Business News Letter-Issue 24 PDF

Issue No.
: 24
SSIM Business News Letter
Vol – 2 Issue No: 24 Oct 22nd – Nov 4th, 2014
Compiled by: Mr. S. Saibaba, Assistant Professor & Mrs. V. Annapurna, Asst. Professor
Student Co-ordinators: B. Venkatesh {RP – Jrs. TPS – A},
O.B. Venkata Siva Reddy {RP – Jrs. TPS – A}
Hard Work, Willpower And IN THIS ISSUE
Dedication  Corporate ............................... 3

Lead To Sure Success  Economy & Policy................. 5
 Infotech and Logistics ........... 9
 Marketing ............................ 12
 Markets ................................ 18
 M&As .................................. 18
 Money and Banking ............ 20
 Start-Ups .............................. 24
 Person-in-News ................... 25
greatest English writers, William Hazlitt has

written-“Prosperity is a great teacher; adversity
is greater. Possession pampers the mind;
Life is not a bed of roses. It consists of both privation trains and strengthens it.”
adversity and fulfilling situations; prosperity Blockbuster movie, “Bhaag Milkha Bhaag,” a
and privation. Those who do not have to biopic about the greatest Indian athlete till date,
undergo hardships are not the real achievers, Milkha Singh, is a living illustration of a
because it is hardship which teaches us how to aforementioned line of Hazlitt. Milkha lost his
enjoy the fruits of our achievements. In other parents in the riots that followed Partition and
words, the real achievement calls for hard the creation of Pakistan .Seeing his parents and
work, will power and dedication. One of the relatives being killed before his eyes forced a
FOR ANY SUGGESTIONS: saibaba@ssim.ac.in

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Issue No. : 24
12-year old Milkha to run for his life and land You can also reach great heights in life, if you
in India traumatized and penniless. While just develop courage to bear with every
growing up, he resisted getting into bad adversity. If you develop self-confidence to
company and thought of joining Indian Army. fight privation and overcome every difficulty
Though he was rejected thrice, he did not give en route to your goal, nothing can keep you
up hope and finally joined the Indian Army at from attaining your goal. The great writer,
the EME Centre in Secunderabad. It was here Mark Twain has rightly said, “Begin with the
that he trained hard. He even raced against the determination to succeed, and the work is half
metre-guage, first trains that went via done already.”
Secunderabad. His first competitive event was
Milkha Singh’s life tells us that nothing is
a cross-country race where he finished sixth
impossible in this world, if we have
among 500 runners. When he graduated from
determination and courage to change our
EME Centre, he joined services and started
dreams into reality. It is sheer dedication to our
training for a 400-metre race. Though he did
work which can enable us to develop
not succeed in getting any Medal in Olympics,
perseverance. If hard work, will power and
he has become a role model for the Indian
dedication can make an orphan like Milkha
Athletes. He ran 80 races all over the world
Singh an all-time great, you can also become
winning 77.
what you want to be in life. The only thing you
The biopic to above, “Bhaag Milkha Bhaag”, need is sincerity and will power. As Milkha
ends with a line by him which says that “hard Singh says, “Hard work, will power and
work, will power and dedication” are necessary dedication can lead anybody to sure success.”
for success. It is the combination of all the three
Wishing you willpower and dedication to
virtues which has made Milka Singh immortal.
succeed………….
When he defeated the fastest runner, Abdul
Khaliq in 1960s on his home turf, i.e.in (Reproduced from Competition success
Pakistan , Pakistani General Ayub Khan patted review September 2013)
at his back and said, “You did not run today.
You flew. You will be called the Flying Sikh
from today.” Thereafter, he has been referred to
as “the Flying Sikh” by all and sundry.

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Issue No. : 24
Corporate
Better product mix helps JSW Steel post Rs. 749-cr profit
Higher domestic sales, coupled with lower iron ore and coal prices, helped JSW Steel post a net
profit of Rs. 749 crore for the quarter ended September 30 against a loss of Rs. 116 crore a year
ago. The previous year’s quarter had a foreign exchange loss of Rs. 851 crore. The steelmaker’s
revenue rose 7 per cent to Rs. 13,895 crore in the quarter against Rs. 12,984 crore a year earlier.
Seshagiri Rao, Joint Managing Director and Group CFO, said domestic sales were up by 10 per
cent and that the sale of value-added products comprised 33 per cent of total sales. This apart, the
lower price of iron ore and coal helped improve margins. The company imported 1.71 million
tonnes of iron ore during the period. Earnings before interest, taxes, depreciation, and amortisation
margins rose to 20.4 per cent against 19.4 per cent in the year-ago period.
Given the shortage of iron ore domestically, and the fact that prices were moving upwards against
declining global prices, iron ore import by the company was bound to go up, he added. The Indian
economy posted a moderate recovery in the first quarter of FY-15. However, Rao added the
improvement in overall activity seems to have got hit by weaker monsoon, subdued industrial
growth in the second quarter and elevated interest rates. While medium-term business sentiment
remains strong, he said the expected revival of the investment cycle now appears likely in FY-16.
The domestic steel industry has battled against a surge in imports, especially from China and South
Korea. This, coupled with a seasonal weakness and subdued economic activities, has resulted in
the country's steel consumption remaining flat. Constraint of domestic iron ore availability,
consistently large imports at concessional duty from Japan and South Korea, as well as rising
imports from China and a growing imbalance of global steel supply and demand remain major
challenges for the Indian steel industry, Rao added. On Tuesday, the company’s scrip closed 2.85
per cent higher at Rs. 1175.65 on the BSE.
Maruti Suzuki spent more on CSR in 2013-14
Maruti Suzuki India (MSIL) on Tuesday said it spent Rs. 23.28 crore towards corporate social
responsibility (CSR) activities in 2013-14, compared with Rs. 18.94 crore in 2012-13. The amount
includes salary of staff directly working in CSR, the company said in the sixth edition of its
sustainability report. Adopting the theme, ‘Making it Matter’, the report outlines the company’s
focus of taking action in the social, environment and economic spheres. “Our CSR activities will
be primarily in the areas of village development, skill development and road safety. The village
development will include construction of household toilets, upgrading Government schools,
separate toilets for girl students,” RC Bhargava, Chairman (non-executive), MSIL, said. He said
MSIL would focus on skill development to make students from Industrial Training Institutes (ITIs)
job-ready. “The company now partners with 29 ITIs. This programme benefitted over 11,000
students in the last year,” Kenichi Ayukawa, Managing Director and CEO, MSIL, said.

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Issue No. : 24
HUL: Price hikes, cost mgmt aid earnings

Thanks to sustained price rises and some prudent cost management on the operating front,
Hindustan Unilever Ltd (HUL) reported a 10.6 per cent growth in revenue at Rs 7,465.54 crore
and an eight per cent increase in net profit at Rs 988.16 crore for the quarter ended September.
This was despite India's Rs 2.5-lakh-crore fast-moving consumer goods market seeing contraction
in volume and value growth of less than four per cent, said HUL Managing Director Sanjiv Mehta.
Analysts had expected HUL to fare well, even as its parent, Unilever, reported a dismal set of
numbers last week, owing to a weak performance across Asia and Europe. The world's second-
largest consumer goods company reported underlying volume growth of 2.1 per cent for the
September quarter, 43 per cent below the consensus estimate of 3.7 per cent and the weakest
performance in five years. At five per cent, HUL's volume growth was in line with Street estimates,
flat compared to the year-ago period and marginally lower on a quarter-on-quarter basis. For the
June quarter, HUL had surprised the Street with six per cent volume growth, 300 basis points
higher than the consensus estimate.
For the September quarter, net profit stood at Rs 988.16 crore, against Rs 913.8 crore a year earlier.
The company cut its advertising and sales promotion expenditure 175 basis points; its gross margin
fell 160 basis points. Gross margins take into account the cost of raw materials/inputs alone. Read
more…
LPG consumption grew fastest in three-and-a-half years in Sept

The steep rise in India’s consumption of liquefied petroleum gas
(LPG) does not seem to be abating any time soon. Cooking gas
consumption grew at 16 per cent in September, the fastest pace in three-
and-a-half years, or 42 months for which official data is available, on the
back of easing of the cap on subsidised cylinders per household.
“LPG consumption for the thirteenth month in a row recorded a
positive growth of 16 per cent during September 2014 and with a
cumulative growth of 11.2 per cent for the period April-September
2014,” said the latest report on petroleum products sales released by
Petroleum Planning and Analysis Cell (PPAC), the oil ministry’s
technical arm. LPG consumption stood at 1.552 million tonnes in
September against 1.344 million tonnes in the year-ago period.
The report did not reveal the break-up of the consumption growth
in subsidised (accounting for 80 per cent of total consumption) and
unsubsidised categories. Total LPG consumption had grown at 8.5 per
cent in the previous month of August with subsidised consumption
growing at 13.4 per cent and unsubsidised consumption registering a 70
per cent decline “mainly due to increase in subsidised cylinders from nine to 12 a year,” according
to PPAC.

