Indian Economy - News & Updates - Archive

[Contrarian]

Wipro gears up for mega global deals

BANGALORE: Tech major Wipro seems to have enhanced significantly its delivery capabilities through its series of acquisitions, building multiple domain expertise and readying a bouquet of service offerings.

The company says it is now ready to venture into deep waters to contest for mega deals, in the range of $250 to $500 million, with top global players like IBM, Accenture and EDS.

Suresh Vasvani, president, Wipro Infotech, told The Times of India, "All the investments we have done so far towards enhancing our service lines have started yielding results. This has given us immense strategic edge. As a result, we currently have a pipeline of several $100 million deals and many mega deals of international size. We started experiencing this trend in the domestic market a couple of quarters ago by winning work orders from HDFC and Dena Bank worth $80 mn and $70 mn respectively. Most of these mega deals are going to be in the areas of offshoring, infrastructure management and business process outsourcing."

Wipro's integrated services approach seems to have worked well for it. It has brought all its services __ consulting, infrastructure management, software applications, systems integration, data centre, BPO services and PC business — under a single package. "Customers are looking at companies that can provide integrated services. Total outsourcing proposition strategy has been effective in the last six quarters,"he said.

Wipro has strengthened its consulting business that has 250 vertical-specific consultants who evaluate clients' businesses, and suggest strategies for profitability and cost reduction.

 

[Neo]

Tuesday, January 23, 2007

Can India sustain its rapid economic growth?

MUMBAI: More than a decade of reform has shifted India’s long-term economic growth rate to a higher level.

With that, analysts agree. Where they disagree, is in deciding what that higher rate is. Over the last three years, growth has averaged about 8 percent and the government is shooting for an average of 9 percent over the next five years.

That’s a big jump from trend growth of about 6 percent in the two prior decades and would move the economy’s momentum closer to neighbouring China, which is sustaining growth of about 10 percent.

While the central bank is not sure if 9 percent growth is so rapid the economy will overheat, analysts are convinced trend growth has shifted to a higher gear, leaving debate to dwell on what growth rate is sustainable. Goldman Sachs analyst Tushar Poddar reckons trend growth is now 8 percent, driven by productivity gains.

Other analysts say it is closer to 6.5 percent, as a lack of infrastructure and skilled workers will eventually limit the economy’s ability to expand.

“In our view, overheating concerns are overdone,” Poddar said. “Demand pressures are well-contained and high credit growth is due to financial deepening.”

Since 1991, India has gradually opened its economy to more competition and encouraged freer international trade.

Signs of its rapid growth are visible on India’s streets from new cars to new houses. Airport lounges teem with a new middle class and mobile phones are ubiquitous in cities. In the April-September half of the 2006/2007 fiscal year, annual economic growth was running at 9.1 percent, backed by 30 percent annual growth in credit. November’s industrial output grew at its fastest annual pace in more than a decade, suggesting the economy maintained its brisk growth rate in the latest quarter.

N Vaghul, chairman of ICICI Bank, India’s second-largest bank, said changes in manufacturing have helped economic growth pick up the pace.

In particular, Indian companies do not find funding expansion to meet increased demand a big problem because they are far less leveraged now than a decade back, he said. “There is a fundamental shift due to lessons learnt by corporates (in the mid-1990s) because they paid a very high price for over leveraging,” he said at a recent graduation ceremony.

Manufacturers, particularly in auto components, textiles and pharmaceuticals, have gained considerable expertise in the past decade, analysts said. Policy makers say the economy has shown resilience in the face of consistently high global oil prices, an optimism reflected in stock prices, which hit a fresh record high last week.

The central bank’s deputy governor, Rakesh Mohan, said the growth trend of the past few years indicated the economy had entered a new phase of stronger expansion. “Most importantly, the current growth process is not a flash in the pan and is exhibiting signs of sustainability along with financial stability, notwithstanding the pressures from unforeseen external shocks,” Mohan said.

Capacity constraints: Not everyone is so bullish. Inflation is running at above 6 percent, higher than the central bank would like, so some analysts believe the authority could tug harder on the monetary policy reins when it reviews policy on Jan 31.

Vice president of Moody’s Investors Service, Kristin Lindow, and HSBC’s Robert Prior-Wandesforde say India’s sustainable growth rate is more like 6.5 percent. Prior-Wandesforde cited a lack of skilled labour and record-high capacity utilisation in the economy as the main limiting factors.

