Winds of Change: Issue 34
In this week's issue, we look at Royal Enfield's bumpy ride, check a solar bid, and worry about drought conditions in India.
Welcome to Winds of Change, a weekly newsletter that collates my work as I chase the winds that bring us the monsoon and drive our turbines.
If you noticed, there was no issue last week. That's because I was just too tired over the weekend to open my laptop and type it out and send one. But fret not, Winds of Change is back!
Bullet Raja encounters problems
Royal Enfield is one of India's most iconic bikes. While its parent company Eicher Motors makes buses, trucks, and lorries, the Enfield brand has fans across the globe.
In the mid 2000s, Eicher was a bulky company with many offerings, including a very profitable tractor and engines business. When Eicher appointed Siddhartha Lal as its CEO, he took the decision to sell off most of the other ventures, focusing solely on their current products. This turned Eicher into one of the premiere auto companies in India, whose shares do very well on the stock market.
So when news broke out that Eicher had refused to renew Lal's contract because of a salary hike issue, heads turned.
Lal is unlike any conventional executive. He is a biker at heart, and lives and breathes the Enfield brand. He sports a mohawk with a rugged beard, and wears t-shirts with leather jackets to board meetings. He is often the face of their ad campaigns, and why not: who better an ambassador than your own MD and CEO?
Shortly after the dispute, Eicher announced that Lal had been reappointed. The podcast discusses how the company has grown, and how Lal has done no wrong — and why, for once, the Board might have been wrong.
Solar tariffs keep on keeping on
In multiple previous editions, I've talked about solar tariffs. We're currently at about half the price for coal-based power, which is really astounding if you think about it: a fairly recent technology has somehow come in, become cheaper than the competition, and is better for the environment?
A collateral damage in the government's efforts to enhance domestic production of solar goods in India is higher import duties. This was expected to raise solar prices.
However, the solar industry continues to operate on paper thin margins. A bid held this past week came in at ₹2.34 per unit, after the industry was predicting around ₹2.50.
The competition is cutthroat, with many Indian and foreign companies vying for the Indian power market. That's good for you and me.
Megha is in no mood to barso
Remember Guru, a fictional biopic loosely based on Dhirubhai Ambani's life? In that there's one scene where Aishwarya Rai is dancing in the rain, and the name of the song is ‘Barso Re Megha Megha’.
Yeah, not much of that is happening right now.
Total rainfall across India fell 10% below normal this week, with 36% of the country receiving inadequate rainfall. This classifies as drought conditions.
It's worrying news for India's agricultural sector, which was already lagging behind in its kharif sowing numbers. 70% of our crops are rain-fed.
However, economists and analysts I spoke to said that there is no need for immediate worrying just yet. The sowing windows of crops are still open, and a monsoon revival in September will bode well for the kharif harvest.
That's all for this week's issue. Thank you for reading! This issue was written by me, Shashwat Mohanty, and the artwork was produced by Devika Menon for Winds of Change.
I hope you learnt something new. Please feel free to reply to me about any errors or typos you spotted, any clarifications, and most importantly, any feedback. Till next Sunday!