Wipro Q2 net profit up by 4 pc at Rs 230 cr
Bangalore: IT major Wipro Ltd on Thursday reported a revenue of Rs 1,374.5 crore for the second quarter ending September 30, an increase of 29 per cent over Rs 1,062.1 crore during the corresponding quarter last year. Profits grew by four per cent at Rs 230.2 crore during the period June to September 2003, over Rs 220.4 crore during the second quarter last year.

Wipro said revenues during the six-month period April to September stood at Rs 2,574 crore, an increase of 29 per cent over the previous year, while profits grew by 20 per cent at Rs 436 crore over the previous year. "This quarter, we saw customers demonstrating both growing confidence in our end-to-end service model as well as an increased willingness to increase spending. Our technology business continued to recover, with sequential growth of 16 per cent, including telecom, which grew sequentially by 14 per cent", the vice chairman, Vivek Paul said.
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Reliance to buy FLAG Telecom for $207 m
Mumbai: Reliance Infocomm has announced its plan to acquire FLAG Telecom, an international provider of wholesale telecom network transport and communications, for an aggregate amount of $207 million (around Rs 1,000 crore). The Agreement and Plan of Amalgamation for the acquisition was signed on Thursday between Reliance Gateway Net Pvt Ltd, a fully owned subsidiary, and FLAG Telecom Group. An announcement by FLAG said that this works out to $95.61 per share, a premium of more than 50 per cent over yesterday's closing price of the company which is listed on the London Stock Exchange and Nasdaq. This will be the first international acquisition by Reliance and the largest such international acquisition in the services sector by an Indian company, according to Anil Ambani, vice-chairman and managing director, Reliance Industries. The acquisition would be made through "cash from the Reliance group". The agreement is for the acquisition of 100 per cent of the fully diluted equity of the company. The acquisition is subject to regulatory approvals and FLAG shareholders' approval, which is to be sought in December this year.
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Metaljunction registers 263 pc growth in April-September
Kolkata: Metaljunction.Com Pvt Ltd, a 50:50 joint venture of Tata Steel and SAIL, has transacted business worth Rs 704.78 crore during the period April-September 2003. This marks a rise of 263 per cent over the business transacted during the corresponding period of last year. During April-September 2002, Metaljunction.com transacted business worth Rs 194 crore. According to a company press release issued here, during the first half of the current fiscal, e-sales contributed Rs 320.59 crore followed by financial services and e-sourcing at Rs 280.01 crore and Rs 104.18 crore, respectively. During the first half of 2002-03, e-sales contributed Rs 98 crore, financial services Rs 67 crore and e-sourcing Rs 29 crore. During April-September, the company sold 2,80,000 tonnes of steel for its clients. This included 50,000 tonnes of prime steel and 2,30,000 tonnes of secondary steel. All categories of steel products were sold online.
In the first half of 2003-04, Metaljunction.com procured materials and services worth Rs 104.81 crore for its clients. In the process, savings to the tune of Rs 17.56 crore were achieved. During the period under review, the company arranged finance to the tune of Rs 280.01 crore through partner banks for distributors and channel partners of its clients. Metaljunction would soon launch OEM finance and supplier finance and is in the closing stages of negotiations between its partner banks and clients, according to the release.
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Colgate continues to sparkle
Mumbai: For the quarter ended September 2003, the company's net sales declined by 3.4 per cent to Rs 255.5 crore; but net profits rose by 22 per cent to Rs 23.2 crore in comparison to the same period last year. The bulk of the cost savings have come from a cutback in advertising expenditure. Adspend as a percentage of sales has fallen from 17.4 per cent in the July-September 2002 quarter to 15.3 per cent in the same quarter of 2003, delivering a significant expansion in operating margins. Since the July-September 2003 quarter was an active one for Colgate on the advertising front (the quarter saw the relaunch of three key toothpaste brands and the debut of the Aromatherapy range of products), the savings in adspend does seem to represent greater efficiency in media buying. Savings in adspend apart, a reduction in tax incidence has also kept Colgate's profit growth at robust levels. That the decline in sales has been contained at 3.4 per cent is proof that the 17 per cent cut in selling prices that Colgate undertook for its flagship brand - Colgate Dental Cream, towards the end of March 2003, has pepped up volume growth.
