Find all the business and economy related news here today.
Here are some of the highlights of the day
--> The Centre launched a scheme of cheap fares for regional flights, known as UDAN, in New Delhi on Friday. Speaking at the event, Minister of State Jayant Sinha said the government would get up to "40 seats in an aircraft subsidised."
--> HCL Technologies promoted COO C. Vijayakumar as president and CEO on Friday. The company also reported a Q2 net profit with an increase of 16.7 per cent.
--> Wipro net profit dips 7.6% to Rs 2,070 crore in the July-September quarter
--> Stage set for banks to take effective action on NPAs, said Finance Minister Arun Jaitley at the annual conference of Accountants General
Live updates:
To wind up for the day, Finance Minister Jaitley said that the government has asked for a detailed report on the debit card data compromise.
6:40 pm: Finance Minister Arun Jaitley today said the government has sought a detailed report on the extent of debit card data compromise following the biggest security breach in the Indian banking industry that affected over 32 lakh card holders. The government has asked RBI and banks to provide details of the data breach and also banks’ preparedness to deal with cyber crimes. “Have sought a report in the debit card issue. The idea is to contain the damage,” Jaitley told reporters here.
6:30 pm: Global airline body International Air Transport Association (IATA) has expressed disappointment over India’s opposition to a global pact for curbing aviation emissions proposed by the United Nations’ International Civil Aviation Organisation (ICAO) in Montreal recently. “We expressed our disappointment (to the government) that India didn’t come to the table as an early adaptor of the carbon offset and reduction scheme for the aviation sector,” IATA Director General and Chief Executive Officer Alexandre de Juniac said at a press conference late on Thursday evening. Mr. de Juniac met top government officials and airline chief executives in what was his first visit to India after taking over charge as the IATA chief. “We are disappointed because other developing nations like China, Indonesia, Zambia and Kenya have signed,” he added.
Mindtree Q2 net declines 37 per cent
6:00 pm: Mid-tier IT services company Mindtree on Friday reported a 37 per cent decline in net profit for the quarter ended on September 30, 2016 of Fy17 and stood at Rs 94.8 crore when compared to the same period last year. The total revenue of the company for the July-September stood at Rs. 1,295 crore a growth of 11.1 per cent when compared to the same period last year.
“The volatile macroeconomic environment has resulted in slower ramp-ups and cautious spending in a few large clients across our verticals,” said Rostow Ravanan, Chief Executive Officer and Managing Director, Mindtree.
Govt to revive strategic stake sale in PSUs
5:45 pm: After 12-year hiatus, government is set to revive strategic sale of state-owned companies with the Cabinet likely to consider shortly the outright sale of stake in over a dozen PSUs including the profit making ones. “The strategic sale will come up before the Cabinet very shortly,” a top source said. NITI Aayog has prepared a list of public sector units where the government can sell its majority stake to private companies in order to bring in greater efficiency and professionalism in functioning.
Loan for the Eastern Dedicated Freight Corridor
5:15 pm Government of India and the World Bank today signed a $650 million agreement towards the third loan for the Eastern Dedicated Freight Corridor (a freight-only rail line) that will help faster and more efficient movement of raw materials and finished goods between the north and eastern parts of India. The Eastern Corridor is 1,840 km long and extends from Ludhiana to Kolkata. The World Bank is supporting the Eastern Dedicated Freight Corridor (EDFC) as a series of projects in which the three sections with a total route length of 1,193 km will be delivered sequentially, but with considerable overlap in their construction schedules
Wipro net profit dips 8% to Rs 2,070 crore in the July—September quarter
4:45 pm: India's third largest IT exporter Wipro reported a 8 per cent decline in its net profit for the second quarter of the fiscal ended September 30, 2016 and stood at Rs. 2070 core when compared to the same period last year. The total revenue for the period stood at Rs. 13766 core registering a growth of 10 per cent as against the same period last year. Wipro's flagship business IT services business revenue was Rs.13,137 crore while the IT services segment profit was Rs. 2340 core a decrease of 5 per cent when compared to same period last year. The company expects its revenue from IT services to be in the range of $1,916 million to $1,955 million for the third quarter ending December 31, 2016. Commenting on the performance Abidali Neemuchwala, Chief Executive Officer and Member of the board said, "we delivered revenues in constant currency at the top end of our guidance range." "The demand environment for IT services industry is evolving fast. As tech spends increasingly transfer from run bucket to change bucket. The IT services industry is experiencing significant transition," added Mr. Neemuchwala.
