Reliance net profit jumps 17%
RPL net inches up 5%
Nusli Wadia, Proline sew up alliance
Dr Reddy’s net at Rs 121 cr
CESC prunes loss to Rs 13 crore
Trouble for RPG Life Sciences
Confusion at Saltlec
Govt okays FDI worth Rs 214 cr
Berger mulls tieups with foreign firms
Foreign Exchange, Bullion, Stock Indices

 
 
RELIANCE NET PROFIT JUMPS 17% 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, July 31: 

Figures beatmarketestimates

Buoyant product prices helped Reliance Industries (RIL) report a better-than-expected 17 per cent increase in first-quarter profit at Rs 720 crore compared with Rs 618 crore in the same period last year.

What was remarkable was that the bottomline bounce came despite flat sales at Rs 6397 crore against Rs 6,390 crore in April-June last year. This does not include trading sales worth about Rs 65 crore. If it were taken into account, RIL’s sales would stand at Rs 6462 crore. The figures include inter-divisional transfers of Rs 1,397 crore ($ 286) compared with Rs 1,297 crore during the corresponding quarter of the previous year.

Analysts have applauded the fact that the bottomline boost more than made up for sluggish sales growth. Another area where this was manifested was the 7 per cent spike in operating profit at Rs 1394 crore compared with Rs 1302 crore in the same quarter of 2001.

Consolidated net profit would be Rs 991 crore if investments in subsidiaries and associates are incorporated.

Operating margin improved to 19.8 per cent because of several reasons, which included better prices, higher degree of integration and value addition, continued focus on costs, productivity, efficiency and a marginal decline in raw material costs.

“We are enthused by Reliance’s strong performance, and looking forward to significant growth and further improvement in future,” company chairman and managing director Mukesh D. Ambani said.

Vice-Chairman and managing director, Anil D. Ambani, said he was happy with the numbers, which have been achieved amid improved conditions for petrochemical firms. He, however, pointed to the poor monsoons as a key factor that will affect the economy, and the intensity of demand for the company’s products.

Taking about the merger of Reliance Petroleum with Reliance Industries, and the acquisition of IPCL, Anil said they would enhance the ability to leverage scale, global competitiveness and production efficiencies — strengthening its leadership in the expanding market at home, and increasing its presence abroad.

“The initiatives planned in oil and gas exploration and production, retail marketing of petroleum products, and the infocom sector, are progressing well. They are expected to make a significant contribution to profitability in the medium to long term in a manner that enhances overall shareholder value,” Anil said.

Production, including toll conversion, increased from 2.81 million tonnes in the first quarter of 2001-02 to 2.94 million tonnes in the same period of 2002-03, a rise of 4 per cent.

Manufactured exports, including the deemed variety, were pegged at Rs 946 crore ($ 194 million) compared with Rs 749 crore in the corresponding previous quarter, an increase of 26 per cent. The combined exports of RIL and RPL stand at Rs 2,573 crore.

There was a 12 per cent fall — caused largely by refinancing high-cost debt — in interest charges at Rs 225 crore.

Reliance said it had focused on high-value premium products, with speciality grades contributing 20 per cent to the production, and generating a premium of 3 to 15 per cent over commodity prices. Oil and gas accounted for 3 per cent of its revenues.

   

 
 
RPL NET INCHES UP 5% 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, July 31: 
At Rs 480 crore, Reliance Petroleum’s (RPL) first-quarter profit was 5 per cent higher than it was at this time last year, but much rosier than forecasts of analysts who track the firm’s fortunes. It was Rs 456 crore in the first three months of 2001-02.

Experts had been looking to a profit figure that remained unchanged, at best, or shrivelled, at worst. That prognosis was fuelled by a marginal decline in refining margins at a time when consumption for petroleum products at home was sluggish. All the same, the profit is the highest in a quarter since RPL’s inception.

Sales went up to Rs. 9,474 crore from Rs 8,865 crore in the corresponding quarter of the previous year, a 7 per cent rise. Capacity utilisation peaked at a record figure of 111 per cent, propelled in a large measure by exports.

“We are encouraged by RPL’s continued good performance with capacity utilisation touching a record 111 per cent. We believe deregulation of fuel marketing offers immense opportunities for even better performance,” company managing director Anil D. Ambani said.

The record capacity use stands appears sharper because it has been accomplished in adverse market environment — flat sales of petroleum products at home and overseas.

This is also in stark contrast to the capacity utilisation rates of other refineries, both in India and abroad. The figures are 91 per cent in North America, 84 per cent in Europe, 84 per cent in Asia Pacific region and 90 per cent for other refineries that operate in India.

For the quarter ended June 30, RPL processed 7.45 million tonnes of crude during the quarter against 7.3 million tonnes during the corresponding previous quarter. Exports, on the other hand, were worth Rs 1,965 crores.

Naphtha sales declined 9.5 per cent due to increased availability of gas for power and fertiliser companies; kerosene sales (public distribution plus direct) fell 5 per cent as availability of LPG connections has increased in semi-urban and rural areas.

