QBiz: Factory Output Jumps to 3-Year High in August, CCD’s IPO
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1.Factory Output Growth in India Nears 3-Year High in August: TOI
The country’s factory output growth accelerated to a near three-year high in August, led by a rebound in manufacturing and mining sectors, while retail inflation inched up in September but remained within the comfort level of the policy makers. The strong data adds to the optimism in Asia’s third largest economy, which is seen as a bright spot against the slowing global economy.
Data released by the Central Statistics Office (CSO) on Monday showed growth in industrial output was 6.4 per cent in August, higher than previous month’s downwardly revised 4.1 per cent and 0.5 per cent in August 2014. Industrial output grew 8.4 per cent in October 2012.
2.India Inc’s Revenues Could Slump Most in 4 Years in July-Sept: Reuters
Revenues at India’s top companies are expected to fall 8.2 per cent in the July-September quarter, the biggest decline in at least four years, according to Thomson Reuters data, highlighting the precarious health of the corporate sector.
But analysts say cost-cutting measures and a lower base effect could see companies post a slight 0.4 per cent rise in net income from the previous year, the first earnings growth in four quarters.
The mixed results could add to concerns about how a weaker-than-expected economy is putting Indian companies under pressure. While the Reserve Bank of India (RBI) has cut official interest rates by 125 basis points since January, banks have moved far more slowly.
The broader Nifty has fallen 10 percent since its record high in early March and is down 1.1 per cent so far this year, a mediocre performance for a market that in dollar terms was Asia’s second biggest gainer last year. Another disappointing earnings season would make it harder to justify even current valuations: the NSE is trading at 18.4 times forward one-year earnings, the second highest in Asia after the Philippines.
3.RIL Faces Nearly $1.3-bn Claim in Gas Dispute With ONGC: TOI
Globally, oil and gas pools are known for not sticking to geographical or political boundaries. The eastern gas bowl off the Andhra coast in the Bay of Bengal has been the stage for intense rivalry among explorers to pump up volumes. Additionally, it has also cradled a festering dispute between two of India’s biggest oil companies – state-run ONGC and private sector Reliance Industries (RIL) – over allegations of gas siphoning since 2013.
Now in a preliminary report that has the potential of intensifying that dispute and putting the oil ministry in a spot, US oilfields consultant DeGolyer and MacNaughton (D&M) has said some 9 billion cubic metres of gas – worth nearly Rs 9,000 crore, or $1.3 billion at $4.2 per unit price – may have escaped from ONGC’s block to a contiguous field being operated by RIL.
4.IOC to Spend Rs 32,500 cr on Expansion: ET
Indian Oil Corporation, the nation’s biggest refiner and fuel retailer, is planning to spend about $5 billion (nearly Rs 32,500 crore) to expand its exploration and production business, with half the amount slated to go into acquisition of new assets that are increasingly becoming available in the wake of a global crude oil crash.
About 50 per cent decline in crude oil prices in a year and the expectation that the prices may not go up in a hurry has shaken the faith at many oil firms, which have been redrawing plans, shelving projects and touching only those projects that are viable at current prices. IOC also plans to invest Rs 50,000 crore in expanding capacity at its existing refineries in the next five to seven years. Another Rs 30,000 crore will be spent on setting up new petrochemicals plants by 2022.
5.P&G Sales Decline Despite Focus on Premium Products: ET
The Indian business of Procter & Gamble, the world’s largest consumer products company, expanded at the slowest pace in more than a decade in 2014-15 as demand for its shampoo brands tapered off while skin care portfolio growth declined amid lack of innovation and internal focus on higher margins.
P&G’s three entities in the country, selling an array of products ranging from detergents and shampoo to razors and sanitary napkins, posted combined revenues of Rs 10,347.7 crore for 2014-15, growing at 12.7 per cent compared to 15 per cent a year ago.
The growth rate halved compared to that in most of the past decade when the company saw its business grow more than 25 per cent.
6.Coffee Day: Not Purely a Coffee Business: BS
Coffee Day Enterprises (CDEL), parent company of the Cafe Coffee Day (CCD) chain of cafes (1,538 in India), is to have an Initial Public Offer (IPO) of its equity, worth Rs 1,150 crore.
It is the country’s largest cafe chain and enjoys strong brand visibility. What puts one off, though, is that the parent is also a holding company, with unrelated diversification. For instance, CDEL has stakes in information technology (16 per cent stake in Mindtree), logistics (53 per cent in Sical Logistics), Special Economic Zone development (100 per cent stake in Tanglin), financial services (81.9 per cent in Way2Wealth Securities) and hospitality (100 per cent in The Serai Resorts) businesses.
While competitive intensity in the business is high, CCD’s record provides confidence. The coffee business is also seen growing faster, leading to a higher share of CDEL’s revenues as one goes ahead.
7.Investment in Food Startups Rises 93% so Far in 2015: BS
Online food ventures have been grabbing headlines in the startup ecosystem and among private equity and venture capital firms. Seventeen deals were concluded this year, up from five a year ago, and the investment flow has increased by 93 per cent to $130.3 million.
These startups help in ordering food, provide dining reservations and rate restaurants.
According to Chennai-based Venture Intelligence, food technology startups attracted $130.3 million investments between January and September this year. The five deals in 2014 brought in $67.7 million and six deals in 2013 attracted $42.06 million.
This year’s top three deals are $16.25 million pumped in by Sequoia Capital, Nexus Venture Partners and Matrix Partners into TinyOwl, $16.5 million by SAIF, Norwest, Accel and DST Global in Swiggy and $60 million by Temasek and Vy Capital in Zomato.
8.Sharad Mehrotra Appointed CEO of Telenor India:BE
Sharad Mehrotra has been appointed as the new Chief Executive Officer (CEO) of Telenor India. Mehrotra will succeed Vivek Sood who has been appointed Executive Vice President and Chief Marketing Officer of the Telenor Group. Both appointments will be effective from November 1, 2015, the company said in a statement.
Mehrotra was earlier Chief Marketing Officer (CMO) of Telenor Myanmar, where he has played a key role in the successful launch of Telenor’s mobile services. He was also a part of the management in India from 2008-2013 during establishment of Uninor, now Telenor India. As CEO of Telenor India, Mehrotra will also be a member of Telenor Group’s executive management.
9. Infosys Clocks Rs 3,398 cr Net Profit; Vishal Sikka Says ‘Will Work Hard to Buck Difficult Q3 Trend’: FE
Infosys, India’s second largest IT services exporter, reported a robust performance for the second quarter of FY16 with net profit rising 9.1 per cent on a sequential basis in US dollar terms, coming off from a decline in the first quarter. Similarly, the revenue momentum for Infosys continued to see an upsurge with 6 per cent sequential rise in US dollar terms, which was the highest in the last 16 quarters. The net profit at the end of the second quarter stood at $599 million while the revenue was $2.3 billion. Commenting on the results, Infosys CEO Vishal Sikka said, “We had a great quarter. This was the best performance in 16 quarters.”
CFO Rajiv Bansal has resigned and has been replaced by Ranganath MD, who took over yesterday. Bansal’s resignation will be effective from December 31, 2015. He will stay till the end of this year to help with the transition process.
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