QBiz: Women Lead India Ops, Gold Reserves Plunge & More
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Women Lead India Ops of Top IT MNCs - TOI
Silicon Valley is often criticized as being a boys’ club. Men dominate the software industry, and hold most leading positions.
The Indian software industry cannot completely avoid that tag. But here, women constitute a higher proportion of the technology workforce than in the Valley, and, extraordinarily, almost all of the biggest IT multinationals in India now have a woman at the helm.
Accenture on Friday elevated Rekha Menon as its India chairman, and she will lead a workforce of over 1 lakh people, a third of Accenture’s global strength. Menon joins a league that already has Vanitha Narayanan, MD of IBM India, Neelam Dhawan, MD of HP India, Aruna Jayanthi, CEO of Capgemini India, Kumud Srinivasan, president of Intel India, and Kirthiga Reddy, MD of Facebook India.
Narayanan and Jayanthi too lead companies that have over a lakh employees. Dhawan leads a firm estimated, by IT publication DataQuest, to have $6 billion revenue.
Thomas Cook Buys India, HK Travel Biz of Kuoni
Indian-Canadian billionaire Prem Watsa-backed Thomas Cook (India) will buy rival Kuoni’s travel businesses in India and Hong Kong for Rs 535 crore, or about $85 million, upping its play in the fast-growing leisure industry.
The deal by Thomas Cook is the second biggest in India’s travel services space after Watsa’s Fairfax Financial purchased Thomas Cook itself for $150 million in May 2012.
Thomas Cook and Kuoni’s tour operating businesses in India and Hong Kong will continue to operate as separate entities, the companies said in a statement. The 134-year-old Thomas Cook will pay Rs 320 crore to add consumer-travel brands such as SITA, SOTC and Distant Frontiers to its portfolio in India, helping it overtake Peter Kerkar-owned Cox & Kings to become the top player in customised holiday bookings. It will pay the balance Rs 215 crore for Kuoni’s Hong Kong travel business, marking Thomas Cook’s foray into another Asian nation after Sri Lanka, where it acquired Luxe Asia a few days ago. The company also has a presence in Mauritius.
Thomas Cook — which pipped MakeMyTrip and Oberoi chain’s Mercury Travels for the acquisition — will retain all of the 1,800 employees at Kuoni’s India and Hong Kong units, which generated a turnover of Rs 1,804 crore and operating profit of Rs 29 crore in 2014.
Mumbai Residential Apartment Sold for a Record Rs 202 crore - ET
Records don’t stand long in Mumbai’s real-estate market. The latest to set a new mark is a sea-facing triplex penthouse in South Mumbai’s Napean Sea Road locality with a Rs 202-crore deal, the biggest ever for a residential apartment in the country.
A prominent industrialist is buying the luxury pad with 17,000 sq ft of carpet area spread over the 20th, 21st and 22nd floors of a project, The Residence, being built by the Runwal Group. The penthouse offers views of the Arabian Sea and the Queen’s Necklace and has 21 car-parking slots as part of the transaction.
The industrialist has already made a token payment under an agreement signed last week and the deal is expected to be concluded over the next one month. It works out to be one of the most expensive transactions on a per sq ft basis too, as the buyer is paying about Rs 1.20 lakh per sq ft.
Exporters Worried as Orders Plummet - BS
In the first quarter of 2015-16, India’s merchandise exports contracted 16.75 per cent to $66.69 billion, from $80.11 billion in the same period of 2014-15. Exports have fallen for seven months in a row.
The situation is equally grim for other export-oriented labour-intensive industries, such as textiles, gems & jewellery, and handicraft. Even star export houses in the textiles sector are feeling the pinch.
“We have no idea where things are heading for. Everyone is silent. I had to close down one of my factories because there is no demand for finished leather goods. By this time we generally start shipping Christmas and New Year orders. But this year we are seeing a decline of 15-20 per cent in our order books. Large-scale job losses are inevitable,” said Ahmad, a former president of the Federation of Indian Export Organisations (FIEO).
Leather exports in the first quarter of this financial year declined by almost five per cent from those in April-June 2014. Finished leather goods account for 21 per cent of the total leather exports from India. China and the European Union are the biggest markets.
JK Tyre Set to Buy Unit of Birla Tyres - ET
India’s third-largest tyre maker JK Tyre & Industries is set to buy the Uttarakhand tyre unit of BK Birla flagship Kesoram IndustriesBSE 17.51 % for an enterprise valuation of Rs 2,000-2,200 crore. A deal would take the company’s share of the Indian market to about a fifth from approximately 16% now, bringing JK Tyre on par with No. 2 Apollo Tyres.
A formal announcement is expected in the next one week. Both sides are engaged in last-minute discussions, said multiple sources aware of ongoing negotiations. ET was the first to report, on July 6, that JK Tyre had emerged the frontrunner to buy the unit after Kesoram’s negotiations with a number of global and Indian strategic players such as MRF and Apollo weren’t fruitful.
