QBiz: Cognizant Results Bring Gloom; Flipkart to Slash Burn Rate
The Quint’s compilation of business news from dailies across India.
1. Cognizant Results Deepen IT Gloom
Cognizant Technology Solutions Corp reported weaker-than-expected quarterly earnings and cut its full-year revenue growth forecast for the third straight time this year, portending more turbulence for India’s $150 billion information technology sector.
The latest reduction of its revenue forecast signals tougher times ahead for the outsourcing sector. Rivals Tata Consultancy Services Ltd (TCS) and Infosys Ltd have disappointed with a tepid performance in the first six months of the fiscal and now run the risk of growing at a slower pace than the 7.1 percent and 9.1 percent growth reported by the two firms, respectively, last year.
(Source: Livemint)
2. Tata Sons Board Was Aware of Exit Strategy for Group Firms
Cyrus Mistry presented a 10-year vision document to the board which talked about the need to reduce concentration risk for the group arising from Tata Consultancy Services Ltd (TCS) and a plan to exit some group companies, said a person close to the ousted chairman of Tata Sons Ltd.
The discussions on this strategy were minuted by the board in three meetings, this person said, rebutting accusations that Mistry and his team didn’t have a long-term vision for the group and were unilaterally moving to sell parts of the group like Tata Steel’s European business.
The 40-page strategy document titled “Tata Strategy 2025”, parts of which were seen by Mint, was first presented by Mistry to the Tata Sons board in June 2015.
(Source: Livemint)
3. Flipkart to Slash Burn Rate in a Bid to Save $150-200 Million by December 2017
Flipkart will slash its burn rate to save $150-200 million by December 2017 as the online marketplace looks to double its growth pace. The company will infuse minimum fresh capital into the business until a new investor comes on board, according to people with knowledge of the matter.
The company intends to generate surplus cash through operational efficiencies and drum up revenue from units such as advertising and logistics arm eKart.
(Source: The Economic Times)
4. India Firms to List 600 Million Pounds of Masala Bonds in London
India is preparing to list about 600 million pounds ($746 million) of so-called masala bonds in London as it seeks to fund expansion of its energy and transport infrastructure.
Four bonds – denominated in rupees, but sold overseas – will be issued by the state-backed Indian Railway Finance Corp, Indian Renewable Energy Development Agency, Energy Efficiency Services Ltd and National Highways Authority of India by the end of January, UK Prime Minister Theresa May’s office said on Monday in an e-mailed statement. The announcement is a bright spot in May’s three-day visit to India, during which she’s already clashed with her counterpart, Narendra Modi, over British visas for Indian students.
(Source: Bloomberg Quint)
5. Future Retail Buys Heritage Foods' Retail Business
Kishore Biyani-led Future Retail Ltd on Monday said it agreed to buy the retail business of Hyderabad-based Heritage Foods Ltd, promoted by the family members of Andhra Pradesh chief minister N Chandrababu Naidu, in an all-stock deal.
Under the terms of the deal, Heritage Foods will get a 3.65 percent stake or freshly issued shares worth Rs 295 crore in Future Retail. Heritage’s retail business includes the popular Heritage Fresh chain of 124 stores in the three key southern cities of Hyderabad, Bengaluru and Chennai. The stores sell a range of household items, fast-moving consumer goods (FMCG), staples, fresh fruits and vegetables.
(Source: Livemint)
6. HDFC Bank Matches SBI, Cuts Benchmark Lending Rate to 8.9 Percent
HDFC Bank Ltd has cut its one-year marginal cost of funds based lending rate (MCLR) to 8.90 percent, matching the rate offered by market leader State Bank of India.
HDFC Bank has reduced its MCLR by 15 basis points across tenors with effect from 7 November, a spokesperson of the company told BloombergQuint.
Consequently, the private sector bank’s two-year MCLR now stands at 9.00 percent, three-year at 9.05 percent and its overnight rate is 8.70 percent. Since April, banks have shifted to the marginal cost of funds method of calculating lending rate from the base rate regime. Accordingly, lending rates are being reviewed every month based on banks’ cost of funds.
(Source: BloombergQuint)
7. RBI Reiterates Hedging Policy for External Borrowings
The Reserve Bank of India (RBI) on Monday reiterated its foreign exchange hedging policy for external commercial borrowings (ECBs) to ensure uniformity in hedging practices.
The RBI clarified that borrowers should hedge both principal and coupon payments through financial hedges, where mandated. The financial hedge should start from the day the liability is created in the books of the borrower.
(Source: BloombergQuint)
8. Bigbasket Said to Be Looking to Raise $150 Million Next Year
Bigbasket, the online grocer which raised $150 million in March, will approach investors again to raise an equal amount of money early next year, according to two people aware of ongoing discussions.
(Source: Livemint)
9. Britannia Second Quarter Profit Rises, Margins Shrink
Britannia Industries Ltd posted a 6.8 percent growth in profit for the second quarter, missing street estimates.
Net profit rose to Rs 234 crore from Rs 219 crore in the corresponding quarter last year, according to the company’s filing on the Bombay Stock Exchange. The Bloomberg poll of analyst estimates had pegged the profit at Rs 243 crore.
(Source: BloombergQuint)
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)