The IT Services segment had a headcount of 174,238 people as of September 30,2016. IT services margin was 17.8 per cent for the quarter. Wipro Ventures the VC arm of Wipro has so far made 8 investments with a committed spend of around $22 million. "Our margins was flat in Q2. We maintained margins in Q2 despite the impact of salary increase for an incremental two months due to strong operational improvements in automation-led productivity, offspring and utilization," said Jatin Dalal, Chief Financial Officer, Wipro - Pradeesh Chandran
Zee Learn reports growth
4:40 pm: Zee Learn Limited (ZLL), India’s leading Education company reported a 7 fold growth in its PAT to Rs 7.59 crore over the Q2 FY16. The company’s PAT at 1560 Lakhs in H1 FY17 became 3 fold over H1 FY16 and in fact exceeds the PAT for the full FY16. The Company’s reported EBITDA in Q2 FY17 doubled to around 40 % from around 20 % in Q2 FY16. On the backdrop of its sterling performance, the Board of Directors declared a first ever Interim Dividend of 5% to the Equity Shareholders of the Company. Debshankar Mukhopadhyay, Chief Executive Officer, said “We are pleased to announce an Interim Dividend for the first time at Zee Learn Limited. This shows our commitment to the shareholders who believed in us and continued to invest in the Company.
Speaking on the results, he said that Q2 & H1 FY17 were remarkable for us and our strategy to focus on our strengths has resulted in delivering the profits which are multiple times more than the profits delivered during the last financial year. - Piyush Pandey
New Phone alert - Here is Reliance's LYF smartphone
4:35 pm: Mukesh Ambani led Reliance Retail on Friday launched LYF F1, a Special Edition future-ready device from LYF Smartphone+, priced at Rs 13,999 to deliver an enhanced experience over advanced networks. F1 was unveiled by Indian actor and model Genelia D’Souza at the Reliance Digital store in Prabhadevi, Mumbai. > Piyush Pandey gives us the phone specifications
Anant Gupta starts new venture
4:30 pm : Anant Gupta, former HCL Technologies CEO, has announced a new venture TECHCELX, which will incubate and invest in next-gen technology. “With TECHCELX I am pursuing my long term goals and passion towards promoting our country’s entrepreneurship and innovation potential in the technology space,” Mr Gupta said in a statement. HCL Technologies on Friday morning announced that Mr Gupta has put in his papers, following which the company has elevated current Chief Operating Officer C Vijayakumar to the post of President and CEO.
TECHCLEX has announced a Rs. 100 crore fund to support ventures developing “cutting-edge technology products and businesses being disrupted by technology”. The fund will focus on ventures with specialisation in technologies like Machine Learning, IoT (Internet of Things), AI, Analytics and Data Science and Automation across three main sectors of Banking, Education and Healthcare, Mr Gupta added. The company will invest between Rs 50 lakh and Rs 10 crore in disruptive technology ventures and the shareholding will range between 15% and 51%. Three other key partners from Investment banking and technology sectors are backing this fund, the company said. - Yuthika Bhargava
4:20 pm: Sensex drops 52.66 pts to end at 28,077.18; Nifty falls 6.35 pts to 8,693.05. - PTI |
V-Guard Q2 net up 70 per cent
4:15 pm Leading consumer electrical and electronics company, V-Guard Industries Ltd on Friday said that its net profit for the second quarter of Fy17 ended September 30, 2016 stood at Rs. 39 crore registering a growth of 70 per cent as against the corresponding quarter last year. The company attributed strong performance to better market conditions and increased sales of its products like water heaters, pumps and fans.