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Issue No. : 24
The fresh data establishes a sharp jump in domestic LPG sales along with a major drop in
commercial sales in the current year, since the cap on subsidised cylinder was raised from nine to
12 in January 2014, cementing concerns over diversion and black-marketing of subsidised
cylinders for commercial purposes. Read more…
TCS the only Indian company in top 50 most innovative cos in world
India’s largest information technology services provider, Tata Consultancy Services (TCS), has,
for the first time, made it to The Boston Consulting Group(BCG)’s top 50 most innovative
companies of 2014 across the globe. TCS is the only Indian company to have made it to the list.
This is not all. Bangalore-based Wipro is ranked fifth among the top 10 up and coming companies
that have the potential to join the Top 50 Most Innovative Companies in the world.
BCG has been conducting this survey since 2005. It has surveyed more than 1,500 senior
executives in a wide range of countries and industries since 2004 to help cast light on the state of
innovation in global business. In its new report, “‘The Most Innovative Companies 2014: Breaking
Through Is Hard to Do’”, the firm revealed the 50 companies that international executives ranked
as the most innovative. Apple continues to top the list since 2005. Samsung and Google switched
places at number two and three; and Microsoft and IBM round up the top five. For 2014,
technology and telecommunications companies continued to lead the pack holding down all of the
top five spots in 2014, seven of the top 10, and 21 of the top 50 — the most since 2010.
The biggest change in the 2014 top 50 list is the decline in the number of auto companies. Only
nine auto companies are in the top 50 in 2014, and only four ranked in the top 20. This compares
with three automakers in the top 10 places in 2013, as well as nine in the top 20, and 14 in the top
50 spots. Automakers also reported both a 26 per cent decline in innovation priority, with 62 per
cent assigning it a top-three position, down from 84 per cent last year. Read more…
Economy and Policy

Gas production falls 6.1% in September
Domestic natural gas production continued its declining trend in September. Production fell 6.1
per cent in September to 2.716 billion cubic meters from 2.894 billion cubic meters in the same
month last year. The fall was primarily due to a 5.2 per cent fall from offshore fields to 2.045
billion cubic meters. Domestic crude oil production also fell in September by 1.1 per cent. During
the month, crude oil production was 3.044 million tonnes as against 3.078 million tonnes in the
same month last year. Refinery throughput was 2.4 per cent lower in September.
Oil minister reviews readiness for re-launch of DBT in LPG scheme

Petroleum Minister Dharmendra Pradhan on Friday reviewed the performance of oil marketing
companies for the relaunch of Direct Benefits Transfer in liquefied petroleum gas (LPG) scheme.
The Union Cabinet had, on 18 October, approved the launch of the scheme aimed at cutting LPG
subsidies as well as getting rid of diversion of subsidised cooking gas for commercial purposes.
The scheme would be launched in 54 districts across the country in mid November.
Pradhan spoke to a field officer of Indian Oil Corporation in Jalandhar district through video
FOR ANY SUGGESTIONS: saibaba@ssim.ac.in 5

Issue No. : 24
conferencing to understand the issues faced by consumers in implementation of the earlier version
of the Direct Benefits Transfer in LPG. “The oil marketing companies informed the minister about
the roll-out plan, along with timelines for different activities to create awareness among LPG
consumers about the scheme, the technological changes required and the processes to be put in
place for the implementation,” the oil ministry stated.
Telangana eyes 2000-Mw power from Chhattisgarh

The newly-born Telangana state has sought 2000-Mw power from Chhattisgarh to overcome the
severe crises that the state had been reeling with. Earlier, Telangana state had demanded 1000-Mw
power from the Chhattisgarh that had been power surplus during off peak time. The Chhattisgarh
government had given its consent for the same and the senior officials of both the states had held
meeting to give final shape to the power purchase deal. "The Telangana government has now
sought 2000-Mw power from Chhattisgarh and has sent a proposal," a senior official with the
energy department said. The state government has sent the proposal to the state-run Chhattisgarh
power distribution company to examine it and send the opinion.
The state government has been deliberating to provide all possible assistance to neighbouring
Telangana state to deal with the power crises that has deepened forcing the authorities to extend
the night-time power cuts in the rural areas to meet the deficit. The power deficit in the state is
touching 1,500 mw per day while unscheduled cuts are back in parts of city, in addition to the four
hours of scheduled cuts. "Chhattisgarh is however in a position to provide power to Telangana,
provided it waits for some time as about six power projects both in public and private sector are
on the verge of completion," the official said. The projects on completion will generate 4000-Mw
power. Under the agreement with the private power producer, Chhattisgarh will get its share from
the production that it could sell. The official said the state government would ink an agreement
with the Telangana government for power deal once the power company examine the proposal and
send note that it was in a position to provide power.
AP gets bids for 1296 Mw solar projects

The Andhra Pradesh government has received bids totalling 1,296 Mw in response to the
procurement of 500-Mw grid-connected solar projects in the state. About 50 prospective solar
power developers had submitted their proposals offering a tariff ranging from Rs 5.25 per unit to
Rs 8.08 per unit with 3 per cent escalation every year up to 10 years, according to a press release.
The levelised tariff works out to 6.17 per unit, which was lower than the tariff of Rs 6.49 fixed by
the earlier government, it said.
FX reserves up $945.6 mn
The country's foreign exchange reserves rose $945.6 million for the week ending October 17 to
$313.68 billion, show Reserve Bank of India (RBI) data released on Friday. Foreign currency
assets, a key component of reserves, rose $914.1 million to $287.80 billion. Gold reserves
remained unchanged during the week at $20.01 billion. For the week under review, the Special
Drawing Rights (SDRs) rose $23.1 million to $4.32 billion. While the country's reserve position
with the International Monetary Fund was up $8.4 million to $1.55 billion.

Issue No. : 24
India's GDP likely to grow by 5.6% in FY15: World Bank

India’s gross domestic product (GDP) is likely to expand by 5.6 per cent this financial year as
reforms gain momentum. The growth is expected to accelerate as proposed measures such as the
goods and services tax (GST) will give a boost to
manufacturing, a World Bank report said on Monday. In the
following years, GDP growth is likely to rise further to 6.4 per
cent and 7 per cent in FY16 and FY17 respectively, it said.
“India’s economic growth is expected to rise to 5.6 per cent in
FY15, followed by further acceleration to 6.4 per cent and 7
per cent in FY 2016 and FY 2017,” said the World Bank report.
India’s growth is likely to accelerate towards its high long-run
potential and implementation of GST as well as dismantling of
inter-state check posts can significantly improve the global competitiveness of Indian
manufacturing firms.
“Implementing the GST will transform India into a common market, eliminate inefficient tax
cascading, and go a long way in boosting the manufacturing sector. The transformational impact
of reform, particularly if enhanced by a systematic dismantling of inter-state check posts, can
dramatically boost competitiveness and help offset both domestic and external risks to the
outlook,” said Denis Medvedev, Senior Country Economist, World Bank, India.
The incumbent government is positive on reforms and this is good, said Onno Ruhl, World Bank
Country Director in India. “With economic reforms gaining momentum, long-term prospects for
growth remain bright for India. To realise its full potential, India needs to continue making
progress on its domestic reforms agenda and encourage investments. The government’s efforts at
improving the performance of the manufacturing sector will lead to more jobs for young Indian
women and men,” said Ruhl. Growth has rebounded significantly due to a strong industrial
recovery. Capital flows are back, signalling growing investor confidence as inflation has
moderated from double digits, exchange rate has stabilised and financial sector stress has
plateaued, said the update.
Think tank NCAER sees economy slowing

The mid-year review of the economy by the National Council of Applied Economic Research
(NCAER), released here on Saturday, paints a sobering picture, with the outlook for 2014-15
worsening from the beginning of the financial year. After growing at 5.7 per cent in the first
quarter, the NCAER estimates the gross domestic product will grow at 5 per cent in 2014-15, down
from the 5.7 per cent forecast in July, implying a significant deceleration in the coming quarters.
But with the quarterly model forecasting growth of 6.1 per cent for the current fiscal year), it also
underlines uncertainty in the economy. The Baseline and Professional Forecasters' Median
Projections of the Reserve Bank of India estimates GDP growth for 2014-15 will be 5.5 per cent,
while the World Bank and the IMF are predicting 5.6 per cent.