“India cannot continue at 9 percent-plus growth momentum as capacity bottlenecks may prove a constraining factor,” Lindow said. To maintain its current rate of expansion, the economy needs to overcome several problems, said Julian Jessop, chief international economist at London-based research consultancy Capital Economics Ltd. Apart from upgrading infrastructure and improving public finances, it should relax labour market laws and restrictions on foreign investment to boost manufacturing still further, he said. Industry accounts for about a quarter of India’s GDP.

Indian Prime Minister Manmohan Singh has acknowledged that poor roads, rail, ports and insufficient power supply were holding the economy back.

India has said it needs $1.5 trillion in investment in the next 5 years to improve infrastructure and raise manufacturing and farm output. But ICICI’s Vaghul said he was now less worried about problems such as weak infrastructure and more concerned about a shortage of skilled labour, which was sending wages spiralling. “Shortage of human resources has created a serious situation in the country and we are not recognising it,” he said.

“The major threat for growth is going to come from shortage of human resources.” Prior-Wandesforde said the economy would continue to grow above trend of 6.5 percent for now as there were no triggers for an immediate, sharp slowdown. “The longer this goes on, however, the bigger will be the ultimate downturn,” he said.

http://www.dailytimes.com.pk/default.asp?page=2007\01\23\story_23-1-2007_pg5_27

 

[Neo]

Tuesday, January 23, 2007

CBOT eyeing India’s growing commodities trade

NEW DELHI: The US-based Chicago Board of Trade (CBOT) plans to enter India’s booming commodity derivatives market as it believes the country will soon ease rules governing trading and foreign investment, a board official said on Monday.

“Easing of rules is just a matter of time. The current rules in India may be a little more stringent, but as governments see the benefits of futures industry, they will tend to open up,” Richard A. Jelinek, a board director, told Reuters.

India’s commodity market regulator currently does not allow banks and financial institutions, either domestic or foreign, to trade in commodity markets. But a bill to permit foreign players to take part in commodity futures and buy stakes in Indian exchanges should come before India’s parliament in the session beginning next month.

Jelinek said India’s booming economy would attract more investment if access to the commodities market was opened up.

“Free and open access is a very important aspect of the futures industry. We are interested in Indian markets and we have very good relations with Indian exchanges,” Jelinek said. India only allowed trading in commodity futures in 2002. Three exchanges — the National Commodity and Derivatives Exchange, Multi Commodity Exchange, and the National Multi Commodity Exchange — were set up in 2003.

According to the Forward Markets Commission, the commodity market regulator, commodities worth 27.4 trillion rupees ($619.8 billion) were traded between April and December 2006 against 14.08 trillion rupees ($318.5 billion) the year before.

“India continues to grow in terms of agricultural markets and precious metal markets and it is good business practice for the Board of Trade to reach out to our customers in India,” Jelinek said.

The Chicago board, awaiting U.S. government approval to merge with the Chicago Mercantile Exchange, also plans to launch a slew of contracts to capitalise on investors’ growing appetite. Contracts in South American soy products, Black Sea wheat, and distillers dried grains, a feedstock substitute which is a byproduct of ethanol production, were being considered. The exchange would increasingly focus on the energy sector, especially biofuel, Jelinek said.

http://www.dailytimes.com.pk/default.asp?page=2007\01\23\story_23-1-2007_pg5_35

 

[Contrarian]

SBI Q3 net dips 4.5% to Rs 1,065 crore

MUMBAI: State Bank of India, India's largest lender, missed market forecasts with a 4.5% fall in quarterly earnings, knocking its shares down, hit by a sharp rise in provisions for bad loans.

SBI more than doubled its provisions for contingencies and bad loans in the December quarter, but banks, seen as a proxy for growth in an economy expanding at more than 8% a year, are set for strong earnings in the March quarter.

"It's because of extraordinary items last year," said Kush Joshi, analyst at Indsec Securities. "Stripping one-off items, it is a net profit of more than Rs 1,100 crore, versus a loss of about Rs 620 crore."

The government-run bank earned a net profit of Rs 1,065 crore ($241 million) for the fiscal third quarter ended December 31, down from Rs 1,115 crore ayear earlier when it had some tax payments refunded to it and made currency gains.

A Reuters poll had forecast net profit of Rs 1,187 crore.

