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Top stories this week… - Views on News from Equitymaster
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  • Jul 14, 2001

    Top stories this week…

    Infy: Growth story continues…
    Infosys has reported a sharp 9 percent growth in topline to Rs 6,125 million (US$ 130 million) for the first quarter of the fiscal year 2001. On a year-on-year basis revenues have gone up sharply by 72 percent. Despite sluggish market conditions, the company has managed to add 26 new clients during the first quarter. Margins declined primarily on account of higher salary costs and pressure on billing rates. The management has plans to go-ahead with its recruitment plan of around 1,500 to 2,000 employees in 2002. Infosys is expected to report a 30 percent growth in bottomline for the fiscal year 2002. Read more...

    A disinvestment ‘special’…
    Videsh Sanchar Nigam Limited (VSNL), the state owned international telephony service provider, has declared a dividend of Rs 50 per share (US$ 1.1) (Rs 10 as normal dividend and Rs 50 as special dividend) ahead of its disinvestment, which the government has targeted by the end of March 2002. The company had more than Rs 5 billion (US$ 106 million) as cash reserves and was expected to declare a dividend Rs 100 per share (US$ 2.1). After the dividend, the company’s reserves are expected to be in the range of Rs 35 billion (US$ 740 million). Read more...

    Cautiously optimistic…
    Satyam has posted a topline growth of 6.6 percent to Rs 4,119 million (US$ 88 million) and a bottomline growth of 9 percent to Rs 1,215 million (US$ 26 million). But on a year-on-year basis revenues have grown by 76 percent and the net profits have gone up by 141 percent. The company's topline has grown by a sober 6.6 percent compared to a significant 18 percent in the fourth quarter of 2001. This could be due to the tough market environment the company has been facing. Operating margins have come down by 110 basis points on a quarterly basis, as billing rates continues to remain strained in light of difficult market conditions. Read more...

    Hughes Tele breaks even…
    Hughes Tele.com, the basic and broadband service provider in Maharashtra and Mumbai, has reported a robust growth in sales for the first quarter of 2002. Net revenues have gone up sharply by 82 percent to Rs 545 million (US$ 12 million) backed by a 13 percent rise in subscriber base in the first quarter to 85,000 (70,000 in 2001). Operating profit for the aforesaid period stood at Rs 21 million as compared with a loss of Rs 50 million (US$ 1 million) in the corresponding period of the previous year. The company has set a target of 200,000 subscriber lines by end of March 2002 and it seems to be on target. Read more...

    SBI to the rescue…
    Unit Trust of India, the beleaguered leading mutual fund, has finally got some support from State Bank of India (SBI), another public sector bank. SBI has agreed to provide a line of credit against collaterals and the expected funding is around Rs 1.5 billion (US$ 32 million). Other public sector banks including Corporation Bank are working out a similar line of credit. Meanwhile, the fund’s management is set to announce minimum applicable sale of units in the coming week after a flood of opposition from retail investors on the ban of sale and purchase of US-64. Read more...

    Positive outlook…
    The Center of Monitoring Indian Economy (CMIE) has projected the country’s gross domestic product to grow by 6.3 percent for the fiscal year 2002. This would be primarily led by a sharp rebound in agricultural production, which is estimated to report a 9 percent growth as against 0.2 percent in 2001. However, CMIE expects the industrial production to show decline in production in 2002. Following this, the Reserve Bank of India’s Governer, Mr. Bimal Jalan, announced that the central bank expects the economy to grow in the region of 5.6 percent to 5.8 percent. The better than expected monsoons in some of the drought affected states have buoyed prospects for the economy. Read more...

    The decline continues…
    Industrial production has slipped back once again reflecting slowdown in the economy. Growth for May 2001 has slid by 1.9 percent as against a growth of 6 percent in the corresponding period of the previous year. The only sector, which continues to report positive growth, is mining, where production has gone up by 4.1 percent as compared to 2.6 percent last year. The cumulative figures of the first two months of the current year (April-May 2001) stood at 2.6 percent as against 5.1 percent last year. Basic, consumer and capital goods have also registered degrowth in the aforesaid period. Read more...

    Sweetening results…
    Cadbury India has posted a 23 percent growth in net profit in the second quarter of 2002 to Rs 88 million (US$ million). Net Sales grew by 11 percent to Rs 1,185 million (US$ 25 million) during the same period. The impressive aspect is the 11 percent growth in sales in the second quarter. On a consolidated half yearly basis, Cadbury India net sales have gone up by 9 percent. The company continues to endeavor to reduce its raw material costs. Raw material costs have declined marginally, but as a percentage of sales raw material costs went down by 360 basis points to 38.7 percent in the first half of 2002. Read more...

    ACC in the black…
    The Associated Cement Companies (ACC) seems to be on a firm turnaround path with both volumes and margins moving up sharply in the first quarter of 2002. The company has benefited from better operating margins due to better realisations, greater control on costs and a decline in interest expenditure. The company has posted a net profit of Rs 440 million (US$ 9 million) after factoring in a one-time loss of Rs 30 million (US$ 0.6 million) on the sale of its stake in Floatglass India. Since ACC has one of the lowest margins in the industry, expansion in margins is expected to continue in the coming quarters also. Read more...



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