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Friday, July 10, 2009
BSE Bulk Deals To Watch - July 10 2009
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
10/7/2009 524412 AAREY DRUGS SOMABHAI GOKALDAS PATEL S 25000 37.13
10/7/2009 524412 AAREY DRUGS HIRABEN SOMABHAI PATEL S 27000 36.38
10/7/2009 531223 ANJANI SYNTH MANGILAL B. BURAD B 57585 41.90
10/7/2009 526839 CCAP LTD MANJULA H PAREKH B 25270 34.17
10/7/2009 526839 CCAP LTD KIRAN PODDAR S 20000 34.15
10/7/2009 512199 CORE PROJECT ALBULA INVESTMENT FUND LTD B 450000 110.91
10/7/2009 532696 EDUCOMP SOLN OPG SECURITIES P LTD B 88351 3921.41
10/7/2009 532696 EDUCOMP SOLN OPG SECURITIES P LTD S 88351 3922.03
10/7/2009 532984 ENSO SECUT ARION COMMERCIAL PVT LTD S 64205 14.12
10/7/2009 532022 FILAT FASH BIJAL BHATT B 40000 101.22
10/7/2009 531863 GEEKAY FINAN AMIT BUSINESS PVT LTD B 88873 198.57
10/7/2009 531863 GEEKAY FINAN ALPS VYAPAR PVT LTD S 72354 198.30
10/7/2009 531913 GOPAL IRON AMRUT SECURITIES LTD. B 100000 7.47
10/7/2009 531913 GOPAL IRON HIMAL KANCHANLAL PARIKH HUF S 100000 7.47
10/7/2009 504336 INDTRADECO L BCB FINANCE PRIVATE LIMITED B 1000000 0.71
10/7/2009 504336 INDTRADECO L SKYLARK INDUSTRIAL CLEANERS PVT LTD S 1400000 0.71
10/7/2009 522259 KALIN RAIL N BP FINTRADE PRIVATE LIMITED B 60456 164.75
10/7/2009 522259 KALIN RAIL N BP FINTRADE PRIVATE LIMITED S 59919 165.43
10/7/2009 531602 KOFF BR PICT SAMIR ROHITKUMAR SHAH B 336100 3.43
10/7/2009 531602 KOFF BR PICT NAYANBHAI RAMESHCHANDRA SHAH S 400500 3.43
10/7/2009 531602 KOFF BR PICT SAMIR ROHITKUMAR SHAH S 305000 3.39
10/7/2009 531731 KUVAM INTL GOLDIAM TRADING COMPANY PRIVATE LIMITED S 20000 10.86
10/7/2009 504288 POLAR INDUST DEBNATH MUKHOPADHYAY B 100000 4.89
10/7/2009 504288 POLAR INDUST CHANDRA NATH MUKHERJEE B 100000 4.89
10/7/2009 504288 POLAR INDUST COPTHALL MAURITIUS INVESTMENT LIMITED S 250000 4.89
10/7/2009 512413 SPECTACLE HEMANT MADHUSUDAN SHETH S 370000 46.52
10/7/2009 526133 SUPERTEX IND KUMKUM STOCK BROKER PVT LTD B 49695 54.65
10/7/2009 531874 VENUS VENT VIPUL HIRALAL SHAH B 47105 26.05
10/7/2009 531874 VENUS VENT ABHAY NARAIN GUPTA S 50000 26.05
10/7/2009 533023 WABCO TVS RCTL A/c Reliance long termequity fund B 956700 250.00
10/7/2009 533023 WABCO TVS SOUTHERN ROADWAYS LIMITED S 189446 250.00
10/7/2009 533023 WABCO TVS T V SUNDARAM IYENGAR & SONS LIMITED S 237958 250.00
10/7/2009 533023 WABCO TVS SUNDARAM FINANCE LIMITED S 142068 250.00
10/7/2009 533023 WABCO TVS SUNDARAM INDUSTRIES LIMITED S 378908 250.00
NSE Bulk Deals to Watch - July 10 2009
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
10-JUL-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,BUY,136512,3938.32,-
10-JUL-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,BUY,6653022,18.36,-
10-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,ASHWIN STOCKS AND INVESTMENT PRIVATE LIMITED,BUY,141677,165.86,-
10-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,JMP SECURITIES PVT LTD,BUY,97000,164.51,-
10-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,KSHITIJ-PORTFOLIO-PVT.-LTD.,BUY,111884,164.91,-
10-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,SETU SECURITIES LTD,BUY,64319,164.91,-
10-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,VIJIT SHARES AND COMMODITIES PVT.LTD.,BUY,60603,165.25,-
10-JUL-2009,BAJAJHIND,Bajaj Hindusthan Ltd,DEUTSCHE SECURITIES MAURITIUS LIMITED,SELL,1746295,159.74,-
10-JUL-2009,EDUCOMP,Educomp Solutions Limited,C D INTEGRATED SERVICES LTD.,SELL,136437,3940.88,-
10-JUL-2009,ISPATIND,Ispat Industries Limited,JAYPEE CAPITAL SERVICES LTD.,SELL,6732040,18.38,-
10-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,ASHWIN STOCKS AND INVESTMENT PRIVATE LIMITED,SELL,133955,164.82,-
10-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,JMP SECURITIES PVT LTD,SELL,47670,166.16,-
10-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,KSHITIJ-PORTFOLIO-PVT.-LTD.,SELL,81884,165.21,-
10-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,SETU SECURITIES LTD,SELL,54935,165.47,-
10-JUL-2009,KALINDEE,Kalindee Rail Nirman (Eng,VIJIT SHARES AND COMMODITIES PVT.LTD.,SELL,43772,164.72,-
Post Session Commentary - July 10 2009
The domestic market today nosedived heavily after paring all earlier gains during final trading hours to close in red terrain. Key stocks slipped sharply after exhibiting sea-saw movement, due to severe selling pressure led by concerns over the economy and poor monsoons. Weak opening of European markets along with depressing US index futures weighed on the sentiments. However, market tried to gather momentum during afternoon trade after the IIP data came in better than expected. India’s industrial production for May grew 2.7% from a revised 1.2% rise in April and a 4.4% recorded in the corresponding month last year. BSE Sensex ended below 13,600 level and NSE Nifty closed round 4,000 mark.
The market opened on pleasant note following mixed cues from the global markets and Infosys results have also contributed to the positive sentiments in the market with better than expected quarterly results. However, US stocks markets closed flat on Thursday after a sharp choppy trade. The financials made a rally after an analyst upgraded Goldman Sachs. However, Indian stocks slipped from the day’s highs and turned a little volatile ahead of IIP data for May. Further, benchmark indices continued to move between positive and negative territory though tried to sustain growth during afternoon on as India''s industrial output for May 2009 rose by faster-than-expected 2.7% from a year earlier. However, during last trading hour market trimmed all gains and descended sharply to end the day in red territory on huge sell-off. From the sectoral front, all indices closed in red barring IT stocks. Besides, most of the selling was witnessed in Oil & Gas, Power Capital Goods, Realty, PSU, Bank and Pharma stocks. BSE Mid Caps and Small Caps stocks also remained out of favour.
Among the Sensex pack 24 stocks ended in red territory and 6 in green. The market breadth indicating the overall health of the market remained negative as 1785 stocks closed in red while 772 stocks closed in green and 81 stocks remained unchanged in BSE.
The BSE Sensex closed lower by 253.24 points or (1.84%) at 13,504.22 and NSE Nifty ended down by 77.05 points or (1.89%) at 4,003.90. BSE Mid Caps and Small Caps closed losses of 92.20 and 95.22 points at 4,718.59 and 4,234.50 respectively. The BSE Sensex touched intraday high of 13,897.19 and intraday low of 13,418.39.
Losers from the BSE Sensex pack are Reliance Infra (6.50%), JP Associates (5.62%), RCom (5.43%), HDFC (4.66%), Sun Pharma (4.16%), Reliance (3.99%)M&M Ltd (3.88%), Hindalco (3.82%), SBI (3.64%) and ACC Ltd (3.51%).
Gainers from the BSE Sensex pack are Wipro Ltd (3.37%), Sterlite Industries (3.32%), Infosys Tech (2.97%), TCS Ltd (1.56%), Maruti Suzuki (0.70%) and HUL (0.23%).
The industrial production for May grew 2.7% from a revised 1.2% rise in April and a 4.4% recorded in the corresponding month last year. The manufacturing sector output in May shot up by 2.5%, while the mining sector and power generation grew 3.7% and 3.3%, respectively. The cumulative growth rate during April-May works out to 1.9%, down from 5.3% during the corresponding period last fiscal.
On the global markets front the Asian markets that opened before the Indian market, ended mostly lower. Shanghai Composite, Hang Seng, Nikkei 225 index and Seoul Composite ended lower by 9.10, 82.17, 3.78 and 2.27 points at 3,113.93, 17,708.42, 9,287.28 and 1,428.62 respectively. However, Straits Times ended marginally up by 0.37 points at 2,307.98.
European markets, which opened after the Indian market, are trading in red. In Frankfurt the DAX index is trading down by 27.99 points at 4,602.08 and in London FTSE 100 is trading lower by 28.70 points at 4,129.96.
The BSE Oil & Gas stocks ended lower by (3.28%) or 289.63 points to close at 8,533.30. Major losers are RNRL (5.27%), BPCL (4.15%), Gail India (4.07%), Reliance Pet (4.02%) and HPCL (3.49%).
The BSE Power index plunged (2.54%) or 67.81 points at 2,603.36. Scrips that lost are Reliance Infra (6.50%), Lanco Infra (4.80%), Reliance Power (4.11%), Suzlon Energy (3.65%) and GVK Power (3.11%).
The BSE Capital Goods index lost (2.27) or 263.98 points to close at 11,291.12. Losers are Praj Industries (8.13%), Areva (6.61%), Alstom Proje (6.17%), Aiaengineer (4.62%) and Reliance Indutrial Infra (4.50%).
The BSE Realty index dropped by (2.10%) or 61.12 points at 2,845.66. Penland Ltd (8.15%), Housing Dev (4.98%), Mahindra Life (4.75%), Orbit Co (4.75%) and Unitech Ltd (3.36%) ended in negative territory.
The BSE PSU ended lower by (2.03%) or 153.25 points at 7,390. Losers are Rashtriya Chem & Fert (8.24%), NMDC Ltd (6.30%), Dredg Corp (5.62%), Indian Bank (4.23%) and BPCL (4.15%).
The BSE IT index increased by (2.17%) or 67.17 points to close at 3,196.09. Main gainers are Wipro Ltd (3.37%), Infosys Tech (2.97%), TCS Ltd (1.56%), HCL Tech (0.74%) and Oracle Fin (0.55%).
Alstom Projects India Limited lost 6.17%. The company has been awarded a contract worth Rs 265 crore by Lanco Infratech Limited to install a new power plant on the Teesta River, in India''s Sikkim region. The electricity output of this new 500 MW plant will be connected to the country''s power grid.
Aurobindo Pharma Limited dropped by 3.62%. The company has received final approval for Fosinopril Sodium and Hydrochlorothiazide Tablets USP I0/I2.5mg and 20/12.5mg from the US Food & Drug Administration (USFDA).
Punj Lloyd decreased by 0.67%. A wholly owned subsidiary of the company and Sembawang Engineers and Constructors (Sembawang) announced its first three breakthrough projects In Libya totaling more than Rs 5,904 crore (US$ 1.2 billion) to build commercial and residential developments.
McNally Bharat Engineering Company ended lower by 1.03%. The company has received 2 orders for Design, Engineering, Manufacturing, Testing, Erection and Commissioning of Ash Handling System for 2X600 MW Mahan and Salaya Essar Power Projects for Rs 69 crores and Rs 24 Crores respectively.
Mahindra Satyam Ltd gained 2.03% after the company signed a five-year multi-million dollar deal with UK-based GlaxoSmithKline to provide SAP and other critical systems support.
Infosys Technologies is closed higher by 2.97%. The company has reported a 17.28% growth in consolidated net profit at Rs 1,527 crore in the first quarter ended June 30, 2009 as compared to Rs 1,302 crore for the quarter ended June 30, 2008. The income stood at Rs 5,472 crore for the Q1 ended June 30, 12.73% up from Rs 4,854 crore in the corresponding period a year-ago. On a quarter-on quarter basis, the company’s net profit declined by 5.33% to Rs 1,527 crore in Q1, from Rs 1,613 crore in the January-March quarter of FY 2009.
Nifty July 2009 futures below 4000 mark
Turnover rises
Nifty July 2009 futures were at 3971.90, at a huge discount of 32 points over the spot closing of 4003.90. Turnover in NSE's futures & options (F&O) segment rose to Rs 57,891.12 crore from Rs 53,047.24 crore on Thursday, 9 July 2009.
Reliance Industries July 2009 futures were at discount at 1760 compared to the spot closing of 1775.15.
Infosys Technologies July 2009 futures were at discount at 1716.35 compared to the spot closing of 1721.15.
Reliance Infrastructure July 2009 futures were at discount at 1015 compared to the spot closing of 1028.15.
In the cash market, the S&P CNX Nifty lost 77.05 points or 1.89% at 4003.90.