Issue No. : 24
Expectations of a slowdown are largely on account of agriculture and industry. Rainfall this year
has not only been deficient at 17.1 per cent on a year-on-year basis, but has also been unevenly
distributed. According to the ministry of agriculture's estimates, the output of kharif grain in 2014-
15 is likely to be 120 million tonnes, 7 per cent lower than the previous year's 129 million tonnes.
The NCAER expects agricultural growth to slow down to 2 per cent for the entire year from 4 per
cent in 2013-14. Read more…
Govt cuts import tariff value on gold, silver

The government on Saturday slashed import tariff value on gold to $391 per 10 grams and silver
to $551 per kg following weak global price trends. During the last fortnight, the tariff value on
imported gold was fixed at $401 per 10g and on silver at $575 per kg. The import tariff value is
the base price at which Customs duty is determined to prevent under-invoicing. It is revised on a
fortnightly basis taking into account global prices.
The decrease in tariff value on imported gold has been notified by the Central Board of Excise and
Customs (CBEC), an official statement said. Gold in New York, which normally sets price trend
on the domestic front, fell 2.3 per cent to $1171.60 per ounce and silver by 1.73 per cent to $16.18
per ounce in Friday’s trade. In the national capital, gold prices on Saturday are ruling at Rs 26,550
per 10g, while silver at Rs 36,250 per kg.
Gold is the second largest import item for India after petroleum. Gold import increased for a
consecutive month to 95 tonnes in September ahead of festival season. The government has
imposed several restriction to curb imports to contain current account deficit (CAD). Import duty
on gold was increased thrice to a record 10 per cent last year and made it mandatory to export 20
per cent of the imported gold.
Andhra Pradesh proposes special Acts, sops to attract investment

The Andhra Pradesh government has proposed a host of new steps in addition to a liberal monetary
incentive regime as part of the upcoming industrial policy. Through this policy the government
seeks to increase the contribution of the manufacturing sector to the GSDP by hundred per cent,
achieve a three-fold increase in investments and create employment opportunities for an additional
500,000 people by the end of 2019. Some of the steps as a part of this grand package include a
Special Investment Regions (SIRs) Act that promises operational autonomy besides self-contained
physical infrastructure in the proposed SIRs, Single Window Policy Act that guarantees a time-
bound and hassle-free clearance mechanism and establishment of a separate society under the
name of 'AP Sunrise' to provide hand-holding services to the industries with an investment of over
Rs 1,000 crore to set up, run and even exit operations.
For the foreign direct investment (FDI), the state has proposed
to create a country-specific helpdesk besides offering hand-
holding services and reports on cost of doing business among
other things. "...the bifurcation of Andhra Pradesh has now
given the opportunity to establish the residual state as a safe
haven for the investors by providing a favourable business
climate, excellent infrastructure for trade and investment, law

Issue No. : 24
and order maintenance, peaceful industrial relations and healthy socio-economic reforms. In order
to facilitate the same, formulation of a new industrial policy becomes imperative," the government
said in the preamble of the draft policy document. The industry policy was drafted using a 360-
degree feedback approach, it said. Read more…
Infotech and Logistics

Logistics firms gear up for festive e-commerce rush
Sumedh Gupte, a resident of Pune, bought a Micromax smartphone from Flipkart much before the
online portal's Big Billion Day sale started. Gupte ordered the phone on October 2, which was to
be delivered on October 9. "After much follow-up I received the product on October 13. Every
time I called them or to track my shipment, I was told it was at the Bangalore hub and would reach
Pune in a day's time," recounts Gupte. Gaurav Deoras, a resident of Mumbai, booked an Asus
Zenfone 4 from Flipkart during the Big Billion Day sale. He is still awaiting delivery. "I got a good
discount on the product but am yet to get it. I have already made the payment. I had booked two
phones; one I received in two-three days. The delivery boy said before the sale day they were
delivering 20-30 products a day, but they were now delivering 60-70," said Deoras.
A customer whose product was delivered by GoJavas tweeted that the company was an 'epic fail'.
When the online team contacted the individual, he said the product reached before time; it was
meant to be a surprise birthday gift. The online sale bonanza that started with Flipkart's Big Billion
Day, followed by other players like Snapdeal and Amazon, showed that while e-commerce is here
to stay and the Indian consumer is ready to transact online, there are inefficiencies on the supply
side.
With Group M's Grand Diwali Mela, supported by search giant Google and Amazon, going on and
with demand again set to rise due to Diwali festivities, the supply chain services providers are
gearing up for a better show. The Grand Diwali Mela began on October 3 and will go on till this
Friday. Read more…
Wipro Q2 profit up 8%, misses forecast

Wipro Ltd, the country’s third-largest software services exporter, failed to meet market estimates,
reporting an 8 per cent increase in net profit to Rs. 2,084.8 crore year-on-year for the second quarter
of the current fiscal year. Analysts expected Wipro to post a net profit of over Rs. 2,100 crore.
Revenue grew 8 per cent to Rs. 11,683.8 crore, compared with the same period of the previous
fiscal year, meeting the lower-end of the company’s guidance. In a traditionally strong quarter for
most IT service firms, Wipro’s dollar revenue grew at just 1.8 per cent sequentially, which is much
lower than revenue growth reported by its peers Infosys, TCS and HCL earlier this month at 3.1
per cent, 6.4 per cent and 1.9 per cent,
respectively. The operating margin was flat at
22 per cent.
“The demand environment continues to be
steady and we see discretionary spends
returning in North America,” TK Kurien,

Issue No. : 24
Executive Director and CEO of Wipro, told newspersons here. “We also expect headwinds in some
of our key accounts until December,” he said. Stating that there will be no change in strategy and
the focus was now on execution, Kurien said he expects the second half of the year to be much
better than the first. he company’s revenue outlook for the third quarter ending December 31 is in
the range of $1808-1,842 million, a growth band of between 2.1 per cent and 4 per cent.
Wipro added a net of 6,845 employees in the second quarter taking the total headcount to 154,297.
Its attrition rate remained flat at 16.9 per cent during the quarter compared with 17 per cent in the
previous quarter, unlike Infosys which hit a high of 20.1 per cent. The company added 50 new
customers during the quarter. “Wipro’s growth in the second quarter is okay given that they are
focused on automation and building a sustainable non-linear practice. By opting to do less of the
same kind of linear projects, they are on the right track for growth over the next few quarters,”
said Sundararaman Viswanathan, Management Consultant, Zinnov.
Gati Ltd Q2 net doubles to Rs 12.5 cr

Gati Limited, an express distribution and supply chain solutions provider, reported a 117 per cent
rise in net profit to Rs 12.49 crore for the quarter ended September 2014, as compared with a profit
of Rs 5.76 crore in the corresponding quarter previous year. The company's consolidated income
has increased by 13 per cent to Rs 414.91 crore from Rs 366.93 crore in the same period.
The company said that it was now delivering six million packages a month across 667 districts in
the country. During the quarter under consideration, its cold chain subsidiary, Gati Kausar India
Limited, had raised Rs 150 crore from Mandala Capital AG and Mandala Agribusiness
Investments II Limited. Of this, Rs 30 crore had been invested in the form of equity shares and
compulsory convertible preferential shares, while the remaining Rs 120 crore would be invested
in the form of non-convertible bonds.
“The investment in Gati Kausar will give us the impetus to position ourselves as the end-to-end
solution provider for the cold chain industry. We are confident that with the expansion in the cold
warehouses in the country in the next 3 years, we will emerge leaders in this sector too,” Gati
founder and chief executive officer, Mahendra Agarwal, stated in a press release.
Cognizant to invest Rs. 500 cr in Hyderabad facility

Information technology services and consulting firm Cognizant will expand its facility at
Gachibowli in Hyderabad with an investment of over Rs. 500 crore. The company is looking to
add 1.5 million sq feet of built-up area in the 11-acre campus. At present, it has 2.25 lakh sq ft of
built-up space at the campus. The company started operations in Hyderabad in 2002 with 180
employees. Currently, it has 18,000 employees and five facilities in the city.
“The expanded facility can accommodate around 8,000 employees,” Lakshmi Narayanan, Vice-
Chairman of Cognizant, has said. “Besides growing our operations here, the centre would help us
tap the huge talent pool available here,” he said, while announcing the expansion plan in a
statement on Wednesday. The Hyderabad centre services over 300 of its global clients in industries
spanning banking and financial services, insurance, retail, hospitality, manufacturing and logistics,
and life sciences. The company expects to start construction in 2015 and will continue to add
headcount based on business demand. “The additional headcount will complement the existing
workforce focused on our core areas of expertise across technology and business process services,”
said a spokesperson for the company.

