Friday the 13th gloom spells doom
Hind Lever third quarter net profit at Rs. 331 crore
Guj Ambuja net dips
China beats India in byte might
PSUs seek nod to export diesel
Sub-contracting exchange for infotech, telecom takes Net to villages
VSNL to tap overseas markets via joint ventures
Haldia Petro to resumeoperations in a week
Foreign Exchange, Bullion, Stock Indices

Mumbai, Oct 13: 
The markets woke up to a Black Friday. As much of West Asia remained on a knife edge amid mounting tensions between Israelis and Palestinians, the markets at home were stalked by rising crude prices, and its impact on an economy teetering on the brink of a slowdown.

A clobbered rupee hurtled to yet another record low of 46.45 while the Bombay Stock Exchange (BSE) sensex lost 108.65 points as skittish investors punished technology shares.

Things improved a little at the end, when the 30-scrip index closed at 3,738.93 after hitting an intra-day trough of 3714.16. The rupee recovered some of the lost ground, finishing at 46.3450/3550.

Apart from the new peaks in crude prices, what heightened concerns was the downtrend in overseas stock markets. On Thursday, Wall Street was in the grip of an oil scare with the Dow Jones Industrial Average plummeting 375 points. The tech-stacked Nasdaq also closed with steep losses. Analysts blamed Thursday’s 10 per cent spike in crude prices to an assault on a US military carrier in Yemen.

Opening considerably weaker at 3749.77, the sensex hit an intra-day high of 3793.08 before closing 2.82 per cent lower over Thursday’s finish in a roller-coaster trading session. Brokers said losses early in the day were led by infotech, communication and entertainment stocks. Later however, there was a mild recovery as operators resorted to short covering.

In the forex market, there was a dash for dollars by corporates and banks, which sent the rupee tumbling to an intra-day low of 46.42/45. The currency had opened at 46.29/34, but lost its way due to fears that the high cost of oil imports will have consequences that could spill over to key sectors.

After the rupee plumbed its record low, a clutch of banks and companies came out of the woodworks to sell a part of their dollar holdings. “There was some good supply of greenbacks when the rupee slipped below the 46.40 mark. This helped it rebound against the dollar,” a dealer said.

Analysts said a part of the dollar sales came from the custodian banks acting on behalf of FIIs. Speculators were also believed to have offloaded a portion of their greenback reserves.

According to market sources, the rupee is likely to remain under pressure because fears over mounting oil prices have not receded. There are now concerns in several quarters that the currency may decline beyond the crucial 46.50 threshold in the immediate term.

“If the oil prices remain continuously above $ 30, the rupee will remain on the skids for some time,” an analyst with a foreign bank said.

On Dalal Street, 113 shares, including 23 from the sensex, registered sharp to moderate losses while 26 others reported moderate gains. Global Telesystems was the most active scrip with a turnover of Rs 706.04 crore, followed by HFCL (Rs 670.92 crore), Infosys (Rs 517.96 crore), Satyam Computers (Rs 436.66 crore) and Zee Telefilms (Rs 426.97 crore).

Global Telesystems dropped by Rs 104.70 to close at Rs, 1039.20, HFCL by Rs 128.25 at Rs 1006.10, Infosys by Rs 310 at Rs 6479.75, Satyam by Rs 41.20 at Rs 368, Zee by Rs 31.85 at Rs 356.35, Lever by Rs 8.20 at Rs 184.65, NIIT by Rs 53.10 at Rs 1210.15, Wipro by Rs 152.25 at Rs 2174.30 and SSI by Rs 139.25 at Rs 2135.85.

The gainers included ITC which firmed up by Rs 23.15 at Rs 768.90. Dr Reddy’s increased by Rs 25.75 at Rs 1358.10, Grasim by Rs 10.45 at Rs 185.25, Ranbaxy by Rs 34.20 at Rs 655.05, Bombay Dyeing by Rs 9 at Rs 114.10 and Gujarat Gas by Rs 35.70 at Rs 592.65.    

Mumbai, Oct 13: 
Hit by the slowdown in the economy, FMCG major Hindustan Lever Limited’s (HLL) recorded a sluggish growth in profits and sales.

HLL reported a profit before tax of Rs 414 crore and net profit of Rs 331 crore for the September quarter, a growth of 10.7 per cent and 16.1 per cent respectively.

Net sales for the quarter was Rs 2462 crore compared with Rs 2452 crore in the previous corresponding period, a mere 40 per cent growth over the previous quarter. Analysts tracking the industry had predicted a slower growth for the company. However, today’s lacklustre sales growth also took them by surprise.

