Engineering major Larsen & Toubro (L&T) reported a tepid 6.87 per cent increase in consolidated net profit on Friday at Rs 861.75 crore in the September quarter due to subdued sales from its power and hydrocarbon verticals. The company had reported a Rs 806 crore net profit in the year-ago period after tax, minority interest and share in profit of associates, it said in a statement. The company's consolidated revenue rose by 10.60 per cent to Rs 21,159.35 crore from Rs 19,130.77 crore in the same period during the last fiscal year. "Sales growth is a reflection of low activity and challenges in execution in the prevailing market conditions. There has been an improvement in the environment, but the real push from growth-oriented policy initiatives taken by the government will take time to translate into ground reality," L&T's Group Chief Financial Officer R. Shankar Raman told reporters in Mumbai. He said that revenues during the quarter were boosted mainly due to better performance in infrastructure and developmental projects. The infrastructure segment achieved a revenue of Rs 9,633 crore, registering a growth of 27 per cent, driven by a surge in execution by all businesses of the segment, while international sales constituted 27 per cent of its total revenue, Raman said. "Higher revenues in the infrastructure segment is on the back of large order book. We are executing across business verticals. The subdued growth in sales reflects lower activity levels and challenging execution in power, metals and hydrocarbon sectors," he said. The developmental projects segment recorded a revenue of Rs 993 crore, reflecting an increase in developing and operating infrastructure as well as power generation assets sales, mainly due to divestment gains, besides commencement of commercial production at the 1,400-MW Rajpura power plant. Its power segment sales declined 20 per cent to Rs 1,153 crore from the corresponding quarter of the previous year, due to a majority of newly secured orders being at initial stages of execution. "There has been a modest pick in the order inflow in the investment started power sector over the past period. As the projects on hand start getting completed, revenues will decline to that extend going forward," Raman said. Decline in Hydrocarbons Business The hydrocarbons business sales also declined 24 per cent to Rs 1,804 crore registering a decline of 24 per cent over the corresponding quarter of the previous year mainly on account of low opening order book and deferment of project awards. International sales constituted 61 per cent of the total revenue. "We, however, expect order inflow to pick up in the international market, resulting an improvement in sales," Raman said. The revenue from the metallurgical and material handling segment saw sharper decline to the tune of 32 per cent at Rs 778 crore, while income from heavy engineering business came down to Rs 810 crore, and sales from the electrical and automation segment remained flat at Rs 1,213 crore. Income from IT and technology services increased to Rs 1,854 crore during the quarter while the financial services segment recorded revenue of Rs 1,604 crore, driven by growth in loan book and disbursements. The company secured fresh orders worth Rs 39,797 crore during the quarter, registering a growth of 17 per cent. The global order inflow stood at Rs 6,756 crore constituting 17 per cent of the total order inflow. Major orders during the quarter were secured by the infrastructure, power and hydrocarbon segments. Consolidated order book of the group stood at Rs 2,14,429 crore as of September-end, higher by 14 per cent on a year-on-year basis. International order book constituted 27 per cent. "Order inflow from the domestic segment during the quarter was nearly 83 per cent, which signals early trend of opportunities in domestic market," Raman said. (PTI)
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FLIP SIDE: Balance sheets of oil companies will improve thanks to the price hike (AP) The hike in petrol and diesel prices reverses the price cut announced in January this year. While this was widely anticipated, critics are making every effort to embarrass the government. From an economic point of view, the hike will do several things. One, it will reduce the amount of off-balance sheet government borrowing through oil bonds, and reduce the fertiliser subsidy as well. Two, with wholesale price inflation being negative, the impact on the public — through higher transportation costs — is expected to be manageable. Three, it will help the government convey the impression that it is serious about tackling the huge fiscal deficit. Finally, it gives the government room for manoeuvre on any envisaged expenditures on social welfare programmes. This budget is expected to benefit the aam aadmi, and that includes funding programmes such as the National