Oil stocks lead a near 2% Sensex slide
A sell-off in index heavyweight Reliance Industries (RIL) triggered a sharp fall on the bourses in the last one hour of trade today. Power, realty and capital goods stocks dropped. However, IT stocks held firm after IT bellwether Infosys Technologies raised the lower end of its annual forecast in dollar terms. The BSE 30-share Sensex fell 253.24 points or 1.84%, off close to 390 points from the day's high and up 90 points from the day's low. The S&P CNX Nifty regained 4,000 mark after falling below that level in late trade. The market breadth turned weak in contrast to a positive breadth earlier in the day. Weak global markets and lower US index futures dented sentiment.
The BSE Sensex posted its biggest weekly fall in more than eight months. The benchmark index lost 9.4% in the week ended Friday, 10 July 2009.
The market was volatile. The market pared gains after a firm opening triggered by better-than-expected Q1 results from Infosys before trading hours. The Sensex slipped into the red after moving between the positive and negative terrain in mid-morning trade. A bout of volatility was witnessed in early afternoon trade. The market surged in mid-afternoon after Planning Commission deputy chairman Montek Singh Ahluwalia said the rise in industrial production in May 2009 is not a surprise and the worst is over for industrial output. A total reversal of trend was witnessed later as the market slumped in late trade.
India's industrial output rose 2.7% in May 2009 compared to a revised growth of 1.2% in April 2009 government announced at 12:00 IST today showed. April's annual growth rate was revised down to 1.2% from 1.4% previously. Manufacturing production rose 2.5% in May 2009 from a year earlier.
Finance Secretary Ashok Chawla today said industrial output is showing further improvement and he expects the positive trend in output to continue.
Road transport minister Kamal Nath today said the government expects to build 12,000 kilometres of roads this year, with a preference to use a toll model for new roads as far as possible.
Meanwhile, Farm Minister Sharad Pawar said today poor monsoon rains in North India is a serious problem. He, however, said the government is ready with plans to deal with the weak rainfall. The rains were 8% below normal in early July, reviving after the driest June in 83 years, but water in the main reservoirs has more than halved, putting at risk even winter-sown oilseeds and wheat.
Junior finance minister Namo Narain Meena said today there are no plans to revise interest rates on small savings. Meena said the government will to initiate institutional reforms which will encompass subsidies, taxs and disinvestment to bring fiscal deficit under control.
Rating agency Moody's today said India's Union Budget 2009-2010 is in line with its stable sovereign outlook on the country. Finance Minister (FM) Pranab Mukherjee in the Union budget had set a sharply higher fiscal deficit target to 6.8% for the financial year ending March 2010 after he increased spending on roads, power and aid to the poor. The higher fiscal deficit has raised fears of a downgrade of India's sovereign rating by the global credit rating agencies.
European shares fell on Friday, with oil producers leading the losers after US oil firm Chevron Corp late on Thursday warned that second-quarter earnings would be hit by a sharp decline in US refining margins. Key benchmark indices in France, Germay and UK fell by between 0.67% to 0.73%.
Asian stocks were mostly in the red. Key benchmark indices in China, Hong Kong, Japan, Singapore and South Korea fell by between 0.04% to 0.46%. The key benchmark indices in Singapore and Taiwan rose by between 0.02% to 0.32%.
Trading in the US index futures indicated Dow could fall 62 points at the opening bell today, 10 July 2009.
Wall Street ended a choppy Thursday trade largely flat. The Dow Jones Industrial Average was up 4.76 points, or 0.1%, to 8,183.17. The S&P 500 index rose 3.12 points, or 0.4%, to 882.68, while the Nasdaq Composite Index gained 5.38 points, or 0.3%, to 1,752.55.
On the economic front, the latest initial weekly jobless claims fell more than expected to 565,000. It was the first time since January 2009 that initial claims came in below 600,000. However, June retail sales report disappointed as consumers eased spending amid higher gasoline prices and rising unemployment.
The BSE 30-share Sensex fell 253.24 points or 1.84% to 13,504.22. The Sensex rose 139.73 points at the day's high of 13,897.19 in mid-afternoon trade. At the day's low of 13,418.39, Sensex fell 339.07 points in late trade.
The S&P CNX Nifty was down 77.05 points or 1.89% to 4,003.90. Nifty July 2009 futures were at 3971.90, at a huge discount of 32 points over the spot closing of 4003.90. Turnover in NSE's futures & options (F&O) segment rose to Rs 57,891.12 crore from Rs 53,047.24 crore on Thursday, 9 July 2009.
BSE clocked a turnover of Rs 4,586 crore, lower than Rs 4,894.55 crore on Thursday, 9 July 2009.
The market breadth turned weak in late trade in contrast to a positive breadth earlier in the day. On BSE, 770 shares rose as compared with 1,781 that fell. A total of 80 shares remained unchanged.
From the 30 shares Sensex pack, 24 fell and the rest rose.
Indian stocks have risen sharply this year boosted by strong inflow of foreign funds. The BSE Sensex is up 3,856.91 points or 39.97% in calendar year 2009, as on 10 July 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex has risen 5,343.82 points or 65.48% as on 9 July 2009.
Coming back to today's trade, the BSE Mid-Cap index was down 1.92% and underperformed the Sensex. The BSE Small-Cap index was down 1.72%. It outperformed the Sensex.
The BSE IT index (up 2.17%), the BSE TECk index (down 0.09%), the BSE FMCG index (down 0.77%), the BSE Auto index (down 1.29%), the BSE Metal index (down 1.35%), the BSE Consumer Durables index (down 1.71%), the BSE Healthcare index (down 1.77%), outperformed the Sensex.
The BSE Oil & Gas index (down 3.28%), the BSE Power index (down 2.54%), the BSE Capital Goods index (down 2.28%), the BSE Realty index (down 2.1%), the BSE PSU index (down 2.03%), the BSE Bankex (down 1.86%), underperformed the Sensex.
India's largest private sector firm by market capitalisation Reliance Industries (RIL) was down 3.99% to Rs 1,778.40. The Supreme Court on Tuesday declined to stay the Bombay High Court's verdict in a dispute over the sale of natural gas by Reliance Industries (RIL) to Reliance Natural Resources (RNRL).
The Supreme Court didn't grant RIL' plea to stay the order of the Bombay High Court until the resolution of the case and issued notices to the companies and the Centre. Both companies have to reply to appeals filed by each other by 20 July 2009, when the matter is scheduled to be heard. The government must also respond by then, the court said.
RIL, late last week, moved the Supreme court, challenging the Bombay High Court judgment asking it to supply gas to the former at a price that is 44% lower than fixed by the government. In its appeal filed in the Supreme Court on Saturday 4 July 2009, Reliance Industries contended that the high court had erred in deciding the three terms - quantity, tenure and price of gas supply to power plants of Reliance Natural Resources (RNRL) affiliates.
Oil stocks were mixed as crude oil fell today as the dollar gained against the euro and the yen, reducing the appeal of commodities to investors as a hedge against inflation. India's largest state-run oil exploration firm by revenue ONGC fell 1.26%. But Cairn India rose 1.63%. Crude oil for August delivery fell 16 cents to $60.25 a barrel on the New York Mercantile Exchange. The fall in crude oil prices would result in lower realizations from crude sales for oil exploration firms.
PSU OMCs fell after oil minister Murli Deora on Thursday said that the government will roll back the Rs 4 a litre hike in petrol prices and the Rs 2 a litre increase in diesel rates if international crude oil prices stabilize between $50 and 60 a barrel. HPCL, BPCL and Indian Oil Corporation fell by between 3.49% to 4.19%. The Government had, last week, raised petrol and diesel prices citing spike in international crude oil prices to $70 a barrel.
A recent sharp slide in crude oil prices augurs well for PSU OMCs. Lower crude oil prices will reduce under-recoveries at the state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price.
Contrary to market expectations, the Union Budget 2009-2010 did not include a roadmap for decontrol of fuel prices in the country even as the finance minister said an expert panel will be set up to look into the matter of fuel pricing.
India's second largest IT exporter by sales Infosys rose 2.97% after the company raised the lower end of its annual forecast in dollar terms at the time of announcing Q1 June 2009 results before trading hours today. The management comments that global information technology spending may recover in 2010 on a possible revival of the global economy, also boosted the counter.
Infosys said consolidated revenues in dollar terms are expected to fall 3.1% to 4.6% at $4.45 billion to $4.52 billion in the year ending March 2010 (FY 2010). In April 2009 at the time of announcing Q1 June 2009 results, Infosys has forecast a revenue of between $4.35 to $4.52.
Infosys said consolidated earnings per American Depositary Share is expected to fall between 11.1% to 12.4% at between $1.97 and $2.00 in FY 2010. The company had forecast earnings per American Depositary Share of between $1.91 to $2 in April 2009.
However, the IT major Infosys has revised downwards its earnings and revenue guidance in rupee terms for the year ending March 2010 (FY 2010). Infosys' consolidated net profit as Indian GAAP declined 5.3% to Rs 1527 crore on a 2.89% fall in revenue to Rs 5472 crore in Q1 June 2009 over Q4 March 2009. The results were better-than-market expectations.
Infosys expects prices in the fiscal year to March 2010 to drop by 5% as its overseas clients battle slowing economy, senior officials said at the time of announcing the Q1 results.
Other IT stocks rose after better-than-expected Q1 June 2009 results from Infosys. India's largest IT exporter by sales TCS rose 1.56%. India's third largest IT exporter by sales Wipro rose 3.37% as its American depository receipt (ADR) rose 3.39% on Thursday, 9 July 2009.
Realty stocks fell after the Finance Minister made no major announcement to boost the debt ridden sector reeling under slump in demand for new homes in the Budget. DLF, Unitech, Indiabulls Real Estate, Housing Development & Infrastructure, Omaxe, Akruti City fell by between 0.04% to 4.98%.
Bank stocks declined after the government did not announce financial sector reforms in the Budget. Market expectations on financial sector reforms were high. The government's annual economic survey released ahead of the Budget had called for a phased increase in the foreign direct investment limit in banks. Voting rights in banks should be aligned with equity holdings, the Survey had said.
India's biggest bank in terms of branch network State Bank of India (SBI) fell 3.64%. India's second largest private sector bank by net profit HDFC Bank fell 2.2% even as its American depository receipt (ADR) rose 1.88% on Thursday, 9 July 2009. India's largest private sector bank by net profit ICICI Bank fell 1.18% even as its ADR rose 1% overnight.
India's biggest dedicated housing finance firm by operating income Housing Development Finance Corporation fell 1.3% as the finance minister did not announce a hike in tax sops for housing loans in the Budget contrary to market expectations.
Capital goods stocks fell on profit taking after recent gains triggered by a thrust on infrastructure development in the Union Budget 2009-2010. BEML, Crompton Greaves, Punj Lloyd, Siemens, Larsen & Toubro, Praj Industries, Bharat Heavy Electricals fell by between 0.64% to 8.13%.
Among construction shares, Punj Lloyd, Era Infra Engineering, IVRCL Infrastructure & Projects and Nagarjuna Construction Company, fell by between 0.4% to 5.24%. Finance Minister Pranab Mukherjee on 6 July 2009, provided a thrust on various infrastructure projects in the Budget which will benefit construction firms in the form of increased orders. The government announced more spending for urban, water and road projects. The allocation to National Highway development program allocation was increased 23% to Rs 15948 crore.
Cement stocks fell on profit taking after a sharp surge this week triggered by the Budget's thrust on the infrastructure sector. ACC, Birla Corporation of India and Ambuja Cements, Ultratech Cements, fell by between 0.44% to 6.8%.
Power stocks fell on lack of any major sops in the Budget for the power sector. NTPC, Reliance Infrastructure, Tata Power Company, Relianc Power fell by between 0.46% to 6.5%.
Metal stocks fell as metal prices were subdued on the London Metal Exchange. Steel Authority of India, Hindalco Industries, Tata Steel, Sterlite Industries, National Aluminum Company fell by between 2.97% to 6.75%.
India's largest drug maker by sales Ranbaxy Laboratories fell 3.65% after company said it has voluntarily recalled a single batch of skin infection drugs, Sotret Isotretinoin capsules in 40 miligram strength, from the US market. The company said that the move to withdraw this lot of medicines fell under the US FDA Class III recall. Such a recall implies that the use of or exposure to the product is not likely to cause adverse health consequences.
Finance minister on 6 July 2009, reduced basic customs duty on influenza vaccine and nine other specified life-saving drugs used for treating breast cancer, hepatitis-B, rheumatic arthritis, etc.
The government has also reduced basic customs duty for two bulk drugs used in manufacturing these medicines from 10% to 5%. Bulk drugs are processed raw materials used in manufacturing the final doses of medicines.
Some FMCG stocks rose as the Finance Minister reiterated the government's thrust on the agriculture sector in Union Budget 2009-2010. FMCG firms derives a substantial revenue from rural sector. REI Agro, Jain Irrigation, Tata Tea, Nestle India, Hindutan Unilever, Dabur india rose by between 0.16% to 2.45%.
Finance Minister Pranab Mukherjee, while presenting the Union Budget for 2009-10, said the government will ensure that agriculture grows by at least 4% per year.
The government has announced additional interest rate subvention of 1% to farmers who pay short-term farm loans on schedule. The government has also decided to extend agriculture debt waiver by six months and to provide additional Rs 1000 crore over interim budget for irrigation.
Auto stocks fell even on retention of lower excise duties in the Budget. Ashok Leyland, Hero Honda Motors and Mahindra & Mahindra fell by between 2.01% to 8.66%.
There was no across-the-board increase in excise duties after a sharp reduction in excise duties in two stages since December 2008 which was announced as a part of the government's stimulus package for the economy. A section of the market was fearing rollback of excise duties in the Budget due to signs of a recovery in the Indian economy.