Demand for loans from firms to expand capacity and individuals to buy homes and cars is expanding at about 30% a year, even after the central bank raised lending rates by 100 basis points in 2006.

The central bank is expected to raise rates again at a review on January 31 to rein in inflation, which is running at two-year highs, but this is seen as unlikely to severely dent loan growth.

SBI shares were down 4.1% at Rs 1,174.40, after falling as much as 4.5%, in a Mumbai market.

 

[Contrarian]

Deora for diesel excise cut to stem inflation

NEW DELHI: Oil minister Murli Deora on Tuesday put forth to FM P Chidambaram a duty recast package in his Budget wishlist, which, if included in the final document, will save consumers of petroproducts a big pinch in case international oil prices head north in future.

Deora suggested a gradual removal of excise duty on diesel as a "measure to check runaway inflation", starting with a Re 1 reduction. The other suggestions revolve around the idea of scrapping/reducing levy on crude or setting them at flat rates rather than a mix of specific and ad-valorem duties. Among the options are scrapping import duty on crude or halving it to 2.5% from 5% at present. On petrol and diesel, the preference is to cut customs to 2.5% from 7.5% now.

As a second option, duty could be lowered to 5%. On jet fuel too, the duty is suggested to be halved to 5% from 10%, or at least reduced to 7.5%. Similar cuts have been suggested for other industrial petroproducts, while kerosene and cooking gas do not attract any customs.

The real play of the strategy, however, is in the suggestions for an excise tweak. Deora wants excise on petrol at a flat rate of Rs 15.92 a litre instead of a mix of 8.16% plus Rs 13.26 per litre. As a second option, it wants a flat rate of Rs 15.44/litre. On diesel, the suggestion is for a flat rate of Rs 6.08/litre instead of a mix of 8.16% plus Rs 3.32/litre. The second option is to set the rate at a flat Rs 5.56/litre. Similar structures have been suggested for other industrial petroproducts.

If the duty revamp proposal is taken as a whole, the current retail prices will not change. But if international crude rises to, say, alarming levels of $70 a barrel in future, the impact on consumers will be miniscule.

Oil ministry calculations show at current crude prices, the government will gain Rs 10,872 crore if the first option is accepted. If the choice is on second option, the gain will be Rs 5,780 crore. The second option is based on the assumption that excise on petrol and diesel will be raised to offset the gain for companies from customs reduction
http://timesofindia.indiatimes.com/...cut_to_stem_inflation/articleshow/1411386.cms

 

[Contrarian]

Global calls via Net at 95 paise/min

NEW DELHI: World Phone Internet Services Pvt Ltd, a category 'A' internet service provider (ISP) is introducing international calls at a new low of just 95 paise a minute.

Consumers can call over 30 countries at this rate, including US, Canada, France, Germany, Hong Kong, Italy, Singapore and Switzerland. In comparison, leading ISP's offer international calls at over Rs 2/minute.

According to Aditya Ahluwalia, chairman, World Phone, "We aim to make superior quality international voice calls affordable for every Indian consumer and assist the government in curbing the rapid proliferation of illegal internet telephony service providers". Currently, World Phone negotiates over 10 million international call minutes through its internet telephony network every month.

World Phone's pre-paid internet telephony cards are available in denominations of Rs 100, Rs 250, Rs 500, Rs 1,000 with a 100-day validity. They can be purchased by logging on to World Phone's website www.worldphone.in or through the company's network.
http://timesofindia.indiatimes.com/...ia_Net_at_95_paisemin/articleshow/1411358.cms

 

[Contrarian]

Your roaming bill set to go down 10%

NEW DELHI: Here is some news to warm your heart. The Trai is set to announce a substantial cut in roaming tariffs on Wednesday, with consumers likely to see their roaming bills reduced by about 10%. According to sources, the Trai is still working on the fineprint of tomorrow's directive, which has been bitterly opposed by cellular operators.

Trai wants to do away with the Rs 50 rental and 15% surcharge in addition to a pruning of airtime charges which are currently much higher than local mobile call charges.

Trai sources confirm only two things: that rental charges will go, and that the Authority is excercising forbearance on SMS charges.

However, the final maths on the surcharge and roaming call charges is still being worked out at the time this report was being filed. Following Wednesday's announcement, the new rates are likely to become effective from 1st April or perhaps even earlier.