Rural Employment Guarantee Scheme. The government-owned oil companies will also benefit from reduced pressures on their balance sheets. But the overall impact is less than desirable. The prices of kerosene and liquefied petroleum gas (LPG) — the staple fuels of the poor and urban middle class — have not been touched, and these account for the most significant part of fuel subsidies. Plus, it will not be long before inflation kicks in; already, there has been a revival of demand for several commodities, whose prices have begun to head upwards again. Unless the government introduces serious price reforms in the budget, it will be perceived as just another cosmetic measure, or another wasted opportunity. STRICTLY BUSINESS Tokyo-based Hitachi, which posted a loss of $8.1 billion for the last fiscal, is banking on batteries for hybrid cars to catapult it back to profitability. It will provide lithium-ion batteries, which power hybrid cars, to General Motors from next year. For this, Hitachi will increase its production of the batteries from 40,000 cells a month to three million a month. Click here to view 'Madoff In A League Of His Own' EDUCATION A New Course Adding another regulator to the education system may not work NEW IDEAS: Yash Pal (right) recommended a super regulator for the education sector (ABP) Government-appointed committees have one thing in common — they invariably advocate the setting up of a new body to tidy things up. On 24 June, the Yash Pal Committee proposed the setting up of “a regulatory mechanism, which is overarching, transparent and accountable”. This means setting up of an overall authority for higher education, which will subsume all other regulatory bodies. The R.C. Bhargava Committee on Indian Institutes of Management (IIMs) — which submitted its report to the government in September 2008 —had also suggested the setting up of a pan-IIM committee to improve coordination between the IIMs and the government. Bhargava’s proposal of an overarching IIM committee was panned as adding another layer of bureaucracy. Yash Pal’s suggestion, too, may end up doing just that if the various councils — All India Council of Technical Education, Distance Education Council and University Grants Commission, et al — are not dismantled and replaced with a single body. That, many feel, is unlikely to happen. What is more likely to happen is that all the councils will continue to exist, although under a different name, in a new avatar. Shalini S. Sharma NUCLEAR POWER Who Will Fix The Price? Even as the first tranche of imported nuclear fuel is set to be used for the Rajasthan atomic power station, there is already a turf battle underway on who should regulate the tariffs. The power ministry wants these plants to be regulated by the electricity regulatory commissions; but the department of atomic energy (DAE) says nuclear power is too complicated to be handled by general electricity authorities. The nuclear power business is expected to grow from the present 4,000 MW. Nuclear power plants fall under the purview of the DAE, which fixes the tariff of nuclear power stations in consultation with the Central Electricity Authority. “You can’t have unregulated power in the grid,” says a senior official. But DAE thinks otherwise. The nuclear programme in India is evolving through a series of sequential reactor as well as fuel-cycle technology development stages, DAE officials say. Kandula Subramaniam SEA DRIVE: The Bandra-Worli sea link, inaugurated on 30 June, is five years behind schedule and was executed with a cost overrun of Rs 1,300 crore. The partly constructed freeway, which ends at Mumbai’s southern tip of Nariman Point, exits at Worli on a narrow ramp. For the motorist, this is a nightmare after a 4 minute, 5.6-km dreamrun from Bandra. (Pic by Satheesh Nair) (Businessworld Issue Dated 7-13 July 2009)
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Venezuela will continue to boost oil exports to China and India to capitalize on their booming economies, the OPEC member's oil minister said on Thursday. "That's where we have to keep building our markets because those are the countries that have the biggest year-on-year growth," Asdrubal Chavez told a parliamentary committee. "We're going to keep increasing our shipments to Asia: India and China," he added, without specifying figures. Venezuela's exports of crude oil and refined products slipped 5.6 percent in 2013 from the year earlier to 2.43 million barrels per day, according to state oil company PDVSA. The United States remains the top destination for Venezuelan oil exports. But shipments are down 49 percent from a decade ago, according to the U.S. Energy Information Administration, as Venezuela's socialist government seeks to wean itself from dependence on its ideological foe to the north. Meanwhile, Asia has become an increasingly important market