NATCON Covention: Singapore, April 28-29, 2011

The Confederation of Real Estate Developers’ Associations of India (CREDAI), the apex body of private real estate developers in India, is organizing an international conference in Singapore on 28 and 29 April 2011. The convention theme is: “Igniting change in Indian Realty.”

According to the CREDAI website, the real estate and construction industry contributes nearly 20% to India’s GDP, driven largely by the rapid increase in urban population, which is likely to go up from 30% currently to 41.2% by year 2030. The Apex realty body citing a McKinsey Global Institute 2010 report says that by 2030, 590 million people will live in Indian cities, which is almost twice the population of the US today. And an investment of $1.2 trillion will be required to meet the projected demand in these cities, and about 700-900 million sq meter of land space will need to be built, or a new Chicago every year! This process of urbanization is set to make large demands on the ability of the industry to provide mass housing, buildings and other infrastructure at a rapid pace which has not been witnessed before.

The magnitude and complexity of projects under development today necessitates ‘change’ to be embraced, whereby traditional approaches must be replaced with sophisticated ones, taking inspirations from the developed markets. To cope up with the never before execution challenge, there is a need for new ideas, out of box thinking, innovation and foresight.

To serve as a breeding ground for these ideas, this conference is titled at “Igniting Change in Indian Realty.” 

Given this background, the NATCON Convention in Singapore will try to achieve the following objectives, by identifying and discussing the key catalysts of change.

 

Source: Confederation of Real Estate Developers’ Associations of India (CREDAI)

Amy

People’s Choice: Tata Steel is India’s No.1 reputed firm

Tata Steel emerges as the most reputed firm in India while Infosys slips to 9th rank in the Nielsen India’s Corporate Image Monitor survey 2010.

Tata Steel has emerged as the most reputed firm in India, according to the latest Corporate Image Monitor survey (2010) by Nielsen India. Tata Steel is India’s second largest and world’s sixth largest steel maker.  Tata Motors, along with Aditya Birla Nuvo, Wipro and Bharti Airtel are the other companies which figure in the list of top five reputed companies in the study which measures the reputation of leading corporates on a variety of parameters. The other two Tata group firms which find place among the top ten list are India’s largest software exporter, TCS (Tata Consultancy Services), and Tata Power. 

Surprisingly, Infosys, which had ranked second in the 2008 survey (there was no survey in 2009), slips to ninth rank in the 2010 list while Bajaj Auto, HDFC and L&T, which featured among 2008’s top ten reputed firms, are conspicuous by their absence in 2010’ top ten list. Aditya Birla Nuvo, Tata Motors and RIL have emerged as the top 3 most innovative companies in the product category, while Wipro, Bharti Airtel and TCS are the top 3 innovators in the service sector.

The Corporate Image Monitor, which is conducted by Nielsen, a global information and measurement company, measures people’s perceptions of the image and reputation of India’s leading companies, across sectors and serves as an important indicator of the strength of the corporate brand. The survey’s participants include policy makers, influence groups, the financial community, investors, corporate executives, the corporate elite and the general public.

Service levels and product quality have major influence on people’s perception of a firm’s reputation. Besides, other parameters like financial performance, talent pool, innovation, pace of growth, and the extent of media visibility too play a part in shaping up stakeholders’ perceptions of a firm’s reputation. While these are not directly cited by stakeholders to influence reputation, deeper analysis reveals that firms which perform well on these aspects in general, tend to have stronger reputations, the study said. It also highlighted that stakeholders expect leading organizations to be strong on parameters such as vision and leadership.

But the major suggestion was regarding the Corporate Social Responsibility (CSR) as the respondents felt that corporates should give priority to issues pertaining to public health and the environment as part of their CSR agenda.

“Corporate reputation is a very critical factor that drives stakeholder’s perception about a company and thereby its sustained growth. It is evident from the Nielsen survey that most leading companies in India have a strategy in place aligned to their business needs to nurture and enhance their corporate image to boost stakeholders confidence,” said Surekha Poddar, Executive Director, The Nielsen Company.

Top 10 Corporates- Nielsen Corporate Reputation Index

2008	2010
Tata Motors	Tata Steel
Infosys	Tata Motors
Reliance Industries	Aditya Birla Nuvo
Wipro	Wipro
Tata Steel	Bharti Airtel
HUL	TCS
L&T	Tata Power
HDFC	Reliance Industries
TCS	Infosys
Bajaj Auto	HUL

Source: Nielsen Corporate Image Monitor

Amy

Dell 2.0 delivers: Q4FY11 profits more than double

The ‘make-to-order’ PC king makes a grand comeback with its emphatic performance for FY’11.

