Brent Crude Hits $95/Barrel, Nifty below 24K, Trump Pharma Tariff Threat & More | Business 360

[00:00:03]Good evening. Thanks for joining us on Business 360. I'm Shireen Bhan. The big stories that we're tracking for you this evening. Crude oil prices hit the $95 mark as the US and Iran continue to trade strikes. Trump threatens to target a suspected Iranian nuclear site soon.

[00:00:17]Tehran says that would amount to an expansion of the war. US Secretary of State Marco Rubio says Iran is not serious about peace talks even as mediators meet in Islamabad in search of a breakthrough.

[00:00:29]Sharp cuts on Dalal Street. The Sensex down over 700 points. Nifty drops below 24,000. The rupee weakens against the dollar and moves closer to the 97 mark.

[00:00:41]President Trump threatens to impose a 100% tariff on generic pharmaceutical drugs from August of 2020. [music] It provides a two-year window for companies to move manufacturing to the US. Shares of Indian companies decline as they supply nearly half of the generic drugs [music] dispensed in the US.

[00:00:59]Zomato's parent company terminal misses estimates in the first quarter. Profits nearly halved sequentially but operational performance remains strong [music] with food deliveries growing at 20% and quick commerce orders surging 86%.

[00:01:12]Bloomberg reports the government has initiated talks [music] to drop a clause that may clear the runway for airport operators like Adani Group and GMR to own and run airlines. The current rules bar Delhi and Mumbai airport operators from owning more than 10% in an airline.

[00:01:28]The aviation ministry [music] is yet to comment on the Bloomberg report.

[00:01:33]The student protest continues at Jantar Mantar. 16 Delhi metro stations [music] closed for security reasons. The Supreme Court refuses to hear a petition on the protest and the police crackdown. Chief Justice Suryakant tells the lawyer, "Don't waste our time [music] and yours."

[00:01:49]Parliament adjourned for the third day without any business. The Union Minister [music] Rijiju says the government is ready to debate the NEET paper leak in the house next week. Opposition leaders protest wearing black shirts demand a statement from the Prime Minister.

[00:02:04]The death toll from the Sikkim tunnel blast rises to 20. At least five people trapped for the last 48 hours.

[00:02:10]Preliminary reports suspect a burst [music] of methane trapped within the rocks caused the explosion at the under construction tunnel.

[00:02:18]Ukrainian President Zelensky resorts to damage control, replaces the country's army chief after removal of the defense minister which led to protests on the streets.

[00:02:28]The 35-year-old Federov had been widely [music] praised for his attempts to modernize the army which had led to a wedge with the now former army chief [music] seen by many as a Soviet school commander reluctant to implement radical changes.

[00:02:42]OpenAI reveals two of its AI models went rogue during a cyber security test. They hacked [music] into a rival company called Hugging Face which provides open source AI tools. The incident highlights growing concerns about AI systems causing cyber attacks.

[00:02:58]For the top story this evening, the US and Iran exchange fire for the 11th day as tensions refuse to die down. Here are the latest developments. The US military claims to have carried out strikes on Iran's military operation centers and maritime capabilities. US forces also claim that Iran has hit over 30 commercial vessels transiting the Strait of Hormuz. President Trump has also warned of attacks on Iran's underground nuclear facility site at Pickaxe Mountain. In retaliation, Iran launched missiles and drones at US bases in Jordan, Bahrain, and Kuwait. According to Jordan's military, four Iranian missiles have been intercepted while two other missiles fell in remote areas.

[00:03:37]Kuwait's army said it continues to confront missile and drone attacks through its air defense systems. In the oil market, Brent crude prices surging now over $95 a barrel with ships transiting through the Strait of Hormuz being subdued. According to Marine Traffic, 45 vessels have passed the waterway in the last 24 hours.

[00:03:56]Separately, two India-bound tankers in the Red Sea also made a U-turn following a warning from Yemeni militant group the Houthis, who have announced a naval blockade of Saudi Arabia. Top US diplomat Marco Rubio is in the Philippines for the ASEAN Summit. The US Secretary of State met with his counterparts from the Quad Alliance, including India's External Affairs Minister S. Jaishankar. Rubio said Iran does not appear serious about negotiations and reiterated that no country can claim control over any international waterway.