for Caracas. Venezuela has said it exports roughly 500,000 bpd of crude oil to China, part of which is used to pay off oil-for-financing agreements. The country exported more than 400,000 bpd to India last year, according to EIA estimates. "Our job is to keep diversifying our markets," Chavez said. His comments come after Venezuelan President Nicolas Maduro blamed the U.S. shale boom for tumbling oil prices. The slump has come at a delicate time for cash-strapped Venezuela, which needs to shore up its coffers to cover multibillion-dollar bond payments and growing arrears with the private sector. The Venezuelan petroleum export basket, which includes crude oil and refined products, was at $72 dollars per barrel on Thursday, Chavez said. "This is a scenario that will continue as long as certain market imbalances aren't corrected," he said, blaming the oil price slump on "an economic war and a financial war in the international market". Maduro blames Venezuela's severe economic crisis on saboteurs out to topple him and accuses the United States of seeking to destabilize Russia by "flooding" the market with oil. Separately, the new head of PDVSA, Eulogio del Pino, told the committee that the company aims to keep producing roughly 3 million bpd and exporting around 2.5 million. Venezuela is pinning its hopes for increased production on new projects in the Orinoco region, where PDVSA says output is now 1.27 million bpd and set to pass 1.3 million by the end of this year. (Reuters)
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Suzlon Group, the largest wind turbine manufacturer, surpassed the capacity of Asia’s largest wind farm at Kutch, Gujarat to 1100 MW. With this expansion, Suzlon now generates 1800 MW in Gujarat thus accounting for 20 per cent of Suzlon’s total pan-India capacity of over 8250 MW.Company unveiled S97 120m – World’s tallest hybrid tower to harness the wind energy across low wind sites. It is installed at Jamanwada, Kutch in Gujarat and has successfully generated 1500+ kWh in its pilot stage of three months.Tulsi Tanti, CMD, Suzlon Energy, said, “The S97 120 m hybrid tower, a potential game changer, is the result of our continued focus to invest in next generation technologies that will provide energy efficient solutions thus ensuring higher yields to our customers. As the world is waking up and implementing measures to combat climate change, the contribution of wind energy in the energy architecture mix across the world has increased manifold. Governments are now pivoting their attention on renewables to provide the much needed energy security for their respective countries.”The S97 120M hub height hybrid tower is part of Suzlon’s S9X turbine suite.Edelweiss To Provide Smart Investment Options Through ETFs Edelweiss Asset Management, a subsidiary of Edelweiss Financial Services Ltd - announced that it has licensed the MSCI India Index as the basis for a forthcoming ETF from MSCI, the largest index provider in the world. This will be the first ETF based on an MSCI index in India and has been done keeping in view the increasing demand for low cost investment solutions amongst investors.Vikaas M Sachdeva, CEO, Edelweiss Asset Management Ltd said, "ETFs have been around for a long time and also they have a worldwide inflection point of 10-11 years. We have a very strong in-house manufacturing and distribution capabilities and it is only appropriate from our side that we provide Indian investors options to invest in domestic as well as global indices. Hence the main aim is to expand the Asset Management market."Edelweiss Mutual Fund through its offerings focuses on providing better risk-adjusted returns which has made it a pioneer in providing low volatility investment solutions. The Fund House has a diverse product portfolio straddling the risk spectrum with an offering for just about every investor.Vasco Launches Bluetooth-enabled Digipass Authenticators Vasco Data Security International, a global leader in authentication, electronic signatures, and identity management, announced two new DIGIPASS Authenticators DIGIPASS 875 and DIGIPASS GO215 with Bluetooth capabilities. Both devices provide enhanced security for the growing number of mobile devices such as smart phones and tablets.Vasco Digipass 875 is suited for environments with high security and convenience requirements such as internet banking and e-commerce. It offers WYSIWYS (What You See Is What You Sign) functionality that allows the user to see the transaction amount and account number before they electronically sign a transaction. This protects against Man-in-the-Middle attacks, a common attack method used by hackers. DIGIPASS 875 supports mobile devices across multiple platforms including iOS, Android, and Windows Phone, and it can be used with multiple card formats.Digipass GO215 can communicate with any Bluetooth Smart Ready