When four year ago, on January 31, 2007, when Dell Inc (NASDAQ: DELL), once the undisputed king of the desktop computer market which shot to fame with its unique make-to-order or direct-to-customer model, announced the unceremonious ouster of its then CEO Kevin Rollins and return of Michael Dell, the Founder-Chairman, as the new CEO, expectations rose high. Dell was making a comeback as CEO at a time when Dell was down, though not out, dethroned by arch rival HP as the world’s number one PC maker, and as rivals such as Acer and Lenovo were busy chipping away at its market share.

However, four years down the line, once mighty Dell seems well on track to regain its crowning glory, going by its outstanding performance during the fourth quarter of the fiscal year 2011, led by its expanding strength as an enterprise solutions provider and continued strong execution. In fact, according to the company, it was also one of its most successful financial quarters ever.

The company’s net income during the fourth quarter of FY’11 grew by 177% to $927 million from $334 million in the same quarter a year ago while its full-year net income was up 84% to $2,635 million ($2.6bn) in FY11 from $1,433 million ($1.4bn) in the previous financial year. The company’s full-year EPS too grew almost at a similar rate (85% to be precise) to $1.35 from $0.73, during the said period.

Commenting on the company’s spectacular performance, Michael Dell, Chairman and CEO said, “I’m very pleased with our fiscal year results and the strong performance we’re seeing in our commercial businesses.” He added, “We remain focused on developing and acquiring new technologies and capabilities, and our IT solutions portfolio has never been stronger. Customers are now seeing Dell in a fresh light, and we’re heading into the new year with strength and optimism.”

Market analysts attributed the company’s robust performance to the falling price of components and the replacement of corporate IT products and also to Dell’s strategy of focusing on emerging areas such as data storage services and cloud computing away from the slowing market for PCs and towards, the influential BBC commented. “Dell's positive outlook is a plus for its suppliers' businesses, but their share price will still be weighed on by rising costs and thinning margins," it cited Andrew Deng of Taiwan International Securities as saying.

Giving its outlook for the fiscal-year 2012, the company said that it expects revenue growth of 5-9%, non-GAAP operating income growth of 6-12%, and continued strong execution on cash flow with cash flow from operations exceeding net income.

Although, it cautioned that it expects normal seasonal declines in its consumer and public businesses and, as such, a slight sequential decline in revenue in its first quarter of fiscal-year 2012.

Fiscal-Year 2011 Fourth Quarter and Full Year Highlights

                                                                                       Fourth Quarter                                              Fiscal Year   

(in millions)	FY11	FY10	Change	FY11	FY10	Change
Revenue	$15,692	$14,900	5%	$61,494	$52,902	16%
Operating Income (GAAP)	$1,145	$510	124%	$3,433	$2,172	58%
Net Income (GAAP)	$927	$334	177%	$2,635	$1,433	84%
EPS (GAAP)	$0.48	$0.17	182%	$1.35	$0.73	85%
Operating Income (non-GAAP)	$1,286	$798	61%	$4,149	$2,974	40%
Net Income (non-GAAP)	$1,018	$544	87%	$3,106	$2,054	51%
EPS (non-GAAP)	$0.53	$0.28	89%	$1.59	$1.05	51%

Source: Dell.com

Amy, Chief Editor.

Tata Motors’ Q3 Consolidated PAT surges 273%

Continuing its good show of the last three quarters since March’10, Tata Motors has once again reported stellar performances in the just concluded December 2010 quarter. India’s largest automobile company which enjoys a unique portfolio of cars – from the mass market Nano to the marque brands like Land Rover and Jaguar – notched up a growth of 273% in its consolidated net profit at Rs. 24.24 billion in Q3FY11 compared to just Rs. 6.5 billion in the same quarter a year ago. The company’s bottom line was boosted by substantial jump in its EBITDA margin which rose to 15.2% from 11.8%, a growth of 340 bps, during the said period. The company’s consolidated net revenue too grew at a healthy 22% to Rs. 316.85 bn in Q3FY11 from Rs. 259.74 bn in Q3FY10.

On a sequential basis, in Q3FY11, the company’s net revenue rose 10.1% while the PAT growth just failed by a whisper to kiss the double-digit mark, registering a growth of 9.1%.

The super fast growth of the company was no doubt driven by JLR, which have continued their good run of show in European markets, as well as global sales, reflected in the fact that the Indian operations accounted for just Rs. 4.1 billion out of the PAT of Rs. 24.24 billion the company earned during the December quarter of FY 2010-11.