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Issue No. : 24
Infibeam launches .OOO domain globally
Even as it launched the new generic top level domain .OOO (dot-triple-’O’) globally, becoming
the first Indian Internet Registry to do so, Ahmedabad-based Infibeam is planning to file the draft
red herring prospectus (DRHP) for its upcoming Rs 500 crore
IPO in two months. Backed by growth in its flagship e-
commerce portal, along with BuildaBazaar and now .OOO,
Infibeam is planning to expedite the IPO process. However,
talking about the IPO, Vishal Mehta, founder and CEO,
Infibeam said that the company will be planning few more
initiatives before filing the DRHP. By next fiscal, the company
is planning to raise roughly Rs 500 crore from the IPO.
The company recently became the country’s first generic top level domain (GTLD) Registry after
bagging necessary clearances and license from The Internet Corporation for Assigned Names and
Numbers (ICANN). Infibeam has entered into Registry Registrar Agreement (RRA’s) with leading
global domain Registrars for making available .OOO to the customers worldwide. All the Registrar
partners are ICANN accredited with over 15 years of experience in distribution and management
of domain names. .OOO will be wholesaled to the Registrars and they will further retail to the end
user. Read more…
Dated laws, policy grey areas worry e-commerce players

E-commerce players such as Amazon and Uber feel that dated laws and lack of clarity in
regulations are the biggest risk for their India operations. Industry observers say that the country’s
laws need to keep pace with the rapid development of the e-commerce sector. The world’s largest
e-retailer Amazon.com Inc last week acknowledged the risks of operating in India. In its quarter
results filing to the US Securities and Exchange Commission, Amazon said there are “substantial
uncertainties” regarding the interpretation of Indian laws. “If our international activities were
found to be in violation of any existing or future Indian laws or regulations, or if interpretations of
those laws and regulations were to change, our businesses in those countries could be subject to
fines and other financial penalties, have licenses revoked, or be forced to shut down entirely,”
Amazon said. While the parent company announced a $2 billion investment in Amazon India, the
operations in the country now face an uncertain future with Karnataka mulling changes in its Value
Added Tax regime.
It isn’t just Amazon. San Francisco-based cab operator Uber has been asked to change its payment
mechanism by the Reserve Bank of India. Uber allows users to download a mobile application
after asking for credit card details. Unlike traditional payment gateways in India, which have a two
step-verification, Uber’s international payment gateway directly charges the card after every trip.
Domestic start-ups Flipkart and Snapdeal, which are now valued at $7 billion and $2 billion
respectively after multiple rounds of investments from private equity funds, have also been in the
eye of the storm. Brick-and-mortar retailers are crying foul and have asked the Commerce Ministry
to step in.
“The rules that exist are dated and there is less clarity and lack of transparency. This leaves the
rules open to interpretation and open to judgement on the investor’s best call,” Sanchit Vir Gogia,

Issue No. : 24
Chief Analyst and Chief Executive Officer, Greyhound Research told a Newspaper. “There is
definitely a need for specific rules and regulations for consumer protection,” he added. But, lack
of clarity in laws has not deterred investments. According to retail consultancy firm Technopak,
e-commerce firms have raised more than $3 billion in over 150 deals between 2012 and October
2014. Arvind Singhal Chairman Technopak said, “At about $32 billion (net revenues) by 2020
end, e-tail will account for 3 per cent of the total merchandise retail in India, even if e-tail grows
faster than the current projections it is not likely to be more than 5 per cent of the total retail in
2020 and 10-12 per cent of the total retail by 2025.” “The primary reason for increase investments
is the large consumer base and the potential demand from India,” said Greyhound Research’s
Gogia.
Marketing
South African Airways to educate travellers on country being Ebola safe
To tell travellers that South Africa is not affected by the deadly Ebola virus, South African Airways
plans to follow the route adopted by its counterpart in Hong Kong – using flyers to show that the
distance between East Africa, which has the presence of Ebola, and South Africa is equal to the
distance between Hong Kong and Dubai. “We have seen a big drop in demand. I am trying to get
the flyers used by South African Airways in the Hong Kong office to India. We will customise
these for India as we need to educate customers here,” said Sajid Khan, Country Manager (India).
Sajid declined to provide specific numbers of passengers carried by South Africa Airways on their
flights as it is market competitive information.
South African Airways operates six flights a week to Mumbai providing the only direct air link
between India and South Africa. The airline largely carries point-to-point traffic although some
passengers also use the airline to travel on to South America and neighbouring states in Africa.
Meanwhile, in a boost to South Africa tourism, a group of close to 200 travel professionals will be
travelling there soon. “These are people who advise travellers on where they should go. They are
likely to spend a few days there,” Sajid said. Airline officials feel there are different ways of
looking at the impact on Indian tourist arrivals in South Africa. “Frequent travellers are unlikely
to cancel a visit to South Africa because they know what to expect. But a first time visitor is likely
to cancel the trip and consider travelling to an alternate destination,” said an airline sales executive.
Bollywood also continues to repose faith despite the Ebola scare. Sajid said that at least three
movies were planning a shoot in South Africa.
Fiat launches compact SUV Avventura priced up to Rs 8.17 lakh

Fiat Chrysler Automobiles India on Wednesday launched its compact sports utility vehicle
Avventura in the Hyderabad market. It would be available in both petrol and diesel versions. The
petrol variants are priced between Rs 6.06 lakh and Rs 7.15 lakh while the diesel variants are
priced between Rs 6.99 lakh and Rs 8.30 lakh. Speaking to mediapersons on the launch, Fiat
Chrysler India operations president and managing director Nagesh Basavanhalli, said, “The
Avventura showcases Fiat’s commitment to India to produce cars designed for India and
manufactured for India.”

12
Issue No. : 24
The vehicle is being manufactured at the company’s Ranjangaon plant in Pune. Fiat is sourcing 90
per cent of the production requirement locally. Basavanhalli said the company in the last one week
had received more than 15,000 enquiries for the test drive and got over 500 advanced bookings
pan-India till now. On the new launches in the pipeline, he said the auto major would launch its
luxury hatchback Abarth 500 by December. In the next five years, it would roll out 12 models in
the country and will begin producing models from the Jeep brand in India by 2015. By 2018, it
expects to have a production capacity of 245,000 units annually, compared with the current
135,000 vehicles.
Toyota sales decline despite upgrades, new features

Toyota’s first made-for-India models, Etios sedan and Liva hatchback, which were launched with
much fanfare four years ago, are seeing sharp decline in sales even after several upgrades and
addition of newer features. During the last three years, the combined sales of Etios and Liva slipped
from 73,831 in 2012 to 59,982 in 2013 and further to 35,014 units (till September), clearly showing
that the decline has been swift and sharp. The latest upgraded models which were launched last
week have a completely new front grill and far better interiors including air bags for both the driver
as well as the passenger seats across all grades. The company’s Director and Senior Vice-President
for sales and marketing, N Raja, told BusinessLine that through these upgrades, Toyota hopes to
cast the net wider. “Our effort now is to get more customers to experience it,” Raja said.
He pointed out that when Etios and Liva were introduced in 2010, target customers were the youth
but now the company also wants to focus on quality-driven customers and rural segments. An
official with Toyota had earlier said that the Etios and Liva compete in extremely tough segments
where the choice is wider and car makers offer models at different prices. Etios has a market share
of 4.6 per cent, while Liva has 3.7 per cent after a four year grind in a market dominated by
Maruti’s Swift Dzire and Swift hatchback.
Raja said that since the launch of Etios in
2010, Toyota has been regularly introducing
upgrades, limited editions and variants
keeping up with the changed market and ever
changing customer needs. However, Toyota
was unable to reach the 10 per cent market
share by 2010 it had hoped it would when it
started operations in 1998.
According to market reports, the car maker’s current market share is slightly over 5 per cent.
Toyota did not give market share of its Indian operations. As of March 31, 2014, its total sales was
1,28,811 units, about 22 per cent less than the previous year. An auto analyst with a consulting
firm who did not want to be named said that Toyota should have launched Etios as well as Liva at
price points which were extremely competitive and introduced far more features when they were
launched. He also said that the car maker should have launched several models in the Indian
market by now.

13
Issue No. : 24
Philips unveils handset targeting senior citizens

Philips, which recently re-launched its mobile phones in India, is using its core strength of being
a utility company to sell mobile phones – a phone designed for senior citizens is one such example.
Similarly, its flagship phone W6610 comes with a 5300 mAH battery that provides
users with 66 hours of standby time. “We are always known as a utility company
and using the same concept in selling mobile phones,” told SS Bassi, Country
Manager (SAARC), Sangfei, which manufacturers and distributes Philips mobiles
phones. Philips may be late in the mobile phone market but it has the right products
for the Indian market.
Three years ago, the company entered the market but did not have the right product
mix of features and smart phones. However, this time it has done a thorough study
of the market,said Bassi. For instance, the senior citizen mobile phone Xenium X2566 at Rs. 3,800
has large font size keypad for easy reading, has dual-SIM facility and comes a torch-cum-SOS
button and long lasting battery life. “The market is flooded with mobile phones targeted mostly at
the youth while senior citizens have been left out and they find it very difficult to type in small key
pads or use the touch screen,” he said. The phone comes with a ‘magnifier’ to allow users to
magnify letters on phone screen. With the entry of several other Chinese smart phone players such
as Xiaomi, Gionee and Lenovo, Bassi said Philips’ strength is its after-sales service and customised
phones for the Indian market. Bassi said next month the company will launch its Octo-core
processor phone i908.
Hero ISL is most watched tournament on TV after IPL

STAR India's bet on non-cricket sports seems to be paying with the Hero Indian Super League
(ISL) recording a reach of 74.7 million on its launch day and a cumulative reach of 170.6 million
in the first week.
These reach figures are second only to the annual twenty-20 tournament of the Indian Premier
League (IPL). These are aggregated reach numbers across eight channels - STAR Sports 2
(English), STAR Sports 3 (Hindi), STAR Sports HD 2 (English), STAR Gold (Hindi), STAR
Utsav (Hindi), Asianet Movies (Malayalam), Jalsha Movies (Bengali) and Suvarna Plus
(Kannada).
The Hero ISL has outstripped other football

tournaments' telecasts in the country by a large
margin, including the FIFA World Cup 2014 held
earlier this year, the I-League, the Calcutta
Football League and the English Premier League.
In July this year, the broadcaster also telecast the
Pro Kabaddi League, which went on to become the
second-most viewed sporting tournament in the
country after cricket with a launch reach of 66
million and went on to have a cumulative reach of
435 million throughout its tenure.

