No relief from weak global cues

In what started as a strong negative reaction to the results of the US polls, global equity markets, including indices in Indian stock markets languished in the red throughout the session today. While the BSE-Sensex closed lower by around 56 points, the NSE-Nifty closed lower by 21 points. Amongst sectoral indices, auto and FMCG indices managed to buck the trend. While the BSE Mid Cap managed to end higher, the BSE Small Cap index lost around 0.2%.

Asian indices across the board closed lower today while Europe is trading in the negative currently. The rupee was placed at Rs 54.43 to the dollar at the time of writing.

As per a business daily, the delay in commissioning of gas pipelines passing through Odisha has caused a roadblock for Tata Power's gas-based power plant in the state. Tata Power had proposed a 2,000 MW coal-fired power project at Naraj near Cuttack. But, mounting protests from green activists owing to the proximity to a nearby wildlife sanctuary had forced the company to switch to gas-based mode. The change in technology of the proposed power plant (coal-based to gas-fired) was necessitated by delay in obtaining clearances from the State Wildlife Board and National Wildlife Board. Tata Power's 2,000 MW project was to come up on 1,000 acres of land. The company had claimed earlier that the land acquisition process was completed and it had paid Rs 1 bn to Odisha Industrial Infrastructure Development Corporation (Idco) towards acquisition cost.

Meanwhile group company Tata Motors, has announced plans to launch six new passenger vehicles and 25 new commercial vehicles in the first half of FY14. Further, the company's plan to roll out the CNG and diesel variants of Nano is on track. Nano sales rose 4% in October 2012 to 4,004 units. Tata Motors registered a 6% growth in its total sales (including exports) at 71,771 vehicles for the month of October 2012. The company's domestic sales of Tata commercial and passenger vehicles for the month of October rose by 7% YoY. However, the company's sales from exports were lower by 13% YoY.

Indian share markets slide further
01:30 pm

With all-round selling across counters, Indian share markets continued to slide deeper in red in the post noon trading session. Majority of the sectoral indices are trading negative with capital goods, power and oil and gas stocks leading the pack of losers. Auto and FMCG are the only indices trading in green.

BSE-Sensex is down 108 points and NSE-Nifty is trading down 43 points. BSE Mid Cap and BSE Small Cap indices are trading down by 0.4% and 0.3%, respectively. The rupee is trading at 54.4 to the US dollar.

Most of food stocks are trading in positive led by United Spirits and Tata Global Beverages. As per a leading financial daily, in a bid to move closer to its consumption markets and also prune costs, Britannia wants to push up the proportion of in-sourced manufacturing from the present 45% to 65% over the next few years. To achieve this, the company plans to set up greenfield manufacturing plants in Bihar, Odisha and Gujarat as well as buy stakes in companies promoted by its contract manufacturers. Apart from its portfolio of seven power brands that include Good Day, Marie, Milk Bikis, Tiger, Nutrichoice, Treat and 50-50, the company feels that having regional offerings that cater to local tastes and preferences is important so as to fully address the consumption footprint. Some of its regional brands include Britannia Top, Nutrichioce Thin Arrowroot biscuits in West Bengal and Tiger Brita biscuits in Kerala. According to the company, the penetration of its biscuits stands at around 50% which is more than half of the overall category penetration of 90%. The stock is 0.5% up.

Majority of the engineering stocks are trading in red with Praj Industries and Jain Irrigation being the biggest gainers. The stock of Crompton Greaves has been under pressure since the company announced its results for the quarter ended September 2012. While the company's consolidated revenue grew by about 8% YoY during the quarter, profits were lower by about 64% YoY. The revenue growth was largely led by the consumer products division. Crompton Greaves' power systems and industrial segments businesses reported marginal growth figures in 2QFY13. Operating profits dropped by about 40% YoY on the back of a sharp contraction in margins. The same was on account of an increase in staff costs and other expenses. The sharper decline in profits was on the back of an 86% YoY rise in interest costs. At the end of 2QFY13, the company's unexecuted order book stood at Rs 94 bn. The order inflow - during the quarter - stood Rs 25.7 bn. The stock is down 1.2%.

Small Caps buck the trend
11:30 am

Indian equity markets continue to trade weak over the last two hours of trade. Auto and consumer durables stocks witnessed maximum buying interest while capital goods and IT stocks witnessed maximum selling pressure.

The Sensex today is down by 52 points, while the NSE-Nifty today is down by 22 points. BSE Mid Cap index is down by 0.09% while the BSE Small Cap index is up by 0.09%. The rupee is trading at 54.45 to the US dollar.

Hotel stocks are trading in the red led by Oriental Hotels and Hotel Leela Venture. Indian Hotel Company Limited (IHCL) has announced results for the quarter ended September 2012. Net sales for 2QFY13 increased by 6% YoY. This is despite the first two quarters usually being the leanest period for the industry. Operating margins saw a decline of 5.5% YoY. This has been due to increase in overall costs which saw a rise of 12.5% YoY. Operating profits declined by 47.6% YoY. The company posted a net loss as compared to a net profit for the same period last year. This was due to surging operating costs and high tax provisions and the global economic uncertainty which curbed spending on travel. On a consolidated basis, for the half year ended September 2012, the company reported a 14.5% YoY increase in net sales and a wider net loss of Rs 909 m as compared to a net loss of Rs 703 m in the same period last year.

