Wipro winces at profit pangs
ITC posts 17% rise in Q3 net
Siemens net up 29% at Rs 21 cr
Amnesty bait to check cartelisation
Three-way alliance to make buses
Jolt to Skoda plans
Foreign Exchange, Bullion, Stock Indices

Mumbai, Jan. 18: 
A terror-scarred US haunted the company whose chief was the richest Indian ever, and his investors brooked no excuses � or reasons � for the letdown.

When Wipro announced a 17 per cent leap in third-quarter net profit at Rs 223.6 crore, it knew it was trailing expectations, but was convinced it had done the best it could in a business that is made or marred overseas. The earnings growth is a measly 3.3 per cent if measured against the second quarter tally of Rs 216.5 crore.

Investors, who were treated to a figure of Rs 190.4 in the same period last year, were craving for healthier numbers. They voted with their shares, as legions of analysts and market watchers agonised over what lay ahead � the outlook for the current quarter and the full year. Most agreed that an uncertain and challenging environment will ratchet up pricing pressures � the technology industry coinage used to describe a situation in which everything you sell fetches less.

Candid confessions by the software major�s top-guns at a post-result powwow that the market was tough and choppy did strike a cord with analysts familiar with the tech rout, especially the US, but jilted investors weren�t listening: they punished the scrip with an 8 per cent slide. Opening at Rs 1775 on the BSE, the stock slid to Rs 1597, before closing at Rs 1610.10.

A break-up of the way it makes money showed revenue from global IT services at $ 126 million falling short of the company�s own projections. Worse, the fourth-quarter tally may slip 5 per cent over October-December. There was enough evidence of the September 11 attacks in the way business panned out in the third quarter, but the most telling of all was the 0.2 decline in revenues at Rs 875.9 crore from Rs 877.6 crore in July-September 2001. Year-on-year, the revenue growth was pegged at 12 per cent. Similarly, for the nine-month period, while net profit rose by 44 per cent to Rs 654.1 crore, the revenues were put at Rs 2551.9 crore, a rise of 18 per cent.

Commenting on the results, Wipro chairman Azim Premji said: �The results for the quarter were in line with our expectations in an environment of enhanced economic turbulence. We believe we have grown ahead of the industry growth rate for the nine-month period.�

In the third quarter, sources said it was only the telecom (equipment) and internet businesses that suffered a decline much sharper than the company�s expectations.

Wipro added 27 clients during the quarter, including six Fortune 1,000 companies. However, what was significant was the decline in North America�s share of global IT revenues to 51 per cent from 64 per cent in October to December of 2000-01, even as Europe�s share in the kitty rose to 42 per cent from 28 per cent.


Calcutta, Jan. 18: 
Tobacco-to-hotels major ITC Ltd posted a net profit of Rs 259.23 crore in the quarter ended December 31, a 17 per cent rise over the year-ago figure.

Net income at Rs 1,222.94 crore in the quarter was 7.65 per cent higher than the third quarter of the 2000-01 fiscal. Earnings per share in the quarter stood at Rs 10.56.

Gross cigarette sales in the third quarter stood at Rs 2,038.89 crore, and in the nine-month period since March, at Rs 6,053.89 crore. �Domestic cigarette volumes continue to remain under pressure due to the steep increase in excise duties imposed in the last Union Budget and the adverse impact of the growing contraband trade in cigarettes. As a result, cigarettes now account for only 14 per cent of India�s tobacco consumption,� ITC said in a release.

Revenues from ITC�s other fast moving consumer goods (FMCG) businesses�including branded garments, greetings cards and packaged foods�was at Rs 9.22 crore in the quarter, and Rs 16.7 crore in the three quarters put together.

The company said it was stepping up its presence in the lifestyle retailing business. It added seven new stores to the Wills Lifestyle chain in the quarter, taking the total strength to 29.

The company said institutional sales contributed to a remarkable growth in its greetings card business. ITC�s agri-business logged a turnover of Rs 333.36 crore, while the paper and packaging business registered an income of Rs 112.14 crore in the quarter.

However, income from the hotel business�at Rs 39.80 crore in the quarter�suffered due to the fall in travel, and higher gestation of new properties, ITC said in a release. Total revenues from the hotel business in the last three quarters stood at Rs 113.38 crore.

ITC has been focusing on internal efficiencies. Total interest cost for the three quarters at Rs 45.22 crore, was significantly lower than last year. Staff cost too, at Rs 191 crore, was a shade lower than 2000-01. �Effective cost control helped absorb the impact of start-up costs of new businesses,� the release added.


Jan. 18: 
Siemens Limited has posted a 29 per cent rise in net profit at Rs 20.5 crore for the first quarter ending December 31 compared with Rs 15.9 crore in the corresponding quarter of the previous fiscal. The turnover stood at Rs 260.3 crore, a 17 per cent growth over Rs 222.5 crore in the same period previous year. Siemens managing director J Schubert said improved productivity and stringent control on costs had significantly contributed to the profitability of the company.