However, the automaker’s standalone results for the said quarter are not so impressive with the company registering a growth of a mere 2.5%, y-o-y, in its bottom line during the Q3FY11, though net revenue grew by a little over 28%, during the same quarter. Further, for the 9-month period, the company’s PAT actually declined by nearly a quarter to Rs. 12.38 bn in 9MFY11 from Rs. 16.43 bn in the same period of the previous fiscal year.

According to the company, its Q3 FY2011 Market share increased Q-o-Q to 64.1% driven by improved share of business in MHCV and LCV. The company resorted to average price increases of ~ 1.2 % in Q3 FY11 along with increased cost reduction initiatives to offset increases in costs due to higher commodity prices. Also, Tata Motors gained market share in CV segment Q-0-Q. The 9m FY 2011 market share for commercial vehicles stood at 62.1%. The 9M FY 2011 market share for passenger vehicles stood at 12.7%.

Tables Sources: Tata Motors

Amy, Chief Editor.

Hero Honda’s Q3 PAT decelerates 20%

Does the profit de-growth signal that India’s largest two-wheeler maker has hit the bumps?

Hero Honda has been in the news for all the wrong reasons in recent times. First, it was the break-up with the Japanese partner which came as a major shocker, and then uncertainty over royalty payments followed by a host of other news that hit confidence in the country’s largest two-wheeler maker. And now the news about its lower profits in the December 2010 quarter further disappoints.

The company which makes popular models such as Passion, Karizma and hugely successful Splendor, today said that its net profit fell by 20% on a year-on-year basis to Rs 429 crore during the Q3FY11, compared to Rs 535.7 crore in the same quarter a year ago, led by a sharper decline in margins to 11.2% from 17.2%, during the said period.

Reportedly, the management has warned that the company’s margins would remain under pressure in the short-term.

In contrast, arch rival, Bajaj Auto had earlier reported strong Q3 numbers for FY11, with its net profits recording y-o-y growth of over 40% to Rs 667 crore and top line jumping nearly 27% to Rs 4177 crore. This was despite a rise in the company’s raw material cost during the December 2010 quarter. 

A section of market analysts have expressed concern over Hero Honda’s growth post-the termination of the 26 years long joint venture between India’s Hero Group and Japanese auto giant Honda. These have also been reports in the media about the Indian partner seeking to dilute its stake in the company. 

-      Amy, Chief Editor

-       

You can reach the author at: businessbanter@gmail.com

Tags: Hero Honda, Two-Wheeler,  Honda, world's largest motorcycle company, Third quarter results, Q3, 2011.

ICICI Bank continues strong growth momentum in Q3, change is working

ICICI Bank has reported strong jump in its consolidated net profit during the third quarter of financial year 2010-11. The largest private sector bank in the country notched up consolidated PAT growth of 77.5% Y-o-Y to Rs. 2,039 crore (US$ 456 million) in Q3FY11 from Rs. 1,149 crore (US$ 257 million) in the corresponding quarter of the previous financial year i.e., Q3FY10.

ICICI Bank is India's second-largest bank, after the state-owned SBI, with total assets of Rs. 3,634.00 billion (US$ 81 billion) at March 31, 2010.

The Mumbai-headquartered bank’s standalone net profit was up 30.50% at Rs 1,437 crore versus Rs 1,101.1 crore, during the said period.

The bank’s standalone net interest income grew 12.34% y-o-y to Rs. 2,312 crore in Q3FY11 from Rs. 2,058 crore in Q3FY10.

In another positive, its Current and Savings Account (CASA) ratio increased to 44.2% at December 31, 2010 from 39.6% at December 31, 2009.

Advances too grew by 15.3% Y-o-Y to Rs. 206,692 crore (US$ 46.2 billion) at December 31, 2010 from Rs. 179,269 crore (US$ 40.1 billion) at December 31, 2009.

For live chart: click here 

However, the bank’s Operating expenses (including direct marketing agency expenses) increased 27.2% to Rs. 1,707 crore (US$ 382 million) in Q3FY11 from Rs. 1,342 crore (US$ 300 million) in Q3FY10, primarily due to costs relating to new branches added over the last year and full impact of cost of erstwhile Bank of Rajasthan, during the quarter.

Provisions decreased 53.6% to Rs. 465 crore (US$ 104 million) in Q3-2011 from Rs. 1,002 crore (US$ 224 million) in Q3-2010.

The bank’s Net Non-Performing Asset (NPA) ratio also declined to 1.16% at December 31, 2010 from 2.19% at December 31, 2009.

In absolute terms, the bank’s Net NPA decreased by 34.9% to Rs. 2,873 crore (US$ 643 million) at December 31, 2010 from Rs. 4,416 crore (US$ 988 million) at December 31, 2009.