Issue No. : 24
Star India COO Sanjay Gupta says: "These numbers (for football and kabaddi) indicate that there
is a hunger for good quality sports. This is the first time football has been mounted on such a large
scale and we have had some good quality games. This, coupled with the reach of the Star Network
and our decision to air the tournament across eight channels and the marketing initiatives, has led
to interest in the League (ISL), which reflects in the reach numbers. It shows that given the right
platform and quality content, football holds great potential in the country." Read more…
HDFC Life eyes Rs 100 cr premium from online sales

Leading private sector life insurer HDFC Standard Life Insurance Company Ltd is targeting Rs
100 crore premium from online sales of its insurance products in the current fiscal. The company
is betting big on the online platform to push growth, having launched an array of 15 online products
in the last couple of months.
“Our mantra here is to Sell Online, Deliver Online, Service

Online. Our Click2Invest plan is a best in class ULIP (Unit
Linked Insurance Plan) available exclusively for online
customers. It is a low cost plan that delivers everything that
customers asked of us in terms of features. We also recently
launched a new online term plan Click2Protect Plus that has
richer features than its previous avatar Click2Protect”, Sanjay
Tripathy, senior executive vice president (marketing, product, digital and e-commerce) said in an
e-mailed response.
The company plans to roll out more products shortly, exclusively for its online customers.“To
leverage the true disruptive potential that the digital medium offers, it becomes crucial to adapt
your systems, processes and personnel to best suit its unique demands. This has led to many
insurers to adopt, and rightly so, a vertically integrated SBU (strategic business unit) like structure
to ensure a dedicated focus that allows for agility, responsiveness and efficient scale up. We were
the first ones to do this”, said Tripathy.
Commenting on HDFC Life's premium growth, he said, “Total premium (in April-September
period) grew by 21 per cent compared to the previous year, aided by all-round growth in first year
individual premium (28 per cent), individual renewal premium (17 per cent) and group premium
(21 per cent). The company maintained a balanced product mix during this period”. Read more…
Nestle to eliminate more low-margin products soon

Nestle India will continue to eliminate low-margin products from its portfolio in the coming
quarters as the company rationalises its products in order to improve profitability. Nestle India
Managing Director Etienne Benet, in a statement on Tuesday, said the culling exercise would
continue and low-margin products that were not in line with Nestle’s current growth strategy
focussing on nutrition, health and wellness would be eliminated.
In India, about 45 per cent of Nestle’s revenues come from milk products and nutrition, another
30 per cent from prepared dishes and cooking aids, 13 per cent from chocolates and the rest from
beverages. But the contribution by milk products and nutrition has declined in the past couple of

15
Issue No. : 24
quarters. In that time, Nestle has withdrawn Nestle Eclairs, Nescafe Mild and milk sachets, as they
were low-margin and low-growth products. While Maggi is also a low-margin product, the
company has been increasing its offerings of instant noodles under the Maggi brand. Read more…
Volvo Trucks expects India sales to grow 25% this year

Swedish truck maker Volvo Trucks expects its India business to grow 25 per cent this year
compared with 2013. The company sold over 630 units between January and October. In the
premium segment, the company has about 65 per cent market share. Since the launch of its Indian
operations, Volvo Trucks has sold over 9,000 units in the country, Philippe Divry, President, Volvo
India, and Senior Vice-President of the Volvo Group, told a Newspaper . Divry has also unveiled
the new range of Volvo trucks at a news conference in Bangalore. The flagship FH trucks, launched
for the Indian market, has features such as an automated gear box to take on tough and rugged
mining operations. The company will also introduce its Dynafleet telematics system, which helps
operators track their fleet on real time.
Rama Rao AS, Volvo Trucks Senior Vice-President and Head of Sales, Marketing and After
Market, said majority of the engines in the trucks do not need any overhaul. Vinod Aggarwal, CEO
of VE Commercial Vehicles, a joint venture between Eicher and Volvo Trucks, said with the
revival of the economy, there has been a 15 per cent increase in sales in the heavy-duty segment.
With the Coal Ministry forecasting that the coal production will increase to 1 billion tonnes from
700 mt last year, the mining sector is expected to get a huge boost during the year, he added.
Eureka Forbes to offer customised solutions

Eureka Forbes, leader in the Rs. 3,800-crore water purification systems market, is betting big on
‘customised solutions’ to expand its footprint. Eureka Forbes has mapped the water quality in over
85 per cent of India’s pin codes over the last 15 years. “This holds us in good stead in offering
solutions for over 17 different types of water conditions in the country so far,” said Marzin R
Shroff, Senior Vice-President (Marketing), Eureka Forbes Ltd. It recently moved up the value
chain from just ‘pure’ to position its products on the ‘health’ platform, with its new tagline ‘More
than just pure. Healthy water’.
Based on its internal feedback system, the company undertakes various research programmes
across the country to understand the needs of different sets of consumers. Over the last 30 years,
Aquaguard has invested heavily in research and technology to understand customer needs and
customise solutions and products to suit every water type in India. For instance, it has launched
mobile water purifier Aquaguard-on-the-Go, he said. Eureka Forbes is expanding its retail network
to cover tier-II and tier-III markets. Initially, a pure-play direct sales company, it now has a
significant presence in retail, franchised, rural, institutional, community, and e-tail platforms.
Shroff says the rural market holds high growth potential, particularly for offline water purifiers,
and “we have come out with a new range of affordable purification units for rural markets.”
It has set up water kiosks in several tier II and tier III towns that sell water at 15 paise a litre. So
far, it has established over to 200 such kiosks in the country. It also proposes to set up such kiosks
in major cities including Chennai, Bangalore, Mumbai and Kolkata. But it may not sell a litre at
15 paise, as cost of running those kiosks in major cities will be much higher. “We are planning to
do some pilots before we launch them,” he said. The market for water purifiers in the country is

Issue No. : 24
growing at 15 per cent year on year. Many home-grown and global brands have jumped into the
fray. “We welcome all competition. It fuels innovation and eventually that will benefit the
consumer,” says Shroff.
AkzoNobel launches app

Global paint company AkzoNobel on Wednesday launched an app ‘Dulux Visualizer’, which
allows you to virtually decorate your room with a colour of your choice using augmented reality
and videos. Rajiv Rajgopal, Director, Decorative Paints, AkzoNobel India, said: “The app, which
is free for download, has Dulux products on offer linked to its stores.” On the importance of the
Indian market, Jeremy Rowe, Managing Director, Decorative Paints, South East and South Asia,
AkzoNobel, said: “India is the third largest market for the company after the US and China and
we have made significant investments in strengthening our capabilities here. We have around 10
per cent share of the market in India and in the premium segment, it is over 20 per cent.” The
company also released the latest edition of its annual global study of colour trends
‘ColourFutures2015’ unveiling copper orange as the colour of the year. On the strategy for
operations in India, Rajgopal said the company is strengthening the proposition on its brands, for
example, the advertisements on Velvet Touch and Weather Shield.
Harley-Davidson rides high on strong demand in India

US motorcycle maker Harley-Davidson has said the company has created a strong market for
premium bikes in the 500cc and above category in India. “We came to India in 2010 and since
then, have sold more than 6,000 bikes. We continue to explore the market across all models in the
above 500cc category, and we are well over where we wanted to be,” Anoop Prakash, Managing
Director, Harley-Davidson India, told a Newspaper . The Street 750 is the cheapest motorcycle
from the company’s stable with the price starting at Rs. 4.3 lakh (ex-showroom, New Delhi).
According to the Society of Indian Automobile Manufacturers, the company sold 1,830 units in
2013 and has already sold 2,919 units this year(January-September) in India. Prakash said Harley
expects better sales in future, especially led by assembling of most of the motorcycles at its Bawal
(Haryana) plant. Harley assembles nine motorcycles in India and five are directly imported. It also
sells full range of genuine parts, accessories and general merchandise, which are available through
its authorised dealerships. The company has 15 dealerships across India, including in New Delhi,
Gurgaon, Chandigarh, Mumbai, Hyderabad and Bangalore, and will open two more by December
– each one in Bangalore and Surat.
Meanwhile, Harley launched three new bikes – Breakout, Street Glide Special and Custom Vehicle
Operations (CVO), priced at Rs. 16.28 lakh, Rs. 29.70 lakh and Rs. 49.24 lakh, respectively (all
ex-showroom, Delhi). The Breakout (1690cc) is the newest addition to the popular Softail family
of motorcycles and will be assembled at its plant in Bawal, while the other two will be imported.
The Street Glide Special (1690cc) will be a fully loaded version of the Touring model, equipped
with a high output twin cam 103 powertrain, Boom Box 6.5GT infotainment system and enforcer
cast aluminium wheels. The CVO (1801cc) will be part of Harley’s limited edition, which are
hand-crafted, stylish, luxury and performance with better ride experience.’