India's largest commercial vehicle maker by sales Tata Motors fell 0.88% even as company's Vice Chairman Ravi Kant said its British luxury auto brands Jaguar and Land Rover (JLR), which have posted over Rs 1,700 crore annual losses, will turn profitable in two years. He further said the acquisition of the two marques was not over-priced.
Unitech clocked the highest volume of 2.32 crore shares on BSE. Cals Refineries (2.27 crore shares), Suzlon Energy (2.1 crore shares), Mahindra Satyam (2 crore shares) and Reliance Natural Resources (1.01 crore shares) were the other volume toppers in that order.
Educomp Solutions clocked the highest turnover of Rs 253.78 crore on BSE. Reliance Industries (Rs 200.85 crore), Reliance Capital (Rs 193.25 crore), Suzlon Energy (Rs 175.54 crore) and Unitech (Rs 157.14 crore) were the other turnover toppers in that order.
Grey Market - Adani Power, NHPC, Mahindra Holidays
Grey Market Premiums of forthcoming IPOs
Prices in Bold are the current grey market premiums
Mahindra Holidays 300
25 to 27
Excel Infoways Ltd. 80 to 85
Discount
Adani Power 110 to 130 (Approximate)
20 to 25
NHPC 15 to 20 Approximate)
4 to 5
Pre Session Commentary - July 10 2009
Today domestic markets are likely to open positive. The Infosys results have surprised the market with better than expected quarterly results. The Q1FY10 PAT recorded at Rs. 1,527 crore marginally lower than Rs. 1,613 crore in the previous quarter. Its revenues declined by a minimal 3% at Rs. 5,472 crore as against Rs. 5,635 crore QoQ. Despite lower topline numbers, the company’s operating profit margin improved by 50bps at 34.1% from 33.6% QoQ. The domestic markets are likely to take a positive thrust from Infosys, however the cautiousness would prevail at the broader level.
On Thursday, domestic markets closed flat amidst lack of news and mixed cues from the Asian markets. The markets opened in a subdued note and showed little sing of rebound from yesterday’s losses. However as the session progressed the benchmark indices kept gyrating range bound. There was immense cautiousness amongst traders and therefore despite northward movement of European markets, the domestic benchmark indices closed flat. Sectors like Metal, HC, FMCG and Oil & Gas were the top gainers of the day with gains of 1.53%, 1.05%, 1.02% and 0.91% respectively. BSE Midcap closed with a gain of 0.58% whereas Smallcap ended flat. Today domestic markets are likely to trade range bound.
The BSE Sensex closed low by 11.69 points at 13,757.46 and NSE Nifty ended flat at 4,080.95. BSE Mid Cap closed with a marginal gain of 27.95 points at 4,810.79 and Small Cap closed with losses of 7.63 points at 4,810.79. The BSE Sensex touched intraday high of 13,879.18 and intraday low of 13,643.97.
Thursday, the US stocks markets closed flat. The day’s session was a choppy trade however financials made a rally after Goldman Sachs was upgraded by an analyst. Further the stocks made modest gains following Alcoa''s better than estimated earnings. Alcoa reported less than expected quarterly losses. It has lost 26 cents per share versus a profit of 66 cents a year ago. But the shortfall was narrower than analyst''s estimates. On the economic front, the number of weekly jobless claims fell to 565,000 last week from a revised 617,000 the previous week but was short of the economist''s expectation of 603,000 new claims. But continuing claims rose to a new record high 6,883,000. US light crude oil for August Futures delivery closed with a marginal gain of 0.4 per cent at $60.41 per barrel on the New York Mercantile Exchange.
The Dow Jones Industrial Average (DJIA) was up by 4.76 points at 8,183.17. NASDAQ index gained 5.38 points to 1,752.55 and the S&P 500 (SPX) grew by 3.12 points to close at 1,752.55 points.
Indian ADRs ended in green on Thursday. In the IT space, Satyam Computers was up 9.73%, Wipro was up 3.39%, Infosys was up 0.58% and Patni Computers was up 1%. In the telecom space, Tata Communication was up 1.4% and MTNL was up 0.8%. In the banking space, HDFC Bank was up 1.88% and ICICI Bank was up 1%. In other sectors, Sterlite Industries was up 5.67%, Tata Motors was up 3.66% and Dr Reddy''s Labs was up 0.66%.
Today major stock markets in Asia are trading flat. Hang Seng is up by 38.57 points at 17,829.16. Shanghai Composite is flat at 3,124.79. Japan''s Nikkei is trading flat at 9,295.05. Strait Times is low by 26.59 points at 2,286.36.
On Thursday, the partially convertible rupee ended at Rs 48.70, 0.37% stronger than its previous close at 48.88. The rupee gained strength as exporters and banks sold dollar foreseeing its weakness.
The FIIs on Thursday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 3,451.00 Crore and gross debt purchased stood at Rs 72.60 Crore while the gross equity sold stood at Rs 2,675.50 Crore and gross debt sold stood at Rs 90.10 Crore. Therefore, the net investment of equity reported was Rs 775.50 Crore and net debt was Rs (17.50) Crore.
On BSE, total number of shares traded were 36.66 Crore and total turnover stood at Rs 4,894.55 Crore. On NSE, total number of shares traded were 93.86 Crore and total turnover was Rs 15,951.48 Crore.
Top traded volumes on NSE Nifty – Unitech with total volume traded 193843547 shares, followed by Suzlon Energy with 65514790, DLF with 17922615, ICICI Bank with 11362660 and SAIL with 11361791 shares.
On NSE Future and Options, total number of contracts traded in index futures was 681519 with a total turnover of Rs 13,361.97 Crore. Along with this total number of contracts traded in stock futures were 543872 with a total turnover of Rs 14,407.52 crore. Total numbers of contracts for index options were 1128744 with a total turnover of Rs 23,900.91 Crore and total numbers of contracts for stock options were 46188 and notional turnover was Rs 1,376.83 Crore.
Today, Nifty would have a support at 4,045 and resistance at 4,148 and BSE Sensex has support at 13,612 and resistance at 13,915.
BREAKING - Infosys Q1FY10 Results
Infosys Technologies, India's second largest software services exporter, has posted a 17.3 per cent increase in net profit to Rs 1,527 crore for the first quarter of current fiscal as compared to Rs 1,302 crore for the quarter ended June 30, 2008.
Total Income has increased by close to 15.5 per cent from Rs 4,971 crore for the quarter ended June 30, 2008 to Rs 5,741 crore for the quarter ended June 30, 2009.
On a sequential basis, quarter on quarter basis, as the company as guided has posted a 5.3 per cent drop in net profit while the topline was down by 3 per cent.
Market may open higher on Infosys's better than expected Q1 result
The key benchmark indices may open in green as India's second largest IT firm by sales Infosys announced better than expected Q1 June 2009 result. However weak revenue guidance may weigh on investor sentiment. Weak Asia may also dampen sentiment. The investors will keenly watch industrial output data for the month of May 2009 due today. The index of industrial production (IIP) rose 1.4% in April 2009 from a revised 0.75% decline in March 2009.
India's second largest IT firm by sales Infosys announced its Q1 June 2009 result today, 10 July 2009. Infosy's net profit rose 16% to Rs 1464 crore on 15.53% rise in total income to Rs 5,369 crore in Q1 June 2009 over Q1 June 2008. On a consolidated basis, its net profit rose 15.48% to Rs 1,527 crore on 15.48% rise in total income to Rs 5,741 crore in Q1 June 2009 over Q1 June 2008
Infosys added gross 3,538 staff in Q1 June 2009 while net staff 945 in the first quarter. It added 27 new clients in Q1 June 2009.
Infosys said cash and cash equivalents stood at $2.27 billion till Q1 June 2009. Infosys CFO said global currency market remain volatile. Infosys CEO said believes short term global economic environment continues to be challenging. Infosys said FY 2010 consolidated earning to drop 11.1-12.4%. It said Q2 September 2009 consolidated EPS to drop 8.9-10.7%. It added Q2 September 2009 consolidated revenue to drop 7.1-8.7%.
Most Asian stocks fell today on worries of a prolonged economic slowdown. The key benchmark indices in China, Hong Kong, Japan, South Korea and Singapore fell by between 0.05% to 0.94%.
The Wall Street ended a choppy Thursday trade largely flat. Stocks made modest gains following disappointing retail sales data, and a mixed weekly jobless claims report. The Dow Jones was up 4.76 points, or 0.1%, to 8,183.17. The S&P 500 index rose 3.12 points, or 0.4%, to 882.68, while the Nasdaq Composite Index gained 5.38 points, or 0.3%, to 1,752.55.
On the economic front, the latest initial jobless claims fell more than expected to 565,000. It was the first time since January 2009 that initial claims came in below 600,000. However, June retail sales report disappointed as consumers eased spending amid higher gasoline prices and rising unemployment.
Back home, the key benchmark indices closed flat after moving between positive and negative terrain throughout the day in what was a volatile trading session. The BSE 30-share Sensex was down 11.69 points or 0.08% to 13,757.46 on Thursday, 9 July 2009.
As per the provisional figures on NSE, the foreign funds sold shares
worth Rs 545.55 crore and the domestic funds bought shares worth Rs 578.16 crore on Thursday, 9 July 2009.
Precious metals recover from two month lows
Prices rise as the dollar weakens
Precious metal prices rose from their two month lows on Thursday, 09 July, 2009. Prices rose in synchronization with as crude price which ended its six day losing streak. Prices also rose due to the weak dollar.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Thursday, gold for August delivery ended at $916.2, higher by $6.9 (0.8%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.1%. Year to date, gold prices are higher by 3.8%.
For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.
On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (12%) since then.
On Thursday, Comex silver futures for September delivery gained 8.3 cents (0.6%) at $12.935 an ounce.
Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. For second quarter, silver rose 4.5%. Year to date, silver has climbed 15% this year. For 2008, silver had lost 24%.
In the currency market on Thursday, the dollar index, a six-currency measure of the greenback's value fell. The euro gained more than 1% against the dollar.
Crude prices ended marginally higher today breaking their six day of continuous losing streak. Crude oil prices settled around $61 today. Crude had given up almost $13 in the past six sessions.
In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.
At the MCX, gold prices for August delivery closed lower by Rs 15 (0.1%) at Rs 14,481 per 10 grams. Prices rose to a high of Rs 14,525 per 10 grams and fell to a low of Rs 14,430 per 10 grams during the day's trading.
At the MCX, silver prices for September delivery closed Rs 72 (0.33%) lower at Rs 21,501/Kg. Prices opened at Rs 21,589/kg and fell to a low of Rs 21,341/Kg during the day's trading.
Crude ends losing streak
Price manages to register marginal gains
Crude prices ended their downward journey and managed to register marginal gains at Nymex on Thursday, 09 July, 2009. Prices rose today due to bullish initial claims data from the Labor Department. Prices also managed to rise due to the weak dollar.
On Thursday, crude-oil futures for light sweet crude for August delivery closed at $60.41/barrel (higher by $0.27 or 0.4%). During intra day trading, it fell below $60 earlier. Last week, crude ended lower by 3.5%. In July, crude has shed 13.6% on a m-t-d basis. Prices had gone down by $13 in the past six sessions.
For the month of June, 2009, crude ended higher by 5.5%. In May, crude had registered the largest monthly gain in a decade rising 30%. For the second quarter, crude ended higher by 40%. Crude prices had rallied 11.3% in the first quarter of 2009.
Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 67% since then. Year to date, in 2009, crude prices are higher by 37.2%.
The Labor Department reported on Thursday, 09 July, 2009 that first-time claims for state unemployment benefits fell in the latest weekly data while continuing claims hit a record high. The number of initial claims in the week ending 4 July, 2009 fell 52,000 to 565,000 - the lowest level since January. The level of initial claims is up more than 50% from the same period in the prior year. The four-week average of initial claims fell 10,000 to 606,000.
In the weekly inventory report, EIA reported yesterday that crude inventories fell by 2.9 million barrels in the week ended 3 July, 2009. The drop came as US imported less oil in the week. Imports averaged 9.2 million barrels a day, down 139,000 barrels a day from the previous week. U.S. refineries ran at 86.8% of their operable capacity last week, slightly lower than the previous week's 87%.
EIA had also reported that gasoline inventories rose 1.9 million barrels, while distillate stockpiles increased 3.7 million barrels for last week. Total U.S. petroleum-product inventories rose for a 15th week to 766.9 million barrels, the highest level since 1998.
Earlier during the week, EIA reported in its short-term energy outlook that it expects a smaller decline in global oil consumption this year due to better-than-expected economic activity in Asia. The EIA now projects oil consumption to fall by 1.6 million barrels a day compared with a decline of 1.7 million barrels a day in its June outlook. The price of crude oil is expected to average near $70 per barrel through the second half of 2009.
In the currency market on Thursday, the dollar index, a six-currency measure of the greenback's value fell. The euro gained more than 1% against the dollar.
Also at the Nymex on Thursday, August reformulated gasoline rose 3.05, or 1.9%, to $1.6638 a gallon and August heating oil fell slightly to $1.5344 a gallon.
August natural-gas futures climbed 1.6% to $3.408 per million British thermal units.
Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.
At the MCX, crude oil for July delivery closed at Rs 2,926/barrel, lower by Rs 77 (2.6%) against previous day's close. Natural gas for July delivery closed at Rs 166/mmbtu, lower by Rs 1.6/mmbtu (0.95%).