[00:04:27]>> Unfortunately, so far, even though we have reached agreements, they have not kept their commitments. And as the president stated earlier today, I guess yes today Washington time, yesterday our time here now, uh the problem we're having right now is that they're not serious about talks. If they're serious, we're serious. If they're not, then we will do what is necessary to protect that our interests and also the interests of our allies.

[00:04:50]>> The US Secretary of State Marco Rubio, the US casualties in the conflict have been steadily rising. Nearly 500 US troops have been injured in the Gulf, according to a report by the Associated Press, citing sources.

[00:05:01]The Pentagon has announced nearly 100 casualties, including the deaths of at least 18 military personnel. Meanwhile, in what comes as a big boost for Saudi Arabia, President Trump has approved the landmark nuclear agreement. Wall Street Journal reports the deal will provide Saudis with a civil nuclear program and potentially open the door to enrich uranium within Saudi territory.

[00:05:21]Another key development comes from the UK, where the new Prime Minister Andy Burnham has allowed the US to use British military bases to carry some strikes on Iran. This is largely a continuation of the policy adopted under former Prime Minister Keir Starmer. And back in the US, the Secretary of War Pete Hegseth was grilled by lawmakers during a testy Senate hearing. Hegseth revealed that the war with Iran has cost more than $37 billion. dollars. He argued that the Pentagon is running low on cash and sought 88 billion dollars in supplementary funding, calling it urgent and necessary.

[00:05:57]>> Last week President Trump said the US would charge a 20% toll to each ship to pass through the state. So, based on your opposition to tolls, did you talk to the the president out of that idea or did someone else?

[00:06:10]>> Um Iran's not charging tolls and they're shooting at ships right now.

[00:06:15]>> But Trump said that he wanted to charge a 20% toll.

[00:06:20]>> Uh we we have a blockade right now of all Iranian ships and Iranian ports and it's it's effective.

[00:06:25]>> Do you have a new estimate about what the war has cost us so far in this the fifth month of the first year of this war in Iran?

[00:06:32]>> Uh Senator, the estimate we have as of today is 37.5 billion.

[00:06:38]>> 37.5 billion spent on the war in Iran so far by the US. That is the US Secretary of War, Pete Hegseth. Now, the last street ending the day lower is escalating geopolitical tensions, a surge in crude oil prices, and a weaker rupee weighed on sentiment. The Nifty slipped below the 24,000 mark closing almost 200 points lower, 680 points lower [music] on the Nifty mid-cap. The HDFC Bank stock down by about a percent.

[00:07:03]Nifty Auto was the only one that closed in positive territory on the back of very strong numbers that came in from companies like Bajaj Auto and TVS. Those stocks were up and about in trade today [music] even as the markets were lower.

[00:07:16]Well, FMCG also bucking the trend today.

[00:07:19]But from equities to the currency market where the rupee weakened [music] by more than 30 paise against the dollar as rising crude oil prices dented sentiment. The rupee's are moving closer to the 97 mark against the greenback.

[00:07:31]96.56 is where [music] the rupee closed for the day.

[00:07:35]The big story coming in from President Trump. He's threatened to impose 100% tariffs on generic pharmaceutical drugs, but from August of 2028. Now, he's provided a 2-year window for companies to move manufacturing to the US. Shares of Indian companies declined as they supply nearly half of the generic drugs that are dispensed in the US. Ekta is here with more on Trump's threat and the implications for Indian pharma. Ekta, to be clear, this is a proposal still. It has not been notified. It has not come into effect. We don't have the fine print all the details, but if this were to go through, will the impact be and how is industry reacting to this threat?

[00:08:17]India is the generic backbone of America's medicine cabinet. 90% of all US prescriptions by volume are generics and India supplies roughly 40% of them.

[00:08:30]That's a $10 billion export business.

[00:08:33]India also runs over 650 US FDA approved plants, the most outside America itself. And the reason it works, manufacturing here costs 30 to 50% less than in the US with labor costs, a large part of the pie, being 35 to 50% cheaper.

[00:08:54]So, who's exposed? Several frontline names. Lupin, Aurobindo, and Glenmark each draw around 42% of their sales from the US. Zydus close behind at round 40%.

[00:09:06]Dr. Reddy's at round 34%. Sun Pharma at round 29% and Cipla at round 22%. Many already have US capacity with Aurobindo and Sun Pharma building up US presence further through recent acquisitions and Lupin with a $250 million Florida investment.

[00:09:29]All this could work in these companies' favor.

[00:09:32]Now, here's the number that should worry Washington more than Delhi.

