BACK PAGE | PAGE 20 AI@WORK | PAGE 9 Lionel Messi retires from international football INTERNATIONAL | PAGE 7 India'sAI inflection point: Moving from pilot to scale LUCKNOW, TUESDAY, SEPTEMBER 1, 2026 USandIrantradeattacks; UAEandJordantargeted FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL 19 NO. 227, 46 PAGES, `12 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 76,957.27 ▼ 307.24 NIFTY: 24,080.40 ▼ 95.25 NIKKEI 225: 66,311.93 ▼ 93.63 HANG SENG: 25,566.99 ▼ 17.80 `/$: 95.17 ▲ 0.21 `/€: 110.40 ▲ 0.63 BRENT: $90.80 ▲ $2.70 GOLD: `1,55,114 ▲ `3,740 MARUTI SUZUKI WILL invest `77,500 crore between FY27 and FY31 as the country’s largest carmaker prepares for higher vehicle demand. The auto major has budgeted `14,000 crore of capex for FY27, reports Nitin Kumar. » INSIDE « GOVTMULLS EASING FDI NORMS FURTHER FOR DEFENCE PAGE 3 THE BATTLE FOR AI HEGEMONY, WRITES ANIL NAIR PAGE 8 Closely tracking inflation risks, bond yields: FinMin INDIA IS CLOSELY tracking global sovereign bond yields, competition for international investment capital and the risk of higher global inflation, the Finance Ministry said in its August monthly economic report, reports fe Bureau. ■ PAGE 3 ITC Infotech to buy 22% in Happiest Minds for `1,330 cr MID-TIER IT services firm Happiest Minds Technologies on Monday announced that its founder and promoter Ashok Soota and Ashok Soota Medical Research LLP will sell a 22.1% stake in the company to ITC Infotech for `1,329.72 crore, reports Poulomi Chatterjee. ■ PAGE 4 At constant prices (% chg, y-o-y) 9.0 INDIA'S ECONOMY GREW a stronger-than-expected7.8%in theApril-Junequarterdespitethe WestAsiawarandtheaccompanying energy price shock, as robust investment,resilient services and a pick-up in exports poweredexpansion. Thegrowth,accordingtodata released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday, waswellabovetheReserveBank of India's forecast of 7% and mostanalysts'estimates. Growthcouldhavebeeneven higher but for the impact of the West Asia crisis on government finances.Highersubsidypayouts andexcisedutycutsonautofuels weighed on net product taxes, creating an unusuallywide gap between GDP and gross value added(GVA). GVA, considered a better measureofunderlyingeconomic activity, expanded 8.2% in Q1FY27,with services growing 10% and the secondary sector 8.6%. GDPgrowthwas8.6%inthe previous quarter — revised 7.7 8.5 7.5 8.2 -2.4 7.8 7.5 Q1, FY27 GDP 7.0 6.5 Q1, FY25 Source: MoSPI Public administration, defence 7.5 8.9 3.6 8.0 SHUBHAM RANA New Delhi,August 31 9.2 GVA 8.5 12.1 Financial, real estate & professional services MARUTI BETS ON SMALLCARS,TO INVEST`77,500 CR ROOM FOR RATE HIKE services, exports drive strong economic expansion Q1FY27, GVA (% chg, y-o-y) Trade, hotels, etc PAGE 4 Sectoral performance Construction COMPANIES ● Investments, Electricity, gas, water THE REPAYMENT PLAN proposed by Zee Group Founder Subhash Chandra faces another round of scrutiny after the original National Company Law Tribunal bench held that no majority view had emerged on the proposal, reports Manu Kaushik. Growthbeatswarblues Manufacturing NCLT: NO MAJORITY VIEW ON CHANDRA REPAYMENT PLAN NARENDRA MODI, PRIME MINISTER India’s exemplary GDP growth of 7.8% during Q1 of FY27 is a herculean feat REFORMS BEARING »INSIDE« FRUIT, SAYS FM P2 CEA: GROWTH MOMENTUM EDITORIAL: RESILIENT REMAINS STRONG P2 INDIA P8 upwards from the earlier estimate of 7.8% — and 7% in Q1FY26. The better-than-expected first-quarter performance promptedsomeanalyststoraise their FY27 growth forecasts to around 7-7.5%, from 6.5-7% earlier. Akey driverwas investment. Gross fixed capital formation (GFCF),a proxy for investment, surged 11.9%,the fastest in the new GDP series going back to FY23. Investment growth has nowacceleratedforfourconsecutive quarters, helped by sustained government capital expenditure. TheCentre'sbudgetarycapex rose24%inApril-Juneand30% inApril-July,reflectingitscontinued use of public investment to crowdinprivate-sectorprojects. TheshareofGFCFinnominal GDProsesharplyto34.3%inthe June quarter from 31.4% a year earlier. Continued on Page 6 Semicon 2.0 notified to widen push beyond fabs ● `1.27L-crscheme targets100,000 moreengineers OJASVI GUPTA New Delhi, August 31 INDIA WILL LOOK to develop another 100,000 semiconductor engineers as part of its `1.27-lakh-crore Semicon 2.0 programme, as the government broadens its chip strategy from attracting fabrication plants to building capabilities across the semiconductor value chain. The government on Monday notified detailed guidelines forSemicon 2.0,offering incentives for chip design, equipment and materials,fabrication plants, advanced packaging,research and development and talent creation. BROADER CHIP STRATEGY ■ For large silicon wafer fabrication plants, the Centre will provide fiscal support of 40% of eligible capital expenditure ■ Smaller fabs with a minimum investment of `500 crore, will be eligible for support of 35% ■ For commercially oriented chip design, startups and MSMEs can receive