Daily News Roundup - July 10 2009
Sterlite is planning to invest Rs200bn over the next one year to create additional capacity of 4,500MW (ET)
Government not to sell 10% stake in BHEL (FE)
Baja Auto to launch 100CC bike, Discover DTS-Si, on July 27th (Mint)
NTPC coal stock at supercritical levels (ET)
Infosys has intensified its efforts to outbid Wipro and Genpact to acquire back-office operations of UBS (ET)
The state of Rajasthan may levy a land-use tax on oil and gas producers including Cairn India (ET)
BEML to bid for rail projects in 12 cities (Mint)
Wockhardt may sell its non-core business to raise Rs7.9bn (ET)
Ranbaxy is voluntarily recalling a batch of its best selling anti-acne drug in the US market (ET)
GSK has signed a new 5-year support contract with Mahindra Satyam for SAP and other critical systems support (FE)
Idea gets nod to de-merge its passive infrastructure to its wholly-owned subsidiary, Idea Cellular Towers Infrastructure Ltd (BS)
Essar Power to raise Rs150bn in debt (FE)
Mahindra Satyam accounts may be restated by March 2010 (ET)
IOC, BPCL and HPCL will set-up 2,263 new petrol pumps during the current fiscal (ET)
Cipla get notices from NPPA for allegedly over pricing of two drugs (BS)
BEML has entered into a MoU with Alstom for technology support for rail products in the domestic market (FE)
HCC bags order worth ~Rs3.9bn for Dagacchu hydro power project in Bhutan (FE)
Bankers approve the debt restructuring package of Wockhardt (BS)
Yes Bank plans to raise US$300mn by March 2010 (BS)
Educomp to raise ~Rs6bn vis QIP (BS)
Matrix drags Teva to court over patent dispute (ET)
Godrej Group to merge consumer goods business to cut costs and increase efficiency (ET)
OBC to open 100 branches in FY10 (BS)
Visa Steel to pump-in Rs10bn for adding 275MW capacity to its 50MW power plant in Orissa over the next three years (ET)
Inflation for the week-ended June 27th was at -1.6% (ET)
India’s monsoon rains were 8% below normal in early July (ET)
India’s agriculture growth is expected to be less than 2% in the current fiscal (ET)
India has decided to allow millers to import raw sugar at zero duty for sale in domestic markets till March 2010 (ET)
Fuel prices to be rolled back if oil prices stabilize between US$50-60/barrel, says Oil Minister (BS)
Department of Financial Services may seek a review of the new FDI norms to ensure that the banking sector is not impacted by PN-2 (ET)
Nothing Unique for market!
Humans are unique as they have plans, purposes and goals which require the need for criteria of choice.
Rarely does Infosys earnings announcement get overshadowed. Nandan Nilekani has made his choice and will bid adieu to Infosys, a company he co-founded 28 years ago. He will head the Government’s ambitious unique ID project. Hopefully IT will lead to a revolution for the nation.
Infosys has reported a consolidated net profit of Rs15.27bn for the April-June quarter versus Rs16.13bn in the previous quarter, representing a sequential fall of about 5%. Revenue for Q1 FY10 has come in at Rs54.72bn as against Rs56.35bn in the fourth quarter of last fiscal year, reflectinga drop of 3% Quarter on Quarter. EPS for the quarter is Rs26.63. Operating Profit Margin (OPM) is down at 30.12% compared to 33.55% in the January-March quarter. These are Indian GAAP numbers.
IIP for May will also be out today and is expected to reveal further improvement.
We expect a flat to cautious start given the jitters over earnings, an erratic monsoon, mixed global cues and persistent selling by FIIs. Overall, the outlook remains murky, exacerbated by a disappointing budget. We will see alternate bouts of buying and selling. The next decisive move could take a while and hinges on incremental "good" news. Anything unique in Infosys or IIP will give bulls some solace for the day.
Results Today: REI Ago, Shiv-vani Oil, Spanco and UTV Software.
FIIs were net sellers in the cash segment on Thursday at Rs5.45bn while the local institutions poured in Rs5.78bn. In the F&O segment, the foreign funds were net buyers at Rs2.09bn. On Tuesday, the foreign funds were net buyers of Rs7.75bn in the cash segment.
US stocks closed with modest gains on Thursday, buoyed by strength in banking, technology and commodity space. An analyst upgrade of Goldman Sachs spurred a rally in financial shares and a rebound in natural-gas prices lifted energy producers, tempering a drop in drugmakers.
But the broad market was still nervous as Alcoa's narrower-than-expected quarterly loss failed to dispel concerns about the health of the corporates amid continuing economic pain.
The Dow Jones Industrial Average gained 4 points or less than 0.1% to 8,183.17. The S&P 500 index rose 3 points, or 0.4%, to 882.68. The Nasdaq Composite index rose 5 points, or 0.3%, to 1,752.55.
US stocks managed gains on Thursday, but the trend has remained nervous since mid-June as investors have turned cautious after a 40% rally off the March 9 lows.
Wall Street is keen to listen what American companies say about their businesses over the next few weeks as they report quarterly earnings and give outlook on future profits and the state of the US economy.
Dow component Alcoa began the corporate reporting period late on Wednesday. The aluminum producer said it lost 26 cents per share versus a profit of 66 cents a year ago as the global recession hurt pricing and demand. But the decline was narrower than the loss of 38 cents per share analysts expected. Alcoa shares were off 2% on Thursday.
S&P 500 companies are expected to see profits decline by 36% from a year ago, according to the latest figures from Thomson Reuters.
The number of Americans filing new claims for unemployment fell to 565,000 last week from a revised 617,000 the previous week. That was short of the 603,000 new claims economists expected. But continuing claims, a measure of Americans receiving benefits for a week or more, rose to 6,883,000, a fresh record high.
May wholesale inventories fell 0.8% after falling a revised 1.3% last month. Economists thought inventories would fall 1%. It was the ninth straight month of declining inventories.
The economic slowdown continued to take its toll on consumer spending, with clothing retailers and luxury item merchants especially feeling the impact of the recession. Among the notable decliners, Abercrombie & Fitch said same-store sales fell 32% versus a year ago, topping forecasts for a drop of 26.6%. Same-store sales is a key retail sector indicator that measures sales at stores open a year or more.
Victoria's Secret owner Limited Brands said sales fell 12% versus forecasts for a drop of 7.9%.
Merck and Portola Pharmaceuticals said they will develop and market an oral blood thinner used to prevent stroke in heart patients. Merck will pay Portola $50 million up front and potentially an additional $420 million down the line. Merck, a Dow component, fell 3.7%.
But a variety of other Dow stocks rose, including DuPont, IBM and JPMorgan Chase.
Treasury prices fell, raising the yield on the benchmark 10-year note to 3.40% from 3.31% late on Wednesday.
Energy prices gained after several down sessions. US light crude oil for August delivery rose 27 cents to settle at $60.41.
In currency trading, the dollar fell against the euro and gained against the Japanese yen.
COMEX gold for August delivery rose $6.90 to settle at $916.20 an ounce.
Friday's reports include the May trade balance from the Commerce Department, June import and export prices from the Labor Department and the initial July consumer sentiment index from the University of Michigan.
Next week brings reports from financial firms JPMorgan Chase, Goldman Sachs and Citigroup. Dow components Intel and GE are on tap as well.
European shares rose for the first time in six sessions on Thursday. The pan-European Dow Jones Stoxx 600 index advanced 0.7% to 199.41, taking back a portion of its 5.5% slide over the last five sessions. Germany's DAX index rose 1.3% to 4,630.07 and the French CAC-40 index gained 0.5% to 3,025.94.
Indian markets ended the day on a flat note amid high volatility on Thursday. Markets continued its struggle for direction as the index languished below the 4,100 levels for the second straight day. Traders and investors preferred to stay light ahead of Q1 results by Infosys and the Industrial Production numbers to be announced on Friday.
Inflation once again was a non event despite the index falling for fourth consecutive week. Inflation fell mainly owing to a high base effect, but the contraction in the key price gauge is expected to halt following last week's fuel price hike.
The annual, point-to-point inflation stood at (-)1.55% in the week ended June 27, 2009 compared to (-)1.30% in the previous week, the Commerce & Industry Ministry said. Inflation rate was at 12.03% during the week ended June 28, 2008.
Finally, the Sensex was down 11 points at 13,757 after touching a high of 13,879 and a low of 13,644. The index had opened at 13,796 against the previous close of 13,769.
The NSE Nifty ended flat to shut shop at 4,081.
Asian markets ended in mixed; the Nikkei index in Japan slipped 1.3% at 9,291, Australia's S&P/ASX ended flat at 3,763. Hang Seng index gained 0.4% at 17,790.
Elsewhere in the Europe, stocks were trading in green. The FTSE index was up 0.7% at 4,167. The DAX index was up 1.2% at 4,631. CAC 40 index was up 1% at 3,036.
Coming back to India, among the BSE Sectoral indices BSE Metal index was the top gainer gaining 1.5%, followed by the BSE Pharma index up 1%, BSE FMCG index up 1% and BSE Oil & Gas index up 1%.
On the other hand, the BSE Consumer Durables index was the top loser, down 1.5% and BSE Capital Goods index ended lower by 1%. Meanwhile, the broader indices were mixed, the BSE Mid-Cap index gained 0.6% and the BSE Small-Cap index fell 0.2%.
In the Sensex, the major gainers were Reliance Infra, Sun Pharma, TCS, Sterlite, ITC, Tata Power and HDFC Bank.
On the other hand, Tata Motors, ICICI Bank, DLF, M&M, Infosys, L&T and Hindalco were among the top losers.
Outside the frontline indices, the top gainers included KSK Energy, Educomp, APIL, Ashok Leyland, REI Agro and Unites Spirits.
Among the big losers in the broader market were Sintex Industries, Pantaloon, Essar Oil, Moser Baer, RCF and Fortis Healthcare.
Educomp Solutions has announced that the Duly authorized Committee of Board of Directors passed necessary resolutions approving issue of 16,20,000 equity shares of Rs10 each at a price of Rs3,745 per equity share including a premium of Rs3,735 per equity share, aggregating to an Issue size of Rs6.06bn.
The Committee has passed necessary resolutions fixing the Bid Closing Date for the said Issue as being July 09, 2009 and approving the Placement Document in respect of the Issue.
Shares of Educomp rallied by over 13% to Rs3902 after hitting an intra-day high of Rs3,984 and a low of Rs3,474 and recorded volumes of over 0.8mn shares on BSE.
A Punj Lloyd joint venture has reportedly bagged an order worth US$300mn from Saudi Aramco. The stock ended at Rs186 on the BSE gaining 1.3%.
DLF sold its stake in its 50-50 joint venture with Ackruti City to a U.S.-based real estate fund for Rs2bn, stated reports.
The venture is developing 9mn square feet of office space at a northern Mumbai suburb. The sale is part of DLF' plan to raise Rs55bn through asset sale and reduce its Rs140bn debt by March 2010.
Shares of DLF ended lower by 2% to Rs278. The scrip touched an intra-day high of Rs288 and a low of Rs271 and recorded volumes of over 6.3mn shares on BSE.
Shares of Moser Baer extended loses losing over 4% to end at Rs70. The company posted a net loss of Rs1,508.8mn for the year ended March 31, 2009 compared to a net loss of Rs789.1mn in the previous fiscal year. Total income increased to Rs23.25bn for the year ended March 31, 2009 from Rs20.02bn in the year ended March 31, 2008.
Shares of Taj GVK rallied by over 9% to Rs92 on the back of huge volumes. The scrip touched an intra-day high of Rs96.9 and a low of Rs87 and recorded volumes of over 0.88m shares on BSE.
The stock has rallied by over 30% in the last three trading sessions. It had hit 52-week high of Rs115.8 on June 2, 2009 and 52-week low of Rs34.50 on December 4, 2008.
Asian stocks open in positive
Asian mining and technology stocks gained after commodity prices rose and Tokyo Electron said orders surged last quarter.
Tokyo Electron jumped almost 4% after saying that orders nearly doubled last quarter.
Japanese benchmark index Nikkei rose 7.55 points, or 0.08%, to trade at 9,298.61.
Hong Kong`s Hang Seng index gained 9.46 points, or 0.05%, to trade at 17,800.05.
China`s Shanghai Composite advanced 2.18 points, or 0.07% to trade at 3,125.22.
Taiwan`s Taiex index climbed 30.21points, or 0.45%, to trade at 6,778.39.
South Korea`s Kospi index fell 7.76 points, or 0.54%, to trade at 1,423.13.
Singapore`s Straits Times increased 1.63 points, or 0.07%, to trade at 2,309.24. (7.40 a.m., IST)
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FIIs continue buying
Inflow of Rs 775.50 crore on 8 July 2009
Foreign institutional investors (FIIs) bought shares worth a net Rs 775.50 crore on Wednesday, 8 July 2009, sharply lower than Rs 2,798.60 crore on Tuesday, 7 July 2009.
FII inflow of Rs 775.50 crore on 8 July 2009 was a result of gross purchases Rs 3,451 crore and gross sales Rs 2,675.50 crore. The BSE Sensex lost 401.30 points or 2.83% to 13,769.15 on that day.
FII inflow in July 2009 totaled Rs 4,356.70 crore (till 8 July 2009). FII inflow in calendar year 2009 totaled Rs 28,900.90 crore (till 8 July 2009).
There are a total of 1674 foreign funds registered with the Securities & Exchange Board of India (Sebi).
