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Satyam declares net profit growth of 141 percent in Q1
Hyderabad—Satyam Computer Services has announced a
141 per cent growth in net profit Rs 121.46 crore, against a net profit of Rs 50.37 crore
in the corresponding period last year. Net income rose by 75 percent at Rs 421.02 crore
against Rs 240.72 crore last year.
However, the quarter-on-quarter growth in revenue and net profit stood at 9.57 per cent
and 9.08 per cent, respectively; the company earned revenues of Rs 384.24 crore and a net
profit of Rs 111.34 crore in Q4 of 2000-01.
However apart from these spectacular results, the company’s operating margins
remained under pressure. Its operating margins fell to 36.15 per cent in the first quarter
and are expected to fall further in Q2 to 34-35 per cent. On the positive side Satyam
expects a 3 per cent increase in the software services’ income during Q2 over Q1. It
also expects the income from software services for the current fiscal to increase by about
40 per cent year-on-year while the operating margin for the entire year is also expected
to be in the range of 34-35 per cent.
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Hughes records 101 percent
rise in net in Q1
New Delhi –Another one goes against the trend. Hughes Software Systems the Indian
subsidiary of Hughes Network Systems announced a 101 per cent growth in net profit at Rs
18.7 crore in the quarter ended June 2001 over the corresponding quarter last year.
This profit was on a turnover of Rs 63.4 crore, representing a 77 per cent growth over the
corresponding quarter last year. The other income for the quarter was Rs 3.2 crore.
However, its net profit fell 15.38 per cent from the last (January-March) quarter. But it
is still better than 18-20 per cent decline expected by analysts, who point out that the
firm’s first quarter, is generally weak.
President and managing director, Arun Kumar while announcing last quarter’s results
said, "We have continued to show a steady increase in PAT, from 23 per cent in 1997
to 30 per cent in 2000-01 and maintaining industry’s top-end EBITDA margins. Our
expertise in packet-based datacom and other technologies are becoming our key growth
drivers in increasingly difficult situation,’’ he added.
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Compaq announces 4,000 more
jobs cuts
Houston-- Compaq Computer has announced that it was cutting 4,000 more jobs, bringing
the total number of workers it plans to cut this year to 8,500, or nearly 13 per cent of
its earlier work force.
The announcement, made after trading closed on the New York Stock Exchange, came as the
Houston-based company assured investors its second-quarter earnings will meet the Thomson
Financial/First Call analysts' consensus of 4 cents per share.
The computer maker blamed worsening economic conditions in Europe.
"We are committed to taking aggressive actions during this period of slow demand to
make permanent improvements in our business model," said Michael Capellas, Compaq
chairman and chief executive officer.
Second-quarter revenues are forecast to drop to $8.4 billion, a 17 per cent drop from
$10.13 billion in revenue in the year-ago quarter, Compaq said.
Compaq will take a restructuring charge of about $490 million in the second quarter, which
it said was mostly related to job cuts.
The company is expected to save $900 million annually from the total reductions.
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Vadilal launches
‘Quick Treat’ frozen foods in US
Ahmedabad—The Ahmedabad-based Vadilal Industries has launched its
own brand of frozen foods in the North American and British markets under the brand name
‘Quick Treat.’
The Vadilal Quick Treat range consists of 60 products, including vegetables like okra,
yam, gourd, cluster beans and fenugreek leaves.
For those who prefer the heat and eat mode, the brand offers frozen parathas, chapatis,
dal makhani, palak paneer, sarson ka saag and several Gujarati specialities.
Vadilal uses quick-freeze technology for its Quick Treat range, which is why these
products are not being introduced in the domestic market.
The company is unable to market the brand in India because at present the domestic cold
chain network is not adequate for the distribution of such products.
Company officials say that even the best supermarkets do not have enough deep freezer
capacity.
The Ahmedabad based company has been exporting frozen fruits and vegetables to industrial
buyers like ice cream and yoghurt manufacturers for some time now.
The Quick Freeze brand has been allocated an initial advertising budget of Rs 40 lakh,
which will be focused on TV channels subscribed to by NRIs in the USA, Canada and UK.
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Alcatel recasts; to cut
2,500 US jobs
Paris—Alcatel the French telecom-equipment-maker is slashing 2,500 jobs in the US
as a result of the continuing economic slowdown.
These layoffs come on top of the 2,200 positions the company has already shed in the US
this year. After this cut its employee strength in the US will come down to 12,500. The
company employs some 110,000 employees worldwide.