The total revenue of the company for the July-September period witnessed a growth of 14 per cent and stood at Rs. 493 crore when compared to the corresponding period last year.
“We have improved the topline growth when compared with the corresponding quarter of the previous year. We will be expanding to the north markets and expand our range in the Kitchen and home appliances range to cater to a wider audience,” said Mithun. K. Chittilappilly, Managing Director, V-Guard Industries Ltd. - Pradeesh Chandran
FM Arun Jaitley at the annual conference of Accountants General - Puja Mehra reports Live
3:52 pm: Banks will have to enforce their rights in the larger interest of the economy, take effective action to recover (NPAs issue): Jaitley
3:50 pm: In settling the current lot of NPAs the provisions of the Prevention of Corruption Act are playing a role : Jaitley
3:46 pm: Prevention of Corruption Act doesn't distinguish between an erroneous and a corrupt decision: Jaitley
3:45 pm We are testing deliberative democracy and maturity of Indian democracy in the GST Council: Jaitley
3:24 pm: We haven't been a tax-compliant society. Disincentivising use of cash, making tax rates conducive to compliance are all steps being taken: Jaitley
3:22 pm: Accountability for purposes of improvement must balance itself with accountability decision-maker: Jaitley
3:20 pm: In other news, Finance Minister Arun Jaitley is now addressing the annual conference of Accountants General.
Cybersecurity
3:15 p.m.: Cybersecurity has become the hot topic in recent times. US tech giant Microsoft has set up a cybersecurity engagement centre (CSEC) in the Delhi-NCR region that will help it work with partners to identify and respond to cyber threats in the country. The India centre, which is the seventh such facility for the company globally, will function as a satellite to Microsoft’s Redmond Digital Crimes Unit (DCU). While Microsoft declined to comment on investment details, it said the company invests about USD 1 billon annually in the area of security research, innovation and development
3:00 p.m.: In light of the debit card fraud across the country due to security breaches in various banks, here are some do's and don'ts
2.55 p.m.: The country’s largest commercial lender, State Bank of India (SBI), has advised its customers to use the bank’s own ATM network after the security breach of around six lakh debit cards issued by the bank, an official said. “We are advising our customers to use SBI’s ATM network as a pro—active measure. At the same time, the bank is aiming to replace around six lakh debit cards within two weeks,” Partha Pratim Sengupta, CGM of SBI Bengal circle, told reporters here last night. Meanwhile, the bank had blocked the debit cards whose security had been reportedly breached due to the malware attack.
Infosys on exit payment to Bansal
2.40 p.m.: Infosys sheds light on exit payment to former CFO Rajiv Bansal:
Infosys said it has nothing to hide on the severance pay made to former CFO Rajiv Bansal. In a statement posted on its website, the firm said it conducted two investigations after the resignation of Bansal and it did not reveal any wrong-doing. The company said that Bansal’s severance of Rs, 17.38 crore had an enhanced non-compete clause. It also explicitly enabled Rajiv to report to the regulatory authorities in future any matter of impropriety that he became aware of that happened during his tenure.