Tech Mahindra - Annual Report - 2008-2009
TECH MAHINDRA LIMITED
ANNUAL REPORT 2008-2009
DIRECTOR'S REPORT
TO
THE SHAREHOLDERS
Your Directors present their Twenty-second Annual Report together with the
audited accounts of your Company for the year ended 31st March 2009.
FINANCIAL RESULTS:
Rs. in Million
For the year ended 31st March 2009 2008
Income 43,153 37,023
Profit before depreciation and tax 11,980 9,083
Depreciation (1,074) (736)
Profit before tax 10,905 8,347
Provision for taxation (1,039) (689)
Profit after tax before non-recurring /
exceptional items 9,866 7,658
Non-recurring / exceptional items - (4,401)
Profit for the year after tax and non-recurring /
exceptional items 9,866 3,257
Provision in respect of earlier years written back - 165
Balance brought forward from previous year 5,202 4,261
Profit available for appropriation 15,068 7,683
Dividend - Final (paid for the year 2007-08)* (1) -
- Interim (Paid) (487) -
- Final (Proposed) - (668)
Tax on dividend - On interim dividend (83) -
- On final dividend - (113)
Transfer to General Reserve (1,000) (1,700)
Balance carried forward 13,497 5,202
* In respect of equity shares allotted pursuant to ESOP, after 31st March
2008 and before the record date.
DIVIDEND:
During the year, your Directors declared interim dividend @ 40%, i.e. Rs. 4
per equity share of Rs. 10 each on 21st October 2008. Your Directors
recommend that the same be treated as final dividend for the year.
The Interim Dividend of Rs. 4 per equity share has been paid to the
Shareholders, whose names appeared in the Register of Members as on 29th
October 2008, the Record Date fixed for this purpose.
The amount so distributed together with tax on distributed profit amounted
to Rs. 570 Million as against Rs. 781 Million for the previous year.
CHANGES IN SHARE CAPITAL:
During the year under review, your Company allotted 370,765 equity shares
of face value Rs. 10 each on the exercise of stock options under its
various Employee Stock Option Plans and consequently the number of issued,
subscribed and paid-up equity shares has increased from 121,362,869 equity
shares to 121,733,634 equity shares of Rs.10 each aggregating to
Rs.1,217,336,340.
BUSINESS PERFORMANCE / FINANCIAL OVERVIEW:
Your Company is a leading provider of integrated services to the global
telecom ecosystem. Your Company's capabilities span across Business Support
Systems (BSS), Operations Support Systems (OSS), Network Design &
Engineering, Next Generation Networks, Mobility, Security Consulting,
Testing, and other areas.
Your Company's solutions portfolio includes Consulting, Application
Development & Management, Network Services, Solution Integration, Product
Engineering, Managed Services, Remote Infrastructure Management and BPO.
Your Company continues to provide best shore solutions to its customers,
thereby delivering value while maintaining the highest quality standards.
Your Company's initiatives towards improving customer focus have progressed
well in the previous year. Your Company continued to delight its customers
with its domain expertise as well as its ability to deliver and manage end
to end solutions. Your Company has been able to propose new and innovative
solutions to its existing and prospective customers which would help them
in the current challenging economic conditions. Your Company has made
substantial progress as a preferred provider of services to greenfield
operators globally.
Your Company has been investing into its sales and marketing and has
increased its geographic spread. These investments will hold your Company
in good stead in these difficult times.
Your Company continued to see strong and profitable growth in the Financial
Year 2008-09 across all markets driven by good performance in existing and
new areas of business.
During the year under review, total income increased to Rs. 43,153 Million
from Rs. 37,023 Million in the previous year, registering a growth rate of
17%. On a consolidated level, total income increased to Rs. 44,269 Million
from Rs. 38,705 Million in the previous year, a growth of 14%.
During the year, 68% of your Company's revenue came from Europe, 25% came
from USA and 7% came from Rest of the World (ROW).
The Profit before depreciation amounts to Rs. 11,980 Million (27% of
revenue) as against Rs. 9,083 Million (25% of revenue) in the previous
year.
Profit after tax, before exceptional items, has increased to Rs. 9,866
Million from Rs. 7,658 Million. At a consolidated level, profit after tax,
before exceptional items, increased to Rs. 10,146 Million from Rs. 7,695
Million in the previous year, a growth of 32%.
RECENT MATERIAL CHANGES:
Your Directors wish to apprise the members about the current status in the
matter of Satyam Computer Services Limited (Satyam).
Members may be aware, Satyam's founder and the then Chairman, Mr. B.
Ramalinga Raju, submitted a letter to the then Board of Directors informing
them that the Company's accounts were falsified over a period of several
years. This letter was also copied to the Chairman of Securities and
Exchange Board of India (SEBI) and the Stock Exchanges where equity shares
of Satyam are listed.
In light of Mr. Raju's statements, the Government of India filed a petition
before the Company Law Board (CLB) to suspend Satyam's then-existing Board
of Directors and appointed Government nominees on the Board of Satyam.
After receiving necessary approvals from CLB and SEBI, the Board of Satyam
invited an Expression of Interest on 13th March 2009 from prospective
Investors to participate in the bidding process for acquisition of a
controlling stake in Satyam.
Satyam is the fourth largest Indian IT software and services company with a
well-diversified client base spread across BFSI, manufacturing, retail,
transport, logistics, telecom, media, healthcare and pharma etc. It has
operations in more than 65 countries and development centers in 28 cities
located in 14 countries, 20 of which are outside India.
The announcement of the bid presented a unique strategic opportunity to
your Company to catapult itself to the next level of growth for the
following reasons :
* Diversify across customers, verticals, geographies and technology
offerings
* Minimal overlaps in terms of target industry segments and clients
* Likely synergy benefits
* Ability to sell a wide range of services to your Company's existing
customers
* Common support and control systems - reduction in operating expenses
Your Company, therefore, decided to participate in the Satyam bidding
process, through its wholly owned subsidiary, Venturbay Consultants Private
Limited (Venturbay), at Rs. 58 per share. Venturbay was declared as the
highest bidder on 13th April 2009 and as the winning bidder post the CLB
approval on 16th April 2009.
Venturbay deposited a sum of Rs. 29,107 Million in the Escrow Account to
cover the cost of 31% preferential issue by Satyam and a 20% open offer. On
5th May 2009, the Board of Directors of Satyam allotted 302,764,327 shares
of Satyam to Venturbay, representing 31% of its share capital. On 6th May
2009, Venturbay as the Acquirer' and your Company as the Person Acting in
Concert' filed the draft Letter of Offer with SEBI for acquiring upto 20%
of the expanded share capital of Satyam. On 27th May 2009, the Board of
Satyam appointed four nominee directors of Venturbay, Mr. Vineet Nayyar,
Mr. C. P. Gurnani, Mr. Sanjay Kalra and Mr. Ulhas N. Yargop (collectively,
the 'Venturbay Directors'), to the Board of Directors of Satyam. Mr. Vineet
Nayyar has been designated as Whole-time Director of Satyam, effective 1st
June 2009.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
A detailed analysis of your Company's performance is discussed in the
Management Discussion and Analysis Report, which forms part of this Annual
Report.
AMALGAMATION OF SUBSIDIARIES:
As reported in the previous Annual Report, iPolicy Networks Limited and
Tech Mahindra (R & D Services) Limited merged with your Company and
effective 20th May 2008, iPolicy Networks Limited and Tech Mahindra (R & D
Services) Limited stand dissolved without winding-up. The Appointed date
i.e. the date from which the provisions of the Scheme of Amalgamation came
into operation was 1st April 2008.
With this amalgamation, Tech Mahindra (R&D Services) Inc., which was a step
down subsidiary of your Company through Tech Mahindra (R&D Services)
Limited became a direct subsidiary of your Company.
With a view to streamline the US operations, Tech Mahindra (R&D Services)
Inc. was merged with Tech Mahindra (Americas) Inc. w.e.f. 1st July 2008.
QUALITY:
In the Financial Year 2008-09, your Company's passion towards quality has
helped in achieving another quality accreditation i.e. SEI-CMMI L5 v1.2, in
addition to other accreditations like ISO 9001:2000, ISO/IEC 20000-1:2005,
ISO/IEC 27001:2005, SEI-CMMI Level 5 v1.1, P-CMM Level 5 and SSE-CMM Level
3. Your Company is the third in the world to have been appraised for SSE-
CMM Level 3.
Processes in your Company are designed to develop solutions that meet
client specifications in accordance with statutory and other industry-wide
standards. Continuous improvement in these processes is a way of life with
a goal of ensuring greater customer satisfaction by improved quality,
productivity and cycle time.
HUMAN RESOURCES:
During the Financial Year 2008-09, your Company along with its subsidiaries
made a net addition of 2,088 employees to its workforce. The employee
strength was 24,972 as at 31st March 2009, as compared to 22,884 a year
before, registering an increase of 9%. BPO services also registered a
growth of 9% as the headcount went up to 3,769 from 3,445, a year before.
Employee Learning and Development/Interface with Academia
Your Company believes in human potential and invests in the growth and
development of individuals with its on-going training and other
developmental initiatives.
Every year, your Company hires bright engineers from across the country. In
order to align them with the Company's culture and values and at the same
time bring them at par with the required telecom domain knowledge, in-depth
and exhaustive 14 weeks induction training is conducted.
Complementing this, your Company runs earn while you learn' programs for
science graduates who are enrolled for the MS program in Telecommunications
and Software Engineering, in collaboration with BITS, Pilani, which is
partially and in some cases 100% sponsored by your Company.
In order to help employees define their learning path which is in-line with
the technology area, client and role they are associated with, your Company
has crafted QUEST, a learning framework. It allows online end-to-end
management of learning paths which includes, creating new learning paths,
assigning of trainings, courseware deployment and online examinations. To
complement the on-line learning, employees across the globe are provided
with online training courses and virtual sessions.
Your Company also provides learning assistance to its employees who aspire
to undertake higher education and have tie-ups for Distance Education
Programs with Indian Institute of Technology (IIT ), Bombay, Birla
Institute of Technology (BITS), Pilani and University College of London,
UK.
Due to business requirements and out of personal career aspirations, many
employees do wish to undertake various technology certifications. To help
employees with the same, your Company has an enterprise level partnership
with M/s Promatric which provides in-house testing centers enabling
employees to undertake certification examinations at their convenience and
as per required standards.
Leadership Development:
Your Company believes in nurturing talent, motivating indigenous innovation
and promoting leadership development.
To bring in fresh ideas and young talent, your Company has been running the
Global Leadership Cadre (GLC) program for the past three years selecting
management graduates from premier Business Institutes across the globe and
also technical specialists from within the organization. These highly
talented participants have shown very low learning curve and your Company
has been able to provide them faster career progression, thereby creating a
pool for leadership.
To compliment the GLC program, your Company has also introduced Management
Training program where management graduates from various Business Schools
across India are hired and groomed for future GLC roles.
For middle managers, your Company has associated with XLRI Jamshedpur for a
one month residential Management Development Program giving them an
overview of all aspects of management.
For senior management, your Company conducted Entrepreneurship training
programs in association with IIMC, India and also participated in similar
programs that have been organized by Mahindra & Mahindra Limited, the
holding company in association with Michigan University, US.
SUBSIDIARY COMPANIES:
During the year, your Company acquired the entire share capital of
Venturbay Consultants Private Limited (Venturbay). Consequently, w.e.f.
19th March 2009, Venturbay became a wholly owned subsidiary of your
Company.
As on 31st March 2009, your Company has 11 subsidiaries, including one
step-down subsidiary. There has not been any material change in the nature
of the business of the subsidiaries. As reported in the previous Annual
Report, iPolicy Networks Limited and Tech Mahindra (R & D Services) Limited
merged with your Company and effective 20th May 2008, iPolicy Networks
Limited and Tech Mahindra (R & D Services) Limited stand dissolved without
being wound - up.
With this amalgamation, Tech Mahindra (R&D Services) Inc., which was a step
down subsidiary of your Company through Tech Mahindra (R&D Services)
Limited became a direct subsidiary of your Company.
With a view to streamline the US operations, Tech Mahindra (R&D Services)
Inc. was merged with Tech Mahindra (Americas) Inc. w.e.f. 1st July 2008.
As required under the Listing Agreements with the Stock Exchanges, the
Consolidated Financial Statements of your Company and all its subsidiaries
are attached. The Consolidated Financial Statements have been prepared in
accordance with Accounting Standards AS 21, AS 23 and AS 27 issued by The
Institute of Chartered Accountants of India and show the financial
resources, assets, liabilities, income, profits and other details of your
Company and its subsidiaries and associate companies as a single entity,
after elimination of minority interest.
Your Company has been granted exemption for the year ended 31st March 2009
by the Ministry of Corporate Affairs vide its letter dated 20th March 2009
from attaching to its Balance Sheet, the copy of the Balance Sheet, Profit
and Loss Account, Reports of the Board of Directors and Auditors of each of
its subsidiaries. Since Venturbay became a subsidiary after this
application, your Company re-applied to the Ministry seeking exemption from
attaching the aforesaid documents in respect of Venturbay with the Balance
Sheet of your Company, which was approved by the Ministry vide its letter
dated 20th May 2009. As directed by the Central Government, the financial
details of the subsidiaries have been separately furnished forming part of
this Annual Report. These documents will also be available for inspection
by any member at the Registered Office of the Company and the office of the
respective subsidiary companies during working hours upto the date of the
Annual General Meeting. Documents of the subsidiaries will be submitted on
request to any member wishing to peruse a copy, on receipt of such request
by the Assistant Company Secretary of the Company at the Registered Office
/ Corporate Office of the Company.