[00:09:37]Industry voices say generic manufacturing in the US runs five to 10 times more expensive depending on the molecule, raising costs by 25% for US production to even be commercially viable, prices would possibly need to rise 50% Take paracetamol, a box of 100 generic tablets cost around $2 to $5 in the US today versus $7 to $15 for the branded version of it. Shift generic production home and that same box could climb to around $4 to $7.50.

[00:10:17]And that gap only widens as the drug complexity increases. Now the impact, industry watchers are drawing on the branded pharma playbook. Some dilution as deadlines approached. Analysts expect generics to follow a similar script.

[00:10:35]CapEx announcements as a hedge but not a full manufacturing exodus. There's also a political catch. Trump's term ends in Jan 2029 and this two-year runway ends right around the 2028 US election. But there's no guarantee policy reverses if the political wind shift and in that scenario smaller and mid-size generic companies serving the US could see a far bigger hit. Industry stands right now, wait and watch. No formal order, no fine print and a clear sense that Indian pharma has to lobby its case before the clock runs out.

[00:11:17]>> Well yes, wait and watch indeed. Ekta, many thanks for joining us. Let's talk about earnings now and let's start with Nestle reporting strong numbers in the first quarter ahead of street estimates on all fronts. Net profit up 45% revenue up more than 25% on an annual basis. All four product groups have recorded strong double-digit growth as well. So, strong quarter there coming in for Nestle.

[00:11:38]Zomato's parent company, that's Eternal, has missed estimates in the first quarter. Profits have nearly halved sequentially. However, operational performance has remained strong with food delivery growing at 20% and quick commerce orders surging 86%. Mangalam joins us now with more. Mangalam, why has Eternal seen such a hit on its profitability?

[00:11:59]>> Well, beyond >> headline numbers, good internals is what I would say for Eternal this time round.

[00:12:03]Let's look at the headline numbers. The revenues a little over 20,000 crores versus street expectations of a little under 20,000 crores. The EBITDA came in a little under 600 crores. The street was working with a number of 670 crores, and that's where the mild miss was, and that was a reporting miss. The net profit as a result of which coming in at 92 crores, and the poll was about 335 crores. But, here's where the numbers really stand out, and that explains why the stock recovered from the lows as well. The key internals, which are then notified in the company's shareholders letter, food delivery NOV, or net order value, grew at 20% versus expected 18 to 20% growth. So, that's the higher end of the expected range. Quick commerce grew upwards of 86%. The street was expecting a range of 80 to 85%. District, the going out business, saw a growth of 60% year-on-year, and the company says this is structural, not necessarily seasonal.

[00:12:51]And out here as well, losses narrowed from 81 crores to 65 crores quarter-on-quarter. They added 200 Blinkit dark stores as well. Management commentary also fairly robust. They expect the NOV and quick commerce business, which derives most of its value on Zomato, has, you know, they expect that to be robust. They're not seeing any visible impact of high input cost or high fuel prices on demand yet.

[00:13:12]They expect competitive intensity to remain high, but that's become predictable. So, the company's modeled that, and the fourth quarter average retention across all their cohorts has been almost half for Blinkit, which signifies their competitive strength in a highly competitive environment. The two things which are most important for me is the quick commerce operating leverage beginning to show. Yes, the Blinkit EBITDA has increased quarter-on-quarter and now the pace of increase is also growing fast, so that's a positive. And secondly, for the last three quarters, despite all the investments that they are making and despite all the noise around competition and slowdown, etc., the cash balance, which is the most important thing for the company, has been increasing. So, these three factors led to the stock recover from the lows today. Good internals, good EBITDA coming in from Blinkit, good commentary, and finally, increasing cash.

[00:14:00]>> All right, Mangalam, many thanks for joining us. Recovering from its intraday low after its numbers. After months of legal and boardroom disputes, Bira 91 founder Ankur Jain has stepped down from the company's board and his executive role as part of a settlement with lenders and investors. The agreement paves the way for the company's restructuring and a fresh capital raise.

[00:14:19]As part of the settlement, all litigation will be withdrawn, personal guarantees extended by the founder will be released, and the promoter family will exit the board and all executive positions. Both sides have also agreed to withdraw all claims and legal proceedings, bringing the dispute to a close. So, uh for possibly a fresh start there for Bira 91. We will head to a break, but up next, OpenAI reveals two of its AI models went rogue during a cybersecurity test. That and more when we get back.