This suggests that over a period of time, Colgate's strategy of pruning adspend, and passing on the savings to consumers, by reducing selling prices, may help arrest declining sales. But this is not likely to happen anytime soon. For one, Colgate has taken a 15 per cent price cut on its gel toothpastes in July, which is likely to trim sales growth in the coming quarters.

Second, Colgate's key competitor-HLL has matched Colgate's price cuts and is renewing its onslaught in both the gel and white toothpaste segment. New regional competitors (such as Ajanta), continue to flood the market with extremely low-priced offerings. In the recent times, Colgate has also been testing the markets with premium products from its parent's portfolio. Over the past quarter, Colgate has unveiled the Aromatherapy range of bath products and Simply White, a tooth-whitening product. These brands have been big grossers for Colgate's parent in the past couple of years. Given their premium pricing, building a market for these products may take some time. But if these launches click, they are likely to make a disproportionately high contribution to Colgate's profit margins.
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Adobe, TCS join hands
Bangalore: Adobe Systems Incorporated on Thursday announced a strategic alliance with Tata Consultancy Services (TCS), one of the world's largest global software services and consulting organisations. The alliance will enable TCS to integrate and resell Adobe products as part of their enterprise solution offerings. TCS will address the document generation, collaboration and process management challenges the organisations face as they move paper-based processes online. In addition, TCS will sell Adobe's enterprise products as part of its offering and will provide first level customer support. The alliance will enable the two IT leaders to leverage each other's expertise. Initially, TCS will integrate and resell Adobe's server products. Over a time, Adobe and TCS expect to work together to build `repeatable' document solutions targeted at vertical markets, such as financial services and government that can be applied to solving document integration problems.
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Reliance plans to hike stake in IPCL to 51%
Mumbai: Reliance group is planning to increase its stake in IPCL to 51 per cent by acquiring additional shares from the Government, Anil Ambani, vice-chairman and managing director, Reliance Industries Ltd (RIL), said on Thursday. Addressing a press conference here, he said as per the modified agreement on IPCL disinvestments between the Government and Reliance, the company would like to acquire additional 5 per cent from the Government to take the group holding to 51 per cent. This follows the Government plans to offload its remaining 34 per cent holding in IPCL through IPO. Reliance group had taken 26 per cent Government stake in March 2002 through the bidding process at Rs 231 per share and acquired additional 20 per cent by making an open offer.

Ambani said independent valuers would decide the price at which the additional shares would be acquired. He said as per the agreement, if Reliance does not exercise the option then the Government is free to sell its holding through an IPO and if the IPO does not materialise then Reliance will have a call option to buy the entire Government stake. Meanwhile, Unit Trust of India (UTI) stake in RIL has come down below three per cent from the peak 13 per cent, Ambani said. Selling the shares in the open market has resulted in dilution of UTI stake. Ambani said with the sale of major portion of RIL shares by UTI, the overhang of selling pressure by UTI is over. He also informed presspersons that between December 2002 and till date the holding of FIIs have increased from 15.5 per cent to 20.1 per cent. The holding in GDR has also increased from 5.6 per cent to 6.1 per cent. However, during this period, the shareholding of public and financial institutions have come down. Ambani said FIIs have pumped $600 million along in buying the shares of RIL this year. The stock price of RIL, has increased from Rs 297 in January this year to Rs 484 today, a gain of 63 per cent and during this period BSE Sensex gained by 43 per cent from 3,390 to 4,855. This year, the stock price of RIL has outperformed in terms of returns compared to other international oil and petrochemicals major, he said.
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Citigroup Global picks 5 pc stake in SSI
Chennai: The Chennai-based SSI Ltd has informed the NSE that Citigroup Global Markets (M) Pvt Ltd has a 5.094 per cent stake in the company as on October 15. The stake is believed to have been acquired through open market transactions. According to information filed by the company with the exchange, the promoters' holding as on June 30, 2003 stood at 27.81 per cent, the same as on March 31, 2003. However, UTI's stake fell to 3.23 per cent from 4.18 per cent, while FII holding (Oppenheimer Funds Inc and Virginia Retirement System) went up to 6.19 per cent from 5.18 per cent as on March 31, 2003. The stake of private corporate bodies fell to 1.66 per cent (Eastern Resin Allied Products Ltd) from 3.53 per cent (Eastern Resin Allied Products Ltd and Utkal Investments Ltd, which held 1.87 per cent) earlier. The public shareholding fell to 38.18 per cent from 42.48 per cent.
