IndiGo’s bold moves vs Air India’s big merger
Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened, but why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.
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In today’s edition of The Daily Brief:
How IndiGo and Air India are Shaping the Future of Flying
Did Tata Motors have a bad quarter?
Dr. Reddy's wants people to lose weight
How IndiGo and Air India are shaping the future of flying
India’s aviation industry is really taking off. It recently reached a major milestone, becoming the world's third-largest aviation market, meaning more people are flying in India than almost anywhere else. This growth is driven by rising demand and more planes in the sky to meet it—a big change from the struggles during the COVID-19 pandemic. Now, the industry is bouncing back strong.
Interestingly, just three airlines—IndiGo, Air India, and Vistara—control almost 90% of all domestic flights. These three are in tight competition, each making careful moves to lead the market. Let’s start with IndiGo. For years, it’s been the dominant player in India’s skies, known for its simple, no-frills approach as a low-cost carrier (LCC).
As a low-cost carrier, IndiGo keeps things simple. It only uses one type of aircraft—the Airbus A320 family—making it easier to train pilots and maintain planes. Passengers pay for extras, so there are no free meals or added perks onboard. This keeps costs low, allowing IndiGo to offer cheaper tickets, making it a favorite among budget-conscious travelers.
But IndiGo’s cost-cutting doesn’t stop at what we see. For example, they don’t have onboard ovens, which reduces weight and saves fuel. They also buy planes in bulk, getting better deals. These smart moves keep their operations efficient and their fares competitive.
All these savings add up, allowing IndiGo to keep fares low while still staying profitable. Aditya Ghosh, one of IndiGo’s early leaders, put it best when he said, “Anyone can be a low-fare carrier, but only the sharpest management can be a low-cost carrier.” That subtle but crucial difference has kept IndiGo at the top, with a 63% share of India’s domestic market.
Now, IndiGo is trying something new with the launch of “IndiGoStretch”—its version of business class. For a budget airline, this is an interesting move. IndiGoStretch offers passengers wider seats, more legroom, and even gourmet meals crafted by chefs from the Oberoi Group, along with perks like priority check-in.
This isn’t what you’d typically expect from a low-cost airline. Globally, most budget carriers, like Ryanair or EasyJet, avoid premium services because they don’t usually bring in high profits. So, IndiGo’s move into business class raises some big questions: Can they balance this new premium service with their low-cost model? Will they attract a new type of passenger without losing their appeal as a budget-friendly airline?
Only time will tell, but this seems like a strategic shift worth watching for both travelers and investors.
Let’s move on and talk about a major change unfolding in Indian aviation involving Air India and Vistara. Starting November 12, Vistara flights will operate under the Air India name, creating a single, large airline that will cover more than a quarter of India’s domestic market. This merger is significant for several reasons, so let’s step back and see how we got here.
The Tata Group launched Vistara as a premium airline focused on providing a comfortable, high-end experience for its passengers, offering features like premium economy seating and great in-flight service. Now, as Vistara merges with Air India, the Tata Group has assured that they plan to carry over Vistara’s premium standards into the Air India brand. For Vistara fans, the hope is that the top-notch service they love will continue—just under a new name.
But this merger isn’t just about combining two airlines. It’s part of the Tata Group’s bigger plan to bring all its airline holdings together into a single, stronger, full-service airline. They aren’t doing it alone; Singapore Airlines is involved too, holding a 25.1% stake in the combined airline. This partnership could be a big boost for Air India, bringing in international expertise and connections to enhance its service quality. As part of this transformation, they’re rebranding their loyalty program as the “Maharaja Club” and integrating it with the Star Alliance network, which means frequent flyers can look forward to more rewards and benefits when flying with the new Air India.
With this merger, the Tata Group is betting big on offering a top-tier, full-service airline experience that competes on an international level. Meanwhile, IndiGo is sticking to its budget roots while cautiously exploring premium travel options with IndiGoStretch. This sets up a fascinating dynamic—one airline is focused on raising its service game, while the other is testing the waters of premium travel without straying too far from its low-cost focus.
These changes aren’t just corporate moves; they could have a real impact on travelers like us. While Air India’s merger with Vistara promises a better experience for those who prefer full-service travel, IndiGo’s new business class option might give budget travelers a more affordable way to enjoy a touch of added comfort.
