April 10, 2006
Category: Uncategorized – Author: admin – 12:24 am
| Analysts expect operating, net profit to be lower than sales growth in Q4. |
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| All eyes are now on the fourth- quarter results of Indian companies, which will start flowing in this week. The Sensex is near its all-time high and corporate performance this quarter will decide whether stock prices are too high. |
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| As far as market expectations are concerned, analysts estimate this quarter to be better than the previous two quarters for India Inc in terms of top line growth due to robust demand. |
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| But cost pressures could result in lower growth in operating and net profit, both of which are expected to be lower than net sales growth. |
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| For the March 2006 quarter, analysts�taking the average projections by Merril Lynch, ICICI Securities and Motilal Oswal Securities�expect net sales to grow at 21.7 per cent for the 30 stocks comprising the Sensex, to Rs 1,16,455 crore in the fourth quarter of 2005-06, as compared with the March 2005 quarter. |
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| Operating profit is expected to grow at 17.35 per cent to Rs 31,486 crore. With these estimates, analysts expect fourth-quarter growth to be much better than growth in the previous two quarters. |
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| In the December 2005 quarter, the Sensex stocks had reported a mere 10.66 per cent growth year-on-year in operating profit to Rs 28,795.44 crore, with net sales expanding 13.7 per cent to Rs 99,401 crore. In the September quarter, net sales had increased by 17.71 per cent with operating profit growing by 10.89 per cent. |
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| Higher sales growth forecast in the March 2006 quarter as compared with the December 2005 quarter is due to an improved performance from diverse industries. |
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| For instance, sectors such as IT, metals, telecom, banking and financial services are expected to do well. TCS, Wipro and Infosys are expected to see 40 per cent plus growth in their top line. |
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| With strong aluminium prices this year, Hindalco’s sales are expected to grow at 55-60 per cent. Dr Reddy’s is also likely to grow revenues at over 40 per cent. Upstream player ONGC is expected to be a key beneficiary of higher crude oil prices in the March 2006 quarter. |
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| The major improvement in operating profit is expected from companies in sectors such as engineering, cement, automobiles and IT. The net profit growth is expected to be 15.05 per cent. |
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| However, these figures exclude NTPC and Tata Power, both of which had seen net profits go up last year due to extraordinary income last March. This quarter, however, analysts expect their net profits to fall over 30 per cent. |
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| Reliance Industries and SBI are expected to see a flattish trend in net profit. Meanwhile, IT (TCS, Wipro, Infosys and Satyam), telecom (Bharti) and engineering (BHEL and L&T) are expected to see an impressive growth in their net profits. |
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| Of course, the growth anticipated in the March 2006 quarter, pales in comparison to the sizzling performance recorded by Sensex stocks in the June 2005 quarter, when the 30 stocks’ operating profit grew 31.5 per cent y-o-y along with a 23.2 per cent growth in sales. |
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| In the March 2005 quarter, net sales for the Sensex stocks, excluding TCS, had increased by 24.72 per cent y-o-y, with an operating profit growth of 36.45 per cent and a rise of 51.11 per cent in net profit. |
Source: http://news.indiamart.com
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April 7, 2006
Category: Uncategorized – Author: admin – 5:35 am
French insurance giant Axa, America’s Capital International, Dutch giant Aegon and UBS are all planning to enter India’s fast-growing asset management business, lured by a robust stock market performance and buoyant fundamentals in Asia’s fourth-biggest economy.
While Axa and Aegon are relatively new to India, Capital International is already a big investor as an FII. It is now seeking to expand its presence with an asset management business.
Representatives of the leading financial giants are talking to possible local partners for a tie-up before approaching the Securities and Exchange Board of India (Sebi) for a formal approval.
Axa is a large French insurance giant but is interested in exploiting the potential of the asset management business. The company is also believed to be keen on an insurance tie-up.
Aegon, the Dutch financial services giant, has already set up shop in India and is keen on insurance, pension funds and asset management.
Sebi regulations require asset management companies to give at least 25% to an Indian partner. Sebi regulations seem to have gotten over that hurdle given the size and potential of the Indian market.
Capital had a tie-up with Aditya Birla group in the early 1990s which broke up, allowing the Birla group to strike a deal with Sun Life of Canada.
The domestic mutual fund industry is about Rs 1.5 lakh crore and grew by about 60% in the year thanks to a robust stock market.
The sensex leapt 73% in 2003, the second-best performer in Asia, contributing to a number of new schemes. The sensex may not have risen so much in 2004 but strong economic fundamentals and healthy corporate performance is buoying investor interest and attracting new entrants.
Dutch banking giant ABN-Amro became the latest to enter the business when it launched its schemes some time ago.
Experts say the entry of so many new players is likely to trigger a fresh wave of consolidation in the industry, which has already seen the exit of some high profile foreign players such as Zurich, Alliance Capital and Pioneer.
Recently, Alliance sold its business to Birla Sun Life and exited the country.
Source: http://www.techtree.com/techtree/jsp/article.jsp?article_id=72090&cat_id=643
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April 4, 2006
Category: Uncategorized – Author: admin – 3:18 am
India will have to evolve a clear policy framework in energy sector for attracting $10 billion of private investment in the next five-six years to bridge the demand-supply gap, consulting firm KPMG said on Monday.
The rethinking of India’s energy policy would open up private investment opportunities. The country would need $9-10 billion of private investment in next five-six years alone to meet demand, KPMG said in its India Energy Outlook.
More clarity was also required in matters such as energy pricing, market structure, cross-border investments and imports and exports of energy products, it said.
India’s energy requirements could jump four-fold over the next 25 years, KPMG said and suggested that the government should enter into partnerships with key nations to diversify energy supply base and improve long term supply.
"With energy requirements expected to grow at five or six per cent per annum, there is an urgent need for India to strategically re-evaluate its supply options," Partha Bardhan, Head of KPMG’s Energy practice in India, said.
The report said India’s mineable coal reserves could be exhausted in about 40 years.
Bardhan said coal could not be relied on forever while hydrocarbon reserves in India were meagre. Hydroelectric and nuclear power seemed to be the obvious options, but improved frameworks were needed to attract private sector which is so crucial to realise India’s potential in these areas, he added.
The report favoured deregulating the coal sector and setting up an independent body to govern investments. India’s energy requirements and availability of sources also imply that it would have to build 250,000 MWe of nuclear capacity by 2050, KPMG said.
Source: http://www.hindustantimes.com/news/181_1665708,0002.htm
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