[00:14:50]According to a Bloomberg report, the government has begun discussions on scrapping a rule that could pave the way for airport operators such as the Adani Group and GMR to own and operate airlines. Under the current policy, operators of the Delhi and Mumbai airports cannot hold more than a 10% stake in an airline. Madiha joins us now with more. Madiha, let's turn the spotlight on the Adani Group and GMR.

[00:15:10]Both groups already have presence in the aviation value chain. And now, if the government were to tweak the policy, make this change, and allow airport operators to uh to own and operate airlines, how will they stand to benefit?

[00:15:26]>> Absolutely, both will stand to benefit because they have a significant presence across the aviation value chain. So, Bloomberg is reporting that the government is considering a major policy shift that could allow private airport operators to own and operate scheduled airlines. The proposal is currently being discussed within the civil aviation ministry and will require the law ministry's approval as well. But, if approved, it could pave the way for airport operators like the Adani Group and the GMR Airport Group to launch their own airlines. Now, if the rules do change, Adani would have already had a presence across almost uh the entire aviation value chain. Besides operating airports, the group has presence in aircraft maintenance, ground handling, flight training, airport retail, airport lounges, and even aircraft assembly uh through its partnership with Brazilian aircraft manufacturer Embraer. An airline is the only missing piece here.

[00:16:19]So, if the Adani won the rights to operate uh Adani Group won the rights to operate six airports in 2019, including Ahmedabad, Lucknow, Jaipur, Guwahati, Mangaluru, and Thiruvananthapuram. That became possible after the government in 2018 removed the requirement for bidders to have prior airport management experience, opening airport privatization to new infrastructure players. The group's biggest expansion came in 2021 when it took control of the Mumbai International Airport from the GVK Group and got Navi Mumbai Airport too as part of that deal. Since then, the group has expanded well beyond the eight airports. It recently inaugurated a commercial terminal at Mundra Airport, which used to be its private airstrip.

[00:17:00]So, if the government does allow airport operators to own airlines, and should the Adani Group look at the opportunity, it could potentially have a presence across almost every segment of the aviation value chain. From airports and airline operations to maintenance, ground handling, flight training, and even aircraft assembly. And it's not just the Adani group, but the other private operator, GMR, which operates a Delhi, Hyderabad, Goa, and Nagpur, has also expanded beyond airport operations.

[00:17:27]The group has built businesses in aircraft maintenance, cargo handling, duty-free retail aviation, a training academy, and airport parking. So, if the aviation norms are eventually relaxed, both of India's largest private operators uh already have a significant aviation ecosystem in place. Now, [snorts] uh we should also note that India does have a shortage of airlines with Indigo controlling 66% market share and the Air India group at 24% Akasa Air at 6% and SpiceJet just at 2%. So, while it would bring competition in the aviation sector, there are also concerns of airport operators possibly allocating prime slots to their own carriers.

[00:18:06]Nevertheless, if the proposal eventually becomes a policy, it could fundamentally reshape India's aviation landscape.

[00:18:13]CNBC-TV18 has reached out to the aviation ministry and is awaiting a response from the government.

[00:18:19]>> Well, yes, uh it uh is a Bloomberg report where uh we are awaiting a comment from the government. But, Nidhi Amanya, thanks for joining us. In fact, I spoke with Jeet Adani in December last year ahead of the Navi Mumbai airport launch on the possibility of the group foreign into the airline business if the government were to change the policy.

[00:18:38]Here's what he had to say.

[00:18:40]>> What part of this business are you currently not into that you wants to get into? I mean, you know, the the the the big question is is a foray into airlines the next big plan on the Adani group's calendar?

[00:18:54]>> absolutely not. Uh we were legally not allowed to.

[00:18:57]>> Yeah, but but but I know you're legally at this point in time not allowed. But, the government's been talking about, you know, competition. The government's been talking about the need for a large airlines, especially in the light of what we've seen happen with the Indigo.

[00:19:09]If tomorrow the opportunity were to arise, would you consider it?

[00:19:12]>> Um I would say there's nothing that we won't consider, but as it stands today, structurally the the airline industry is not something that we see, you know, fitting our um our sort of capital discipline. Um we're used to high margin businesses, investing in asset uh and you know, sweating that asset well. Um the airline is completely opposite in every >> So from our from our unit economics point of view, it doesn't make any sense for you.

[00:19:44]>> no.