Trai's move to reduce roaming tariffs for consumers by aligning them closer to costs has mobile operators fuming. But the good news is that unlike previous occasions, this time, they may be unable to take legal recourse.

Cellular operators admit they are not in a position to appeal against Trai's tariff order in Telecom Dispute Settlement and Appellate Tribunal (TDSAT) as TDSAT is unlikely to rule against a pro-consumer order. Especially as the basis of such an Order is cost data submitted by the operators themselves.

Telecom service providers case is further weakened by the fact that the Order is also consistent with Trai's interconnection regulation, which seeks cost-based, non-discriminatory interconnection between operators.

CDMA operators are even less likely to have a reason for appeal since their consumers roam only on their networks, unlike GSM subscribers who may sometimes roam on rival operators networks.

However, operators argue that Trai's intervention is unjustified as only a niche segment that can afford to pay a premium uses roaming. Trai, on the other hand, considers 1.5 crore consumers large enough to justify a reduction in roaming tariffs.
http://timesofindia.indiatimes.com/...ill_set_to_go_down_10/articleshow/1411355.cms

 

[Contrarian]

Public offers may attract service tax

MUMBAI: The finance ministry is set to reap the benefits of the boom in the primary stock market. As companies queue up with their maiden and follow-on offerings, the ministry is preparing to bring listing of stocks on equity and commodity markets under the service tax net.

Sources told TOI that the proposal mooted by the Directorate General of Central Excise Intelligence (DGCEI) is likely to find its way in the forthcoming union budget for 2007-08, scheduled for February 28. In case the proposal becomes a law, fees for all listings will attract a service tax at the rate of 12.5%.

"Unlike registration fees charged by the Registrar of Companies, the listing fee paid to the stock exchanges is not a statutory payment. Listing of securities can be construed as a service rendered by the stock exchanges and, hence, taxed," said Sachin Menon, partner and head of indirect taxes, RSM & Co.

Already some components in the initial public offerings (IPO) process like the underwriters' fee and the advertising & printing services have come under the service tax net. However, other expenses like lawyers' fee and even the nominal fee paid to the market regulator — Securities and Exchange Board of India__for clearing the IPO are still out of service tax net.

Currently, fees for listing on the exchanges are directly proportional to a company's equity capital. For example, the fee for initial listing on the BSE is Rs 20,000 and thereafter, annual listing fee of Rs 10,000 is charged for companies with a paid-up capital of upto Rs 5 crore.

During financial year 2005-06, Bombay Stock Exchange (BSE) had collected about Rs 16.3 crore as listing fee while for the National Stock Exchange (NSE) the corresponding figure was Rs 8.44 crore. In addition, the bourses had also collected book building fees. While NSE collected Rs 9.72 crore for facilitating book building process during public offers and de-listings, BSE had collected about Rs 6.14 crore. Fees for the two bourses, under all these heads, add up to Rs 40.7 crore.

These fees are expected show a much higher figure at the end of the current financial year. For one, during the current financial year about 50 public offers have been completed, and over 30 are expected to hit the market before the end of the year. This compares favourably with about 70 issues during financial year 2005-06. These listings will also push up the book building fees for the current year substantially.

In addition, companies with large equity base have to fork out higher listing fees. Reliance Petroleum and Cairn India are two such companies each with a large equity base and were listed in financial year 2006-07. Real estate major DLF is another company which has a huge equity base and is waiting to complete its IPO process to get listed on the Bombay Stock Exchange and the National Stock Exchange in a few months. These listings are also expected to lead to higher listing and book building fees for the two exchanges.

In calendar year 2007 alone, public offers worth Rs 45,000 crore are set to hit the market if the current market boom, according to a recent study. Offer documents to raise Rs 28,376 crore have been filed with Sebi. Companies raised Rs 24,432 crore through public offers in 2006.

Even some more aspects of the IPO business can be brought under the tax net, experts suggest. For instance, when an IPO is over-subscribed, the companies park the excess funds with a bank which pays a 6-7% interest as a 'fee' to the company. "This interest or fee paid by the bank may also be brought under the service tax net," sources said.
http://timesofindia.indiatimes.com/...y_attract_service_tax/articleshow/1411304.cms

 

[Contrarian]

Champagne Indage set to buy Australian wine firm

MUMBAI: After Vijay Mallya's UB group acquired French wine-maker Bouvet-Ladubay for nearly $18 million, home-grown wine-maker Champagne Indage is following suit. India's leading wine-producer is acquiring Australian wine company Tandou Wines for an undisclosed amount, a source told TOI.