The layoffs were part of an acceleration of restructuring efforts in the US, the company
said. In addition to previously-announced plant closings, it will shutter a facility in
Raleigh, North Carolina, and consolidate those activities into existing plants in Texas
and Mexico. The move will affect about 700 of its 1,400 employees in Raleigh.
Following the breakdown of its merger talks with Lucent Technologies in May, Alcatel said
it planned to sell assets in an attempt to better focus the business and predicted a
3-billion-euro net loss for the company’s second quarter.
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Wipro to diversify revenue
streams; reduce dependence on US
New Delhi—Wipro Ltd in its annual report of 2000-01 has issued a profit
warning, citing the slowdown in the US as the reason. According to the company, the US
market accounted for nearly 64 per cent of its global IT services revenue and the slowdown
there could hurt its profitability in future also.
The company says that it has intensified its efforts to geographically diversify its
revenue streams.
During the year under review, Wipro increased its dependence on global IT services to 34
per cent of the company's total turnover against 28 per cent in the previous fiscal.
Chairman and managing director Wipro Azim Premji said, "Realising that global
economic conditions are not always going to be conducive, we have spread our markets so
that we are not excessively dependent on a single geography, diversified our revenue
streams, increased business from existing customers and improved quality of our client
profile."
The IT giant also cited wage increases in the long run as another reason for a possible
decline in profitability saying, historically, wage costs in India had been
"significantly" lower than than those in the US and europe for comparably
skilled professionals"... which has been one of our competitive advantages. However,
wage increases in India may prevent us from sustaining this competitive advantage and may
negatively affect our profit margins.... Unless we are able to continue to increase
efficiency and productivity of our employees, wage increases in the long-term may reduce
our profit margins."
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Cavin Kare gets into retail,
launches ‘Greenie’
Chennai—The Rs 200 crore, South-based Cavin Kare is quietly getting
into the retail business.
A few months ago the personal care products company launched a gents beauty parlour
‘Greenie’in Chennai. Not many, even the employees, know that Greenie belongs to
Cavin Care.
Though the parlour is said to use non-Cavin Kare products too, this retail plan could
provide a major boost to company sales.
Greenie is positioned in the mid segment or for those who desire, and don’t mind
paying for, better services than those provided by the local barber, but find five star
rates prohibitive.
Hence charges are not very expensive ranging from Rs 50 onwards (for basic hair styling),
though some services cost Rs 250-300. A "special grooming package" for Rs 1000
is available that necessitates a 2-3 hour sitting on 2 days.
Initial market response seems to have been positive with about 10-15 customers turning up
every day, according to sources.
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MSEB should be split into
three parts suggests Godbole
Mumbai— Former Union home secretary Madhav Godbole has submitted his
report with his recommendations on reforms of the state’s energy sector to the
Maharashtra chief minister Vilasrao Deshmukh. The Godbole Energy Review Committee, as it
is called, suggests wide sweeping reforms in the state's energy sector and has developed a
'Maharashtra model' which recommends the trifurcation of MSEB into generation,
distribution and transmission companies.
The essential features of this model avoid the problems of persisting with government
ownership, mixed zones, single buyer approach and an annual regulatory process, while at
the same time phasing the transition to a full-fledged market system as envisaged by the
proposed electricity bill, in an orderly manner, the report said.
In generation, the committee recommends that MSEB's six generating stations should be
grouped by forming a separate corporation.
The hydro-generation stations and uran plant should be corporatised as Maharashtra Power
Corporation, a single-state owned entity. This entity will also be the nodal agency for
the state's share of central sector generation, such as NTPC power, the report said.
On the transmission side, the panel has recommended that the transmission assets of MSEB
should be unbundled to form a corporate entity mtransco, which would be vested with
responsibility of system co-ordination functions -- including dispatch, maintaining system
stability and ensuring grid discipline.
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'Ranbaxy revenue from Bayer
deal under threat'
Mumbai—Bayer, the German chemicals group, is in the process of
developing a possible alternative to a drug it licensed from Ranbaxy Laboratories,
threatening the estimated $30 million a year in royalties which India's largest drug-maker
could reap on the deal, according to industry sources.
Bayer is reportedly working with another partner on a once-a-day form of the
anti-infective ciprofloxacin, and will decide on whether to take that form to market, or
the one Ranbaxy has developed, the source said.
The puts the rich royalty payments expected to flow to Ranbaxy in jeopardy. In 1999
Ranbaxy licensed a once-a-day dosage form of ciprofloxacin to Bayer, the original
discoverer of the drug.
Bayer wants to maintain its hold on the global market for the drug, estimated at $1.30
billion when the Ranbaxy deal was signed.