Certain payments to Rajiv under the agreement have been suspended pending certain clarifications with regard to such rights and obligations,” the company said in the statement. It added that the suspension was not on account of any ‘extraneous conditions.’ — Sanjay Vijayakumar
2.30 p.m: Tamil Nadu floats tender for procuring 500 MW of solar power
Tamil Nadu has floated tender for procuring 500 MW of solar power via reverse bidding. While there is no doubt about the potential in the State, developers would be wary of the ongoing evacuation issues in the State. Existing solar developers have been facing the situation of state utility unplugging their generating capacity from the grid. There is an ongoing case on the issue before the state regulator — Sanjay Vijayakumar
2.25 p.m.: On customer compensation:
RBI has clear guidelines on the issue. As far as the customer is concerned, once it is proven that the transaction is fraudulent, banks will reimburse. And the bank later on would get reimbursed from the bank which is responsible for the fraud. — Mr. Hota - Manojit Saha > Read the full interview here
2.20 p.m.: On what more banks can do:
As per RBI circular, irrespective of the amount the bank should send alerts. RBI has also allowed that if the banks so like they can charge the customers for the mobile alerts service. But some banks have decided not to charge but fixed a transaction limit beyond which they will send the alert. Banks should follow what RBI said and not make their own rules. — Mr. Hota - Manojit Saha
2.15 p.m.: On lessons from the possible debit card data compromise episode:
One of the lessons that have come out very clearly is that we were thinking that 100 per cent of the customers have linked their mobile number to the bank account, but it is not so. As far the information we have got, it is only 50 per cent of the customers whose mobile numbers are registered with the bank. About 2 years back, RBI has issued a circular that every debit and credit transaction should be alerted to the customers by way of mobile and it is desirable that the customers should link their account to their mobile number. It means that 50 per cent of the customers have not linked their mobile number to their bank account as yet. So, banks are finding it difficult to reach out to the customers - Mr. Hota - Manojit Saha
2.10 p.m.: The NPCI has received 641 complaints, the largest number, from Axis Bank customers, says Mr. Hota. - Manojit Saha
2.05 p.m.: The lesson we learnt from debit card fraud is that not all accounts are linked to mobile numbers, says the NPCI CEO A.P. Hota
Only 50% customers' bank accounts are linked to their mobile numbers, says >@NPCI_NPCI CEO Hota >@the_hindu>@thehindubiz
— Manojit (@monstermanojit) >October 21, 2016
Customers should not panic, they will be compensated by their bank says >@NPCI_NPCI CEO Hota >#debitcardfraud>@the_hindu>@thehindubiz
— Manojit (@monstermanojit) >October 21, 2016
2 p.m.: Mahindra provides a first look at the car.
>#OutsmartYourCity with the all-electric Mahindra >#e2oPlus>pic.twitter.com/WfkFJzPsIQ
— Mahindra Electric (@MahindraElctrc) >October 21, 2016
1.45 p.m.: The car comes with remote diagnostics feature. It has 10 on-board computers that track around 196 performance and health related parameters, enabling quick resolution for any possible snag. There is also an e2oPlus app which syncs all the information about the car to owner's smart phone. The consumer can use the application to also lock/unlock the car, draw charging schedules etc.
The e2oPlus can be charged through any normal 16 Amp plug point. - Yuthika Bhargava
1.30 p.m.: The car will come in four trim levels (P2, P4, P6, P8) and four colours — Coral Blue, Sparkling Wine, Arctic Silver, Solid White. Dr. Pawan Goenka, executive director, M&M Ltd. said, “The launch of the e2oPlus is a defining moment in the electric mobility journey of Mahindra as it marks our foray into the mass market electric city car segment.”
Pravin Shah, president & chief executive (automotive), M&M Ltd & director, Mahindra Electric expressed confidence that e2oPlus will soon be accepted as a mainstream car. "There has never been a better time to embrace electric vehicles as it not only serves the purpose of a smart city car, but also fulfils the need to contribute positively to the environment,” he said. The company claims that the running cost for the e2oPlus is 70p/km. - Yuthika Bhargava
1.15 p.m.: Mahindra launches its new electric car e20Plus at a starting price of Rs. 5.46 lakhs (ex-Delhi). On a full charge, the Mahindra e2oPlus can travel for upto 140 km and can achieve a top speed of 85 kmph, the company claims. - Yuthika Bhargava
1.05 p.m.: Mukul Shrivastava, partner, Fraud Investigation & Dispute Services, EY India suggests use of chip-based cards which are encrypted, to safeguard against data breaches. With a chip and PIN, the card information is not validated by banks server unless a correct PIN number is entered, he added. - Sanjay Vijayakumar
1 p.m.:Essar Ports cargo handling up 3 5 per cent in Q2
Essar Ports (EPL) has registered all-round growth in the quarter ended 30 September 2016. Total cargo handling has grown 35% to 18.27 million tonnes, compared to 13.55 million tonnes in the same period last year. Third-party cargo handling has risen by 106% to 1.03 million tonnes compared to 0.5 million tonnes. Over the quarter, the various terminals of the company handled 209 ships as against 179 ships in the corresponding period last year. The robust performance in the quarter has been driven by significant operational improvements and better cargo support from anchor customers.