The scrip closed at Rs 184.65 on the Bombay Stock Exchange (BSE) today, after hitting a high of Rs 191.30.

The company’s operating margin improved to 15.4 per cent largely due to improved product mix and reduction in material and supply chain costs.

Net sales for the first nine months of the year rose by 4.1 per cent to Rs 7,956 crore. Profit before tax at Rs 1,145 crore and PAT at Rs 881 crore grew by 19.7 per cent and 21.5 per cent respectively.

Commenting on the quarter’s performance, HLL chairman M S Banga said, “This quarter saw a slowdown of market growth and intense competition in certain categories.”

Tea sales declined by 10 per cent due to a planned rationalisation of the low priced portfolio. Sales realisation per kg of tea improved despite a sharp fall in basic commodity price.

The oils and fats business recorded a significant growth of 16 per cent in volume, though lower commodity oil prices neutralised most of these gains.

Deodorants registered an impressive growth of 30 per cent while the household care business grew by 10 per cent. Among the businesses that had a modest growth were oral care at 2 per cent, skin care by 4 per cent, while the premium portfolio grew by 8 per cent, overall volumes declined due to loss of a 2 per cent share in the low price segment.

“Investment in media and market/consumer activities was stepped up to lead market development and address competitive issues. Product mix, continued focus on cost and supply chain efficiencies led to margin improvement and overall profit growth,” Banga added.    

Mumbai, Oct 13: 
Gujarat Ambuja Cements Ltd (GACL) has posted disappointing results in the first quarter of the fiscal year ending June 2001, recording a 50 per cent decline in net profit. Net profit declined to Rs 25 crore from Rs 50 crore in the year-ago period. For the first quarter ended September 30, net sales of the company rose marginally to Rs 251 crore from Rs 243 crore in the corresponding period of the previous year.

During this period, GACL sold 1.30 million tonnes of cement and clinker as against 1.2 million tonnes in the first quarter of the previous year, an increase of 8.3 per cent.

The company said the first quarter covers the monsoon season, when, conventionally, the demand for cement is low resulting in lower prices. This year demand has been further impacted by high cost of captive power due to very high oil prices.

GACL made an operating profit of Rs 90.77 crore against Rs 103.03 crore in the year-ago period. Interest burden was put at Rs 32.22 crore against Rs 22.34 crore. After providing for depreciation of Rs 31.23 crore (Rs 30.64 crore) and non-cash charge on account of ESOP of Rs 2.26 crore, the net profit stood at Rs 25.06 crore against Rs 50.05 crore.    

New Delhi, Oct 13: 
India’s loss is China’s gain. The worlds’ largest information technology and telecom fair — CeBIT Asia — will be organised in China and not in India.

The National Association of Software Services and Companies had initiated a dialogue with CeBIT, organisers of the fair, about two years back, but the talks fell flat as the organisers have decided to set up shop in China.

“About two years ago we had informally asked CeBIT to organise the fair in India. Though there was no written communications between us, the organisers were considering India, but we could not pursue the matter with the concerned authorities,” said Dewang Mehta, president, Nasscom.

According to Jorg Schomburg, director, Deutsche Messe AG, the organisers of CeBIT, “Though Nasscom asked us to organise the CeBIT in India they did not respond to our requests like control of the fair ground. It is an important condition of our project anywhere in the world. We take 50 per cent equity in the fair ground and build it. Lack of proper infrastructure in India also was one of the reason for opting China.”

In spite of major growth in the software sector in India, the CeBIT organisers have not been able to provide additional space for more than 25 companies from India. “Nasscom had asked us to include three more companies in the given space. However, we cannot concede any such request owing to a shortage of space,” said Schomburg.

Last year too, India could send only 25 participants to the annual IT and Telecommunications fair at Hannover due to lack of space.

The organisers who hold only one exhibition in each continent had made an exception by opting to host a second fair in Asia due to the growing interest in information technology and telecom.    

New Delhi, Oct 13: 
Facing a glut, the public sector Cochin Refineries Ltd (CRL) and Bharat Petroleum Corporation Ltd (BPCL) have sought government’s approval to export their surpluses.

Reliance Petroleum Ltd (RPL) has already exported one consignment to Bangladesh and is understood to have concluded deals for a few more cargoes.

Mangalore Refineries and Petrochemicals Ltd (MRPL), the joint venture company, will also have exportable surplus next month as it plans to utilise its full capacity of 9 million tonnes per annum from October. So far, MRPL has been operating at a capacity level of 6 million tonnes per annum, mainly because of its inability to import crude due to cash crunch.