Exide sales up 14%

Exide Industries Ltd�s gross sales increased 14 per cent to Rs 243.09 crore during the quarter ended December compared with the same period previous year. Profit after tax was Rs 7.75 crore as against Rs 6.87 crore in the previous corresponding quarter. Exide has launched new products such as Exide Freedom, Jai Kissan and Exide Max.

HCL Insys net dips

HCL Infosystems� (HCL Insys) has posted a 26.2 per cent dip in net profit to Rs 27.07 crore for the first half ended December compared with Rs 36.71 crore in th year-ago period. Its net profit was down by 16.5 per cent in the second quarter at Rs 14.60 crore compared with Rs 17.49 crore previous year.

Morepen net at Rs 25cr

Morepen Laboratories Ltd�s net profit was up by 11.58 per cent at Rs 24.66 crore in the quarter ended December. The company�s turnover was up by 10.34 per cent to Rs 122.33 crore from Rs 110.86 crore in the corresponding period previous year.


New Delhi, Jan. 18: 
The Union law ministry has proposed the inclusion of a provision in the Competition Bill to grant amnesty to large corporate houses that own up to abuse of their dominant position within the industry.

Union minister of law, justice and company affairs Arun Jaitley said his ministry has put forward the suggestion and has invited public debate on the issue.

Speaking at a symposium on corporate laws organised by Ficci, Jaitley said there has to be a serious discussion on the Competition Bill�which has been referred to a parliamentary standing committee�and should not be rushed through.

�In order to curb anti-competition practices, the question is do you go for a full-scale investigation detecting cartels or do you give the offending party an option in the first instance to make a clean breast of what it has done,� Jaitley said. He favoured the latter option and added that the amnesty to corporate houses that co-operate during the pre-scrutiny stage has worked well in several countries.

Jaitley said the Competition Bill was designed to replace the Monopolies and Restrictive Trade Practices Act, which was framed in 1969 and has outlived its utility in today�s globalised world.

�I do not doubt that there is a need for a regulator to safeguard the consumer from aberrations that the market is likely to throw up,� he added. Reiterating that the Bill would target the abuse of dominance and not dominance per se, Jaitley said already the required pre-merger notice has been done away with.

Allying fears of corporate houses, he said that it is only after a merger is announced that the proposed Competition Commission of India may choose to act if it thinks the merger has an adverse impact on competition.

In his special address, Pranab Mukherjee, chairman of the standing committee examining the Competition Bill, said the committee is in the process of finalising its report. He said the majority view is that the country does not require the new competition law though others think the MRTP has outlived its utility.


New Delhi, Jan. 18: 
Hinduja group-promoted Ashok Leyland has formed a joint venture with Spanish bus body maker Irizar and Sundaram Industries of the TVS group, to manufacture buses. Each partner will hold a one-third stake in the venture�Irizar TVS Pvt Ltd.

Ashok Leyland is leasing out coach factories in Viralimalai and Pudukkotai near Tamil Nadu as physical assets. Sundaram Industries will lend its experience while Irizar will style the bus bodies and find export markets for the company.

The buses will primarily be manufactured on a Leyland chassis, but R. Seshasayee, managing director of Ashok Leyland, said, �For export purposes, the bus bodies can be built on any chassis�Indian or imported�depending on the order.�

Irizar, a part of Mondragon Corporation Cooperative, has a presence in 65 markets worldwide.

The company is drawing up plans to enter the West Asian markets this year with buses.


New Delhi, Jan. 18: 
Skoda Auto India�s plans to import completely built units (CBUs) of its top-line sedan Octavia has slammed into a bureaucratic wall at the commerce ministry which is still to grant permission.

The development has put a crimp on the company�s plans to launch an aggressive campaign to market the Octavia.

The result: the company has run out of stocks and is being forced to import the Octavia as semi-knocked down kits (SKD) for which it has to pay a higher duty.

Skoda had obtained a licence from director general of foreign trade (DGFT) to import 1,500 units of SKD sets of Octavia early last year. These kits came in the form of an engine mounted on the chassis with other parts being shipped separately. The parts were later assembled at the company�s plant at Aurangabad.

However, a customs notification (No. 62/2001) issued subsequently classified an engine-mounted on chassis as a CBU import.

As a result, instead of paying the SKD duty of 89 per cent, the company was charged a CBU rate of 121 per cent for imports. In a double whammy, the company also had to pay excise on top of its higher customs duty as the car was being manufactured (assembled) in India.

The company approached the Foreign Investment Promotion Board (FIPB) in November for permission to import 750 fully built cars in CBU form which would have led to a significant cost saving by way of reduced manpower costs and saving on excise outgo.

However, at its meeting, the FIPB directed the company to approach DGFT as the matter pertained to the latter. Almost two months have passed and Skoda has yet to obtain permission to import Octavia in the CBU form.

�We already have a backlog of more than three weeks and we are now being forced to send our customers away as we do not have enough cars to sell,� Skoda sales and marketing head Bipin Datar told The Telegraph.

Imran Hassen, managing director of the company, was also upset over the whole development.



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