ICICI third-quarter net crawls up to Rs 256 cr
Tisco net drops 72% to Rs 35 cr
75% rise in Gujarat Ambuja net
Tata Tea speeds up Tetley integration
Krishna Kumar on Tata Sons board
Income tax raid on HCL premises
Raymond eyes market in Europe
Industry gasps in 3-year warp
Foreign Exchange, Bullion, Stock Indices

 
 
ICICI THIRD-QUARTER NET CRAWLS UP TO RS 256 CR 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Jan. 24: 
ICICI Ltd has posted a marginal rise in net profit for the third quarter of the current fiscal ended December 31. Net profit rose to Rs 256 crore as against Rs 253 crore in the same period of the previous year. At a meeting held today, the board of directors of ICICI Ltd recommended an interim dividend of Rs 5.5 per share (55 per cent).

ICICI said the Reserve Bank guidelines on classification and valuation of investments have resulted in an additional charge to its revenue account during the second quarter of the current fiscal amounting to Rs 131 crore, which has been shown as an extraordinary item.

During the quarter, net fund-based income rose to Rs 402 crore against Rs 324 crore in the same period of the previous year. Consolidated net profit of ICICI and its subsidiaries increased by 17.5 per cent to Rs 965 crore in the nine months, from the previous comparable figure of Rs 821 crore.

Profit before tax during the nine-month period increased by 21.3 per cent to Rs 1,053 crore. However, the provision for taxation increased to Rs 189 crore (including Rs 95 crore on account of deferred tax provision) from Rs 74 crore in the previous year. After allowing for the deferred tax provision, net profit increased by 8.7 per cent to Rs 864 crore. Provision for tax during the third quarter rose to Rs 55 crore (Rs 25 crore). ICICI’s net NPA ratio was 5.3 per cent on December 31 and net NPAs outstanding were Rs 3,083 crore.

   

 
 
TISCO NET DROPS 72% TO RS 35 CR 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Jan. 24: 
The downturn in the economy has adversely affected the bottomline of Tata Iron and Steel Company Ltd (Tisco), with net profit plummeting by more than 72 per cent to Rs 34.54 crore compared with Rs 127.69 crore in the same period of the previous year.

For the nine-month period, net profit took a 76 per cent beating, declining to Rs 82.43 crore against Rs 344.43 crore in the previous corresponding period. Tisco said the results came in the midst of one of the worst times for the steel industry, the downturn in the global and domestic economies and international trade restrictions, all of which resulted in lower margins.

Income from operations during the quarter increased by 2 per cent to Rs 1,902.21 crore, from Rs 1,868.17 crore in the year-ago period. Income during the nine-month period was Rs 5,446.55 crore (Rs 5,405.94 crore).

Tata Power net up 6%

Tata Power has recorded a 6 per cent rise in net profits for the third quarter of this fiscal ended December 31. Net profit rose to Rs 108 crore compared with Rs 102 crore in the previous comparable quarter. Total revenue rose 5 per cent to Rs 990 (Rs 887 crore).

   

 
 
75% RISE IN GUJARAT AMBUJA NET 
 
 
FROM OUR BUREAUX
 
Jan. 24: 
Gujarat Ambuja Cements Ltd (GACL) has posted a 75 per cent rise in net profit for the second quarter of the year ended December 31. Net profit soared to Rs 57.16 crore against Rs 32.55 crore in the previous corresponding quarter.

During this period, net sales rose to Rs 399.19 crore, up from Rs 341.21 crore last year. For the six-month period, while profits rose to Rs 110.39 crore against Rs 57.61 crore, net sales were placed at Rs 739.27 crore against Rs 631.47 crore last year.

During the quarter, GACL sold 18.02 lakh tonnes of cement against 15.29 lakh tonnes in the second quarter, an increase of 18 per cent.

The operating profit went up to Rs 121.77 crore against Rs 104.28 crore, a rise of 17 per cent. The interest expenses during the quarter were lower at Rs 26.13 crore against Rs 39.03 crore.

For the first nine months of this financial year, cement despatches of the industry totalled 74.5 million tonnes against 69.4 million tonnes, up by 7.3 per cent.

Rossell Tea loss

Rossell Tea Ltd today reported a sharp decline in net sales during the third quarter ended December, leading to a net loss of Rs 0.90 crore.

The company suffered the loss after providing Rs 0.12 crore for depreciation, as against a profit before tax of Rs 1.97 crore last year after providing for a depreciation of Rs 0.23 crore. Rossell Tea had reported a net profit of Rs 1.59 crore during the third quarter of the previous fiscal.