Its Provision coverage ratio increased to 71.8% at December 31, 2010 from 69.0% at September 30, 2010 (51.2% at December 31, 2009).

The bank’s CAR (capital adequacy ratio) stood at a solid 19.98%, with Tier-1 capital adequacy of 13.72%, as per Basel II norms. This is well above RBI’s requirement of total capital adequacy of 9.0% and Tier-1 capital adequacy of 6.0%.

Performance in the 9-Month period of FY 2010-11

The bank’s standalone Profit after tax for the 9-month period of FY 2010-11 grew by 22.5% to Rs. 3,699 crore (US$ 827 million) compared to Rs. 3,019 crore (US$ 675 million) during the same period of the previous fiscal year;

Consolidated PAT for the 9-month period increased by 36.0% to R 4,525 crore (US$ 1.0 billion) for 9M-2011 compared to Rs. 3,328 crore (US$ 744 million) for 9M-2010.

Change@work

According to a statement by the country’s largest private sector lender, it has continued with its strategy of pursuing profitable credit growth by leveraging on its improved fund mix, lower credit costs and efficiency improvement, and cost rationalization. In this direction, the Bank continues to leverage its expanded branch network to enhance its deposit franchise and create an integrated distribution network for both asset and liability products. 

ICICI Bank has 2,512 branches, the largest branch network among private sector banks in the country, as on December 31, 2010.

(To read another of our story on ICICI Bank, click here)

Indian Bank’s Net Profit grows 11.3% in Q3FY11

Chennai-headquartered Indian Bank has reported a rise of 11.3% to Rs. 491.29 crore in Q3FY11 from Rs. 441.38 crore in Q3FY10. The bank’s total income (interest earned plus other income) grew to Rs. 2391.90 crore from Rs. 1968.81 crore, during the same period.

In another positive, this state-owned bank’s employee cost fell down, though marginally, to Rs. 332.79 crore in the third quarter of FY 2010-11 from Rs. 340.79 crore in the corresponding quarter a year ago.

Provisions were up to Rs. 53.55 crore from Rs. 32.04 crore, Y-o-Y, during the above-mentioned period.

For live chart: click here 

The bank’s CAR stood higher at 12.35%, as on December 31, 2010 against 11.77%, as on December 31, 2009, but was lower than 12.71% reported for FY’10.

The bank’s Net NPA (NNPA) ratio was higher at 0.57% from 0.16, y-o-y, during the period under review.

In absolute terms, its NNPA grew sharply, more than quadrupling to 418 crore in Q3FY11 from Rs. 90 in Q3FY10.

According to a release by the Indian Bank, ‘During the quarter (Q3FY11), Non-Performing Financial Assets aggregating to `347.40 crore (net of provisions) were assigned to Asset Reconstruction Companies. In line with the guidelines of Reserve Bank of India, surplus 46.14 crore arising out of this sale is not recognized in Profit and Loss Account.

Non Performing Loan Provisioning Coverage Ratio stood at 83.01%, as on 31st December 2010.

In terms of segment-wise revenues, while incomes from treasury operations declined, those from retail and corporate banking operations grew well, thus more than compensating from the decline in treasury operations (see Table: Segment Wise Results).

Source: Indian Bank

 

Union Bank of India Q3 PAT up 8.6%

Leading state-owned bank, Union Bank of India, has posted a year-on-year growth of 8.6% in its net profit to Rs 580 crore for the third quarter ended December 31, 2010 as compared to Rs 534 crore, in the comparable quarter a year ago.

The bank’s net interest income grew at a healthy 52% to Rs 1,616 crore from Rs 1064.7 crore, during the same period.

For live chart: click here

 

The bank’s provisions grew sharply to Rs 400 crore in Q3FY11 from Rs 160 crore in Q3FY10.

PNB’s net profit grows nearly 8% in Q3FY11

The New Delhi-headquartered Punjab National Bank has posted a growth of a mere 7.8%, on a Y-o-Y basis, in its PAT in the third quarter ending December 31, 2010. The bank’s net profit during Q3FY11 rose to Rs. 1,089.77 crore from Rs. 1,011.31 crore in the same quarter a year ago.

Its total income, however, grew at a healthy 28% to Rs 7,976.35 crore against Rs 6,236.55 crore, during the said period.

On the negative side, the bank’s Capital Adequacy Ratio, as per Basel II norms, fell substantially to 11.9% in the third quarter of FY 2010-11 from 14.56 % in the corresponding quarter a year ago. Further, its ROA (Return on Assets) too declined to 1.27% from 1.46%, during the same period.

 The bank’s EPS stood at Rs. 34.56, as on December 31, 2010, up from Rs. 32.07 in Q3FY10.

 Source: PNB