Commenting on the performance, Rajiv Agarwal, managing director, Essar Ports, said, “Our performance is a reflection of the efficient operations at all our ports and faster vessel turnaround times. We are gradually enhancing our capacity utilization, which is backed by the improved operational performance of our anchor customers. This year, our assets are not only demonstrating enhanced operational parameters, like the berthing of bigger ships, but also showing their technical prowess by undertaking project execution that is synchronised with our operations.” - Piyush Pandey
12.55 p.m.:Vodafone announces free incoming calls while roaming in India
Vodafone India, has announced free incoming calls while roaming nationally for all its customers. Starting this Diwali, all Vodafone India customers, travelling anywhere in the country, can continue to talk worry free without having to cut short their conversations.
Speaking on this new initiative, Sandeep Kataria, director – commercial, Vodafone India, said, “At Vodafone, the customer is at the heart of all that we do and it is an ongoing endeavour to come up with unmatched value and convenience for our customers. Even though outgoing charges while roaming had become comparable to home charges, consumer research has shown that incoming charges while roaming have been a hindrance to worry free usage. As part of our ongoing 200 million customer celebration, providing Free Incoming on National Roaming will ensure that our customers do not think twice while traveling out of town. We hope that this Diwali gift will empower our customers to stay connected with their loved ones without worrying about roaming tariffs." - Piyush Pandey
12.46 p.m.: The price band of Rs. 750-775 fixed for the initial public offer (IPO) of PNB Housing Finance values the company at around 2.4 times FY16 book value, which is slightly stretched when compared to Dewan Housing Finance, says Religare Securities adding that it is still cheaper than Can Finance and HDFC.
The company's foray into affordable housing targeting Tier II/Tier III cities, growth prospects, steady asset quality and strong ROE (18 per cent) will support its valuations over the next couple of years, says the IPO note released by the domestic brokerage.
It highlights the fact that PNB Housing's loan portfolio comprises of around 70 per cent individual housing loans, which are the least risky. Its asset quality (FY16) is the best among housing finance companies with Gross NPAs at 0.22 per cent, lower than DHFL (0.9 per cent) and HDFC (0.7 per cent), it said. - Ashish Rukhaiyar
12.45 p.m.: Religare Institutional Research says Jio's addition of 16 million subscribers so far has been a big suprise, mostly driven by the inaugural offer of free data. Data consumption of 1GB per day for each user has been above expectations, it said, while noting challenges it faces from call drops and sustaining high data speeds as subscriber additions surge. The research firm also said RIL's management hinted on a possibility of extending the inaugural offer beyond December 2016 if higher call drops continue. - Sanjay Vijayakumar
12.35 p.m.: HCL Tech has retained the guidance in an environment when most of the companies have lowered the guidance or outlook (Infosys/TCS), says Govind Agarwal, analyst at Prabhudas Lilladher. The brokerage firm also noted that HCL has been able to maintain margins despite impact of wage hike in this quarter. - Sanjay Vijayakumar
12.20 p.m.: At the time of marriage, you don't fix the date of divorce, says Civil Aviation Minister Ashok Gajapathi Raju at the UDAN launch.
