public broadcast is absolute. But freedom or autonomy has its own responsibilities.
Media has the responsibility of being neutral and objective. There’s always a concern that when the government is spending so much, it must reach the public. The public broadcaster is a tool for public awareness. Having said all of this, let me categorically state that we have no plans to enforce controls on the media.
Modi has been described as a “post TV” Prime Minister, in that he reaches out to his audience or voter directly. How would you recast the role of the traditional media?
This is a lesson for everyone on how to put your point across, in the way the Prime Minister does. Minister for law and communications Ravi Shankar Prasad and I have been deputed as spokespersons for the government and we will shortly come up with a communications plan to suit everyone’s needs. This government is different from the way it approaches issues and problems.
For instance, Modiji’s design for the Cabinet. Yesterday, there were some issues related to environment and power. Piyush Goel holds the power, coal and renewable energy portfolio, I hold the environment portfolio, and between the two of us and 10 officials we sorted things which the previous government had tied up in knots in a Group of Ministers (GoM) set up. The emphasis is on synergy. For the media too, there will be things to learn from the new government and its functioning.
Business
Every decision of government needn’t be a big reform: Anand Mahindra
On Modi government’s 10-point agenda.
I think it is almost brilliant to put at the head of the list the fact that bureaucrats should be encouraged to take decisions without fear. In a sense he’s gone to the heart of the problem of the paralysis. The Indian government is extraordinarily large and it is difficult to try and believe that one leader can make all the change. This is a federal system. In a large bureaucracy you cannot exercise the transformation of any situation without coopting bureaucracy.
So empowerment becomes important. It’s a good sign. If you remember, one of the major apprehensions about Modi was an autocratic style of functioning. By putting right at the top of the agenda the empowerment of the bureaucracy I think one has to appreciate and admit that it is definitely not the act of an autocrat.
On disbanding ministerial groups.
Without making much heavy weather of it, he’s been a case study for business schools on how to exercise leadership and have an impact from day one in the new job. He’s setting a clear agenda and is making a clear promise of making a measurement of progress made against that clear agenda. For example, making an agenda for 100 days will make it clear what the matrix would be for measuring success of that agenda. It is important that every day some incremental progress is made towards that agenda and that progress is communicated transparently. He has got his team ready, which is a focused team. To me, every decision needn’t be a big-bang reform but a signal of proactive decision-making and removal of red tape and bureaucracy. And a promise of even speedier decision-making in the future.
On the government’s immediate priorities.
Back in the 1980s, I had written a column headlined ‘Roads to Nowhere’. At that time we were not building enough roads. (Among) America’s competitive advantages happen to be its highways and its transportation network. Those are like blood vessels to the economy and they create job opportunities. Therefore, in a funny sense, the best thing anyone can do to create an inclusive economy is ironically through building roads, because access to markets or the lack of access to markets is one of the most discriminatory things one can do to the poor, especially to the rural poor. It’s not a point that we automatically think of but roads are a mechanism to create inclusiveness in the economy. So, I think, the faster he does that the better for the economy. There is huge economic data to show that roads (give) a bigger boost to rural income than even irrigation. It will help power dual income for families and will allow a kind of diversity from dependence on agriculture which creates productivity.
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On India-US ties.
I’ve been here (in the US) for quite a while now. The Indian elections have generated enormous interest. Most of the diplomatic and political pundits are now urging the leadership in Washington not to miss out on what they feel is the diplomatic opportunity for the US in reaching out to and rebuilding a very strong relationship with India. They feel US has lost ground because of the visa controversy and that they should now rediscover the ground and build a strong relationship.
There is a feeling that both Japan and China have both stolen a march on building this kind of relationship with India. There is going to be, in my opinion, a strong effort from decision-makers here to reach out to the prime minister and his colleagues to rebuild the relationship.
On the perception that the new government will tilt more toward the east — Japan, China, South Korea.
There has been significant interest shown by Japan. It is a country with a liquidity overhang and an investment surplus. Modi is well aware of that. Why Japanese investors have been holding back is because they did not perceive any of the promises we’ve given to be gaining traction.
In the area of construction and large industrial projects, they can take pole position in large projects here. That being said, everybody speculated what the position of the PM and the Cabinet would be and the PM is his own man. My contention is that our PM is a practical man and he knows that any kind of vindictiveness has no role in foreign policy.
I think his whole objective is to enhance India’s economic health and through that gain what should be India’s rightful role in the world. The fact that we are the world’s largest democracy and we are all aware that power and a role in global affairs for a nation comes from economic strength. I think, in his own way and at the right time, he will respond positively when the correct signals are sent out from the US administration.
On FDI in defence
We have been consistent from the time we entered into JVs with foreign companies. We have not changed our stance. Right from the beginning we have been representing to the government that it is a positive step to allow at least 49% investment through the automatic route. Because it encourages the foreign partner to deploy the technology into the JV. Otherwise, there is wariness on their part to provide 100% support to the joint venture. So if you really want the best technology to be manufactured here, then (it should be) a minimum of 49% stake, which we have always advocated.
On Mahindra’s investments plans.