Tandou is the seventh largest wine producer in Australia with a capacity of three million cases per annum and sell Broken Earth and Wontanella brands. Champagne Indage, the acquirer, has a winery in Narayangaon, near Nashik with a capacity of one million cases per year. Post acquisition, Champagne Indage's capacity will go up by 400%.

In Monday's lacklustre market, Champagne Indage stock closed marginal 0.5% higher at Rs 658 on the Bombay Stock Exchange. Volume in the counter was also thin.

Of late wine has become popular in India, especially among the upper class. And one of the main objectives for the UB group to acquire the wine division of the French company was to make use of this changing trend to its advantage by offering Bouvet to the Indian wine consumers. The other objective was to get access to wine-making technology of the highest order.
http://timesofindia.indiatimes.com/..._Australian_wine_firm/articleshow/1411280.cms

 

[Contrarian]

Three players in race for Hutch

MUMBAI: Hutchison Telecom International has said that the race to acquire its 67% equity stake in Mumbai cellular phone operator Hutchison Essar has narrowed down to three bidders — Vodafone, Reliance Communications and Hindujas.

Hutchison conveyed the field details to the Hindujas, who wanted to know if the whole company was on sale or only Hutchison's 67%.

The Hindujas also sought clarity on the term sheet with the Ruias and the status of the current management led by Asim Ghosh after the sale takes place, sources familiar with the development said.

The Hong Kong firm has indicated to one of the bidders, who had put in a non-binding bid last week, that they concerned only about their 67% that is on the block and the Ruias can either bid or utilise the 'tag-along clause' to sell their stake.

Tag-along, a common clause included in joint venture pacts, means the Ruias can go along with Hutchison and sell their stake to the buyer at the same price. Hutchison, which has said that it would sell its stake to the highest bidder, is understood to have requested the Hindujas to retain the management if they win the deal.

UK telecom giant Vodafone and the London-based Hinduja group had put in non-binding bids last week. An industry source said that Anil Ambani's Reliance Communications has also made a pitch, but a source at the company denied it.
The Essar group too says that it is in the race.

"Why should we do a due diligence if we are not interested in putting a bid," a company official said. A group spokesperson said: "We had done a due diligence."

Meanwhile, Hutchison Telecom International Ltd (HTIL) has convened a board meeting on January 29. The agenda of the meet could not be ascertained. A source said the management might brief the board about the latest on the tender.
There is speculation in banking circles that Vodafone has bid $16.5 billion and the Hindujas $17 billion for the 67% ownership in Hutch-Essar. The Hindujas have shown their commitment by submitting bankers' comfort letters to the Hutchison team.

Industry sources familiar with the development said Hindujas will begin their due diligence on February 5 along with their private equity and financial investors. One of the names being talked about is a private equity fund from West Asia.

Sources said the automobile-to-media group is not averse to joining hands with rivals — Vodafone, the Ruias or Reliance Communication — to run the company. When contatced, a Hinduja spokesperson declined to comment.
http://timesofindia.indiatimes.com/...ers_in_race_for_Hutch/articleshow/1410981.cms

 

[Contrarian]

Currency gains lift Tata Motors Q3 profit

MUMBAI: Tata Motors Ltd., on Tuesday said its quarterly net profit rose a larger-than-expected 12 per cent, helped by currency gains.

The New York-listed company, which increased its market share in commercial vehicles to near 65 per cent from 60 percent a year earlier, improved operating margins to 13.7 per cent from 12.3 per cent a year ago, a company official said.

"Despite an increase in raw material cost, we've had a good quarter at the operating level with a significant improvement in market share for commercial vehicles," finance director Praveen Kadle told reporters.

"Our cost reduction drive continues," he said.

Tata Motors said its net profit rose to 5.13 billion rupees ($116 million) in the fiscal third quarter to December from 4.6 billion reported a year ago.

Net sales surged 37 per cent to 69.57 billion rupees from 50.75 billion a year earlier.

Tata Motors had currency gains of 1.32 billion rupees in the quarter compared with a loss of 432.7 million rupees a year earlier.