The government has no objection to public sector refineries undertaking export either directly or through IOC, the canalising agency.

However, official circles are sceptical about the ability of CRL to export diesel. Though rated as an efficiently run unit, it has no experience in export business. Being a marketing company based in Mumbai, BPCL, should be in a position to export its surplus diesel.

There is no official estimate of the surplus diesel in the country as refineries are not putting into operation their full capacity. These refineries had projected production of various items for the current fiscal which formed the basis of the oil economy budget. Subsequently, many refineries sought government’s permission to step up diesel production. But in view of the glut in the domestic market, the government advised them to limit their diesel production to the quantity they had earlier indicated.

Official circles say in the case of RPL, the government is not in a position to lift even the committed quantity. This is because RPL’s refinery is located in Gujarat which is surplus not only in diesel but also in other petroleum products. Shortage of products is mainly on the east coast. The government can go to RPL’s rescue only by forcing PSUs to slow down production of diesel.

This can lead to a serious problem as the government is duty bound to minimise the transporting cost of products. The refineries closest to east coast are MRPL and BPCL and any attempt to ignore these refineries will invite problems for the government. The management of RPL appreciates the problem and that is why it went in for export of diesel.

There is no indication as yet when the glut situation will be over. With domestic diesel consumption remaining stagnant (in some months it even turned negative), energy planners are not in a position to make a reliable forecast.    

New Delhi, Oct 13: 
The United Nations Industrial Development Organisation (UNIDO) and Electronics and Computer Software export Promotion Council (ESC) have set up a national subcontracting partnership exchange (SPX) for electronics, infotech and the telecom industry.

Announcing the initiative, D. P. Bagchi, secretary, ministry of small scale industry, said the ministry would hold meetings with the ministry of finance and the Small Industrial Development Bank of India (Sidbi) to sort out various issues to help promote the SSI sector in India.

He was speaking at the National Workshop on International Subcontracting Opportunities in Software and IT Related Services for Small and Medium IT Companies of India, organised jointly by NASMEIT, ESC and Software Technology Parks of India (STPI) today.

NASMEIT, ESC and UNIDO signed an memorandum of understanding for creating an SPX.

Bagchi said that the proposed NASMEIT-ESC-UNIDO Subcontracting Exchange would be globally networked with 46 other such exchanges across the world.

The SPX initiative of NASMEIT/ESC would be unique in the country as it would network SME software companies of India with companies elsewhere in the world requiring infotech services such as embedded software for telecom equipment and white goods.    

New Delhi, Oct 13: 
Net for the rural masses may sound like a distant dream, but a young entrepreneur from Naidu-land is trying to turn it into a reality, and make money in the process.

Srinivas Polisetty, a US-trained software designer and co-founder of the three-year old IT firm, is doing just that, bring the internet to the aid of rural artisans. has tied up with the Andhra Pradesh government to develop a project called DWACRA (Development of Women And Child in Rural Areas) to help rural artisans export their produce directly, cutting out all middlemen.

The DWACRA project will be beneficial for all the three concerned parties, i.e, the artisans, the government and of course,

“Besides being much more gainful for artisans, it earns foreign exchange for the government,” says Polisetty. The company earns its profit as commission from the government. The project is an e-tailing model with a difference, instead of individual sellers putting up their websites, it is rather like an online co-operative market.

Polisetty is also working to popularise his company’s latest software product iEMS (inter Enterprise Management System).

“If one is looking for suitable software for business, web application or for office purposes, Mahadev iEMS enables its users to have a programme exclusively tailor made for their use,” he said.

The computer powered by Mahadev iEMS creates programmes to cater to the user’s needs automatically, informs Polisetty. Established in December 1997, jointly by Polisetty and Naveena Nagi in the USA ( Inc USA) the company came to India last year when it opened its office in Hyderabad.

Citing a clientele from across the world, the company projects a business volume of about $ 90 million for the next two years.About Mahadev iEMS, Polisetty said that’s implementation partners include some of the top 500 companies in the USA.

“All the providers of software solutions ultimately have to narrow down to software products,” says Polisetty.

The company provides end-to-end ebusiness backbone for the entire enterprise.Claiming that it is cost effective and secure, Polisetty informed that has decided to extend mobile commerce to its privileged clients through its open and scalable platform of b-commerce.Polisetty is part of the new age icons of Indians who have made money in the fabled Silicon Valley.

He embarked on his software career with a firm called EIT which was acquired by Verifone. Later, Verifone itself was acquired by Hewlett Packard for $ 1.29 billion. Says Polisetty, “HP acquired Verifone because of two products — vPOS & vGATE which I had written.”These acquisitions landed several stock options for Polisetty, which he says came handy for floating his own company. In India, the company did a private placement last year.