Ranbaxy's chief financial officer Vinay Kaul acknowledged Bayer had two 500 mg, once-a-day
dosage products in phase III trials -- one from Ranbaxy and the other from a source not
identified
Phase III is the final stage of clinical trials before the drug can be marketed.
Both are in phase III and Bayer is contractually obliged to launch Ranbaxy’s product,
and have affirmed they will said Kaul.
Industry sources said that other partner's one gram dosage of the same product was also in
phase III clinical trials, the industry source said.
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Kitply net rises 93
percent in 2000-01
Kolkata—Kitly Industries has announced a net profit of Rs 56 lakh during the
financial year ended March, 2001, 93.10 per cent higher over the Rs 29 lakh recorded in
previous fiscal.
Sales during the year increased to Rs 20,976 lakh from Rs 17,671 lakh, while other income
jumped to a whopping Rs 2,952 lakh from Rs 212 lakh in 1999-2000, the company said.
Total expenditure shot up to Rs 22,147 lakh from Rs 15,570 lakh, while interest charges
were brought down to Rs 930 lakh from Rs 1,658 lakh in the previous fiscal.
The company said the results after modification by transfer of deferred revenue
expenditure and capitalisation were taken on record by the board.
Gross profit stood higher at Rs 851 lakh against Rs 6,550 lakh, but depreciation charges
stood higher at Rs 795 lakh over Rs 626 lakh during the previous fiscal.
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DPC unit has global
ramifications: Lay
Mumbai—The best efforts are on to salvage the Enron promoted Dabhol Power
Project. Enron Corporation chairman Kenneth Lay said there were international
ramifications to the Dabhol Power Company's $3-billion power project in India, and the
corporation was interested in seeing challenges associated with it speedily resolved so
that it could move forward.
He said India needed to have a well-developed infrastructure, diversified resources and
foreign investment to move forward, Lay said adding that the DPC project had the ability
and would contribute towards realising India's potential of becoming a leading economy.
This afternoon, after his meeting with Shiv Sena supremo Bal Thackeray, the Enron chief
had sought a significant involvement of the centre to solve the energy major's several
disputes with Maharashtra State Electricity Board.
Maharashtra will have to live up to its contract DPC and a significant part of the
obligations would have to be fulfilled by MSEB," he added.
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Modis
accept FI conditions on stake sale
New Delhi-- Modi Rubber (MRL) managing director Bhupendra Kumar Modi has written to
the Industrial Development Bank of India chairman S K Chakravarti accepting all the
conditions laid down by the financial institutions to offload their 44 per cent stake to
the original promoters, the Modis.
The institutions had said that they would offload their stake only if the Modis agree to
not selling their stake to a third party after acquiring their block of shares and, in
case the Modis did sell their shares, they must share the profits with the institutions.
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LNJ Bhilwara wooing foreign
firms for power
New Delhi--The LNJ Bhilwara Group is trying to seek foreign participation in its
upcoming 192-mw hydroelectric Bus Bar power project in Himachal Pradesh.
The company is also in talks with some big bulk consumers of power in the states of north
India for the Allain Duhangan project, according to LNJ Bhilwara Group chairman, Ravi
Jhunjhunwala.
The group had recently signed the implementation agreement for the project with the
government of Himachal Pradesh. Work on the project, which is expected to cost around Rs
950 crore, will commence by the end of the year.
A detailed project report is being revised and updated for submission to the Central
Electricity Authority for techno-economic clearance.
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Fuchs
plans 1000 quick-lube shops
Mumbai--Fuchs Petrolub AG, the German lubricants major, after a six-year low-profile
presence in India, is revving up its operations as part of its new global strategy.
The company, which operates in India through a wholly owned subsidiary, Fuchs Lubricants
(India), is now planning to open 1,000 quick-lube centres in the country on a franchisee
basis over the next five years.
Michel Behar, executive vice-president (Asia-Pacific) and member of group executive
committee, Fuchs Petrolub AG said, "in ten years, we envisage that 5 per cent of our
global sales will come from India. We want a 5 per cent market share by the same
time."
Fuchs entered India through a joint venture with Balmer Lawrie & Co, a subsidiary of
oil marketing PSU IBP, and bought out the latter's stake in the venture last year.
The company is targeting independent auto service centres, among others, for franchisees
and plans to upgrade their facilities in return for branding them as "Fuchs Quick
Lube Centres."
The company wants to increase brand visibility and customer awareness through these
efforts.
Castrol India, the other major multinational, is the second-largest lubes company in the
country after Indian Oil Corporation.
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Hyundai
launches Santro variant
New Delhi--Hyundai Motor India Ltd has launched three new variants of small car
Santro.