In short, IndiGo is carefully stepping into the premium market, while Air India is aiming to become a true full-service giant. However, there is a possible downside. With fewer airlines in the market, competition could decrease, potentially leading to higher ticket prices. When fewer players dominate the skies, there’s often less pressure to keep fares low. So, while we might see better services, we may also have to deal with steeper costs.
Looking ahead, both IndiGo and Air India have big challenges to tackle. IndiGo will need to balance its low-cost model with the demands of its new premium service. If it goes too far, it could lose the simplicity and cost advantages that have made it so popular. For Air India, the challenge lies in scaling up Vistara’s high service standards across a much larger operation. Merging two airlines is no small task, and maintaining quality while expanding is a tough balancing act.
Dr. Reddy's wants people to lose weight
In this next story, let’s talk about a drug that’s shaking things up in the pharmaceutical world—Ozempic, and another similar drug called Wegovy. You’ve probably heard about them in passing, but let’s break down what they are and why they matter to us.
Ozempic was originally developed to treat diabetes, helping patients keep their blood sugar levels in check. But it didn’t stop there. Ozempic and Wegovy, both made by the Danish company Novo Nordisk, have recently gained popularity as weight-loss solutions, putting their active ingredient, semaglutide, in the spotlight.
Now, Dr. Reddy’s Laboratories, a well-known Indian pharmaceutical company, is planning to enter the weight-loss and diabetes market by making an affordable version of semaglutide. Their goal is to offer a more affordable option, especially in India, where the high cost of such treatments often makes them out of reach for many people.
To understand why Dr. Reddy’s move matters, let’s take a closer look at semaglutide. When Novo Nordisk first created it, the goal was to help people with diabetes. Semaglutide works by mimicking a natural hormone in the body called GLP-1 (Glucagon-like peptide-1), which helps control blood sugar and reduces hunger by making people feel full after eating. As it turns out, semaglutide has another benefit: it slows down digestion, which helps people stay full for longer. This appetite control has made it a powerful tool for weight loss, especially as more people look for ways to manage their weight.
With its popularity has come a high price. In the U.S., a month’s supply of Ozempic can cost over $900—a hefty expense for many, especially in places where incomes are lower. This rising cost issue is becoming more pressing as demand for weight-loss solutions grows. The global market for GLP-1 drugs (the category semaglutide belongs to) is expected to reach $100 billion by 2030. An affordable alternative could really change the game.
Dr. Reddy’s Laboratories sees big potential in offering a more budget-friendly version of semaglutide, especially with India’s rising rates of obesity and diabetes. It’s a serious public health issue—by 2035, around 11% of India’s adult population is expected to be obese, and diabetes rates are already among the highest in the world. An affordable version of semaglutide could make a real difference for millions who currently can’t access such treatments.
But there’s a challenge. Producing a cheaper version of semaglutide isn’t as simple as setting up a factory. In the pharmaceutical world, patents are a major factor. Patents give original creators, like Novo Nordisk, exclusive rights to make and sell their drugs for a certain period. Right now, Novo Nordisk holds the main patent on semaglutide, which means it controls its production and sales.
In India, this main patent is set to expire in 2026. After that, other companies, including Dr. Reddy’s, could potentially start producing semaglutide—if they meet specific legal conditions. The tricky part is that Novo Nordisk has filed extra patents, called secondary patents, on details like the drug’s manufacturing process and packaging. These secondary patents could last until 2033, creating more hurdles for any company hoping to replicate the drug exactly.
Despite these obstacles, Dr. Reddy’s is not sitting idle. They’re investing heavily in infrastructure right now so that when the main patent expires in 2026, they’ll be ready to launch immediately. Their goal is to hit the ground running with a smooth, end-to-end operation for producing, packaging, and distributing the drug without delays.
And it’s not just Dr. Reddy’s with their eyes on this opportunity. Other major players in India, like Biocon and Sun Pharma, are also gearing up to enter the GLP-1 market as soon as the patents start loosening. This makes Dr. Reddy’s readiness especially important—they want to be first or among the first to offer a more affordable alternative when the time comes.
Dr. Reddy’s also has some support from the Indian government. The Production-Linked Incentive (PLI) scheme is a government program designed to encourage local production of essential drugs, including GLP-1 treatments like semaglutide. This program could give companies like Dr. Reddy’s a boost with resources and support to bring generic versions of semaglutide to market faster once they’re legally allowed.