The company, which is also India's third-biggest car maker after Maruti Udyog Ltd. and South Korea's Hyundai Motor Co., said its raw material costs rose 36 per cent.

Tata Motors, valued at $8.2 billion, sold 141,623 vehicles during the December quarter, up 27 per cent from a year ago.

It is investing 120 billion rupees over four years to expand capacity and has started construction of a plant in West Bengal state to make a long-planned cheap small car.

Tata Motors formed a joint venture with Italy's Fiat last July in which it has said it would invest more than $877 million to make cars and engines from 2008, and may also make trucks.

The joint venture would make more than 100,000 cars and 200,000 engines and transmissions from the beginning of 2008.

The two firms are also discussing industrial and commercial cooperation in Latin America. Fiat has said it would make Tata Motors' new 1-tonne pick-up truck in Argentina for Latin America and overseas from the second half of fiscal 2008.

In December, Tata Motors took a 70 per cent stake in a joint venture with Thailand's Thonburi to make pick-up trucks.

While improving infrastructure in India has increased demand for trucks and buses, analysts have criticised Tata Motors' product mix, which favours lower-margin light trucks. Firming interest rates and inflationary pressure may also dampen demand.

Ahead of the result, shares in Tata Motors fell 1.5 percent to 950.05 rupees in a Mumbai market that fell 1.2 per cent.

The stock had risen 4 per cent during the December quarter, beating a 2.8 per cent gain for the sector index but trailing a 10.7 per cent rise on the benchmark BSE.
http://timesofindia.indiatimes.com/...Tata_Motors_Q3_profit/articleshow/1409120.cms

 

[Contrarian]

Jet starts daily flights to Bangkok

NEW DELHI: Jet Airways, one of India's largest private airlines, on Tuesday launched two new international flights linking Delhi and Kolkata to Bangkok.

"Bangkok is the 50th destination on our network and our third destination within the ASEAN region," Wolfgang Prock-Schauer, chief executive officer, Jet Airways, said after the arrival of a Jet flight in Bangkok from Delhi on Tuesday.

"The strengthening of economic ties between the two nations will see a marked increase in both business and tourist traffic and hence this is our effort to provide travellers with convenient connections," he added.

"The 14 daily direct flights between India and Thailand will be operated with the new generation Boeing 737-800 aircraft with winglets," an official spokesperson of Jet Airways said here.

As part of its inaugural offer, Jet Airways has introduced a special return economy class inaugural airfare starting at Rs.6,500 on the Kolkata-Bangkok-Kolkata sector, while economy fares start at Rs.13,500 on the Delhi-Bangkok-Delhi sector. The fares are exclusive of taxes.

The return airfare for club premiere for the Delhi-Bangkok sector ranges from Rs.28,500 to Rs.38,000 while on the Kolkata-Bangkok sector it is between Rs.18,500 and Rs.26,000.

Jet Airways has also announced a companion free offer for club premiere passengers on the Delhi-Bangkok-Delhi sector until March 31, 2007. The 'club premiere' tickets must be purchased by Feb 15 for travel until March 31, 2007, an official spokesperson for the airlines said.

Jet Airways operates over 330 daily flights to 50 places covering various destinations in India. It also operates flights to outside India, including London, Singapore, Kuala Lumpur, Colombo, Bangkok and Kathmandu.

The airline plans to extend its international operations to North America, Europe, Africa and Asia in the coming years with the induction of wide-body aircraft into its fleet in 2007.
http://timesofindia.indiatimes.com/...ly_flights_to_Bangkok/articleshow/1408069.cms

 

[Contrarian]

Bear clutch: Sensex closes 168 pts down at 14,041

The market continued its sourthward journey on Tuesday as the bears strengthened their clutch over the bourses. The breadth was very negative with more than 700 stocks trading down and only 200 stocks in the positive. All 50 stocks on the Nifty were in the red.

The opening was well below break-even and each successive trading hour saw the indices make further inroads into the red. Mixed results announced by India Inc. seemed to have taken its toll on the indices.

The overall market breadth was negative with losers outnumbering gainers by a ratio of 9 to 1 on the Sensex. While ACC, Gujarat Ambuja both down 7 per cent and Dr.Reddy's 5 per cent led the pack of losers on the Sensex on Tuesday, Bharti Airtel up 2 per cent and Hindalco was up marginally.