However, LPG recorded a growth of about 9.7 per cent and petrol consumption grew by about 10.5 per cent.

   

 
 
NUSLI WADIA, PROLINE SEW UP ALLIANCE 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, July 31: 
In an alliance that could catapult it to the country’s top league of apparel makers, Bombay Dyeing & Manufacturing Company Limited today said it would buy up to 51 per cent in Proline India.

The company told the exchanges about this in a letter sent to them, but did not reveal how much it would have to fork out for the deal, which was approved by the Bombay Dyeing board at its meeting here today.

The bourses have been told that the strategic alliance being worked will enjoin Bombay Dyeing to transfer its readymade garment facility to Proline India, and to participate in the equity share capital of the company to the extent of 51 per cent. “Bombay Dyeing expects to become a major player in the apparel industry by combining its distribution strength and financial resources with experience and skills of the Batra group, the promoters of Proline,” the firm said.

The alliance will put brands like Vivaldi, Proline and Fila (Italian shoe brand in India) in the same wardrobe. Bombay Dyeing has a turnover of over Rs 35 crore from its garment business, while Proline, known more for its casual-wear and sportswear brands, racks up Rs 30 crore.

The alliance is expected to benefit both partners as Proline, which has a limited number of outlets, can aim for a larger slice of the in the domestic apparel industry. It can now reach out through Bombay Dyeing’s 400 retail stores in the country, in addition to its own 50 outlets.

This link-up is not new in an industry that has seen similar alliances sewn up in the past, but analysts it would be smaller than the canvas that emerged after the A. V. Birla group firm Indian Rayon snapped up Madura Garments.

It is also felt that since the Batra group has been in the garment business for the last 30 years, they can use their skills in enhancing the presence of Bombay Dyeing’s garment division.

   

 
 
DR REDDY’S NET AT RS 121 CR 
 
 
FROM OUR SPECIAL CORRESPONDENT
 
Hyderabad, July 31: 
Dr Reddy’s Laboratories Ltd today reported a net profit of Rs 121.2 crore in the first quarter ended June 30, as against Rs 44 crore recorded a year ago. Revenues grew 51 per cent to Rs 453.3 crore in April-June, compared with Rs 299.5 crore in the first quarter last year.

The company stated that the financials for the current quarter have been consolidated as per the US GAAP accounting norms and, were hence, not comparable with the earlier standalone Indian system adopted in the previous years.

Net profit margin was higher at 27 per cent as against 15 per cent in the same period last year.

International sales contributed to 63 per cent of total revenues. It grew by 78 per cent to Rs 287.2 crore this quarter, from Rs 161 crore a year ago.

   

 
 
CESC PRUNES LOSS TO RS 13 CRORE 
 
 
BY A STAFF REPORTER
 
Calcutta, July 31: 
The first quarter loss of CESC, the power utility controlled by R. P. Goenka, is down to Rs 13 crore from Rs 40 crore in the same period of the previous year. The improvement has been attributed to a Calcutta high court order that allowed a tariff hike.

Net sales has gone up 10 per cent to Rs 550 crore in the first quarter from Rs 500 crore in the previous year. Profit before depreciation is Rs 67 crore against Rs 38 crore in the corresponding period of the previous year.

The Calcutta high court ruled against an appeal filed by the West Bengal Electricity Regulatory Commission (WBERC) on May 14, clearing the way for a tariff revision.

Sumantra Banerjee, managing director of the company, said: “Armed with the judgement, the company started billing revised tariffs in 2002-03, which is included in net sales for three months ended June 30.”

The court order is being contested by WBERC and others in the Supreme Court. To that extent therefore, the results are provisional in that they are subject to the apex court’s verdict. Accordingly, provision for deferred taxation if any, could not be made, a company release said.

Banerjee said the interest burden is marginally lower at Rs 105 crore from Rs 108 crore in April-June previous year.

The company, he said, continues to focus on efficiency improvement, and generation this quarter is up 155 million units — a 10 per cent rise over the same period last year.

“We are also reducing imports of power from other agencies. Steps are being taken to check pilferage as part of a larger drive to contain transmission and distribution losses. The anti-theft law is also helping the company to put a check on illegal hooking and tapping.”

   

 
 
TROUBLE FOR RPG LIFE SCIENCES 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, July 31: 
RPG Life Sciences Ltd (RPGLS) today said it has suspended all operations at one of the small pharmaceutical manufacturing units of the Pune facility of Hindustan Antibiotics Ltd (HAL), which has been leased by the company.

The company today informed the stock exchanges that an accident, which took place on Tuesday morning, affected the technicians operating the equipment and has resulted in a few casualties. The casualties were believed to be a result of the leak in one of their plants.

While all operations at the facility have been temporarily suspended by the company, a high-powered team comprising the senior management and technical experts from RPGLS are on the location, to analyse the cause of the accident and provided support and relief, the company said. Other pharmaceutical companies also share the HAL facility located at Pimpri.