mobile device. It provides a positive and frictionless user experience and enables a higher level of security for mobile banking. The DIGIPASS GO215 instantly creates a virtual secure channel between the host server and the mobile device to secure communication between these two. A single push of a button generates a One Time Password to secure access and transactions. In its connected mode, the GO215 offers electronic signing for additional transaction security.Perpetuuiti Expands Business To North AmericaPerpetuuiti Technosoft (PTE), a leading global Information Technology products company, announced its partnership with Cyber Innovation Labs (CIL), a premier provider of enterprise-class managed Infrastructure-as-a-Service solutions and professional services, in North America. CIL will deliver Perpetuuiti’s extensive business resiliency and service availability suite to the North American market.According to an IT complexity expert and Object Watch founder, Roger Sessions, organizations in the United States lose $1.2 trillion from IT failures every year. The biggest pain points for the North American market are silent IT disasters which have drastic consequences on businesses. Perpetuuiti’s comprehensive end-to-end business continuity and disaster recovery planning includes in-depth plans and action points for silent disasters, thereby ensuring that businesses are protected from unexpected and expected risks.Perpetuuiti’s Business Impact Analysis (BIA) of all probable risks allows enterprises to plan for even the most unexpected disasters and therefore ensure minimum impact on systems, data and processes. Perpetuuiti’s solutions ensure business continuity and resiliency by providing real-time visibility into cascading effects and business impact of silent disasters.Affle Appoints Amit Sharma As MDAffle, a leading Mobile Apps & Ads as a service (MAAS) company, announced the appointment of Amit Sharma as the Managing Director of Affle Appstudioz, it’s mobile apps and analytics platform business. Amit is one of the founding team members of Affle’s India business and has in the last 8 years played multiple roles in the company. In his most recent role he led International Sales & Delivery team and was instrumental in building Affle’s business and partnerships in new markets globally. In his prior roles in the company he had led the Mobile Apps and Operation Services Group, which successfully deployed Affle's apps and platforms with multiple carriers, publishers and other partners. Prior to working with Affle, Amit worked with one of India's leading media houses - The Indian Express Group where he was part of the IT, managed infrastructure, communication & security teams. Also as part of the announcement it is confirmed that Saurabh Singh and Snigdha Singh, the ex-promoters of AppStudioz are no longer associated with Affle Appstudioz Pte Ltd and Appstudioz Technologies Private Limited.Dell Bolsters Digital Services And Analytics Software Solutions To Help Enterprises At Dell World, Dell introduced a series of solutions that help enterprises take advantage of analytics to enable improved customer relationships and transform data into actionable business insights. Dell Services introduced comprehensive, digital business services that help customers redesign business processes to improve operational efficiency and engagement at every point in the customer experience through digital technologies. In addition, Dell Software announced the start of a collaborative effort with Microsoft aimed at delivering predictive analytics in a hybrid cloud setting. Dell Software is also upgrading its Statistica (formerly StatSoft) advanced analytics platform with enhanced big data capabilities through integration with Kitenga.Dell Services is focused on helping its customers in three primary areas: modernization, transformation and digital services. Today, the business unit has unveiled a new, dedicated service line called Dell Digital Business Services (DBS), which includes Digital Transformation Consulting and Digital Technology Services, to help customers better understand their end users’ preferences and transform business processes using digital technologies.Digital Business Services leads with consulting to help companies assess their needs and create a plan to leverage digital technologies including analytics, mobile, social media and cloud, along with other emerging trends, such as the Internet of Things. DBS pulls in best practices from Dell’s analytics solutions, experience as a social media pioneer, acquisitions across cloud and business intelligence, deep partnerships and expertise in digital technologies, and IP from across Dell’s end-to-end portfolio. With this comprehensive solution, Dell Services is uniquely able to help customers adapt their business processes and operating models to a take a digital-first approach.