Selling continued unabated across index heavyweights causing the indices to close well below Monday's levels. While selling was seen across-the-board, select stocks in the telecom, power and energy sectors garnered investor interest. As regards global markets, while Asian indices closed a mixed bag, the European indices are also witnessing a mixed trend currently.

The BSE Sensex closed at 14,041 down 168 points. Nifty closed at 4,066 down 37 points.

Telecom stocks closed mixed on MOnday. While Bharti Airtel stock was up 2 per cent on the back of impressive performance in Q3. MTNL was also another stock that traded marginally up. Reliance Communication was down 1 per cent.

Pharma stocks closed in the red on Tuesday and the key losers were Glenmark down 6 per cent and Dr.Reddy's down 5 per cent. The latter closed weak despite strong results.

Almost all cement stocks were down on the back of government announcement on excise duty cuts. This announcement would impact the cement companies in so far as it will make the imports cheap. However, all media stocks closed a mixed bag. While Zee Entertainment up 5 per cent, Wire & Wireless 3 per cent and TV18 2 per cent. NDTV was down 4 per cent and Balaji Telefilms also closed weak down 3 per cent.

 

[Contrarian]

Bharti net surges 123% on subscriber growth

NEW DELHI: The country's leading private cellular operator Bharti Airtel on Tuesday surpassed market expectations by reporting a 123% growth in quarterly net profit. Net profit was Rs 1,215 crore for the quarter ending December 31 2006. Total revenues were at Rs 4,913 crore, up 62% over the corresponding period last year.

Airtel added 50.19 lakh customers in the third quarter, with a total customer base of 3.37 crore till December 31, 2006, a 92% increase over the same quarter last year. The company's market share has also gone up with its subscriber base 21.8% higher than before.

Its average revenue per user (Arpu) fell to Rs 427 in December from Rs 438 in September, but minutes of usage surged to 467 from 451. Chairman Sunil Mittal said demand for telecom services continued to be strong, helped by a buoyant economy. "In particular, the wireless segment has seen record additions and we believe this trend is likely to continue," he said.

According to Akhil Gupta, joint MD & CFO, growth was unlikely to slow down as market growth of 7 million new subscribers a month is sustainable. "Our preliminary estimate for capex is $2.5 billion for the next fiscal," he added.

With a view to enhancing operational efficiencies, Bharti Airtel's board of directors approved the transfer of the towers for mobile communications and related passive infrastructure into a wholly-owned subsidiary — Bharti Infratel Ltd.

It also approved the acquisition of a submarine network cable system from Network i2i through the purchase of all assets or equity for $110 million, subject to obtaining requisite approvals. Network i2i is jointly owned by Singtel and a Bharti group company.

Bharti intends to launch DTH services to address the fast-growing home entertainment segment through its wholly owned subsidiary — Bharti Telemedia Ltd. Singapore Telecommunications Ltd owns 30.8% in Bharti, while Britain's Vodafone holds a 10% stake. Directors of Vodafone did not attend the Bharti Board meet on Tuesday, in view of its interest in acquiring rival Hutch-Essar.
http://timesofindia.indiatimes.com/..._on_subscriber_growth/articleshow/1411321.cms

 

[Contrarian]

IT exports to touch $31b in '06-07, says Nasscom

MUMBAI: The software and services exports sector is all set to scale new heights with revenues exceeding $31 billion in the current fiscal said Nasscom. According to its yearly Strategic Review report, India is on track to double that figure by 2010.

In the last decade the Indian information technology industry has grown its revenues ten-fold, from $4.8 billion 1997-98 to $47.8 billion in 2006-07, the report noted.

This pegs the estimated contribution of the industry to GDP to about 5.4%, which has grown from 1.2%since 1998. The similar trend continues in the domestic market too said the report, this year the revenue is pegged at USD 15.9 billon which is a growth of a good 21% from last year.

"The last decade is testament to the growing impact that the Indian IT industry is having on the global and local economies," said Nasscom chairman, B. Ramalinga Raju.

The top sectors still remain BFSI, Telecom and Hi-Tech, which continue to bring in about 60% revenue of the pie. But other verticals such manufacturing, retail, transportation, healthcare and utilities are also growing rapidly, said the report. The sector would employ 1.6 million people March-end.
http://timesofindia.indiatimes.com/...D31b_in_06-07_Nasscom/articleshow/1411296.cms