We have never shied away from making investments. Even during downcycles, we never stopped our investments. We invested in the Chakan automotive plant when the economy was down; we also invested in the tractor plant in Zaheerabad when the tractor market was witnessing a downcycle. When the market improved for tractors we were able to ramp up our output. We always have a long-term view of the economy. We have consistently been investing. In defence, for example, if the government starts buying again for the much-needed upgrade then we’ll certainly make the investments. Pawan (Goenka) has gone on record to say that we are considering a Rs 4,000-crore investment, which is independent of the new developments. It was something we were going to do.
Business
Earnings call transcript: Develop Global’s Q3 2025 performance boosts stock

Earnings call transcript: Develop Global’s Q3 2025 performance boosts stock
Business
Raamdeo Agarwal: We may see rapid growth over the next few years: Raamdeo Agrawal
The central government has complete power with a clear mandate, but directives from the Centre have to be executed well at the state level. So, there are many things that are still not in Modi’s hands, says Raamdeo Agrawal, Joint Managing Director, Motilal Oswal Financial Services in an interview with Narendra Nathan and Sanket Dhanorkar.
Are we looking at a multi-year bull run?
I think the market has not yet priced in the full potential of the economy. For the first time, a true nationalist has come to power with a clear majority. There is a new-found energy across the nation. My sense is that the market has not yet understood the difference between 300-plus seats for NDA and 272-plus seats for BJP alone. Look at how the cabinet posts have been assigned — BJP allies have got limited posts and their negotiating power is diminished. Complete power is in the hands of the government. The political scenario is drastically different now. The economy is on the cusp of a historical positive change.
It is the same vehicle, but the driver has changed. It is now being steered by a formula-one driver. So, the acceleration will be dramatic. It will become visible very quickly. Today we are growing at 4.5 per cent. Growth is likely to pick up pace rapidly in the next few years. A lot of things will happen in five years. It will be interesting to see the index level at that time. In the process, investors will make tons of money, because the market will discount that growth two years in advance. It will not wait for the fifth year. If all domestic and global factors align, markets will go through the roof.
Are there challenges to the fragile economic recovery?
The current optimism is because a major variable — the shambolic political setup — has been corrected. There is no doubt that the new government has been fully empowered in this election; the mandate has been given to an extremely competent individual. Right now, everybody is bullish. But one must have tempered expectations. Finally, directives from the Centre have to be executed well at the state level. Otherwise it will be a waste. There are many things that are still not in Modi’s hands.
A lot of other factors will also play a role. Good monsoons, favourable global environment, peaceful borders, etc., can change the entire scenario. But, only time will tell how many stars will align. So, a lot will depend on external factors. I am also keenly watching how the new government tackles inflation, which is just a symptom of a much deeper problem somewhere else. The government has to address supply-side bottlenecks. A weak currency cannot make a strong country. That is why, inflation must go down. It will be the beginning of development, investments, and so on.
The rally, so far, has been driven by hope. When will fundamentals take over?
News headlines, and making money are two entirely different things. We should not get carried away by the headlines. The focus must be on who will actually make money. In most cases, it will be a company which is making money right now. Very rarely will a company that is broke today make money tomorrow, unless there is a complete change in business dynamics. Today, we do not have anything to go by. So, wherever there are anomalies in the economy, these will come back to normal levels. Right now, it is only about the promise of a better tomorrow. Some of these promises will have to take shape in the budget.
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What should be the first priority for the new government?
India has to become much more business friendly. Finally, the country needs to create jobs for its rising young population. Who will create these jobs? More than the government, it is the businesses which will create jobs. Businesses can create jobs only if the business environment is friendly. They also cannot sustain growth without creating jobs. So, the government has to become business friendly. All hurdles should be removed. We need businesses to take more risks as it will result in more jobs.
Will mid-cap stocks continue to perform better than large-caps for now?
It really depends on the company. Mid-caps were lagging for quite some time; smallcaps even more. Eventually it has to converge. Large-caps are now looking highly priced. Investor appetite is limited at these levels. Most of the action is in the low-quality, low-priced segment. Smaller investors are clearly buying low-quality stuff, thinking that the price is low. But, even if it moves into high valuation territory, low quality will remain so. This is where the entire game ends. Sure, high quality stocks are expensive now. But that doesn’t mean you should have junk in your portfolio. If you find quality at a reasonable price, buy with modest expectations. Such names are few and far between. But, even if you get 3-4 such ideas over one year, you can make money. The challenge is to have patience and hold on to the investment. Filling with junk will be a disaster, but if it works, you get a multi-bagger. Investors in high quality may underperform in a rallying market, but will emerge better off over an entire cycle.
Can we expect an earnings upgrade anytime soon?
A 12-15 per cent earnings upgrade is definitely possible this year. As the economy recovers, sectors, such as cement, steel and automobiles, will pick up pace. Oil & gas can also contribute to earnings growth. Right now corporate profits are contributing around 4 per cent to the GDP, which is near the bottom of the band. At the peak of a cycle, this can go upto 7-8 per cent. Assuming 13-14 per cent nominal growth in GDP, it will double in rupee term to Rs 220 trillion in next six years. Now the question is whether the current profit of Rs 4 trillion will move up to Rs 8 trillion or Rs 16 trillion. If it maintains the current ratio, it will go to Rs 8 trillion. If it touches the upper end of the band, it will go to Rs 16 trillion. If this happens and the PE multiple remains the same, the market will go up four times. Profits will zoom the moment the economy moves from 5-6 per cent to 8-9 per cent growth. That is why there is a potential for the market to go up to the stratospheric levels from here.
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