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India is hoping a new China-backed multilateral lender will fund coal-based energy projects, an official said, putting it in direct conflict with the World Bank, whose chief has maintained that it would stick to its restrictions on such lending. A senior Indian official told Reuters the Asian Infrastructure Investment Bank (AIIB), sponsored by China, is expected to allow funding of coal-fired power plants that the World Bank has almost totally blocked. "When you have 1.3 billion people starved of electricity access and the rest of the world has created a carbon space, at this point denying funding is denying access to cheap energy,” said the official, who spoke on condition of anonymity. India sits on the world's fifth-largest reserves of coal, and the commodity generates three-fifths of India's power supply. But the demand for electricity far outstrips supply, and according to data compiled by the World Resources Institute in 2012, proposals have been made to set up 455 new coal-fired plants in the country. Research house Integrated Research and Action for Development said earlier this year India needs to invest $250 billion in the power sector by 2017. Since 2013, the World Bank's energy strategy limits the financing of coal-fired power plants to "rare circumstances", making it part of a push by U.S. President Barack Obama to fight climate change. "We have got to redouble and redouble again our efforts at fighting climate change," World Bank President Jim Yong Kim told Reuters in an interview in Seoul on Wednesday. "And our way of doing it is to just do everything we can to avoid coal." Kim has said the World Bank has not signed any agreements to support coal-based power plants since he took office in July, 2012. The Asian Development Bank (ADB), a multilateral lender dominated by the United States and Japan, says it will selectively support coal-based power projects if cleaner technologies and other safeguards are adopted. Last year, it approved a $900 million loan to help build a 600 megawatt coal-fired plant in Pakistan. The articles of agreement of the AIIB, which will include its lending strategy, will not be finalised until the end of 2015, Chinese officials have said. Kim said he understood India's position on coal-fired energy projects, but the World Bank's stand would not change. "We have to be sensitive to the fact that climate change is something that, India for example, has contributed much less to than the United States or Europe or other countries and what they're saying is, that we need energy," he said. "And what they're saying is: that we need energy now so that our economies can grow, so that we can provide jobs for our people," he said. "Now we won’t be engaged in coal unless there’s absolutely no other option, and we’ll see where they go," Kim said. Infrastructure Financing GapIndia signed up late last month to be a founder-member of the AIIB, and is also a member of a new development bank from the BRICS group of emerging markets - Brazil, Russia, India, China and South Africa. The cooperation comes despite traditional rivalry - the two Asian giants fought a brief war in 1962 and have overlapping territorial claims along their Himalayan border. The Indian official, who was involved in the AIIB decision, said the funding of infrastructure in the region by the World Bank and the ADB was inadequate. "Had the World Bank resourced its capital base, had the World Bank done reforms that are due, and ADB also resourced the capital base, perhaps there would have been no need to set up the (new) bank," the official said. Experts say the Asia-Pacific region needs about $1-1.5 trillion per year to fund infrastructure needs. The World Bank's total lending to East and South Asia was about $16.6 billion last year. At the end of 2013, the ADB's lending amounted to $21.02 billion, including co-financing with other development partners. "The infrastructure financing gap in Asia, in emerging Asia, is so big and even the existence of ADB, World Bank, and other multilateral development banks cannot fulfil that demand," Indonesian Finance Minister Bambang Brodjonegoro told Reuters last week. "AIIB will be a welcome newcomer." The AIIB was launched at a ceremony in Beijing at which 21 nations were represented, but Australia, South Korea and Indonesia were absent. Australia and South Korea were pressured not to join by the United States, local media in both countries said, but Indonesia said it did not attend because its new government had not taken office. On Tuesday, Brodjonegoro said Indonesia could join the AIIB as early as next week. Analysts say Washington's fears about the AIIB are that the new bank will encroach on its role in providing funds to the region through Western-backed institutions and that it will allow China to assume leadership in Asia. "Don't imagine for a moment that the AIIB is just about economics," said Hugh White, professor of strategic studies at Australian National University. "Asia really does need more infrastructure and there does need to be some new funding mechanisms, but it's also an opportunity for China to build its political and strategic leadership role in Asia." (Reuters)