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Blue Dart Express second quarter net up 38 pc
Mumbai: Blue Dart Express Ltd, the air express, courier and logistics company, has recorded a net profit of Rs 6.64 crore in the second quarter, an increase of 38 per cent over the Rs 4.81 crore recorded in the same period last year. The company posted a net profit of Rs 12.19 crore in the first-half, as against Rs 10.80 crore in the corresponding period last year. According to an official release, income from operations increased to Rs 88.56 crore, up 11 per cent on the Rs 80.08 crore posted in the corresponding previous quarter.
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Coke admits pesticide drag on India Q3 performance
New Delhi: The shadow of the pesticide controversy in India seems to follow close on the heels of global soft drink major Coca Cola, with the company admitting on Thursday that the controversy has in fact been a drag on its financial performance in India for the third quarter (Q3). "In India, the beverage industry was impacted by false accusations that soft drinks contained high levels of pesticides. As a result, the company's unit case volume declined during the quarter, following several consecutive quarters of strong double digit-growth," the parent company said, announcing its Q3 results from Atlanta. This, even as the company's global revenues register a 21 per cent increase, clocking $4.1 billion, in its first nine months. Coca Cola's results during Q3 benefited from 5 per cent unit case growth in international operations led by strong performance throughout Europe, Mexico, China, Argentina and Thailand. "This strong performance was partially offset by weak beverage industry trends in both Japan and India," the parent said. This is in stark contrast to the parent's observations on its India operations last year, where it expected strong performance from India, besides China and the Philippines. This time around, India came in for more mention, with reference made to the pesticide controversy affecting the soft drink segment. Admitting that the company's unit case volume declined during the quarter, following several consecutive quarters of strong double-digit growth, the note added that the situation in India would continue to be monitored, even though unit case volume trends have stabilised over the past few weeks. Meanwhile, worldwide unit case volume grew by 4 per cent in the third quarter and 4 per cent on a year-to-date basis, the company said. This was led by 5 per cent growth in international operations and 2 per cent growth in North America. In the Europe, Eurasia and West Asia market - unit case volume increased 9 per cent in the Q3 and increased 6 per cent for the first nine months. And in Asia, unit case volume increased 1 per cent for the quarter, cycling 9 per cent growth in the prior year third quarter. Though unit case volume trends in Q3 were affected by weaker industry trends in Japan and India, the company said that Asia's performance during the first nine months was led by growth in China, Australia, Thailand and India. "In China, unit case volume increased 24 per cent during Q3, cycling 13 per cent growth from the prior year," the company said, with the carbonated soft drinks segment recovering from the SARS-impact, thanks to marketing initiatives.
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Mallya raises open offer price to Rs 215
Bangalore: The UB group chairman, Vijay Mallya, has upped the offer price to the shareholders of Herbertsons to Rs 215 per share in his bid to retain control over the country's third largest spirits company. Mallya's offer is a counter to his rival, Kishore Chhabria's offer for 20 per cent shares of Herbertsons at Rs 210.74. Mr Chhabria's offer opens on Friday. "We have lots of time and we will come out with a revised bid soon," sources close to Chhabria said. Kotak Mahindra Capital Company Ltd, on behalf of UB group companies - McDowell & Co Ltd, Phipson Distillery Ltd and UB Holdings Ltd - informed the shareholders about the upward revision, which would increase the financial resources required for the offer to Rs 92.45 crore. On September 10, the UB group had come out with a counter offer pegged at Rs 200 per share and the total cash outflow was estimated at Rs 86 crore. Kotak has advised the shareholders to wait till November 20 to know the final price of each bid, as the offer price cannot be revised after that day. On August 1, Securities Appellate Tribunal (SAT) directed Chhabria, who holds 43 per cent stake in the company, to make an open offer for another 20 per cent of the shares. On August 21, he made the offer at Rs 90.95 per share and, under SAT directions, also offered 15 per cent annual interest to those shareholders holding shares from January 25, 1995 taking the total consideration to Rs 210.74 per share. Mallya countered it with Rs 200 per share offer. Later, Chhabria offered to pay 15 per cent interest to all shares irrespective of the period of holding of acquisition subsequent to January 25, 1995.
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