17
Issue No. : 24
Markets
Global commodity markets hit by major demand slowdown
Global commodity markets are currently going through a period of turmoil. The tug-of-war
between supply and demand is palpable. Several uncertainties that impacted the market in recent
years continue to play out differently. In the last two years, markets were driven by a series of
concerns and uncertainties covering global economic growth, geopolitical instabilities, contrasting
monetary policies by different countries, currency gyrations and weather. There is no denying that
a substantial part of the commodity price boom was liquidity driven, thanks to the US Fed’s ultra-
liberal monetary policy. At the same time, since 2013, the world has witnessed supply growth
across commodities – metals, bulks, crude and agriculture. Higher supplies, especially of growth-
driven commodities, were steadily absorbed even as the excess liquidity boosted commodity prices
in the form of speculative capital.
Again, led by the US, steadily improving growth signals helped support commodity demand.
Agriculture commodity prices were substantially driven by a huge rebound in harvests (corn,
wheat, oilseeds, cotton, sugar, etc) following generally benign weather across the globe. The
situation has altered dramatically in recent months. Geopolitical tensions that threatened crude
supplies have abated in recent months. If anything, supplies of energy products are rapidly
expanding. Crude oil prices have dropped by 20 per cent. With normalisation of the US monetary
policy (following tapering of quantitative easing), liquidity continues to shrink. Availability of
easy money, especially the dollar, has turned tight. From 1.38 to the euro at the beginning of the
year, the dollar is substantially stronger currently at 1.27. If the US growth continues, the
greenback could rise further. So, reduced geopolitical tensions, shrinking liquidity, stronger dollar
and benign weather have combined to push commodity prices down. Given the fairly comfortable
supply situation, speculative capital stands substantially withdrawn from the market. In the
bourses, speculative longs have exited en masse. Read more…
Mergers and Acquisitions

GVK Bio, Takeda tie up to recycle failed drugs
GVK Biosciences and Takeda Pharmaceutical Company have joined hands in a novel partnership.
It is a bold attempt to recycle shelved or failed drugs and find possible new indications. The
confidence to venture into this comes from the GRIP-GVK Bio Repurposing Integrated Platform.
It is a combination of repurposing database, eight different algorithms, analytics tools and a
visualisation engine developed by the company, says Nandu Gattu, Vice-President and leader of
the group.
After initial successes, the two have agreed to evaluate the pre-clinical proof of concept for certain
indications of select therapeutic compounds to develop novel indications for the previously failed
compounds, he said. There are more than 200 drugs in the market, which have been repurposed or
recycled with a totally new indication, after their initial failure either at Phase-2 or 3 or totally
shelved. The market is estimated to be over $10 billion, he told a Newspaper .

Issue No. : 24
GVK Bio has leveraged its decade-long experience and expertise in drug discovery and working
with global majors to develop the GRIP. “With Takeda, we have taken a number of their failed
compounds are working on potential, alternate indications”, he added. The Hyderabad-based
company plans to leverage the strengths of the platform to approach major pharma companies and
work with their failed or shelved compounds. In a way, success here can recoup big losses or
investments in the initial drug discovery research, which is risky, he said.
Reliance Jio to merge two subsidiaries ahead of launch

Reliance Jio Infocomm Ltd is merging its two subsidiaries, Infotel Telecom Ltd and Rancore
Technologies, with itself. The move is aimed at bringing all its telecom related operations under a
single entity before launching services. While Reliance Jio has a unified licence, Infotel Telecom
has long-distance telephony licences. Rancore is an R&D unit. Infotel Telecom, which is already
registered with the Registrar of Companies, had earlier received the company court’s approval for
the merger. The merger will enable Reliance Jio to conduct national and international long-
distance business under a single licence. The effective date for the Infotel Telecom merger is
September 1, 2014, while the approval is pending as Reliance Jio has not submitted details of the
minimum paid-up capital of the company and minimum net-worth details of the companies.
According to sources, the DoT has asked for certain details, including certificates detailing Indian
and foreign equity held in the company and details of minimum paid-up capital.
The DoT has also suggested that the Telecom Ministry’s wireless planning & coordination (WPC)
wing also look into the proposal as Reliance Jio holds 20 MHz of Broadband and Wireless Access
spectrum across all the 22 circles.Mumbai-based Reliance Jio, controlled by industrialist Mukesh
Ambani, had also sought a similar approval to merge Rancore Technologies with itself. The
company, which holds 1800 MHz spectrum across 14 circles and 2300 MHz in 22 circles, is
gearing up to launch fourth-generation wireless services in 2015.
Wipro invests $8.2 million in Opera Solutions

Wipro has invested an additional $8.2 million in Opera Solutions, a global big data and analytics
company. In May 2013, the Bangalore-based IT services company had invested $30 million in
Opera which specialises in machine learning to Big Data flows to extract predictive patterns which
are also known as "signals". Including the latest investment, so far Wipro has invested around $53
million in Opera for close to 20 per cent stake in it. In a filing on the BSE, Wipro said it has entered
into a Series G preferred unit purchase agreement to increase its investment in Opera Solutions.
Cyient Q2 net up 24%

Cyient Ltd reported a 24.4 per cent growth in net profit at Rs 90.18 crore for the quarter ended
September 30, 2014, compared with Rs 72.50 crore for the corresponding period last year. In dollar
terms, net profit was up 28.6 per cent at $14.9 million from $11.6 million in the year-ago period.
Profit growth was supported by a 22.4 per cent jump in revenues at Rs 672.39 crore as against Rs
549.28 crore in Q2 of 2013. It was also aided by a forex gain of Rs 19.96 crore as against a loss of
Rs 4.96 crore, taking the other income to Rs 34.01 crore in the current quarter as against Rs 8.34
crore last year.
The voluntary staff attrition during the quarter dropped to 12.7 per cent when compared with 15.4
per cent during the same period last year. Gross employee addition for the quarter stood at 847

19
Issue No. : 24
with a net addition of 220 individuals. The share of revenues from American continent during the
quarter grew to 63.9 per cent from 57.9 per cent last year. However, the revenue share from Asia
Pacific dropped to 8.7 per cent from 12.2 per cent recorded in the last year period. The company
in a release stated America's revenues grew 11.7 per cent sequentially in dollar terms; Europe,
West Asia, Africa and India were up 2.5 per cent, while the Asia Pacific region was down 3.4 per
cent. The software services company added 19 customers during the quarter, including four in
engineering and 15 in data transformation, network and transformation (DNO) verticals.
Money and Banking

HDFC Bank Q2 net rises 20%
HDFC Bank, country’s second largest private sector lender, reported a 20 per cent rise in net profit
in the second quarter ending September, 2014 at Rs. 2,381.5 crore. This is the fifth consecutive
quarter that the bank has posted net profit that is below its trend growth rate of 30 per cent.
Provisions and
contingencies
increased 18 per cent to
Rs. 456 crore
(consisting of specific
loan loss and general
provisions) for the
quarter under review
from Rs. 386 crore in
the same quarter last year. It also provided for tax expense of Rs. 1,223 crore before profit. Net
interest income (difference between interest earned and interest expended) grew by 23 per cent to
Rs. 5,511 crore. Other income grew by 11 per cent at Rs. 2,047 crore as against Rs. 1,844 crore in
the corresponding quarter ended September 30, 2013.
“We saw pick up in retail disbursements, which grew over 20 per cent, especially in car loans and
personal loans. Commercial vehicles and equipment also saw a growth of 10 per cent, turning
positive from flat or negligible growth a year ago,” said Paresh Sukthankar, Deputy Managing
Director at HDFC Bank. Margins improved to 4.5 per cent due to slightly better deposit mix of
current and savings deposit. “Right now, we are comfortably placed on liquidity and there is no
compulsion to change interest rates,” Sukthankar added. As of September 30, total advances
increased 22 per cent. Domestic retail and wholesale loans grew 17 per cent and 22 per cent,
respectively.
Gross non-performing assets (NPAs) improved at 1.02 per cent of gross advances as on September
30, 2014, as against 1.09 per cent as on September 30, 2013. Total restructured loans declined to
0.1 per cent of gross advances as of September 30, as against 0.2 per cent last year. “Capital
expenditure loan demand is still a couple of quarters away. Corporate lending has seen pressure as
corporates are borrowing from other avenues like commercial paper. So, to that extent banks are
getting lower business from them,” the Deputy MD said. After declining marginally post-results,
HDFC Bank shares ended almost flat at Rs. 895.90 a share, up by 0.12 per cent over the previous
close on the Bombay Stock Exchange.