If Dr. Reddy’s succeeds, the impact could be huge. Not only would they tap into a growing, lucrative market, but they could also help millions of people access vital treatments that were previously out of reach. And as more companies join in, increased competition could drive prices down even further, benefiting patients across the board.
In summary, Dr. Reddy’s Laboratories is making a calculated bet on the expiration of semaglutide’s patents. By investing early, they aim to grab a share of the booming market for weight-loss and diabetes drugs, offering a much-needed affordable option in India and beyond. Their timing and preparation could give them a big edge in a market that’s both valuable and increasingly critical for public health.
Did Tata Motors have a bad quarter?
When we think about the auto industry in India, Tata Motors is a name that stands out. It’s not just one of the oldest players in the Indian automobile space but also one of the most versatile. Tata Motors makes everything—from trucks and buses to luxury vehicles like Jaguars and Land Rovers. This wide reach means that how Tata Motors performs can give us a good sense of the overall health of the auto industry.
Recently, Tata Motors shared its performance results for the second quarter of the 2025 fiscal year (FY25). Overall, there was a dip in revenue compared to the same period last year—a drop of around 3.5%. While this might sound small, for a company as large as Tata, it still signals some challenges. Behind this decline were specific issues across Tata’s three key segments: its luxury arm Jaguar Land Rover (JLR), its commercial vehicles division (CV), and its passenger vehicles division (PV). Let’s take a closer look to understand what’s happening.
First, let’s talk about Jaguar Land Rover (JLR). This is Tata’s luxury brand, known for its high-end cars, such as Range Rover and Jaguar models. JLR is Tata’s biggest moneymaker, accounting for nearly 70% of the company’s total earnings. Competing with global brands like BMW and Mercedes, JLR gives Tata Motors international recognition and brings in a large share of its revenue.
While JLR is a strong brand, it faced some setbacks this quarter due to unexpected supply chain disruptions and other challenges:
Supplier Flooding in Switzerland: One of JLR’s main suppliers, which provides aluminum—a crucial material for making vehicles—experienced severe flooding. This disrupted operations, slowing down JLR’s production schedules.
Delayed Quality Checks: Around 6,000 JLR vehicles intended for the UK and EU markets were delayed because of last-minute quality inspections, further affecting deliveries and revenue.
These issues led to a 10% drop in JLR’s sales volume, with total sales slipping to 87,300 units, resulting in a 6% decline in revenue. The root cause was difficulty getting cars from the production line to customers on time.
In China, JLR’s third-largest market, the situation was complicated by financial troubles among dealerships. Several dealers went bankrupt, creating a “domino effect” that made it harder for others to secure financing. This weakened JLR’s regional sales and distribution network, making it tough to maintain smooth sales operations in a critical market.
Despite these challenges, JLR management remains ambitious about the future. The company is focusing on a new strategy called “Reimagine,” with a £500 million investment to transition to electric vehicles. By 2030, JLR plans to go fully electric, with its Halewood plant playing a central role. This investment aims to help JLR bounce back from this quarter’s setbacks and lead the luxury EV market in the coming years.
Now, let’s move on to commercial vehicles, where Tata Motors has deep roots. With about 30% market share, it’s the biggest player in this segment. Tata’s trucks, buses, and heavy-duty vehicles have long been the backbone of Indian transportation, supporting industries from mining to construction.
Commercial vehicle sales often reflect the broader economy. When the economy slows, so does the demand for heavy vehicles. This quarter, overall commercial vehicle sales in India dropped by 11%, while Tata saw a steeper decline, with sales falling by 19%. Here’s the breakdown:
Heavy Commercial Vehicles: Sales dropped by 24%.
Medium Commercial Vehicles: Sales were down by 13%.
Small Commercial Vehicles: Sales declined by 10%.
Buses: The bright spot in this segment, with sales growing by 5%.
According to Girish Wagh, who heads Tata’s CV division, three key factors impacted the segment:
Lower Infrastructure Spending: Ahead of elections, government infrastructure spending typically slows, reducing demand for heavy vehicles like trucks.
Reduced Mining Activity: Less mining means fewer trucks are needed to move materials from mines.