EMPLOYEE STOCK OPTION PLAN:
Details required to be provided under the Securities and Exchange Board of
India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 are set out in Annexure I to this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
Your Company continues to demonstrate its deep commitment to social
responsibility. It contributes 1% of its profit after tax (PAT) every year
to fund its CSR activities, most of which are undertaken on its behalf by
the Tech Mahindra Foundation.
During the year under review, your Company has donated Rs. 90.12 Million to
Tech Mahindra Foundation. The Foundation works to give concrete expression
to your Company's keenness to make a meaningful and sustainable
contribution to the well-being of the less fortunate members of our
society. Tech Mahindra Foundation is very focused in its approach and
concentrates its endeavours on providing quality education and vocational
skills to vulnerable sections of the community.
During the year under review, the Foundation selected several new not-for-
profit organizations spread over Pune, Mumbai, Noida, Delhi and Bangalore.
It now works with 45 NGOs enabling it to reach out to many more children,
with special attention to the educational needs of such vulnerable sections
as girls from economically disadvantaged minority families.
As far as vocational training is concerned, the Foundation has made a
special effort to link up with organizations making innovative use of
technology to reach out to the needs of the physically, particularly
visually challenged.
Last year, the Foundation had reported the launch of the initiative to
honour outstanding teachers and principals working in the Municipal schools
of Delhi. These were selected through a rigorous and independent process.
Mr. Keshub Mahindra, Chairman of Mahindra & Mahindra Limited distributed
the awards to 20 principals on 22nd February 2009 at a ceremony attended by
the Municipal Commissioner of Delhi.
Your Company also supported the Bihar Flood Relief program launched by
Mahindra group by donating Rs. 5 Million. The employees of your Company
also contributed Rs. 9.79 Million towards Bihar Flood Relief. Your Company
also supports the Nanhi Kali program run by the K. C. Mahindra Education
Trust.
An increasing number of your Company employees is volunteering their free
time to help partner NGOs of the Foundation. Your Company in collaboration
with the Foundation has finalized a policy for Employee Social
Responsibility Options. This initiative has been undertaken to give
employees an avenue for participation in CSR going beyond the activities of
the Foundation. Under this initiative, employees would be invited to
present proposals for supporting NGOs/charitable organizations working in
the fields of education, health, environment and child welfare. Your
Company will provide financial aid to these organizations.
CORPORATE GOVERNANCE PHILOSOPHY:
Your Company believes that Corporate Governance is a voluntary code of
self-discipline. In line with this philosophy, it follows healthy Corporate
Governance practices and reports to the shareholders the progress made on
the various measures undertaken. Your Directors have reported the
initiatives on Corporate Governance adopted by your Company in the section
Corporate Governance' in the Annual Report.
DIRECTORS:
Mr. Anupam Puri, Dr. Raj Reddy and Mr. Paul Zuckerman retire by rotation
and being eligible, offer themselves for re-appointment.
Mr. M. Damodaran, ex-Chairman of SEBI, Mr. Ravindra Kulkarni and Mr. B. H.
Wani, both eminent corporate lawyers were appointed as Additional Directors
during the year. They hold office upto the date of the ensuing Annual
General Meeting.
The Company has received Notices from Members under Section 257(1) of the
Companies Act, 1956, alongwith the requisite amount of deposit, signifying
their intention to propose the candidatures of Mr. M Damodaran, Mr.
Ravindra Kulkarni and Mr. B. H. Wani as Directors of the Company, at the
forthcoming Annual General Meeting.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to section 217(2AA) of the Companies Act, 1956, your Directors,
based on the representation received from the Operating Management and
after due enquiry, confirm that:
i. in the preparation of the annual accounts, the applicable accounting
standards have been followed;
ii. they have, in the selection of the accounting policies, consulted the
Statutory Auditors and these have been applied consistently and reasonable
and prudent judgments and estimates have been made so as to give a true and
fair view of the state of affairs of the Company as at 31st March 2009 and
of the profit of the Company for the year ended on that date;
iii. proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv. the annual accounts have been prepared on a going concern basis.
AUDITORS:
M/s. Deloitte Haskins & Sells, Chartered Accountants, the Auditors of your
Company, hold office up to the conclusion of the forthcoming Annual General
Meeting of the Company and have given their consent for re-appointment. The
shareholders will be required to elect auditors for the current year and
fix their remuneration. Your Company has received a written confirmation
from M/s. Deloitte Haskins & Sells, Chartered Accountants to the effect
that their appointment, if made, would be in conformity with the limits
prescribed in Section 224 of the Companies Act, 1956. The Board recommends
the re-appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants
as the Auditors of the Company.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
In view of the nature of activities that are being carried on by your
Company, Rules 2A and 2B of the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, concerning conservation of
energy and technology absorption, respectively are not applicable to your
Company. Your Company being a software solution provider requires minimal
energy consumption and every endeavour has been made to ensure the optimal
use of energy, avoid wastage and conserve energy as far as possible.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
The foreign exchange earnings of your Company during the year were
Rs.42,792 Million (Previous Year Rs. 35,637 Million), while the outgoings
were Rs. 15,554 Million (Previous Year Rs. 18,133 Million).
PARTICULARS OF EMPLOYEES:
Your Company had 630 employees who were in receipt of remuneration of not
less than Rs. 2,400,000 during the year or Rs. 200,000 per month during any
part of the said year. However, as per the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Directors' Report being sent
to the shareholders does not include this Annexure. Any shareholder
interested in perusing a copy of the Annexure may write to the Assistant
Company Secretary at the Registered Office / Corporate Office of the
Company.
DEPOSITS AND LOANS/ADVANCES:
Your Company has not accepted any deposits from the public or its employees
during the year under review. The particulars of loans/advances and
investment in its own shares by listed companies, their subsidiaries,
associates, etc., required to be disclosed in the annual accounts of the
Company pursuant to Clause 32 of the Listing Agreement are furnished
separately.
AWARDS/RECOGNITION:
Your Company continued its quest for excellence in its chosen area of
business to emerge as a true global brand. Several awards and rankings
continue to endorse your Company as a thought leader in telecom industry.
Awards for the year:
* In the Leaders Category in The 2009 Global Outsourcing 100' (IAOP's
Annual Listing of the World's Best Outsourcing Service Providers)
* Amity Corporate Excellence Award 2009
* Deloitte Technology Fast 500 APAC 2008
* Deloitte Technology Fast 50 India 2008
* The Best Overall Recruiting & Staffing Organization of the Year Award'
(RASBIC Awards 2009)
* Award for Managing Health at Work (Employer Branding Awards 2008-2009)
* Award for Excellence in Training (Employer Branding Awards 2008-2009)
* BusinessWeek Award for Asia's Best Performing Companies, 2008
* Ranked 2nd in Telecom Software providers of India by Voice & Data, 2008
(V&D 100 Ranking)
* 'Growth Excellence Award' by Frost & Sullivan, 2008
* 6th Largest Software Services Company in India (NASSCOM 2008)
* 10th Largest IT-BPO Employers, FY 07-08 (NASSCOM 2008)
* CanvasM won the award for 'Best Start-up Company' at Mobile Content
Awards & Conference 2008 (MCA08).
* Award in 'Largest Revenue Category' of 'IT and ITeS (excluding Hardware)
Sector' by D&B - ECGC Indian Exporters Excellence Awards, 2008.
* Ranked 12th Largest TOMS vendor by Gartner in 'Market Share: Telecoms
Operations Management Systems - Worldwide, 2006-2007' April 2008
* 'Best Billing Solution' Category at 'Billing and OSS World (B/OSS)
Excellence Awards 2008', April 2008
* The Brand Leadership Award by the Asia Brand Congress, 2008
ACKNOWLEDGEMENTS:
Your Directors gratefully acknowledge the contributions made by employees
towards the success of your Company.
Your Directors are also thankful for the co-operation and assistance
received from its customers, vendors, bankers, STPI, regulatory and
Governmental authorities in India and abroad and its shareholders.
For and on behalf of the Board
Place: Mumbai Anand G. Mahindra
Date : 27th May 2009 Chairman
Particulars of loans/advances and investment in its own shares by listed
companies, their subsidiaries, associates, etc., required to be disclosed
in the annual accounts of the Company pursuant to Clause 32 of the Listing
Agreement. Loans and advances in the nature of loans to subsidiaries:
Rs. in Million
Name of the Company Balance as on 31st March Maximum outstanding
2009 [as on 31st March during the year [during
2008] the previous year]
Tech Mahindra
(Americas) Inc. - [100] 110 [218]
PT Tech Mahindra
Indonesia 25 [-] 55 [35]
iPolicy Networks
Limited - [-] - [94]
Loans and advances in the nature of loans to associates, loans and advances
in the nature of loans where there is no repayment schedule or repayment
beyond seven years or no interest or interest below section 372A of the
Companies Act, 1956 and loans and advances in the nature of loans to
firms/companies in which directors are interested - Nil
Annexure I to the Directors' Report for the year ended 31st March 2009 in
terms of clause 12.1 of the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999
ESOP 2000
Total options granted under the 3,779,850
plan
a) Options granted during the Nil
year
b) The pricing formula Under the scheme, all the options were
granted prior to the listing of
Company's shares. These options were
granted, based on the annual valuation
done by an independent chartered
accountant.
c) Options vested as of 31st
March 2009 2,53,360
d) Options exercised during
the year 96,070
e) The total number of shares
arising as a result of exercise
of option 96,070
f) Options lapsed during the year Nil
g) Variation of terms of options In the Compensation Committee
during the year meeting of the Company held on 19th
May 2008, the Scheme was amended to
include the provision for recovery of
FBT from the employees of holding /
subsidiary companies and forward it to
the concerned employer company.
h) Money realised by exercise of Rs. 7.61 Million
options during the year
i) Total number of options in 2,53,360
force as of 31st March 2009
j) Employee wise details of
options granted to
i. Senior managerial personnel Nil
ii. Any other employee who Nil
receives a grant in any one year
of option amounting to 5% or more
of option granted during that
year
iii. Identified employees who Nil
were granted option, during any
one year, equal to or exceeding
1% of the issued capital
(excluding outstanding warrants
and conversions) of the company
at the time of grant
k) Diluted Earnings Per Share Rs. 76.66
(EPS) pursuant to issue of shares
on exercise of option calculated
in accordance with Accounting
Standard (AS) 20 'Earnings Per
Share'
l) Where the company has The Company uses the intrinsic value-
calculated the employee based method of accounting for stock
compensation cost using the options granted after 1st April 2005.
intrinsic value of the stock Had the compensation cost for the
options, the difference between Company's stock based compensation plan
the employee compensation cost been determined in the manner consistent
so computed and the employee with the fair value approach, the
compensation cost that shall have Company's net income would be lower
been recognized if it had used the by Rs 4 Million and earnings per share
fair value of the options, shall (Basic) would have been Rs. 81.08
be disclosed. The impact of this
difference on profits and on EPS
of the company shall also be
disclosed
m) Weighted-average exercise No options were granted during the year.
prices and weighted-average fair
values of options shall be
disclosed separately
for options whose exercise price
either equals or exceeds or is
less than the market price of
the stock
n) A description of the method
and significant assumptions used
during the year to estimate the
fair values of options, including
the following weighted-average
information: NA
i. risk-free interest rate,
ii. expected life,
iii. expected volatility,
iv. expected dividends, and
v. the price of the underlying
share in market at the time of
option grant.
ESOP 2004
Total options granted under the 10,219,860
plan
a) Options granted during the Nil
year
b) The pricing formula Under the scheme, all the options were
granted prior to the listing of
Company's shares. These options were
granted, based on the valuation done by
an independent chartered accountant.
c) Options vested as of 31st
March 2009 4,996,377
d) Options exercised during
the year Nil
e) The total number of shares
arising as a result of exercise
of option Nil
f) Options lapsed during the year Nil
g) Variation of terms of options Nil
during the year
h) Money realised by exercise of Nil
options during the year
i) Total number of options in 5,677,701
force as of 31st March 2009
j) Employee wise details of
options granted to
i. Senior managerial personnel Nil
ii. Any other employee who Nil
receives a grant in any one year
of option amounting to 5% or more
of option granted during that
year
iii. Identified employees who Mr. Vineet Nayyar: 3,406,620
were granted option, during any
one year, equal to or exceeding Mr. C P Gurnani : 3,406,620
1% of the issued capital
(excluding outstanding warrants Mr. Sanjay Kalra : 3,406,620
and conversions) of the company
at the time of grant
k) Diluted Earnings Per Share Rs. 76.66
(EPS) pursuant to issue of shares
on exercise of option calculated
in accordance with Accounting
Standard (AS) 20 'Earnings Per
Share'
l) Where the company has The Company uses the intrinsic value-
calculated the employee based method of accounting for stock
compensation cost using the options granted after 1st April 2005.
intrinsic value of the stock Had the compensation cost for the
options, the difference between Company's stock based compensation plan
the employee compensation cost been determined in the manner consistent
so computed and the employee with the fair value approach, the
compensation cost that shall have Company's net income would be lower
been recognized if it had used the by Rs 4 Million and earnings per share
fair value of the options, shall (Basic) would have been Rs. 81.08
be disclosed. The impact of this
difference on profits and on EPS
of the company shall also be
disclosed
m) Weighted-average exercise No options were granted during the
prices and weighted-average fair year.
values of options shall be
disclosed separately
for options whose exercise price
either equals or exceeds or is
less than the market price of
the stock
n) A description of the method
and significant assumptions used
during the year to estimate the
fair values of options, including
the following weighted-average
information: NA
i. risk-free interest rate,
ii. expected life,
iii. expected volatility,
iv. expected dividends, and
v. the price of the underlying
share in market at the time of
option grant.