[00:19:44]>> For for you at this point in time or even in the future.

[00:19:46]>> Yeah.

[00:19:47]>> If the opportunity were to arise >> Absolutely, yes.

[00:19:49]>> So that's not something that you would consider.

[00:19:53]>> Well, not looking at it at this point in time. That was Geeta Adani. To me, of course, the big question is whether the government will tweak that policy or not. Thousands of students continue to protest at Jantar Mantar in New Delhi demanding education reforms and the resignation of the education minister Dharmendra Pradhan over the NEET paper leak. Now, 16 metro stations in the national capital have been closed until further orders citing security reasons.

[00:20:19]This as the Delhi Metro Rail Corporation.

[00:20:22]Interchange facilities continue to remain available at Rajiv Chowk, Mandi House, and Central Secretariat.

[00:20:28]Meanwhile, the Supreme Court has refused to hear a petition on the protest and the police crackdown. Chief Justice Surya Kant told a lawyer who had moved that plea, and he said, I quote, "Don't waste our time and your time. We don't want to watch any videos." This was because the lawyer had said that there was evidence on video of police brutality. Now, the Supreme Court Bar Association has condemned the police action on protesting students. The association expressed solidarity with the injured students and sought an impartial inquiry into what it described as excessive use of force. The issue also rocked Parliament for a third day in a row.

[00:21:05]Opposition MPs came dressed in black, staging a protest outside the house calling for Minister Pradhan and Home Minister Amit Shah's resignations over the police action. Union Ministers Kiren Rijiju and J.P. Nadda said the government is ready for a debate in Parliament on the NEET paper leak next week. However, Rajya Sabha leader of the opposition Mallikarjun Kharge insisted that Pradhan must resign first. He demanded a discussion under rule 267, which allows the house to suspend its scheduled business. Both houses were later adjourned without any business for the third day. Education Minister Dharmendra Pradhan said the government remains 100% committed to addressing every genuine concern of the country's youth. This was his first public response on the issue since protesters marched to Parliament on Monday and they were met by that police crackdown.

[00:22:36]Well, action in Parliament. Now, ChatGPT maker OpenAI revealed an autonomous AI agent powered by its technology hacked two prominent startups. The company has called the incident unprecedented.

[00:22:46]Rachna joins us now with more. Rachna, OpenAI saying that its AI model went rogue. Now, what exactly transpired here?

[00:22:56]>> That's right. OpenAI has confirmed that its own models caused last week's Hugging Face security breach, calling it an unprecedented cyber incident. Now, the company says the breach happened during an internal evaluation designed to measure advanced cyber capabilities with models including GPT-5.6 Soul and a more capable pre-release model running with reduced cyber refusals for testing purposes. Now, as per OpenAI's preliminary findings, the models exploited a zero-day flaw in a package registry proxy to escape their isolated sandbox, then worked through privilege escalation and lateral movement until they reached a node with internet access. From there, the models used stolen credentials and additional zero days to break into Hugging Face's production service, hunting for test solutions to cheat the cyber benchmark they were being evaluated on. What makes this different from a conventional breach is that no human attacker directed it or was involved in it. The models were chasing a narrow testing goal and built the attack path themselves without access to the source code of the systems they broke into.

[00:23:59]OpenAI says this confirms in the real world what UK AI safety institute evaluations have shown in theory, that frontier models can now sustain complex multi-step cyber operations over long time horizons. The safeguards that would normally block this were switched off by design because this was a test built to measure maximum capability. That is the uncomfortable part for the entire industry because it means the ceiling is higher than what users see in production, and containment now has to keep pace with capability. Hugging Face's security team detected and contained the activity and OpenAI flagged the anomaly internally. The zero-day has been responsibly disclosed by both the companies, and now both the companies are jointly investigating, and Hugging Face has been brought into OpenAI's trusted access program for cyber defense. Hugging Face CEO Clem Delangue called it possibly the first incident of its kind, saying AI safety will be solved in the open and not by any single company working in secret. It launched the same day Google restricted its new cyber model to governments and trusted partners, the same gatekeeping that Anthropic used for Methos. So, clearly very interesting time when it comes to cybersecurity and frontier models. We'll have to see where it goes.

[00:25:12]>> Absolutely an important issue. Rachna, many thanks for joining us. With that, it is time for us to wrap up this edition of Business 360. The news continues right here on CNBC-TV18. Stay tuned. We're back in a moment.