Heavy Rains: An unusually strong monsoon disrupted freight movement, affecting truck usage across the country.
However, there’s a glimmer of hope. October showed a slight rise in fleet utilization rates, indicating increased demand for trucks and hinting that commercial vehicle sales might start picking up soon.
Tata Motors is making big strides in the electric commercial vehicle space, especially with buses. There are now over 3,300 Tata electric buses on Indian roads, collectively covering more than 200 million kilometers with an impressive 95% uptime. These buses are playing a key role in India’s transition to electric public transport, with Tata leading the charge.
Now, let’s talk about passenger vehicles, which have undergone a significant transformation in recent years. A few years ago, Tata held only a 4% share of India’s passenger vehicle market. Today, that share has surged to 13%, with Tata leading in the electric vehicle (EV) space, commanding around 65% of the EV market.
A major trend in Tata’s passenger vehicle segment is the rise of alternative fuel vehicles. CNG and electric vehicles now make up a third (33%) of Tata’s PV sales, showing that more customers are opting for cleaner options.
Despite Tata’s strong position, PV sales dipped this quarter. To help its dealerships manage inventory better, Tata reduced the number of vehicles sent to dealers. However, this move didn’t hurt retail sales, as Tata recorded its highest-ever retail sales in October. By holding back on dealer inventories, Tata aims to match growth more closely with actual market demand, avoiding excess stock in showrooms.
While Tata maintained its 65% market share in India’s EV space, demand softened after the end of the government’s FAME II subsidy scheme, which provided incentives for electric fleet vehicles. Despite this, Tata’s new model, the Curvv, received a positive response, with 20% of bookings for the EV variant. Tata’s focus on offering multiple powertrain options—petrol, CNG, and electric—shows its commitment to meeting the diverse needs of Indian consumers.
So, what does this mean for Tata Motors and the auto industry?
Luxury Vehicles: JLR faced significant production issues this quarter, but demand for flagship models like the Range Rover remains strong. The company’s investment in electric vehicles through its Reimagine strategy could help it stay competitive in the luxury EV market.
Commercial Vehicles: The performance of this segment is closely tied to the economy. This quarter’s decline reflects a slower economy, but a recent uptick in fleet utilization suggests a possible recovery ahead.
Passenger Vehicles: Tata’s turnaround story in this segment is impressive. It has gained market share, established itself as a leader in India’s EV market, and continues to adapt its offerings to align with changing consumer preferences.
Overall, Tata Motors’ performance this quarter provides a clear view of the challenges and opportunities facing the country’s auto industry. While each division has its own hurdles, Tata’s focus on electric vehicles and strategic moves show a clear intent to stay competitive across the board.
Tidbits:
Foreign Direct Investment (FDI) in India’s non-conventional energy sector surged by 35% in Q1 FY25, reaching $1.04 billion, while traditional sectors like telecom and pharma saw declines. This shift highlights India’s push toward its ambitious 2030 goal of achieving 500 GW of non-fossil energy capacity.
India’s electric three-wheeler segment faces a price increase of 15-18% as subsidy caps under the PM E-Drive scheme have been hit earlier than expected. This could slow down adoption and place a strain on both dealers and manufacturers due to rising costs.
Shares of major Indian solar manufacturers dropped following Donald Trump’s announcement to halt renewable energy projects, impacting companies like Waaree Energies that export to the U.S.
Onion prices in major markets have hit a five-year high due to poor crop quality and increased export demand from countries like Bangladesh, creating supply pressures at home.
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Companies like maruthi Suzuki did not enter the EV segment and has been concentrating on hybrid cars(petrol and cng). The mileage on CNG cars is around 25-30 where usual petrol cars give 15-20 mileage.
I have read concerns on adoption of EV due to lack of charging infrastructure, less range after full charge, battery replacement concerns and subsidies removed for manufacturing of EV vehicles.
My question is what is government's effort to setup the charging infrastructure? How will the passenger vehicle segment play out to changing consumer preferences with respect to hybrid cars, EVs and hydrogen powered cars in the near future?
Indigo & Tata Motors both are market leaders in their segments. Though a weeker revenue in last quarter this companies has bright look forward. Tata is a big name there EV cars is doing really well in the market, which will help them to capture PV segment and might EVs could be turnaround story for them for PV segment.