Pharma stocks are trading in the green led by Biocon Limited and Indoco Remedies. As per a leading daily, the cabinet will discuss the new pharma policy, National Pharmaceutical Pricing Policy today. The policy is aimed at capping the prices of 348 essential medicines. This will likely decrease the prices of various expensive drugs. However, prices of a few low-priced medicines may increase. The prices of these 348 essential medicines will be capped at the weighted average of all drugs in a particular segment with more than 1% market share. After the cabinet clears this new policy, the Department of Pharmaceuticals will have to notify this before the Supreme Court's next hearing on the matter on November 27, 2012.

Indian share markets open weak
09:30 am

All major Asian stock markets have opened the day on a weak note with stock markets in Japan (down 1.6%), Hong Kong (down 1.4%) and South Korea (down 1.3%) leading the losses in the region. The Indian share markets have also opened the day on a weak note. Stocks in the power, banking and IT space are leading the losses.

The Sensex today is down by around 90 points (0.5%), while the NSE-Nifty is down by around 30 points (0.5%). Mid and small cap stocks are also trading in the red with the BSE Mid Cap and BSE Small Cap indices down by around 0.3% each. The rupee is trading at Rs 54.58 to the US dollar.

Aluminium stocks have opened the day on a weak note with National Aluminium Company Ltd (Nalco), Hindalco Industries, and Sterlite Industries leading the losses. Recently, it was announced that the government was planning to divest 12.5% stake in state-run aluminium firm Nalco. It was said that the stake was likely to fetch the government about Rs 15 bn. However, the plan was deferred by the government yesterday on account of concerns over the company's financial performance. It was worth noting that during the quarter ended September 2012 (2QFY13) while the company's sales remained almost flat on a year-on-year (YoY) basis, net profits plunged by 96.6% to Rs 47.8 m against Rs 1,393.4 m in the corresponding quarter of the previous financial year (2QFY12). The steep decline in profitability was attributable to disruption in its coal supply which forced the company to buy imported coal. It must be noted that less than a month ago the divestment of Rashtriya Ispat Nigam Ltd (RINL) was deferred indefinitely after the steel ministry felt that the issue price recommended by merchant bankers was too low. In the case of Nalco too, the government wants to strengthen the financial performance so that the company can fetch better valuations.

Auto stocks have also opened the day on a weak note with Ashok Leyland, Maruti Suzuki and Hero MotoCorp trading in the red. However, Tata Motors is trading firm. India's leading automotive company, Tata Motors, has announced its financial results for the quarter ended September 2012 (2QFY13). During the quarter, the company's consolidated net sales stood at Rs 428,189 m, higher by 19.1% YoY. At the bottomline level, the consolidated net profits grew by 10.5% YoY to Rs 20,747.3 m. The growth at the consolidated level was driven by strong volumes from UK-based subsidiary Jaguar Land Rover (JLR). During the quarter, JLR reported net profits of 305 m British pound sterling (Rs 26.5 bn), higher by 77.3% YoY. However, on a standalone basis, the company's performance was affected by the ongoing slowdown in the Indian automobile industry. The standalone net sales declined by 3.8% YoY to Rs 123,964.6 m. Net profits zoomed up by over 8 times to Rs 8671.1 m in 2QFY13 from Rs 1,020.2 m in 2QFY12. However, the jump in standalone net profits was due to dividend income of about Rs 13,120 m from JLR. In absence of the dividend income, the company would have reported a loss at the standalone level.

US$ 50 bn industry losing shine?

The Business Process Outsourcing (BPO) industry really put India on the world map. Phone calls from across the globe were redirected to India, where employees with fake accents and fake names would provide assistance. These firms saw tremendous growth over the past few years and now even the domestic market is expanding. Yet, there is a lot of underlying dissent within the ranks. India's US$ 50 bn BPO industry has a problem. But they don't have anybody to call to fix it?

BPO companies are struggling to hire the right talent. A few years back, a BPO job was considered prestigious and was a ticket to India's upcoming middle class. But, potential candidates have now opted out of these jobs and have instead opted for more traditional ones in retail, banking and manufacturing spheres. One of the major issues that this industry is facing is that employees do not find these jobs attractive enough. The late hours, lack of job satisfaction and opportunities for employees to grow, learn, and be engaged are making these jobs less desirable. This is despite the perks of working in plush offices, decent pay packages and car drop-offs and pick-ups. The low skill requirements are also leading to poor career growth. Retaining an expensive senior costs more than hiring a new employee on the floor.

According to a study by consulting firm Gallup, only 1 out of 3 BPO employees intend to stay with the organization for more than two years. Plus young aspirants in India usually look at their seniors in order to mentor them on their career path. Indians rely on people from their social network, and usually act on their advice. Not many of these trusted sources would vouch for a job in the BPO industry. Hence, many new job entrants are choosing other fields.

So what can the industry do in order to repair its image for potential employees? Well, firstly it needs to boost employee engagement measures. This will help affect loyalty and advocacy in the industry. Plus leaders need to make sure that employees understand their role in fulfilling the firm's mission and understand their personal growth path. They need to be able to steer their staff in the right direction.