Issue No. : 24
PNB registers 13.81% growth in net profit for Q2

Punjab National Bank has reported a 14 per cent increase in its net profit for the three-month period
ended September 30. Analysts termed
the results as below expectations. The
market was also not enthused by the
results with the shares of the bank falling
by over 2.5 per cent to close at Rs.
931.50 apiece on Tuesday on the BSE.
The bank said that its net profit
increased to Rs. 575.34 crore from Rs.
505.49 crore while income grew by
11.92 per cent to Rs. 13,020.46 crore
from Rs. 11,632.84 crore in the corresponding period of the previous fiscal. However, the bank’s
bad loan or non-performing assets (NPA) is on the rise. According to the bank, its net NPA as a
percentage of total advances stood at 3.26 per cent at the end of September 30, 2014 against 3.07
per cent during July-September of 2013-14. The main cause for this has been poor performance
by the manufacturing sector, which has increased bad debts for the entire banking sector, with
PNB being no exception.
Another factor, which disappointed the market, is the net interest margin (the difference between
interest paid on deposits and interest received on loans). The bank’s NIM came down to 3.18 per
cent (3.42 per cent during the corresponding period of the previous fiscal). PNB attributed two
reasons for the lower NIM – less-than-expected credit growth and refund of about Rs. 294 crore
on account of funded interest term-loans. For the full year, the bank gave guidance of NIM being
in the range of 3 to 3.25 per cent. For the first six month, it is 3.3 per cent and there efforts will be
made to improve it, PNB said.
Bajaj Allianz General Insurance net up

Bajaj Allianz General Insurance reported 28 per cent rise in net profit to Rs. 145 crore for the
quarter ended September 30, despite settling over 3, 000 claims and paying over Rs. 130 crore in
claims related to the floods in Jammu and Kashmir. The company reported 19 per cent growth in
revenue in the first half of the current fiscal. Tapan Singhel, MD and CEO, Bajaj Allianz General
Insurance, said, “The rise in motor and health insurance business has helped us achieve a higher
overall growth. Weather-based crop insurance has also contributed substantially in the growth.”
Aditya Birla enters health insurance

Aditya Birla Financial Services Group has signed a Memorandum of Understanding (MoU) with
South Africa-based MMI Holdings to enter the health insurance segment in India. MMI Holdings
will hold 26 per cent stake, the maximum allowed according to the existing FDI norms in the
sector, in the joint venture. “Health insurance as a category has extremely low penetration levels
in India. Given our group’s focus on building our retail presence across products, we foresee a
huge potential to target the requirements of untapped customers and their families,” Ajay
Srinivasan, Chief Executive - Financial Services, Aditya Birla Group, said.

21
Issue No. : 24
HDFC's net rises in single digit after 21 quarters

Housing Development and Finance Corporation (HDFC), the country's largest home mortgage
financier, reported 7.2 per cent growth in net profit to Rs 1,357 crore for the quarter ended
September, as compared to Rs 1,266 crore in the year-ago quarter, with a rise in loans to
individuals. The profit was largely in line with Bloomberg estimates of Rs 1,362 crore. However,
the net profit growth is the lowest after the March 2009 quarter, when profits declined by 4.5 per
cent. Since then, the net profit growth has always been in double-digits. It is after 21 quarters that
the profit growth has slipped into single digits. The slower growth in this quarter can be attributed
to increase in provisioning and tax, say analysts. Provisions and contingencies jumped 133 per
cent year-on-year to Rs 35 crore from Rs 15 crore in the same quarter last year. However,
sequentially, it remained unchanged.
Tax expenses rose this quarter by 19 per cent to Rs 541 crore as compared to Rs 455 crore in the
year-ago period. The non-banking finance company has provided Rs 83.3 crore towards deferred
tax liability in the quarter on special reserves, as compared to Rs 75 crore in the June quarter. This
item was introduced from the latter quarter. Keki Mistry, vice-chairman and chief executive
officer, said: "The net profit growth appears to be lower because in the past year, we did not have
this deferred tax liability. Apart from this, the dividend income in this quarter has been Rs 100
crore, as compared to Rs 170 crore in the September quarter last year." Read more…
Kotak Mahindra Bank net up 23%

Private sector lender Kotak Mahindra Bank on Wednesday reported 23 per cent increase in its net
profit on a consolidated basis to Rs 718 crore for the quarter ended September as compared to Rs
583 crore recorded during the same period of the previous year, mainly due to higher earnings
from banking operations. On a standalone basis, net profit was up 26 per cent to Rs 445 crore from
Rs 353 crore reported during the same period of the previous year. Profit was higher on account
of robust growth in other income, which comprises fee and treasury income. While other income
more than doubled to Rs 1,652 crore from Rs 713 crore during the period under review, fall in
overall provisioning to Rs 58 crore from Rs 86 crore also helped its bottomline. On the asset quality
front, the lender reported nearly Rs 200 crore increase in gross non-performing assets (NPAs) to
Rs 1,305 crore, which was 1.59 per cent of its total advances. Gross NPA ratio was 1.59 per cent
at the end of September, 2013.
“Asset quality may not have improved significantly, but fresh flows into delinquencies is very
limited now. So that gives a lot more confidence. You will see growth here on. It is more optimistic
than what it was last year,” said Dipak Gupta, joint managing director, Kotak Mahindra Bank. Net
interest income, that is, the difference between interest earned and interest expended, grew by 12
per cent on the back of a 20 per cent year-on-year (y-o-y) growth in advances to Rs 60,948 crore.
Without considering commercial vehicles and commercial equipment, the growth in advances was
28 per cent. Deposits outpaced loan growth which grew by 29 per cent to Rs 68,103 crore, led by
39 per cent growth in savings bank deposit. The bank’s stock closed 5 per cent higher on
Wednesday at Rs 1,064.30 following the healthy growth in earnings. Net interest margin, on a
consolidated basis, went up by 10 bps (y-o-y) to 5 per cent. The capital adequacy ratio of the bank

22
Issue No. : 24
according to Basel-III norms stood at 17.6 per cent at the end of September while the tier-I ratio
stood at 16.6 per cent. The bank had raised about Rs 235-250 crore by way of infrastructure bonds.
PSU banks fail to sell MFs

Public sector banks (PSBs), despite their huge branch networks, haven’t been doing much to
expand their mutual fund (MF) businesses. State Bank of India (SBI), Punjab National Bank,
Bank of Baroda, Canara Bank and Union Bank of India all have their asset management companies
(AMCs). SBI apart, the others earned dismally low brokerage incomes by selling MFs, less than
Rs 10 crore each, in 2013-14. SBI, with a little over 13,000 bank branches, did marginally better
— it earned Rs 29 crore. Private banks, with a much lower branch base, sold MFs more
aggressively. HDFC Bank, ICICI Bank and Axis Bank had brokerage incomes of Rs 159 crore, Rs
118 crore and Rs 94 crore, respectively, that year. Says a leading distributor:
“Private banks are more aggressive in this business because they consider the fee income
— brokerage and trail commission — an important aspect of their balance sheet.” As a result,
PSB-sponsored MFs are ranked low. SBI's, with average assets of Rs 72,800 crore is 6th in the
ranking, an exception among PSBs. Baroda Pioneer, a joint venture between Bank of Baroda and
Pioneer Investors, with assets of Rs 7,100 crore, was ranked 22nd; despite a good market, its
average assets have fallen since March by Rs 1,000 crore. Read more…
Moody’s retains negative outlook on banking sector

Moody's Investors Service has noted that the outlook on India’s banking system remains negative,
reflecting its view that high leverage in the corporate sector could prevent any meaningful recovery
in asset quality over the next 12-18 months. “The negative outlook on the Indian banking system
pertains mainly to the public sector banks, which represent more than 70 per cent of total banking
system assets,” said Gene Fang, Moody's Vice-President and Senior Credit Officer, in a statement.
“These banks have experienced higher growth rates in non-performing and restructured loans, as
well as greater weakening in profits, than private sector banks, and these trends are unlikely to
improve for public sector banks,” Fang added. “Going forward, India's corporate sector will remain
highly levered, representing an obstacle to a cyclical recovery in asset quality,” the rating agency
said.
Moody's ‘Banking System Outlook India’ report said that over the next 12-18 months, the outlook
would depend on factors such as the operating environment which is stable, asset quality and
capital which are deteriorating, funding and liquidity which are stable, profitability and efficiency
which are deteriorating, and systemic support which is stable. While Moody's states that economic
growth would pick up moderately, growth remains constrained by the high interest rates needed to
contain inflation. Moody's base-case forecast is for GDP growth of 5 per cent for the fiscal year
ending March 2015 (FY2015) and 5.6 per cent for FY2016, compared with 4.7 per cent in FY2014.
According to the Moody’s report, India’s broad corporate sector is highly leveraged, with a debt-
to-equity ratio of more than three times.