ESOP 2006
Total options granted under the 5,609,805
plan
a) Options granted during the 2,52,500
year
b) The pricing formula The options granted prior to the
listing of Company's shares, were
granted, based on the annual valuation
done by an independent chartered
accountant.
The grants made post-listing of the
Company's shares on Stock Exchanges
have been made as per the latest
available closing price on the Stock
Exchange with highest trading volume,
prior to the date of the meeting of the
Compensation Committee in which options
are granted.
c) Options vested as of 31st
March 2009 11,88,133
d) Options exercised during
the year 274,695
e) The total number of shares
arising as a result of exercise
of option 274,695
f) Options lapsed during the year Nil
g) Variation of terms of options In the Compensation Committee meeting of
during the year the Company held on 19th May 2008, the
Scheme was amended to include the
provision for recovery of FBT from the
employees of holding / subsidiary
companies and forward it to the
concerned employer company.
h) Money realised by exercise of Rs. 23.39 Million
options during the year
i) Total number of options in 37,36,868
force as of 31st March 2009
j) Employee wise details of
options granted to
i. Senior managerial personnel Nil
ii. Any other employee who Nil
receives a grant in any one year
of option amounting to 5% or more
of option granted during that
year
iii. Identified employees who Nil
were granted option, during any
one year, equal to or exceeding
1% of the issued capital
(excluding outstanding warrants
and conversions) of the company
at the time of grant
k) Diluted Earnings Per Share Rs. 76.66
(EPS) pursuant to issue of shares
on exercise of option calculated
in accordance with Accounting
Standard (AS) 20 'Earnings Per
Share'
l) Where the company has The Company uses the intrinsic value-
calculated the employee based method of accounting for stock
compensation cost using the options granted after 1st April 2005.
intrinsic value of the stock Had the compensation cost for the
options, the difference between Company's stock based compensation plan
the employee compensation cost been determined in the manner consistent
so computed and the employee with the fair value approach, the
compensation cost that shall have Company's net income would be lower by
Rs. 4 Million and earnings per share
(Basic) would have been Rs. 81.08
been recognized if it had used the
fair value of the options, shall
be disclosed. The impact of this
difference on profits and on EPS
of the company shall also be
disclosed
m) Weighted-average exercise Grant Date 19-05-08 21-07-08
prices and weighted-average fair
values of options shall be
disclosed separately Exercise
for options whose exercise price price (Rs.) 957 668
either equals or exceeds or is
less than the market price of
the stock Fair
Value (Rs.) 291.15 240.57
Grant Date 20-10-08 23-01-09
Exercise
price (Rs.) 344 230
Fair
Value (Rs.) 133.07 69.48
n) A description of the method
and significant assumptions used
during the year to estimate the 19-05-08 21-07-08 20-10-08 23-01-09
fair values of options, including
the following weighted-average
information: 7.85% 9.34% 7.65% 5.72%
i. risk-free interest rate, 5.3 5.3 5.3 5.3
years years years years
ii. expected life, 52.82% 52.73% 55.45% 58.70%
iii. expected volatility, 7.68% 6.48% 6.48% 6.48%
iv. expected dividends, and
v. the price of the underlying
share in market at the time of
option grant. 956.70 680.80 367.50 209.30
MANAGEMENT DISCUSSION AND ANALYSIS:
INDUSTRY STRUCTURE, DEVELOPMENTS AND OUTLOOK:
Overview:
Tech Mahindra Limited is a leading provider of IT services and solutions to
the global telecommunications industry. In fiscal 2008, it was ranked by
NASSCOM as the sixth largest Indian IT services company in terms of export
revenue. It was formed in 1986 as a joint venture between Mahindra and
Mahindra Limited, one of India's largest industrial conglomerates, and
British Telecommunications plc, one of the world's leading
Telecommunications Company.
Current environment and global telecom market:
The year 2008-09 has been marred by economic recession, collapse of various
large financial institutions, and record losses being reported by large
corporates worldwide. It has been a year of volatility and uncertainty
leading to an economic downturn that has had widespread impact across the
world.
However, the Telecom segment, though not immune to these recessionary
pressures, is still expected to grow. According to an independent research
agency, the size of the global telecom services market grew by an estimated
5.7% in 2008, reaching US$ 1.34 trillion. It is expected that managed
services and unified communications will lead to steady growth during the
year. Managed network services, which accounts for 20% of the business
services market, is expected to grow to 30% of the market by 2012. The
Telecom Service Providers (TSPs) will face challenges due to reducing
legacy revenues, and will have to invest in new avenues of growth like
broadband. New business models will proliferate as new players such as
cable Multiple System Operator's (MSO's) and virtual network operators
offer Voice over Internet Protocol (VoIP) services impacting the
traditional telecommunication services market. Similarly, Telecom Equipment
Manufacturers (TEMs) could see some rationalization of budgets on their
products and platforms. Corporations will spend more time and effort in
trying to strike a balance between investment to drive growth and being
competitive and efficient.
IT spend in the Communications Industry:
According to an independent research agency, the worldwide IT spending in
communication vertical will be driven by software services and managed
services, etc. The worldwide IT spending by the communications vertical
will reach US $ 426.6 billion in 2012 from US $ 368.3 billion in the
current year. Out of this, IT services are expected to account for US$128.9
billion in 2012 from US$ 108.1 billion in 2008. Short-term cost reduction
propositions including outsourcing will remain attractive, to achieve
reduced fixed cost. To attract higher ARPU and new customers as well as
retain existing customers, TSPs are in the process of transforming their
systems, processes and networks to reduce operating cost, achieve better
efficiencies and faster time to market.
The Middle East and Africa, Latin America and emerging markets in
Asia/Pacific will continue to grow mobile and consumer fixed services,
seeking to cut other spending in preference.
OPPORTUNITIES:
Legacy to Next Generation IT transformation Service providers around the
globe, on the back of dropping legacy revenues and high cost, are looking
to transform their legacy platforms into next generation platforms. This
will enable them to optimize their product portfolio, and rationalize the
costs associated with running the systems. These transformation
initiatives, will lead to outsourcing opportunities.
Diversification:
Telecom companies are diversifying into non traditional business areas for
expansion of services. This could provide additional opportunities for
outsourcing partners to provide increased services and saving opportunities
to these companies.
Greenfield Operators in Emerging Markets:
Emerging markets are hubs for investments in this downturn due to the low
costs and growing market potential. These greenfield operators require
faster time to market as well as packaged and ready to use IT platforms.
This would provide an opportunity for end to end outsourcing vendors.
THREATS:
Consumer Fixed Line Service and Enterprise Fixed line Service will see
reductions
Consumer fixed-service spending will see further reductions because of
mobile substitution in developed markets and pre substitution in emerging
ones. Enterprise fixed services will be hurt by a downturn in the small and
midsize business sector; remote office closures, this reduced demand could
impact IT spend in TSPs.
Mature Markets may see the maximum impact of the economic crisis
Mature markets will be the hardest hit and most of the work would be
outsourced to low cost markets for cost benefits. In this trend IT services
and solution providers based out of emerging markets would be benefitted
more as TSPs in the mature markets would look to lower cost solutions to
achieve their objectives of cost efficiency as well as transformation.
Global IT companies posing challenge with growing India presence
Global IT service providers such as Accenture, EDS, CapGemini and IBM are
expanding their presence in India and pose a challenge to Indian IT service
companies with their global client relationships, deep pockets and domain
knowledge.
Emergence of other low cost destinations:
India remains the preferred offshore destination for IT Services for its
cost effective solutions and huge talent pool. However several countries
like China, Malaysia, Chile, Philippines, Singapore, Thailand and the Czech
Republic are emerging as off-shoring destinations due to their ability to
provide low cost solutions. First movers into these countries will gain
competitive advantage and an ability to differentiate their service
offering.
RISKS:
Continued recessionary pressures going into 2009:
Independent research agencies predict GDP growth forecasts for 2009 in US
and Europe to be negative and APAC, MEA to see a slowdown. Growth is
forecasted in the second half of 2009 onwards. Recessionary pressures for a
longer period may have a negative effect to our top-line since we are
dependent on our clients who are impacted by such slowdowns.
High customer concentration:
In fiscal 2009, Revenues from Top 3, Top 5, and Top 10 clients account for
75%, 81% and 87% respectively and the loss of these clients could have a
material adverse impact on our revenue and profitability.
Withdrawal of tax benefits:
Currently, we benefit from certain tax incentives under Section 10A of the
Income Tax Act for the IT services that we provide from specially
designated 'Software Technology Parks' or STPs. As a result of these
incentives, our operations in India have been subject to relatively low tax
liabilities. Under current laws, the tax incentives available to these
units terminate on the earlier of the ten year anniversary of the
commencement of operations of the unit or 31st March 2010. There is no
assurance that the Indian government will not enact laws in the future that
would adversely impact our tax incentives and consequently, our tax
liabilities and profits. When our tax incentives expire or are terminated,
our tax expense will materially increase, reducing our profitability.
Exchange rate risks:
The exchange rate between the Indian rupee and the British pound and the
rupee and the U.S. dollar has changed substantially in last year and may
continue to fluctuate significantly in the future. During fiscal 2009, the
value of the rupee against the British pound appreciated by approx 8% and
the value of the rupee against the U.S. dollar depreciated by approx 27%.
Accordingly, our operating results have been and will continue to be
impacted by fluctuations in the exchange rate between the Indian rupee and
the British pound and the Indian rupee and the U.S. dollar, as well as
exchange rates with other foreign currencies. Any strengthening of the
Indian rupee against the British pound, the U.S. dollar or other foreign
currencies could adversely affect our profitability.
ACQUISITION OF SATYAM COMPUTER SERVICES LIMITED:
TechM participated in the global competitive bidding process launched by
Satyam Board in March 2009 & in April 09 emerged as the highest bidder for
acquiring 51% stake in Satyam computers. It is a major milestone in the
journey of the Company as this acquisition would catapult the Company and
make it a leading IT Company with geographical, vertical & customer
diversification.
Opportunities:
The acquisition will put Tech Mahindra in a significantly higher playing
field. From being a niche-player with business only from telecom service
providers, it will now get exposure to the other major verticals such as
BFSI, Manufacturing, and Retail.
Challenges:
Since most of Satyam's customers will be new to Tech Mahindra, Tech
Mahindra could face some initial challenges to maintain and grow the
existing relationships with some of Satyam's clients. Given the size of
Satyam, there could be some challenges in consolidating the operations,
making it profitable and streamlining the processes in both the companies.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL
PERFORMANCE:
Overview:
The financial statements have been prepared in compliance with the
requirements of the Companies Act, 1956 and Generally Accepted Accounting
Principles (GAAP) in India. The Consolidated financial statements have been
prepared in compliance with the Accounting Standards AS 21, AS 23 and AS 27
issued by the Institute of Chartered Accountants of India (ICAI).
The discussion on financial performance in the Management Discussion and
Analysis relate primarily to the stand alone accounts of Tech Mahindra
Limited. Wherever it is appropriate, information pertaining to consolidated
accounts for Tech Mahindra Limited is provided. For purpose of comparison
with other firms in this industry as well as to see the positioning and
impact that Tech Mahindra Limited has in the marketplace, it is essential
to take the figures as reflected in the Consolidated Financial Statements.
A. FINANCIAL POSITION:
1. Share Capital:
The authorized share capital of the Company is Rs. 1,750 Million, divided
into 175 Million equity shares of Rs. 10 each. The paid up share capital
stands at Rs. 1,217 Million as on 31st March 2009 compared to Rs. 1,214
Million on 31st March 2008. The increase in paid up capital during the year
is due to conversion of options into shares by employees under Employee
Stock Option Plan.
2. Reserves and surplus:
a) Share premium account:
The addition to the share premium account of Rs. 27 Million during the year
is due to the premium received on issue of 370,765 equity shares on
exercise of option under stock option plan.
b) General reserve:
General reserve stands at Rs. 2,251 Million on 31st March 2009 compared to
Rs. 2,714 Million on 31st March 2008. Rs. 550 Million has been transferred
to general reserve from profit and loss account during the year and Rs.
1,013 Million has been transferred on amalgamation.
c) Profit and loss account:
The balance retained in the profit and loss account as of 31st March 2009
is Rs. 13,947 Million compared to Rs. 5,201 Million as of 31st March 2008.
3. Loan Funds:
There are no Loan funds as at 31st March 2009 compared to Rs. 950 Million
(unsecured loan) in the previous year.
4. Fixed Assets:
The movement in Fixed Assets is shown in the table below:
Rs. in Million
As of 31st March 2009 2008
Gross Book Value
Land - free-hold 173 82
- lease-hold 436 325
Buildings 2,995 1,411
Leasehold Improvements 357 281
Plant and machinery 1,799 999
Computer equipments 2,049 1,659
Furniture and fixtures 1,024 661
Vehicles
Leased 6 48
Owned 47 39
Intangible assets 76 0
Total 8,962 5,505
Less: Accumulated depreciation & amortization 4,061 2,596
Net block 4,901 2,909
Add: Capital work-in-progress 1,541 1,385
Net fixed assets 6,442 4,294
The Net Block of Fixed Assets and Capital Work in Progress increased to
Rs.6,442 Million from Rs. 4,294 Million as at 31st March 2008.
