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Saturday, June 16, 2007
Royal Orchid Hotels FY'07 net up 60%
Royal Orchid Hotels Ltd (ROHL) on Friday reported a 59.9 per cent increase in net profit at Rs 33.91 crore for the year ended March 31, 2007 and has recommended a 60 per cent dividend for the year.
The company's stand alone profit in 2005-06 stood at Rs 21.2 crore.
Total income during 2006-07 grew 46 per cent to Rs 91.18 crore as against Rs 62.48 crore in the previous fiscal.
The Board of Directors has recommended a dividend of 60 per cent, subject to approval by the shareholders, an ROHL statement said.
The consolidated profit after tax for ROHL is Rs 35.26 crore, a 52.97 per cent rise from the Rs 23.05 crore registered in 2005-06. Total income grew 44 per cent during the year to stand at Rs 124.1 crore as compared to the Rs 85.9 crore recorded in the year ago period.
SECTOR WATCH: IT Services
Q4 review: The March 2007 quarter ended on a weak note for the three frontline IT services firms, TCS, Infosys Technologies and Wipro, as they reported lower growth in sales and profits compared with the previous three quarters.
Satyam Computer, however, did well in both sales and profits growth. It demonstrated good volume growth, offshore shift and attrition control. Increasing attrition plagued the top three IT firms. While Infosys pulled back in the fourth quarter, TCS and Wipro saw an increase in attrition in the financial year.
Trigger: The rupee appreciation in the current quarter is likely to have a severe impact on revenues and profits. The rupee has firmed up by an average of 10 per cent to quote at around 41.30, while the IT majors had calculated the rupee at 42.30-43.50 in their guidance estimates.
Outlook: Infosys has estimated a margin drop up to 50-60 basis points for the first quarter of this financial year, if the rupee were to quote at Rs 43.1 a dollar. Satyam’s guidance talked about flat margins based on Rs 42.3 a dollar, while TCS indicated flat year-on-year margins, with the rupee at 43.5 a dollar.
The rupee’s appreciation has exceeded the projections by around 4.2 per cent in case of Infosys, 5.05 per cent for TCS and 2.40 per cent for Satyam. The software majors are thus expected to post a decline in the Q1 margins.
According to a CLSA report, every one-rupee appreciation would knock off 35-40 basis points from the operating margins and 1.6 per cent from the earnings of software majors. With the rupee currently quoting at $41, CLSA has projected a decline in the operating margins by 150-230 basis points in the first quarter of 2008. To reduce the impact of the strengthening rupee, the top IT companies have increased their forex cover.
TCS has increased its forex cover across vendors by $1,500 million, Infosys upped it by $1,000 million, HCL Technologies $900 million and Wipro and Satyam Computer by $600 million each. The increase in forex covers would help the companies to arrest the decline in margins in case the rupee appreciates further
Vodafone-Essar looks at mass market
Announces 50% cut in prepaid monthly recharge.
Vodafone-Essar, India’s fourth largest mobile service provider, is looking to add over 1.5 million subscribers a month in this financial year or 18 million new customers in a year, Vodafone CEO Arun Sarin told reporters today.
Simultaneously, the company announced a 50 per cent reduction in the minimum monthly recharge required for a prepaid customer to Rs 99 from the earlier Rs 199 effective June 16, 2007.
This is the mobile service provider’s first board meeting since Vodafone acquired a 67 per cent stake in the company, formerly called Hutchison-Essar, from Hong Kong-based Hutchison Whampoa earlier this year.
To support the move, which marks a strategic shift from its focus on revenue per customer to the mass market, the board has approved doubling investment for the current year to $2 billion.
To gain consumers and market share, Sarin said the company would also introduce low-cost handsets.
The company’s new monthly target, which would translate into 65 per cent growth in subscriber numbers, is larger than last year’s 1-1.2 million. The company has over 28 million subscribers and operations in all 23 telecom circles in the country.
The target would also be the same as India’s leading GSM operator, Bharti Airtel’s, a former Vodafone partner. The Sunil Mittal-owned company has over 40 million subscribers in the 23 circles.
On the integration of Vodafone with Hutchison-Essar, Sarin said, “Whether it is on the network, marketing or human side, the integration is going on smoothly.”
Vodafone-Essar MD Asim Ghosh said the formal integration would take place by the end of September, and after that it would be an ongoing process.
On the constitution of the board, Sarin said there would be 12 members on it, with eight from Vodafone and four from Hutch. Ravi Ruia is the chairman of the new company, with Arun Sarin as vice-chairman and Asim Ghosh as managing director.
There will be two independent directors, Analjit Singh, who owns a stake in the company, and C R Dua. Prashant Ruia, Anshuman Ruia, Vittorio Colao and Vikash Saraf will be board directors representing Essar. Paul Donovan, Gavin Darby and Robert Barr will represent Vodafone.
Reiterating an issue he had raised earlier, Sarin said the company was looking at infrastructure-sharing in the country and was in talks with other mobile firms.
“Infrastructure sharing is the best possible way to reach the 1.1 billion people living in India. We are setting up a platform with whoever wants to join us, so that we can build our network in India in a cost-effective way,” he said.
Pyramid Saimira sees 250 mln profit from 'Sivaji'
Cinema chain operator Pyramid Saimira Theatre Ltd. expects about 250 million rupees in cash profit from the first-month screening of the much-awaited Tamil film 'Sivaji' in India, a top official said.
The Tamil language movie, which opened on Friday, stars southern Indian superstar Rajnikanth, 57, and comes with a dubbed version in Telugu language.
Pyramid is distributing the movie in southern India and Malaysia, besides exhibiting it across 678,000 seats a day, Managing Director P.S. Saminathan told Reuters over the phone.