   

 
 
CONFUSION AT SALTLEC 
 
 
BY A STAFF REPORTER
 
Calcutta, July 31: 
The news of IBM buying the consulting arm of PricewaterhouseCoopers (PwC) has created an atmosphere of confusion at the consulting unit’s headquarters in Salt Lake Electronic Complex (Saltlec) in Calcutta. Fear of retrenchment looms large among the 1000 odd employees at the company’s Indian outfit.

“Our industry has been going through a bad phase for over an year with drying up of projects and lowering of prices. Now, our company is changing hands. Under such circumstances, fear is quite natural and it’s true that we have lots of doubts,” said an employee who has been working with PwC for the past three years.

Following the apprehension among the employees, the senior officials at the PwC consulting wing convened a meeting on Wednesday afternoon.

“We were told that synergies between the two companies would strengthen the composite outfit,” said another PwC employee.

The Indian outfit generates revenues over Rs 200 crore and boasts high-profile domestic clients like ITC, Tata Steel, Bhel, and Indian Oil.

Besides, PwC has been engaged in implementing various state government sponsored projects in Andhra Pradesh, Orissa and Delhi.

   

 
 
GOVT OKAYS FDI WORTH RS 214 CR 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, July 31: 
American financial house Chubb Global Financial Services Corporation today received permission to invest Rs 73.76 crore (inclusive of a share premium) to acquire a 26 per cent stake in HDFC Chubb General Insurance Company.

The government also cleared the proposal of Metdist of the UK to set up a wholly-owned subsidiary for exploration, development, mining and processing of base and precious metals with an investment of Rs 25 crore.

Commerce and industry minister Murasoli Maran also cleared the plans of Mauritius-based Van Gogh Investments to invest Rs 30 crore to set up a wholly-owned software development business in Mumbai.

These proposals were among the 46 foreign direct investment (FDI) proposals worth Rs 214 crore cleared by the minister. Major investment proposals approved pertained to insurance, manufacture of automotive components and plastic parts, electrical components and telecommunications.

The proposal of Korean major Sinjin Engineering to invest Rs 18.80 crore in the country in a 100 per cent subsidiary for manufacturing automotive components and plastic parts was also cleared.

Samsung Electronics’ proposal to amend the existing foreign currency approval and allow test marketing of specific state-of-the-art high tech, high value models besides imports and marketing of computer components in India have also been approved. Sumitomo Chemicals has been allowed to test market Bacillus Thringienisis variety of bacteria, which can be used to make pesticides and insecticides for plants to fight caterpillars and other common ailments.

Class KgaA of Germany has been allowed to invest Rs 4.20 crore to raise the foreign equity from 40 per cent to 100 per cent in Escorts Class Ltd which makes harvesting machinery. The Rs 6.65 crore proposal of Mahle Filtersystem GmbH to raise the foreign stake from 50 per cent to 91.70 per cent in Kirloskar Mahle Filter, which makes industrial filters for automobile applications, was also cleared.

   

 
 
BERGER MULLS TIEUPS WITH FOREIGN FIRMS 
 
 
BY A STAFF REPORTER
 
Calcutta, July 31: 
Berger Paints will soon finalise technical tieups with a couple of foreign companies to enhance its range of industrial and automotive paints. Berger controls about 25 per cent of the industrial and automotive paint market.

The Calcutta-based paint major, which recently took over ICI India’s automotive paint business, already has a technical collaboration with three companies: Orica, Dupont and Nippon Paints.

Berger’s chairman Kuldip Singh Dhingra said: “The two new tieups will be finalised over the next three to four months. The deal with one of the companies has already been finalised.” He, however, refused divulge names of the companies with which Berger was planning to enter into an alliance.

Dhingra said the company could expand capacity at its plants in Rishra—the one it took over from ICI India—Goa and Pondicherry, if required.

The company was also weighing the possibility of growth through mergers and acquisitions in both the industrial and decorative segments, he added. Berger controls 16-17 per cent of the decorative paint market.

Berger today unveiled sales of Rs 148.64 crore in the first quarter, which is 12.27 per cent higher than last year. Net profit during the quarter at Rs 5.58 crore was 9.62 per cent higher than last year’s figure.

   

 
 
FOREIGN EXCHANGE, BULLION, STOCK INDICES 
 
 
 
 

Foreign Exchange

US $1	Rs. 48.66	HK $1	Rs.  6.20*
UK £1	Rs. 76.22	SW Fr 1	Rs. 32.45*
Euro	Rs. 47.66	Sing $1	Rs. 27.25*
Yen 100	Rs. 40.53	Aus $1	Rs. 26.30*
*SBI TC buying rates; others are forex market closing rates

Bullion

Calcutta			Bombay

Gold Std (10gm)	Rs. 5180	Gold Std(10 gm)	Rs. 5070
Gold 22 carat	Rs. 4890	Gold 22 carat	NA
Silver bar (Kg)	Rs. 7975	Silver (Kg)	Rs. 8000
Silver portion	Rs. 8075	Silver portion	NA

Stock Indices

Sensex		2987.65		-  3.26
BSE-100		1506.23		+  2.18
S&P CNX Nifty	 958.90		-  1.75
Calcutta	 109.40		-  0.42
Skindia GDR	 464.50		-  3.06
   
 

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