12.15 p.m.:HDFC raises Rs 500 crore via masala bonds
In July this year, in the first ever masala bond issue, HDFC had raised Rs 3,000 crore through rupee - denominated bonds that got over-subscribed by 4.3 times. > Read more
12.02 p.m.: How will airlines be selected under UDAN? The Ministry of Civil Aviation has a handy chart.
12 noon:Former Google executive Amit Singhal joins Paytm’s Board
Mobile payment and commerce company Paytm, announced that Amit Singhal, the former Head of Search at Google, is set to join Paytm’s board of directors. A Google Fellow and former head of the core ranking team, he served for over fifteen years in the company.
Mr. Singhal joined Google in 2000 and has been instrumental in shaping Google Search to seamlessly work across desktop, mobile and other devices. Since retiring from Google, he has focused on philanthropic efforts through the Singhal Foundation. He is also an active investor and advisor to various companies. - Pradeesh Chandran
11.57 a.m.:KSRTC, BEST to use recycled cooking oil from KFC as biodiesel
Restaurant chain, KFC India has joined hands with Advait Biofuel Ltd, suppliers of used cooking oil based biofuel to recycle used cooking oil from into biodiesel.
According to a press release from KFC, Advait, a ISCC certified used cooking oil collector will collect used cooking oil from KFC restaurants in Andhra Pradesh and Telangana to convert into biodiesel.
“With this collaboration KFC India has become the first restaurant brand in the country to attempt something of this nature and scale. The produced biodiesel will be used domestically by State Road Transport Corporations in Karnataka (KSRTC) and Mumbai (BEST),” the company release added. - Pradeesh Chandran
11.55 a.m.: Regional flights, less than an hour's flight, will have airfares capped at Rs. 2,500.
Airfares will be capped at Rs 2500 for an hour's flight for regional flights under the scheme :Aviation secy >@the_hindu>#UDAN
— Somesh Jha (@someshjha7) >October 21, 2016
11.45 a.m.: Here is an Aviation Ministry explainer on how UDAN works:
11.40 a.m.: We wil jump start regional aviation market in the country, says Mr. Sinha.
11.36 a.m.: We have made flying affordable by lowering costs across the board, says Jayant Sinha at the press conference announcing the launch of the UDAN scheme. "Up to 40 seats will be subsidised by us in an aircraft to provide cheap airfares."
11.35 a.m.: The government launches the UDAN scheme.
We feel UDAN scheme will take off. We are cautiously optimistic about it : >@Ashok_Gajapathi>@the_hindu>pic.twitter.com/Vfwi0Eqvbg
— Somesh Jha (@someshjha7) >October 21, 2016
We provide seat subsidies to airlines unlike other countries : >@jayantsinha>#UDAN scheme
— Somesh Jha (@someshjha7) >October 21, 2016
11.30 a.m.: Morgan Stanley says that with weakening demographic trends, productivity growth will take on a more important role in driving overall GDP growth outcomes. It, however, adds that the problem is that productivity growth has already been weak and an ageing workforce will have a negative effect on such growth.
"With labor inputs slowing, the importance of productivity in driving overall growth has increased," says the latest report by the global financial major. - Ashish Rukhaiyar
11.15 a.m.: Edelweiss maintains buy rating on Reliance Industries. It believes structural revival in downstream margins will double profits over six years and raise RoE by 400bps. It has a target price of Rs.1,401 — highest on the street. - Ashish Rukhaiyar
10.36 a.m.:Sensex slips post RIL earnings
The 30-share index, which had gained 145.47 points in the previous session, dropped by 94.24 points, or 0.34 per cent, at 28,035.60, with oil and gas, metal, banking, PSU and capital goods sectors bringing about the fall. > Read more
10.17 a.m.:Rupee extends losses, down against dollar
Moreover, the U.S. dollar’s gains against some currencies overseas and a lower opening in the domestic equity market put the rupee on the back foot, forex dealers said. > Read more
10.16 a.m.: Private fund raising by Indian internet companies aggregated to $784 million in the second quarter of FY17, sharply down from over $2.6 billion raised in the same period last year, foreign brokerage firm Jefferies estimates, highlighting the difficult funding environment.