Despite the adverse performance in the third quarter, the company was still in the black with net profit for the nine-month period at Rs 1.11 crore, lower than Rs 4.77 crore in the previous comparable period.

Net sales slipped to Rs 4.34 crore from Rs 10.41 crore last year and other income also dipped to Rs 0.02 crore from Rs 0.08 crore.

While the company maintained total expenditure within manageable limits, interest charges shot up to Rs 0.44 crore from Rs 0.37 crore last year.

   

 
 
TATA TEA SPEEDS UP TETLEY INTEGRATION 
 
 
FROM SATISH JOHN
 
Mumbai, Jan. 24: 
Senior officials from Tetley and Tata Tea are heading for a brainstorming on ways to carve an integrated structure at a February session in Goa.

The process of folding up Tetley Plc into Tata Tea will be accelerated at the meeting, which is expected to yield an agreement on setting up six task-forces to iron out the wrinkles.

Tata Tea vice-chairman R.K. Krishna Kumar said “a kind of unified command structure” will help integrate the functions and structures of the two companies.

Speaking on the occasion of the launch of Tetley tea here today, Kumar said the board of Tetley will meet in Mumbai for the first time. Later, the Tetley brass will join Tata honchos for a four-day session in Goa, from February 4, to map out unification plans.

Boston Consulting Group, already working on an integration agenda, will have its findings discussed at the conclave, set against the backdrop of palm-fringed beaches. Ratan Tata is expected to speak on February 8. Sources familiar with the plans said the task-force will be filled with neutral members from the two entities, but its main agenda will be to take up two “live projects”.

The strategic intent is to dissolve two separate identities and condense them into one outfit with a central command that takes decisions without any geographical bias on matters such as restructuring global facilities and entry into new markets.

Meanwhile, the Tata group has worked off much of the debt it raised to acquire Tetley. “We are planning to bring down the leverage structure (debt) through low-rate refinancing. The six task-forces will, basically, address the geographical divide between the two companies and try to address certain markets where the two companies are not very strong,” sources said.

One team will find ways to assimilate systems that reconcile the financial, information technology and data management aspects of the two firms. Another, sources said, will address procurement-related issues, packaging, cost savings while the fourth group devote itself to matters which are tied to buying and blending of tea.

Two panels will try to come up with methods to harmonise personnel and human resources policies on the one hand, and product development issues on the other.

Taj Mahal’s rival

Tata Tea today launched its global Tetley tea brand, which is directly pitted against ‘Taj Mahal’ tea marketed by Hindustan Lever Ltd, its major rival in the segment. What’s more, while HLL has tabla maestro Zakir Husain to sell Taj Mahal, Tata Tea has hired the country’s hottest model Fleur Xavier for Tetley’s advertising splash, which however has very sober overtones.

Krishna Kumar, said: “The primary objective of launching Tetley in India is to strengthen the Tata Tea portfolio by leveraging the Tetley acquisition with a premium tea offering,” adding “the Tetley brand represents a world leader in tea”.

   

 
 
KRISHNA KUMAR ON TATA SONS BOARD 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Jan. 24: 
R.K. Krishna Kumar, managing director of Indian Hotels Co Ltd and vice-chairman of Tata Tea, has been appointed to the Tata Sons board with effect from January 22.

Kumar has served in several Tata group companies over the last 38 years. He was appointed MD of Tata Tea in 1991, and took over as Indian Hotels’ MD in 1997.

Kumar also heads the Tetley Group Plc, UK, a company in whose acquisition he played a key role, catapulting Tata Tea to the position of the world’s second largest tea firm.

Kumar is also a director on the boards of several companies, including Tata Industries, Tata International and Tata Coffee.

   

 
 
INCOME TAX RAID ON HCL PREMISES 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Jan. 24: 
Income tax officials today raided premises of HCL group companies in the capital for alleged under-invoicing and bungling in share transactions with some overseas corporate bodies in Mauritius.

In an early morning raid, about 60 tax officials swooped down on the company headquarters at Noida, six other offices in Delhi and HCL Technologies chairman Shiv Nadar’s residence at New Friends colony.

A middle-level HCL executive said, “The IT officials asked us to vacate the premises in the morning though a few were allowed inside in the afternoon. But most us left after 5:30 p.m. The IT officials and some of our colleagues were inside till then.”

Income tax officials said the search pertained to only a few share transactions between investment companies of the HCL group and overseas corporate bodies.

The issue had flared up sometime ago when fly-by-night operators masquerading as OCBs dumped stocks sending the markets into a tailspin, prompting Reserve Bank to stop fresh secondary market investments by overseas corporate bodies based in Mauritius.