"Going by the response of the audience and the advanced booking, this might run for 100 days also," he said earlier on television.
Saminathan said he expected a revenue of 500 million rupees from screening the movie in India and another 150 million rupees from Malaysia, where it has been booked for three weeks.
The company has invested about 260 million rupees into this film.
Billion-dollar Indian companies
Company Name Net Sales (2008) in $ billion (conversion rate Rs.40.90 per dollar)
Indian Oil Corporation Ltd 52.53
Reliance Industries Ltd 25.76
Bharat Petroleum Corp Ltd 23.85
Hindustan Petroleum Corp Ltd 21.95
State Bank of India 9.73
Steel Authority of India Ltd 8.63
NTPC Ltd 8.04
Mangalore Refinery & Petrochemicals Ltd 7.04
Tata Motors Ltd 6.79
Chennai Petroleum Corp Ltd 6.07
MMTC Ltd 5.72
ICICI Bank Ltd 5.67
Hindalco Industries Ltd 4.51
Bharti Airtel Ltd 4.39
Larsen & Toubro Ltd 4.33
Tata Steel Ltd 4.33
Bharat Heavy Electricals Ltd 4.25
GAIL (India) Ltd 3.96
Tata Consultancy Services Ltd 3.68
Maruti Udyog Ltd 3.61
State Trading Corp of India Ltd 3.53
Wipro Ltd 3.37
Infosys Technologies Ltd 3.24
ITC Ltd 3.05
Hindustan Lever Ltd** 2.98
Sterlite Industries (India) Ltd 2.91
Reliance Communication Ltd 2.89
Punjab National Bank 2.84
Canara Bank 2.80
Adani Enterprises Ltd 2.50
Mahindra & Mahindra Ltd 2.48
Hero Honda Motors Ltd 2.44
Bajaj Auto Ltd 2.35
Bank of Baroda 2.27
Bank of India 2.26
Grasim Industries Ltd 2.14
JSW Steel Ltd 2.12
Hindustan Zinc Ltd 2.11
Ruchi Soya Industries Ltd 2.11
Videocon Industries Ltd*** 1.87
Ispat Industries Ltd 1.85
Union Bank of India 1.82
Ashok Leyland Ltd 1.77
HDFC Bank Ltd 1.70
Industrial Development Bank of India Ltd 1.56
Ambuja Cements Ltd** 1.55
Central Bank of India 1.54
Satyam Computer Services Ltd 1.54
Syndicate Bank 1.49
National Aluminium Co Ltd 1.46
Housing Development Finance Corporation Ltd 1.45
Indian Overseas Bank 1.44
Bongaigaon Refinery & Petrochemicals Ltd 1.43
ACC Ltd** 1.41
Reliance Energy Ltd 1.40
Petronet LNG Ltd 1.36
Suzlon Energy Ltd 1.33
UCO Bank 1.31
Oriental Bank of Commerce 1.27
Mahanagar Telephone Nigam Ltd 1.21
UltraTech Cement Ltd 1.21
Allahabad Bank 1.20
Jindal Stainless Ltd 1.20
Tata Power Company Ltd 1.16
Redington India Ltd 1.16
National Bank for Agriculture & Rural Development 1.15
UTI Bank Ltd 1.12
Siemens Ltd*** 1.11
Indian Bank 1.06
ABB Ltd** 1.05
National Mineral Development Corporation Ltd 1.03
ONGC# 9.75
* For manufacturing & service companies, net sales considered as revenue.For commercial banks, net interest income is considered as revenue.
** Firms’ financial year ending December 2006
*** Firms’ financial year ending September 2006
# For the nine months ended December 2006, ONGC’s sales were $9.75 billion. It has not yet announced its financial results for the full year. In 2005-06, the firm had recorded sales of $10.74 billion.
ICICI Bank's FPO fixed at Rs 885-950 price band
ICICI Bank's Rs 8,750 crore follow-on public offer's (FPO) price band has been fixed at Rs 885-950 per share. The FPO comes with a green shoe option of Rs 1,312.5 crore.
The issue, which will take the book building route, will open on June 19 and close on June 22.
Sharekhan Investor's Eye dated June 15, 2007
Cement
Dispatches grow by 11% yoy in May 2007
The industry dispatches grew by 11% year on year (yoy) to 14.2 million tonne in May. Among the major players, the volumes of ACC jumped by a massive 19.2% yoy to 1.8 million metric tonne (MMT) boosted by the capacity expansion at Lakheri. Ambuja Cements and the AV Birla group witnessed a marginal volume growth of 2.7% yoy and 4.8% yoy to 1.5MMT and 2.7MMT respectively, as they did not witness any capacity additions. Among the mid-cap cement companies, Shree Cement's volumes jumped by 20.2% yoy fuelled by its third unit at Ras whereas Madras Cement's volumes grew by 15% yoy to 0.45MMT on account of a lower base in the same month last year. JK Cement's volumes declined yoy in both April and May on account of routine maintenance shutdown of its grinding mill at Nimbahera.
VIEWPOINT
Lakshmi Machine Works
Growing at a rapid pace
Lakshmi Machine Works (LMW) is a leading textile machinery manufacturer in India with presence in machine tools and foundry businesses. The company is a major player in the textile machinery space and has about 50% of the domestic market share. The machine tools division makes the CNC machine tools and is a brand leader for customised products while the foundry division makes precision casting.
Though the company has presence in three sectors but the revenues from its textile machinery segment, which contributed 89% of the total revenues in FY2007, dominate its top line. LMW is known for its quality and all its divisions are ISO 9000 certified.
Sharekhan Investor's Eye dated June 15, 2007
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