Hyundai said the LE variant would cost Rs 3,34,379, while the LS and GS variants would
cost Rs 3,75,395 and Rs 3,98,321. The company is also increasing the price of its small
car after a reduction announced subsequent to the Union budget this year.
The cosmetic changes, which the company terms as a "freshening up", include
clear headlamps and fog lamps, new rear combination lamps and a rear spolier with LED
stop-lamp, a chrome finish radiator grill on the GS variant and a remote fuel lid opener
in the LE variant, among others.
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J&J
to launch its global skin-care range in India
Mumbai--Johnson & Johnson (J&J), is planning to revamp the adult personal care
division and as part of this will its range of international skin care brands in the
country.
These could include brands like RoC, Neutrogena, PH 5.5 and Johnson Pure Essential. The
company recently launched the PH 5.5 brand in Bangladesh, Nepal and Sri Lanka, which met
with a good response, company officials said.
In India, J&Js flagship skin care brand is Clean n Clear, targeted at teenagers, but
is gradually losing market share to Hindustan Lever's (HLL) Pond's and Lakme.
In adult care, J&J’s main brands are Johnson's buds and Shower to Shower prickly
heat powder.
J&J Inc, with $29.1 billion sales in 2000, is the world's largest manufacturer of
health care products serving the consumer, pharmaceutical and professional markets.
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Ashok
Leyland cuts output in June
New Delhi--Ashok Leyland Ltd has effected a cut in production of its vehicles in June
2001 compared to both May 2001 and June last year, even as sales went up a notch against
May and declined 11.5 per cent against June 2000.
The heavy vehicle manufacturer produced 1,697 units in June 2001 against 2,563 in June
2000 and 2,429 in May 2001. Domestic sales in June this year at 2,359 units was lower than
2,513 units in June last year but higher than May's 2118. Export sales declined month on
month from 236 last year to 107 this year, while it grew considerably when compared with
May sales at 65 units.
The Hindujas-promoted Ashok Leyland also reported a 4.9 per cent jump in first quarter
sales at 6,208 vehicles compared with 5,918 units sold in the same period last year.
The company says that it bucked the industry trend as total industry volume fell 6 per
cent during the quarter.
Total vehicles sold (including exports) by the company during the quarter went up
marginally from 6441 vehicles to 6446 vehicles, a release stated.
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UTI
Bank Q1 net up to Rs 25.4 cr
Mumbai--UTI Bank has reported a 57.61 per cent rise in the net profit to Rs 25.36
crore for the first-quarter ended June 30, 2001, compared with Rs 16.09 crore in the
corresponding quarter of the previous fiscal.
The bank has gone in for heavy provisioning of Rs 41.87 crore (Rs 24 lakh). Other income
of the bank rose by 239 per cent to Rs 100.90 crore (Rs 29.75 crore). The major components
of the other income were treasury profits and fee-based income.
According to a top company source, UTI is planning to
increase the equity-base by making a preferential issue to private equity funds in the
next three to four weeks, which will increase the equity-base by around one-third.
Consequently, the UTI's holding in the bank will fall to around 40 per cent. He added that
the allotment may be to one or more private equity funds.
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Bharti, Hutch in the lead
for 4th licence
New Delhi-- Bharti and Hutchison have emerged as the most aggressive bidders, quoting
Rs 721.84 crore for 11 licences and Rs 473.90 crore for four circles for the fourth
cellular license.
The government is sure to get at least Rs 1,300 crore, the top quotes for each circle. The
final figure may be higher as bid amounts will rise in the subsequent rounds. However, the
bids this time make it certain that the final collection will be far lower than the Rs
6,000 crore mopup from auctioning the first two mobile licences.
Bharti, the sole bidder for Madhya Pradesh, bags the circle for Rs 17.45 crore. Similarly,
Escorts gets Himachal Pradesh on paying Rs 1.10 crore.
Reliance, which is bidding for 15 licences, has quoted a relatively small amount of Rs 495
crore for the lot. Reliance’s only aggressive bid is for the Delhi circle, for which
it has quoted Rs 90 crore. Escorts, with Rs 292 crore (for eight circles), Batata with Rs
121.50 crore (three licences) and Ind Mobile’s Rs 105 crore (for Punjab) are the
other bidders.
Under the three-step, informed bidding process that’s being followed, the highest bid
in each round becomes the floor rate for bidding to begin in the next round. This means,
for example, that Reliance will have to better Bharti’s huge, nearly Rs 204 crore bid
in the second round if it wants to remain in the race for the Mumbai circle.
The rules also say that top-four bidders for each circle qualify for the next round,
largely irrelevant now because no circle has attracted more than four bids.
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