The firm which tracked deals of over $5 million, also said that decline is much sharper in rounds above $100 million. For instance there was only 2 deals over $100 million in September 2016, when compared to 6 deals in the comparable period last year. - Sanjay Vijayakumar
10.15 a.m.: Cement companies may have to increase prices, due to higher pet coke prices. Pet coke is one of derivatives of crude oil which is used to meet power and fuel needs of a cement plant. It forms 30-40 per cent of power and fuel components of cement companies.
According to brokerage firm Motilal Oswal, average fuel prices in October (both imported coal and domestic petcoke) have increased by 43% from the first quarter of FY17 average. The firmness in global fuel prices is due to lower production in China since March 2016, the research firm said. According to the firm, cement companies need to take price hikes of 2-4% from first quarter levels to retain profitability. The firm sees price hike coming in November and December. - Sanjay Vijayakumar
10.15 a.m.:HCL Tech Q2 net profit grows 16.7 p . c. to Rs. 2,014 crore
Its revenues for the reported quarter were up 14.1 per cent to Rs. 11,519 crore, from Rs. 10,097 crore in the year-ago period, as per US GAAP accounting norms. > Read more
10 a.m.: Ahead of the New Zealand Prime Minister's visit to India the India New Zealand Business Council’s (INZBC) head of Government relations Wenceslaus Anthony spoke on the upcoming visit. > Read more
9.45 a.m.: Reliance Industries shares are down over 1 per cent at Rs. 1,076.40 in opening trade. Shares of ICICI Bank, Axis Bank, HDFC Bank and State Bank of India are also trading down. - Sanjay Vijayakumar
9.30 a.m.:HCL shares trading up 3p.c. on buying out U.S. engineering and design services firm
HCL Technologies shares opened up 1.34 per cent at Rs. 826 and is trading up 3.33 per cent at Rs. 842.4 as it agreed to acquire US based engineering and design services firm Butler America Aerospace, LLC (Butler Aerospace) for cash consideration of $85 million or Rs. 567 crore. - Piyush Pandey
9.15 a.m.:Indian telecom companies' credit profile to weaken: Fitch
Fitch Ratings expects the Indian telcos' credit profiles to weaken amid intense competition and high capex requirements in 2017. Pricing power could be eroded as incumbents retaliate against new entrant Reliance Jio's cheaper data tariffs and free voice and text.
The top-four's — Bharti Airtel Limited, Vodafone India, Idea Cellular and Rcom/Aircel — revenue market share will rise to around 84 per cent (2016: 79 per cent) as they gain market share from smaller telcos; we expect Reliance Jio to gain less than a 2 per cent revenue market share in 2017 but to act a major price-disruptor to the sector, said the Fitch report. - Piyush Pandey
9.12 a.m.:Goldman Sachs on Reliance Jio: Subscriber additions continue to remain strong between 0.6 million and 1.1 million subscribers per day. The brokerage said its telecom team does not expect all the subscribers to continue post the free period although management indicated that most users are likely to continue as (1) tariffs are lower, (2) data speed is better, and (3) voice is free. - Sanjay Vijayakumar
9.10 a.m.: Mid-tier IT services company Mindtree will announce its second quarter results today.
The Bengaluru-based company has revised its July-September quarter guidance downward due to cross-currency movements and project cancellations. - Pradeesh Chandran
9 a.m.: The government's scheme for pricing flight fares below Rs. 2,500 for flights that don't take more than hour to unserved or underserved airports, called UDAN, is to be announced today.
8.50 a.m.: HCL Technologies promotes COO C. Vijayakumar as president and CEO, effective October 20. The current president and CEO Anant Gupta has decided to leave the company to pursue personal interests outside of HCL, it said in a stock exchange filing.