During the year, Company incurred capital expenditure of Rs. 2,415 Million
(previous year Rs. 1,928 Million). The major items of Capital Expenditure
included Leasehold-land and improvements, Plant and Machinery, Computer
equipment and Furniture & Fixtures including amount spent on Hinjewadi,
Pune campus.
5. Investments:
The summary of Company's investments is given below:
Rs. in Million
Investments As at As at
31st March 2009 31st March 2008
Investment in Subsidiaries 905 3,340
Investment (others) 85 -
Investment in Mutual Funds 3,899 -
Total Investments 4,889 3,340
Less : Provision for diminution of value 354 354
Net Investments 4,535 2,986
I. Investment in Subsidiaries:
The Company had investment in the following subsidiaries
a) CanvasM Technologies Limited:
CanvasM was set up as a joint venture between Tech Mahindra Limited and
Motorola Cyprus Holding Limited in October 2006 with an objective to
provide software services and solutions to wire line and wireless telecom
service providers, cable companies, enterprise, media and broadcast
companies, using SI expertise of Tech Mahindra and R&D investments of
Motorola Cyprus. Tech Mahindra owns 80.1% of the shareholding while the
balance 19.9% is held by Motorola Cyprus.
b) Tech Mahindra (Americas) Inc.:
Tech Mahindra (Americas) inc. was incorporated in November 1993 to provide
marketing support services for the USA and Canada region. It acts as a
service provider for sales, marketing, onsite software development and
other related services for North America.
c) Tech Mahindra GmbH:
Tech Mahindra GmbH was established in July 2001 to provide marketing
support in central Europe region.
d) Tech Mahindra (Singapore) Pte. Limited:
Tech Mahindra (Singapore) Pte. Limited is Tech Mahindra's representative in
Singapore and acts as a service provider for sales, marketing, onsite
software development and other related services in Singapore.
e) Tech Mahindra (Thailand) Limited:
Tech Mahindra (Thailand) Limited was established in August 2005 to
strengthen its marketing infrastructure in Thailand.
f) PT Tech Mahindra Indonesia:
PT Tech Mahindra Indonesia is Tech Mahindra's representative in Indonesia
and acts as a service provider for sales, marketing, onsite software
development and other related services.
g) Tech Mahindra Foundation:
Tech Mahindra Foundation was promoted by Tech Mahindra Limited as Section
25 Company with the objective of promoting social and charitable
activities. TechM Foundation primarily concentrates on rendering assistance
to the needy and under privileged people in the society.
h) Tech Mahindra (Beijing) IT Services Limited:
Tech Mahindra (Beijing) IT Services Limited was established in December
2007 to strengthen its marketing capabilities in China.
i) Tech Mahindra (Malaysia) Sdn. Bhd.:
Tech Mahindra (Malaysia) Sdn. Bhd. was established in May 2007 as Tech
Mahindra's representative in Malaysia. It acts as a service provider for
sales, marketing, onsite software development and other related services.
j) Venturbay Consultants Private Limited (VCPL):
VCPL became wholly owned subsidiary of the Company as on 19th March 2009.
It was acquired to act as a special purpose vehicle (SPV) to bid for the
acquisition of Satyam Computer Services Limited (Satyam). It emerged as the
highest and successful bidder in the global competitive bidding process and
has since acquired 31% shares of Satyam.
Tech Mahindra (R&D Services) Limited (TMRDL) and iPolicy Networks Limited
(iPolicy) merged with the Company during the year and effective 20th May
2008, TMRDL and iPolicy stand dissolved without winding-up. The appointed
date for this merger was 1st April 2008.
II. Investment in liquid mutual funds:
The Company has been investing in various mutual funds. These are typically
investments in short-term funds to gainfully use the excess cash balance
with the Company. The investments as at 31st March 2009 were Rs. 3,899
Million compared to Nil as at 31st March 2008.
6. Deferred Tax Asset:
Deferred tax asset as at 31st March 2009 was at Rs. 155 Million as compared
to Rs. 14 Million as of 31st March 2008. Deferred tax assets represent
timing differences in the financial and tax books arising from depreciation
of assets, provision of debtors and leave encashment. Company assesses the
likelihood that the deferred tax asset will be recovered from future
taxable income.
7. Sundry Debtors:
Sundry debtors decreased to Rs. 8,545 Million (net of provision for
doubtful debts amounting to Rs. 69 Million) as of 31st March 2009 from Rs.
10,574 million (net of provision for doubtful debts amounting to Rs. 80
million) as of 31st March 2008. Debtor days as of 31st March 2009,
(calculated based on per-day sales in the last quarter) were 79 days,
compared to 98 days as of 31st March 2008. We continue to focus on reducing
receivables period by improving our collection efforts.
8. Cash and Bank Balance:
The bank balances in India include both Rupee accounts and foreign currency
accounts. The bank balances in overseas current accounts are maintained to
meet the expenditure of the overseas branches and overseas project-related
expenditure.
Rs. in Million
As of 31st March 2009 2008
Bank balances in India & Overseas
Current accounts 4,945 799
Deposit accounts 17 14
Unclaimed dividend account - 1
Total cash and bank balances* 4,961 814
* excluding unrealised (gain)/loss on foreign currency
9. Loans and Advances:
Loans and advances as on 31st March 2009 were Rs. 2,867 Million compared to
Rs. 3,477 Million as on 31st March 2008.
10. Current Liabilities and Provisions:
Current liabilities and provisions were Rs. 8,708 Million as of 31st March
2009 compared to Rs. 8,925 Million as of 31st March 2008.
B. RESULTS OF OPERATIONS:
The following table sets forth certain income statement items as well as
these items as a percentage of our total income for the periods indicated:
Fiscal 2009 Fiscal 2008
% of % of
Rs. in Revenue Rs. in Revenue
Million Million
INCOME:
Revenue from
Services 43,578 100.0% 36,047 100.0%
Other Income (425) 976
Total Income 43,153 37,023
EXPENDITURE
Personnel Cost 14,197 32.6% 12,224 33.9%
Operating and Other Expenses 16,952 38.9% 15,616 43.3%
Depreciation 1,074 2.5% 736 2.0%
Interest 25 0.1% 100 0.3%
Total Expenditure 32,248 74.0% 28,676 79.6%
Profit before tax and
exceptional items 10,905 25.0% 8,347 23.2%
Provision for Taxation (1,039) 2.4% (689) 1.9%
Profit after taxation and
before exceptional item 9,866 22.6% 7,658 21.2%
Exceptional items - - (4,401) 12.2%
Net profit for the year 9,866 22.6% 3,257 9.0%
Provision in respect of
earlier year written back - - 165 0.5%
Net Profit 9,866 22.6% 3,422 9.5%
1. Revenue:
The Company derives revenue principally from technology services provided
to clients in the telecommunications industry.
The revenue increased by 20.9% to Rs. 43,578 Million in fiscal 2009 from
Rs. 36,047 Million in fiscal 2008. This reflected an increase in the number
of clients served during the respective years as well as an increase in the
amount of business from these clients. Revenue from Europe as a percentage
of total revenue was 68.3% in fiscal 2009 compared to 76.9% in fiscal 2008.
Revenue from the Americas increased to 25.0% in fiscal 2009 from 17.3% in
fiscal 2008 while the share of revenue attributable to the Rest of the
World segment was 6.7% in fiscal 2009 compared to 5.8% in the previous
year.
Consolidated Revenue:
Consolidated Revenue for the fiscal 2009 stood at Rs. 44,647 Million
compared to Rs. 37,661 Million last fiscal, a growth of 18.5%. Consolidated
revenue grew at a CAGR of 23.5% over the last 3 years.
Consolidated revenue by Geography:
Europe contributed 66.8% of the consolidated revenue in fiscal 2009 while
Americas and Rest of the World contributed 25.4% and 7.8% respectively. The
revenue share from Europe, Americas and Rest of the World in fiscal 2008
was 73.6%, 19.4% and 7.0% respectively.
Consolidated Revenue by Segment:
For fiscal 2009, 86.8% of revenue came from TSP segment, 5.4% from TEM,
5.6% came from BPO segment while 2.2% from others. The revenue share in
fiscal 2008 from TSP, TEM, BPO and Others segment was 89.2%, 5.1%, 3.5% and
2.2% respectively.
2. Other Income:
Other income includes interest income, dividend income, profit on sale of
current investments, foreign exchange gain/loss and sundry balances written
back.
Interest income mainly consists of interest received on bank deposits.
Dividend income includes dividend received on long term investments as well
as that received on current investments.
Exchange gain/loss consists of mark to market gain/ loss on ineffective
hedges, realized gain/loss and revaluation gain/loss on translation of
foreign currency assets and liabilities.
Other income is at Rs. (425) Million in fiscal 2009 compared to Rs. 976
Million in fiscal 2008. This was primarily due to exchange loss of Rs. 731
Million in this fiscal.
3. Expenditure:
Particulars FY 2008-09 FY 2007-08 %Inc/(Dec)
Rs. in % of Rs. in % of
Million Revenue Million Revenue
Personnel Cost 14,197 32.6% 12,224 33.9% 16.1%
Operating and
Other Expenses 16,952 38.9% 15,616 43.3% 8.6%
Depreciation 1,074 2.5% 736 2.0% 45.9%
Interest 25 0.1% 100 0.3% (75.1%)
Total Expenses 32,248 74.0% 28,676 79.6% 12.5%
Personnel cost includes salaries, wages and bonus, contribution to
provident fund and other funds and staff welfare costs. The increase in
personnel cost in absolute value is mainly due to increase in headcount and
annual increments.
Operating and other expenses mainly include Subcontracting costs,
Travelling expenses, Communication expenses, Rent, Repairs and Maintenance,
Office establishment costs, Software Packages and Professional fess. The
increase is due to increase in business volumes, increase in number of
office locations in India and overseas and overall growth in business
activity.
Increase in depreciation is mainly due to increase in investment in
infrastructure and equipment to service our growing business.
The Company incurred interest expense of Rs. 25 Million in fiscal 2009 on
borrowings as compared to Rs. 100 Million in fiscal 2008.
4. Profit before tax:
Profit before tax increased by 30.7% to Rs. 10,905 Million in fiscal 2009
from Rs. 8,347 Million in fiscal 2008. Profit before tax as a percentage of
revenue was 25.0% in fiscal 2009 compared to 23.2% in fiscal 2008.
5. Income taxes:
The provision of current tax, deferred tax and fringe benefit tax for the
year ended 31st March 2009 was Rs. 1,039 Million as compared to Rs. 689
Million in the previous year, a growth of 50.7%. As a percentage of
revenue, provision for taxes increased to 2.4% in fiscal 2009 from 1.9% in
fiscal 2008. The effective tax rate in these years was 9.5% and 8.3%
respectively.
6. Profit after tax before exceptional items:
Profit after tax before exceptional items increased by 28.8% to Rs. 9,866
Million in fiscal 2009 from Rs. 7,658 Million in fiscal 2008. Profit after
tax as a percentage of revenue was 22.6% in fiscal 2009 and 21.2% in fiscal
2008.
Consolidated PAT:
Consolidated PAT before exceptional item and minority interest for the
fiscal 2009 was Rs. 10,145 Million compared to Rs. 7,695 Million last
fiscal, a growth of 31.8%. PAT as a percentage of revenue was 22.7% in
fiscal 2009 compared to 20.4% in fiscal 2008.
C. CASH FLOW:
The cash flow position for fiscal 2009 and fiscal 2008 is summarized in the
table below:
Rs. in Million
Particulars Fiscal
2009 2008
Net cash flow from operating activities* 12,003 2,097
Net cash flow from (used in) investing activities (6,204) (1,983)
Net cash flow from (used in) financing activities (1,645) 356
Cash and cash equivalents at the beginning of the
year 765 295
Cash and cash equivalents at the end of the year 4,954 765
* includes unrealized gain/(loss) on foreign currency
D. INTERNAL CONTROL SYSTEMS:
The Company maintains adequate internal control system, which provides,
among other things, reasonable assurance of recording the transactions of
its operations in all material aspects and of providing protection against
significant misuse or loss of Company's assets. The company uses an
Enterprise Resource Planning (ERP) package, which enhances the internal
control mechanism.
E. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES INCLUDING NUMBER OF PEOPLE
EMPLOYED:
Despite economic slowdown, Company continued to make addition to its human
resources during fiscal 2009. The Company had a net addition of 2,088
(previous year 3,135) employees mainly through campus recruitment in
addition to lateral hiring. The global headcount of the Company as on 31st
March 2009 was 24,972 compared to 22,884 as on 31st March 2008, a growth of
9.1%. The Company used various sources for attracting talent during the
year. It hired Engineering Graduates and Science Graduates for technical
positions whereas MBA's were recruited from premier management institutes
such as IIM's, ISB, XLRI, London Business School etc. for the future
leadership positions.
The IT attrition rate for the year 2009 and 2008 was 18.7% and 24.7%
respectively. The Company has been working towards containing the attrition
rate by continuously investing in learning and development programs for
associates, competitive compensation, creating a compelling work
environment, empowering associates at all levels as well as a well-
structured reward and recognition mechanism.
The Company believes in promoting and nurturing work environment which is
conducive to the development and growth of an individual employee, by
employing the best HR practices such as performance management, reward and
recognition policy, leadership development program, succession planning,
open work culture and effective employee communication.
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