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The government hopes to attract $250 billion (Rs 15 lakh crore) investment in the energy sector in the next four to five years to provide electricity to all, Power Minister Piyush Goyal said on Thursday. Goyal, who estimated India's total power consumption would double to 2 trillion units by 2019, said the majority of the money would come from the private sector but the government would also invest more. He estimated $100 billion would go into renewable energy. Efforts are being made to increase coal production, strengthen electricity transmission network and get back gas-based power plants on stream, said Goyal, who also holds portfolios of coal and renewable energy ministries. Speaking at the India Economic Summit, organised in New Delhi by the Geneva-based World Economic Forum and the Confederation of Indian Industry (CII), Goyal said the government is pushing ahead with plans for the renewable sector, especially solar energy, where the generation capacity would be increased to 100,000 MW by 2022. "We are expecting around $250 billion investments in the next four to five years. About $100 billion will be in the renewable energy," Goyal said. The electricity transmission segment is expected to see an investment of around $50 billion during this period, he added. The government is sincere in its efforts and "will protect investments", the minister said. India sits on the world's fifth-largest reserves of coal, which generates three-fifths of India's power supply. But the demand for electricity far outstrips supply, and according to data compiled by the World Resources Institute in 2012, proposals have been made to set up 455 new coal-fired plants in the country. Research house Integrated Research and Action for Development said earlier this year India needs to invest $250 billion in the power sector by 2017. The coal industry has struggled to ramp up production as a result of which many power plants have been forced to import coal. Coal India Ltd (CIL), which accounts for 80 per cent of domestic coal production, missed its output target of 482 million tonnes for the 2013-14 fiscal year, producing 462 million tonnes during the period. Goyal said Coal India is expected to double its production to around one billion tonnes by 2019. The private sector is expected to play a bigger role in the coal sector and an ordinance issued recently by the government addresses many of the issues, he said. On September 24, the Supreme Court of India cancelled all but four of the 218 coal block allocated between 1993 and 2011. (Agencies)
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In the first Japanese entry into the Indian property market, Tama Home has announced construction of 12-18 projects at an investment of Rs 6,000 crore in partnership with another firm. Tama Home, listed on the Tokyo Stock Exchange, has an annual sales of Rs 10,000 crore and builds 10,000 homes a year, while its partner Singapore-headquartered Developer Group, a 100 per cent FDI company, is engaged in the Indian real estate. Developer Group is promoted by Japanese investors but managed by Indian professionals. To start with, Japan's Tama Home and Singapore's Developer Group, will jointly build three housing projects, including two townships, having about 3,500 housing units, in Ludhiana, Visakhapatnam and Chennai. "India has tremendous potential for growth in housing. We have found a reliable partner in Developer Group to enter into the Indian market. We want to replicate Suzuki story in India," Tama Home President and CEO Yasuhiro Tamaki said. Tam Home will bring the eathquake-proof technology to the Indian realty market. Tama Home's entry into India comes a week after Japanese telecom group SoftBank buying a major stake in Snapdeal.com for $627 million. (PTI)
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The government plans to sell a 5 per cent stake in energy explorer Oil and Natural Gas Corp (ONGC) in the last week of November or the first week of December, two sources directly involved in the deal said on Wednesday.Prime Minister Narendra Modi's government has introduced long-awaited reforms in the oil sector, freeing diesel prices and raising natural gas prices - measures which should be positive for ONGC and other oil marketing companies.Presentations to investors on the share sale, worth about $2.8 billion at current market prices, are likely to start from 17 November and will run for about a week, said the sources, declining to be named as the details were not yet public."There is a plan to hold roadshows in the US, London and Singapore from Nov. 17 to 23 to attract global investors," said one of the sources.The share sale is part of the government's plan to raise a record $9.5 billion via asset sales in the current financial year through March 2015 to help plug its fiscal deficit.Aradhana Johri, secretary at the divestment department, which oversees the sale of holdings in state companies, was not immediately available for comment.The government has appointed five banks - Citigroup, HSBC Securities, ICICI Securities, UBS Securities and Kotak Mahindra Capital - to manage the sale.In 2012, the government sold 5 per cent of ONGC to raise about Rs 140 billion. It retains about 69 per cent of the company.ONGC, the country's biggest oil explorer, plans to raise overseas output in two stages to 60 million tonnes of oil plus oil-equivalent gas by 2030, or 1.2 million barrels a day.After oil sector reforms, ONGC's share of subsidies is expected to fall substantially this year, said the official. He also said there was no plan to sell stakes in any other oil company this year. (Reuters)
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