milestone linked funding of up to `15 cr or 50% of cost ASHWINI VAISHNAW, IT MINISTER Inthecoming years,closeto10% oftheglobal semiconductor industry's marketis expectedto beinIndia Continued on Page 6 HDFC’s succession goes beyond CEO SASHIDHAR JAGDISHAN’S IMPENDING exit may have removed one uncertainty for HDFC Bank, but the succession challenge goes well beyond the CEO's office. No wonder, brokerage firmshaveloweredtheirtargetprices.Theyhave, however,retainedtheir‘buy’recommendations, betting that a credible successorand a refreshed leadershipteamcouldeventuallytriggerarerating, reports Christina Titus. CFO Srinivasan Vaidyanathan is also due to retire in November, while Bhavin Lakhpatwala,head of strategyand investor relations,resigned in June. ■ PAGE 6 Kotak bank shortlists two EDs for CEO post KOTAK MAHINDRA BANK has recommended Anup Saha and Paritosh Kashyap,both executive directors at the bank, for the post of CEO to the Reserve Bank of India, according to sources cited by a Reuters report.Current Chief Executive Ashok Vaswani’s term ends on December 31,2026 and he will not be seeking reappointment. Saha, who oversees the retail banking business at the private sector lender, joined Kotak in January from Bajaj Finance. Kashyap, in charge of the wholesale banking business at the bank, is a Kotak veteran. MSCI rebalancing fires up NSE closing auction ● Turnoversoarsto BOOST FOR CAS MECHANISM record`40kcr;60 stockshit3%limit 45,000 NSE CAS trading 37,500 KISHOR KADAM Mumbai, August 31 750 678.11 Value (` crore, LHS) Shares traded (million, RHS) 625 30,000 22,500 THE NATIONAL STOCK Exchange’s closing auction session (CAS) received a huge boost on Monday,as the MSCI index rebalance saw the turnover zooming to a record nearly `40,000 crore and pushing almost a third of the stocks traded in the auction to their daily price limits of 3%. A massive 678.11 million shares, worth `39,718 crore, changed hands during the 15-minute closing auction between 3:15 pm and 3:30 pm,as institutional investors routed MSCI rebalancing trades through the new mechanism. The scale of the surge was 500 375 15,000 250 1,276 7,500 0 39,718 PAGE 4 Mining & quarrying COMPANIES Q1 GDPBEATS FORECASTSTO GROWAT7.8% Agriculture IN THE NEWS 25.86 3 5 7 11 13 17 19 Aug 2026 21 25 27 31 125 0 »INSIDE« RBI SUPPORTPUSHES RUPEE NEAR 1-MTH HIGH P6 unprecedented.Since CASwas introduced on August 3, the session had averagedvolumes of just 21.57 million shares and turnover of `1,196 crore. Monday's turnover was more than 30 times that average, while volumes were over 31 times higher. The earlier volume peak was 33.66 million shares on August 12,while the previous turnover high was `1,638 crore on August 18. Continued on Page 6 Aspirations to upgrade & availability of affordable credit fuel premium shift Premiumphonesfly,budgetonesflag CONSUMPTION PUZZLE-IV GEN Z KEY BUYERS India Smartphone Price Band Share (Volume) SMARTPHONES OJASVI GUPTA & ASHUTOSH MISHRA New Delhi, August 31 INDIA'S SMARTPHONE MARKET is splitting in two — and the bottom is falling out.Shipments in the April-June quarter dropped 10% year-onyear,the steepest June-quarter fall in six years, according to Counterpoint Research. The damage was concentrated at the bottom: volumes of phones priced below `15,000 crashed nearly 50%. Yettheaveragesellingprice climbedtoaround`30,000,up almost 20% from a year earlier. Indians aren't buying fewer phones because they can't afford them — thosewho are buying are spending more India Smartphone Price Band Growth Rate (Volume) 45 32 (%) Q1FY26 Q2FY26 Sub-15K 47 27 (%) 23 26 -28 -47 15-30K 30 24 >30K Sub-15K 15-30K >30K than ever. “Demand in the mid-premium segments is sustaining fairly well, whereas volumes at the lower end are languishing,” says Upasana Joshi, senior research manager at IDC India and South-East Asia. The `15,000-30,000 band and above remains Overall Market 3 16 -2 -10 Source: Counterpoint Research robust as consumers chase upgrades. Samsung has raised Galaxy prices several times in eight months; its volumes haven’t flinched. The premium shift isn't new. In the September 2025 quarter,Apple alone shipped 5 million units — the iPhone 16 took 5% of total shipments, the iPhone 17 and iPhone Air another 16%. Total smartphone sales hit 48 million that quarter,up 4.3%year-on-year, IDC data show. For 2025 as a whole, though, shipments were flat at 152 million units. The market isn't growing; it's trading up. What’s funding the splurge? Credit, in large part. “Aspirations to upgrade to a better phone, combined with the availability of affordable credit, is driving sales at the higher end,” executives at a smartphone company said. RBI data show 'other' retail loans — excluding car, home and credit card debt — grew a brisk 23-24% year-on-year every month from January to June. Not all of that went into devices, but a fair share of high-end phones is bought on EMI, with banks and shadow lenders partnering brands right at the checkout counter. Continued on Page 6 Lucknow