23
Issue No. : 24
Start-Ups
Seedfund that germinates a leader in a niche
Mahesh Murthy does not look like your typical venture capitalist. Not for him the formal wear that
you normally associate with fund managers. As Managing Partner of Seedfund, an early-stage
venture capital firm with about ₹410 crore under management, he seeks out and invests in niche
ventures. He is forceful and articulate about his views. Some of which are not what you would
expect of an investor in start-ups.
At the TiE Chennai’s annual conference recently, he shocked the gathering by arguing that all
company valuations are arbitrary and that there is really no science to them. Later, when you catch
up with him for a chat and ask him if he really meant what he said or was he merely taking a stand
in a debate, Mahesh vehemently says, “no, no. I truly believe that.” “I think there is a big un-talked
about ugly, under-belly of valuation in India and elsewhere in the world,” he adds.
There are a large number of mid-size funds in India, he says, that have done particularly badly in
the last 5-10 years. They have pushed up valuations by promising or giving assured returns to one
another by investing in different rounds of a company’s fund raise. These are done because of the
desperation of fund managers to show some movement. “There is nothing realistic or meaningful
about these valuations,” he adds.
Mahesh asserts that valuations are quite often driven by randomness, as the funds have a certain
amount of money to deploy. Each fund can only manage a certain number of companies, but
because they have the money and a limited time within which to invest, they end up giving a higher
amount to the venture than what it requires, pushing up the valuation. There is no logic to this, he
says. Every time, a set of analysts will be asked to justify the valuations one way or the other. Read
more…
To have that cab waiting for you

Raghunandan G and Aprameya Radhakrishna are what venture capitalists call experiential
entrepreneurs. They experienced a pain point, came up with a solution, transformed it into an idea
and started a venture that they hope will succeed. As if to validate their idea, their venture – Taxi
for Sure – has raised three rounds of institutional funding, apart from the seed capital that it got.
The two have been friends for over 15 years, from the time they were in engineering college. Both
worked in the IT sector and then obtained an MBA from IIM-Ahmedabad. Their paths diverged
again, but there was one thing in common – both had to travel a lot as part of their work. Their
pain point was that whenever they needed a cab, they had no idea how long they would have to
wait. Raghunandan and Aprameya realised this must be a common complaint for several others.
The problem was not so much the availability of cabs, as the bottleneck in the call centres of the
operators.
“What we realised was that there was a free car on the road which was ready to provide the service,
there was a customer ready to avail himself of the service. Just because the call centre was the
bottleneck, they were not able to get in touch with each other,” says Raghunandan. They wanted
do something to address this issue. Both quit their jobs and founded Taxi for Sure, which aims to

Issue No. : 24
make it easy for a customer to find a cab at his or her location without any wait. In the process, the
cab driver also benefits in that he does not have to ply long distances for a pick up. Read more…
Easy eat: serving up that quick bite

The next time you order a hot meal of rava upma or kadhi chawal on an IndiGo flight or a pongal
on an Air Costa flight, thank 73-year-old Radha Daga, whose enterprise has made it possible for
you to have your meal. All that it takes for the hostess in the flight to get your meal ready is eight
minutes and a flask of hot water. The hostess has to just cut open the packet containing the de-
hydrated upma or chawal or pongal, empty it into a plastic tub, pour hot water up to the marked
line and close the tub. After eight minutes, your food is ready to eat. On an IndiGo flight, your
upma will come under the brand name Magic Upma, but if you were to buy it in a retail outlet, it
will bear the label Eze Eats, which is the brand under which Daga’s venture Triguni Food Pvt Ltd
sells its ready-to-eat foodstuff. For this housewife-turned-entrepreneur, the food business is her
second venture; the first was a garment business that started off doing work for large exporters and
which later got into making garments for an Italian buyer.
Her garment factory in Tiruverkadu, a suburb in West of Chennai, also houses the food business.
As she talks about her journey as an entrepreneur, the travails she went through first in the garment
business and subsequently in Triguni Food, Daga insists that you taste one of her products. She
does not take ‘no, thanks’ for an answer and when you settle for a sabudhana khichdi, she asks an
employee to bring a jar of hot water, pours it into the food herself and waits for the timer that she
places on the table to show that eight minutes are up. You give the food the thumbs-up and she
happily says that every batch of food that is made is tested for quality. Triguni Food’s menu
includes vegetable biriyani, bisibele bath, poha, tamarind rice, cheese rice, semiya khichdi and
rava kesari. When she started this food business, she believed her consumers would mainly be
students. But she soon realised that the price put it beyond the reach of students. It was a call one
fine day in 2012 from IndiGo asking for a sample that changed her company’s fortunes. Now,
IndiGo accounts for nearly 90 per cent of Triguni Food’s sales. Daga is keen to sell it to more
institutional clients apart from increasing retail sales. Read more…
Person-in-News
Tata AIA Life appoints Naveen Tahilyani CEO and MD
Tata AIA Life Insurance Company Ltd (Tata AIA Life), the joint venture life insurance company
formed by Tata Sons and AIA Group, today announced the appointment of Naveen Tahilyani as
its and Chief Executive Officer (CEO) and Managing Director (MD). Tahilyani would be
assuming his office at Tata AIA Life from January 2015.
Tahilyani, a graduate from the Indian Institute of Technology (IIT), Chennai and Indian Institute
of Management (IIM), Ahmedabad, is currently a Senior Partner at McKinsey & Co. and leads its
South East Asian Insurance and Banking Practice. Tata AIA has not had a chief for past 6 months
ever since its head M Suresh quit. Ishaat Hussain, Chairman of Tata AIA Life said, "I am truly
delighted to have someone of the caliber of Naveen to lead Tata AIA Life. His deep knowledge of
the Life Insurance industry and experience in developing growth strategies for India and Asia's

Issue No. : 24
leading financial services firms will stand us in good stead as we embark on a phase of rapid
growth."
Twitter appoints new head of product

Twitter Inc appointed Kevin Weil head of product, broadening his responsibilities and shifting
another executive into a different role as part of the change, said a person with knowledge of the
matter. Daniel Graf, who was hired from Google Inc and had been head of consumer product since
April, has moved into a special projects job, said the person, who asked not to be identified because
the details are private. Weil, who was previously head of revenue product, is the fifth product head
at Twitter in as many years.
Chief Executive Officer Dick Costolo is working to release new features more quickly, with
Twitter trying to build up its user base and expand its tools for advertisers, said the person. The
San Francisco-based company has struggled to increase membership fast enough to satisfy
investors, even as revenue has risen. Graf didn't respond to a request for comment. Natalie Miyake,
a Twitter spokeswoman, declined to comment. Twitter has cycled through several top executives
this year, replacing its chief financial officer and ousting its chief operating officer. The company
earlier this week lost a top engineering executive, Jeremy Gordon, as well as analytics manager
Adam Kinney.
Mahindra Holidays & Resorts appoints Kavinder Singh as MD and CEO

Kavinder Singh was appointed as the managing director and chief executive officer of Mahindra
Holidays and Resorts Ltd, hospitality arm of Mahindra Group. Meanwhile the company reported
21% growth in Profit after Tax for the quarter was Rs 24.71 crore and total Income stood at Rs
200 Crore, up by 5%. Arun Nanda, Chairman, MHRIL said, that the transition from traditional
avenues of customer acquisition to newer ones like digital is delivering encouraging results. He
added the company expect to shore up its inventory across properties in this financial year.
Among others, inventory in key properties that will be delivered over the second half include
Virajpet, Kanha, Munnar and Udaipur, besides acquisition of new properties under consideration,
he said. Vasant Krishnan, Chief Financial Officer, MHRIL, said, "We are beginning to see some
positive impact of cost rationalisation measures and strengthening of the financial and acquisition
processes and we expect this momentum to continue."
SOURCE: Business Line, Business Standard & Economic Times

ISSUE: October 22nd to November 4th 2014

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Issue No.

Vol – 2 Issue No: 24 Oct 22nd – Nov 4th, 2014

Hard Work, Willpower And IN THIS ISSUE

Dedication  Corporate ............................... 3

greatest English writers, William Hazlitt has

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Maruti Suzuki spent more on CSR in 2013-14

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HUL: Price hikes, cost mgmt aid earnings

LPG consumption grew fastest in three-and-a-half years in Sept

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Economy and Policy

Oil minister reviews readiness for re-launch of DBT in LPG scheme

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Telangana eyes 2000-Mw power from Chhattisgarh

AP gets bids for 1296 Mw solar projects

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India's GDP likely to grow by 5.6% in FY15: World Bank

Think tank NCAER sees economy slowing

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Govt cuts import tariff value on gold, silver

Andhra Pradesh proposes special Acts, sops to attract investment

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Infotech and Logistics

Wipro Q2 profit up 8%, misses forecast

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Gati Ltd Q2 net doubles to Rs 12.5 cr

Cognizant to invest Rs. 500 cr in Hyderabad facility

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Infibeam launches .OOO domain globally

Dated laws, policy grey areas worry e-commerce players

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Fiat launches compact SUV Avventura priced up to Rs 8.17 lakh

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Toyota sales decline despite upgrades, new features

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Philips unveils handset targeting senior citizens

Hero ISL is most watched tournament on TV after IPL

The Hero ISL has outstripped other football

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HDFC Life eyes Rs 100 cr premium from online sales

“Our mantra here is to Sell Online, Deliver Online, Service

Nestle to eliminate more low-margin products soon

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Volvo Trucks expects India sales to grow 25% this year

Eureka Forbes to offer customised solutions

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AkzoNobel launches app

Harley-Davidson rides high on strong demand in India

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Mergers and Acquisitions

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Reliance Jio to merge two subsidiaries ahead of launch

Wipro invests $8.2 million in Opera Solutions

Cyient Q2 net up 24%

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Money and Banking