The deal is likely to be funded through a combination of debt and equity. JK Tyre will borrow Rs 1,500 crore from public and private sector banks, including State Bank of India, with the rest coming from internal accruals, said the people cited above. SBI Caps is advising on the transaction.
Tata Motors Q1 profit Drops 49% to Rs 2,769 cr - BS
India’s largest automobile maker, Tata Motors, said its net profit for the April-June period dropped 49 per cent to Rs 2,769 crore, as its retail sales for the most valuable products, Jaguar and Land Rover, plunged 33 per cent in China. The net was lesser than the average of 30 analysts’ projection of Rs 3,234 crore reported by Bloomberg. Net sales dropped six per cent to Rs 61,020 crore over the past year, trailing Bloomberg’s estimate of Rs 64,362 crore.
“In China, JLR suffered due to macro economic challenges as well as local production related issues,” Chandrasekaran Ramakrishnan, chief financial officer of the company, said while addressing the media on Friday. The company, manufacturing in China since last year through a joint venture with local partner Chery, has not been able to produce as per schedule. “We hope with the ramp up in local production, we will be able to address some of these issues,” he said.
China, which is one of the largest markets for luxury cars, is seeing a slowdown in demand for luxury cars. JLR, luxury unit of the Mumbai-based company, had cut its sales targets and prices in China to face some of these challenges.
MNC Stock Premiums Double in Five Years, Says Ambit - BS
The valuation differential between home-grown companies and multinational ones (MNCs) listed in India has doubled in the past five years. Further broadening of premium is less likely, said domestic brokerage Ambit in a report.
The price to earnings ratio (P/E) of India’s 25 biggest MNC stocks vis-à-vis those on the BSE exchange’s benchmark, the Sensex, doubled to 2.5 between FY10 and FY15.
Ambit says less than a third of the P/E expansion in MNC stocks can be attributed to earnings growth. Scarcity premium, prospects of delisting and ‘safety trade’ are the other factors resulting in an increase in valuations of these companies.
It cited the example of Colgate-Palmolive, the consumer goods major. “Over these five years, Colgate’s P/E rose to 49x in FY15 from 21x in FY10. Note that 21 per cent of this increase in P/E was attributable to earnings growth, whilst 75 per cent was attributable to the re-rating of the P/E multiple for the stock,” it said.
Suresh Prabhu Rolls Out Red Carpet Eyeing Rs 1 trillion Investment Annually in Railways - Zee
Railway minister Suresh Prabhu Friday asked foreign funds and domestic investors to replicate with the railways their success in the telecom, power and road sectors as the national transporter needs a whopping Rs 1 trillion in funds this year and Rs 8.5 trillion over the next five years.
“You have successfully invested in the telecom and power and roads sector, but never in the railways. The government also didn’t invest during the past two decades and so we’ve chalked out a five-year plan under which we are looking at an investment of Rs 1 trillion this financial year and Rs 8.5 trillion over the next five years,” Prabhu told a gathering of overseas investment bankers and domestic funds led by insurers and financial institutions.
The closed-door meeting at the BSE Tower here this evening, where Prabhu rolled out the red carpet for foreign funds and domestic investors, included multinational i-bankers, FIIs, domestic insurers like LIC and other financial institutions, sources said.
However, the minister was quick to admit that private investment in a public service like the railways will take time.
Gold Reserves Plunge, Forex Kitty Dips to $353.46 bn - FE
India’s gold reserves fell sharply by $ 824.2 million as the metal’s prices weakened globally, but gains in currency assets limited the dip in overall forex reserves, which were down $ 187.6 million at $ 353.46 billion for the week ended July 31.
The overall reserves had risen by $ 321.7 million to $ 353.648 billion in the previous reporting week.
After staying unchanged for some weeks, the recent fall in the gold prices seemed to have hit the gold reserves hard, which were down $ 824.2 million to $ 18.25 billion in the period under review, the Reserve Bank said today. Gold prices continued to fall in the international markets with the current week marking the steepest drop in bullion prices since 1999 as the yellow metal closed below Rs 2,500 per gram level.
Foreign currency assets (FCAs), a major component of overall reserves, rose by $ 629.9 million to $ 329.875 billion in the week, the data showed.
Jaitley Says India Can Take on China With Low Cost of Wages - PTI
Expecting a moderation in interest rates in the coming days to spur manufacturing growth, Union finance minister Arun Jaitley said on Friday that the Indian industry can take on neighbour China with lower wage cost and competitive pricing of products.
Speaking at a leather industry event, he said India’s largest competitor China is facing today a “great challenge of a high wage bill”. China’s labour cost, which was once affordable, is now high.
“And therefore their (China’s) costs have to go up... Our wage bills are lesser than our competitors. As we go on to future years, hopefully with interest rates also moderating, the costs therefore have to be kept under control,” he said.
Jaitley said, in the past, India had slowed down in cost competitiveness because of its labour regime, cost of utilities like power, infrastructure, high cost of capital and various other factors.
“As the Indian economy is growing today ... it is also important for us to utilise all our potentials from thermal to hydel to non-conventional (power) and bring down the cost of production itself as the quantity of power production in this country is increasing,” he said.
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