In early December, the island nation had despatched a team of officials to hold talks with the finance ministry and the RBI to resolve the issue.

The Securities and Exchange Board of India (Sebi) and RBI had been seriously looking into the practice of outflow of foreign exchange from the country. “We are looking at the transaction of Indian companies with certain overseas corporate bodies and it is not restricted to Mauritius only,” the sources said.

“Certain share transactions among the investment companies of this group and OCB belonging to the group were being investigated,” sources added. Tax officials did not rule out the possibility of bringing in the Enforcement Directorate or Central Bureau of Investigation. The details of HCL’s share transactions with OCBs are not known. However, company sources said, “They had visited another arm of the group today, HCL Infosys, for a few hours and conducted a routine checks.”

   

 
 
RAYMOND EYES MARKET IN EUROPE 
 
 
BY A STAFF REPORTER
 
Calcutta, Jan. 24: 
Raymond, the Rs 1,400-crore textile major, has acquired Portugal-based suit maker Regency to gain a toehold in the European market.

Raymond group president Nabankur Gupta said the acquisition process has been completed and the company is expected to give a 20 per cent return on the investment. At present, Regency has a capacity of producing 500 suits a day.

While refusing to divulge investment details, he said the company has a very wide-ranging clientele which will give Raymond a ready market in Europe and some part of America.

Gupta claimed that Raymond is currently one of the three largest textile companies in the world.

He also pointed out that the company is looking for further acquisitions, both in the country and abroad to raise its market share world-wide.

The company is investing over Rs 130 crore in the denim and fabric segments while its investment in garments stands at Rs 35-50 crore. With this, Raymond is expected to achieve a strong growth.

   

 
 
INDUSTRY GASPS IN 3-YEAR WARP 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Jan. 24: 
The cassandras have spoken: the gloom-and-doom scenario for the manufacturing sector will persist till 2005 because the chasm between demand and supply is steadily widening.

That’s bad news for the badly-roiled economy in which the manufacturing sector carries the highest weightage among the three main sectors that prop up the economy — manufacturing, agriculture and services.

The manufacturing sector has seen its capacity utilisation levels plummet to an alarming level and, no matter how hard its swings the scythe to pare costs, it cannot price its products competitively.

For the first time, India is experiencing the gut-wrenching downside of a real business cycle since the economy was liberalised in the early nineties.

“Before this, the manufacturing industry experienced downturns in a highly-protected market. But the good news is that there is always an upside to a business cycle — so it will have to just hang in there till the upturn happens. But the present depression will continue till the macro issues in the economy are addressed. The private sector is trying hard, but the public sector has yet to get its act together,” said Suman Bery, director general of NCAER.

Crisil managing director R. Ravimohan said: “The Indian industry has a peculiar follow-the-herd tendency. In the nineties, when they were doing well, most of them added unnecessary capacity as a way to expand. The same measures are going against them. Although operating margins have dropped to 4 per cent and the return on capital employed has gone down to 7 per cent, the capital using by the manufacturing houses has increased.”

He suggested that the industry should continue consolidating and capitalising and lobby hard for important inputs like power. “There should be a customer-oriented approach as the one followed by the two-wheelers companies.” The Crisil study said the polarisation in the industry had become sharper during the downturn. The gulf between the corporate giants and the small players continues to widen and slowly the middle-level players have started to fall by the wayside.

“We no longer have what we used to call the second-string batters — the average players. We find that we are either handing out triple A ratings or second-grade B ratings. The double As and single A brigade are fast disappearing. The clear message is: you either perform well or be prepared to receive a low rating,” Ravimohan said.

If India continues to have a lopsided economy with the manufacturing sector’s contribution to the GDP pegged at 26 per cent, he said it will be difficult to find growth boosters for the economy. “A service-oriented economy is not healthy. So, the policies the government drafts should take this into account,” he added.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 48.35	HK $1	Rs.  6.10*
UK £1	Rs. 68.79	SW Fr 1	Rs. 28.50*
Euro	Rs. 42.45	Sing $1	Rs. 25.90*
Yen 100	Rs. 36.02	Aus $1	Rs. 24.70*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs. 4735	Gold Std (10 gm)Rs. 4660
Gold 22 carat	Rs. 4470	Gold 22 carat	  NA
Silver bar (Kg)	Rs. 7350	Silver (Kg)	Rs. 7420
Silver portion	Rs. 7450	Silver portion	  NA

Stock Indices

Sensex		3357.79		-15.28
BSE-100		1600.12		- 7.97
S&P CNX Nifty	1085.30		- 4.10
Calcutta	 113.69		- 0.09
Skindia GDR	 530.91		-11.10
   
 

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