“Till date Rs 10 crore has been invested in the business,” informs Polisetty. “By the end of this fiscal we will be profitable” he quips. Apart from license fee for the products, other revenue streams of the company include implementation service and revenue sharing with customers.

In this year’s ICE (Internet Commerce Exposition) exhibition in California, was adjudged the best from among 175 participants. Polisetty adds that the award was for making the best payment security software.

“I want to make iEMS for vertical domains,” says Polisetty of his immediate plans. Some of the sectors he is looking at are oil and natural gas, insurance, power, banking and telecom.    

Calcutta, Oct 13: 
Public sector telecom major Videsh Sanchar Nigam Ltd (VSNL) is considering a move to set up multiple joint ventures to tap telecom opportunities in India and abroad, particularly in the Saarc countries.

Confirming the move, a top VSNL executive said the company was scouting for suitable partners both in the country and abroad to set up such joint ventures.

“We are already trying to tap the telecom market in Nepal in collaboration with Mahanagar Telephone Nigam (MTNL), with which we have a joint venture,” the official said.

While refusing to name the countries where VSNL is trying to make inroads, the official hinted that the West Asian countries too have huge potential for growth.

Besides, VSNL also aims to be a global player in the field of internet services and other value-added services like electronic data interchange, managed data network services, video conferencing and TV uplinking .

The company is in the process of setting up a 100 per cent subsidiary which will be called VSNL Seamless Services Pvt Ltd. VSNL’s internet-related services will be shifted to the subsidiary in order to strengthen the focus on this sector which had a very high growth potential, the official said.

The company is also likely to offer internet services in other countries through its subsidiary.

“We currently have over a 70 per cent market share in internet services. We intend to keep our dominance by providing quality services,” the official explained.

VSNL will invest Rs 5000 crore during the Ninth Plan ending March 2002, with much of the investment earmarked for internet-related services. “We have a customer base of 4.5 lakh in Mumbai, Calcutta, Chennai, Delhi, Pune and Bangalore. But, we will start operating at least in 10 new cities where we already have the infrastructure,” the official said.    

Calcutta, Oct 13: 
Haldia Petrochemicals (HPL) chairman Tapan Mitra today said normal operations at the project will start within a week even as state finance minister Asim Dasgupta said he is against fixing a specific time-frame to restore normal operations in 12 units of the complex.

Dasgupta told reporters after a meeting with Mitra, finance secretary Ashok Gupta and industry secretary Jawahar Sircar that all units under the project were shut down for a scheduled technical check-up from September 28 to October 9. However, it was detected during the inspection that two units (HDP & LnDP) were not properly synchronised with the other 10. HPL engineers need more time to rectify the problems, but the two units will start working in shortest possible time, Dasgupta assured.

It was decided at the meeting today that the three prime promoters of the HPL — state government, Chatterjee Group and the Tatas — would provide Rs 250 crore to help ease HPL’s loan burden. The government will release Rs 107 crore, the Tatas Rs 36 crore and the rest will be provided by the Chatterjee Group.

HPL’s project cost has been pegged at Rs 5,170 crore. Of this, Rs 2,000 crore will be in the form of equity while the debt component will be Rs 3,170 crore. HPL had secured a Rs 962-crore loan from IDBI. It was decided at its board meeting in early September that the three promoters of the project would provide Rs 500 crore to relax the loan burden.

The proposed inclusion of IOC and IDBI in HPL’s five-member managing committee was delayed due to non-availability of opinions from the Tatas and the Chatterjee Group in time. However, suggestions from all the three promoters now reached Writers’ Buildings and it would be sent to IOC and IDBI by Monday.    


Foreign Exchange

US $1 Rs. 46.35 HK $1 Rs. 5.85*
UK Ł1 Rs. 68.36 SW Fr 1 Rs. 26.25*
Euro .Rs. 40.13 Sing $1 Rs. 26.15*
Yen 100 Rs. 43.04 Aus $1 Rs. 24.20*
*SBI TC buying rates; others are forex market closing rates


Calcutta	Bombay
Gold Std (10gm) Rs. 4605 Gold Std (10 gm) Rs. 4580
Gold 22 carat Rs. 4350 Gold 22 carat Rs. 4235
Silver bar (Kg) Rs.8025 Silver (Kg) Rs. 8130
Silver portion Rs. 8125 Silver portion Rs. 8135

Stock Indices

Sensex 3738.93 -108.65
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