Meanwhile, HCL Technologies agreed to buy Butler America Aerospace, LLC (Butler Aerospace) for $85 million. The acquired firm is a provider of engineering, design services and aftermarket engineering services to US Aerospace and Defense customers, it said in a stock exchange filing. The proposed acquisition will exclude the staffing business of Butler America Inc. HCL said acquisition will bolster HCL’s capabilities in the space and access to clients with large R&D spends. Butler Aerospace had revenues of $85.4 million for the year ending Dec 31, 2015 at EBIT of 12.2 per cent. - Sanjay Vijayakumar
8.45 a.m.:New product launches to watch out for today:
- The Mahindra e20Plus electric car: The e20 car was launched in the UK in June at a price of £12,995. Concerns over climate change rising and regulations becoming more stringent are the reasons behind the creation of this car, Mahindra Group chairman Anand Mahindra had said.
- Samsung Galaxy C9 phone
8.37 a.m.:Stock to watch: Shares of Reliance Industries would be in focus, after it reported strong results yesterday. Would be interesting to see analysts take on the stock post earnings and how they factor in the Jio impact. - Sanjay Vijayakumar
8.34 a.m.: Retail investors will have an opportunity to buy shares of State-run construction company NBCC India Ltd. The government is selling 15 per cent stake in the firm. Retail investors, for whom 18 million shares or 20 per cent of the offering has been reserved, can bid today. Retail investors may take cue from strong interest shown by institutional investors. On Thursday, Institutional investors had bid for nearly 110.82 million shares, or one-and-a-half times the 72 million shares reserved for them. The floor price for the offer was set at Rs. 246.50 a share. The government is set to raise Rs. 2200 crore from the sale, post which its stake in the firm will fall to 75 per cent from 90 per cent. - Sanjay Vijayakumar
8.32 a.m.: Wipro, India’s third biggest software exporter would be reporting its Q2 results today. Investors would be keenly watching the commentary on demand environment and pricing. Wipro’s bigger rivals TCS and Infosys have spelt out a bleak outlook. Infosys had cut its full year revenue guidance for the second time in three months due to business uncertainty. TCS, which does not give any quarterly or yearly guidance, has pointed out to pricing pressures and uncertain macro environment.
Analyst expectation on Wipro result: Kotak Securities expect the firm’s IT services EBIT margin decline 120 basis points due to impact of wage hike and cross currency headwind and revenue to decline 2 per cent sequentially to Rs. 13428.4 crore. It expects the company to guide 0-2 per cent revenue growth in December 206 quarter on a constant currency basis. - Sanjay Vijayakumar
8.30 a.m.: In the news today:
- U.S. asks India to liberalise retail, financial services
The U.S. has asked India to consider relaxing local sourcing requirements in single brand retail trade as well as liberalising financial services sector, while New Delhi wanted Washington to expedite the conclusion of negotiations on a proposed bilateral social security pact for the benefit of Indian IT workers. > Read more
- WTO members’ commitment to development unchanged: Roberto Azevêdo
Referring to the projected world trade growth of just 1.7 per cent for 2016, the lowest rate of expansion since the financial crisis, the WTO Director General said, “We should be looking for policies that will boost trade growth while also promoting a more inclusive trading system…” > Read the full interview
- Banks cut limit, replace cards to plug data loss
If you have got a text message from your bank to change your PIN (personal identification number) and you have not done it so far, chances are your withdrawal limit from an automated teller machine (ATM) could be cut. > Read more
- Reliance Industries’ Q2 net declines 23% as refining margins dip
Consolidated net profit in July-September at Rs.7,206 crore, or Rs. 24.4 per share, was 22.9 per cent lower than Rs.9,345 crore, or Rs.31.7 per share, earnings in the same period a year earlier. After excluding the exceptional item, the net profit was up 43.1 per cent. > Read more
- Centre to wipe out rust with galvanised steel
The Centre is considering a proposal to mandate galvanisation of steel in sectors such as automobile, construction and infrastructure in a bid to build corrosion-resistant vehicles and buildings. > Read more
