Industry Cursor-April 2009 India

8/8/2019 Industry Cursor-April 2009 India

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Issue 8 April 2009

ryC U R S O RFed xExpress RStrictly for Private Circulation

Index of Industrial Production: Growth (%)

Indian macroeconomic update

Highlights

Macroeconomic triad (forecast)

E: D&B estimateSource: CMIE, D&B Industry Research Service

IIP and core infrastructure: Growth (%)

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The Index of Industrial Production (IIP) declined by 1.2% during February 2009. While the

mining and manufacturing sectors registered declines of 1.6% and 1.4% respectively, theelectricity sector recorded a growth of 0.7% in February 2009.

WPI-Inflation registered a mild decline to 0.26% for the week ending March 28, 2009, from0.31% for the week ending March 21, 2009.

India's exports declined by 21.7% to US$ 11.9 billion in February 2009, while importsdeclined by 23.3% to US$ 16.8 billion. This resulted in a trade deficit of US$ 4.9 billion.

The current account deficit in India's balance of payments amounted to US$ 14.6 billionduring the third quarter ended December 2008. The current account deficit for the sameperiod last year was US$ 4.5 billion.

Macroeconomic update

Auto components

Banking

Cement

Commercial vehicle

Hospitality

IT hardware

IT-ITeS

Passenger vehicle

Pharmaceutical

Power

Retail

Steel

Textile & garment

Two and three-wheeler

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Contents

GDP: Growth (%)

Note: Exchange rate: INR/US$

Interest rate corresponds to yield on T-Bills 15-91 daysSource: D&B Industry Research Service

Note: Figures in ( ) indicate the same period last yearSource: CSO

Source: CSO, D&B Industry Research Service

Inflation(-)0.5 - 0.0%

Exchange Rate(50.00-50.50)

Interest Rate(4.5-5.0%)

Apr-09

-4

-2

0

2

4

6

8

10

12

Q4FY08 Q1FY09 Q2FY09 Q3FY09 Q4FY09E

Agriculture Industry Services GDP at factor cost

-2

-1

0

1

2

3

4

5

6

7

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Six core infrastructure IIP

Indicator Feb-09 Apr08-Feb09

IIP General -1.2 (9.5) 2.8 (8.8)

Mining & quarrying -1.6 (7.9) 2.4 (5.2)

Electricity 0.7 (9.8) 2.4 (6.6)

Manufacturing -1.4 (9.6) 2.8 (9.3)

Use based

Basic goods -0.4 (7.3) 2.7 (7.3)

Capital goods 10.4 (10.7) 8.8 (17.7)

Intermediate goods -5.4 (8.5) -2.7 (9.3)

Consumer goods -3.0 (11.7) 4.9 (6.6)

Consumer durables 5.7 (3.1) 4.1 (-1.0)

Consumer non-durables -5.5 (14.3) 5.1 (9.3)


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Jun-08

Sep-08

Dec-08

Mar

-09

Auto components industry

Highlights

Prices of steel (Rs/Kg)

Note: For Mumbai marketSource: CMIE

Auto components industry:Investment scenario*(Rs billion)

*Outstanding investments

Source: CMIE

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Top global OEMs such as Volkswagen, Fiat and BMW are planning to

make India their global sourcing hub for auto components. Fiat Group

plans to source electrical, chemical and rubber components from India

in addition to existing mechanical and metallic components. Mercedes

sources components mainly for its German and US operations from

India.

In April, auto components manufacturer Verlicchi, Italy, signed a 50:50

JV with Hema Engineering Industries, to set up a plant in Hosur with aninitial investment of Rs 170 million. The JV will manufacture frames, fuel

tanks and exhaust systems for two-wheelers.

Magna International of US is planning to set up an integrated

manufacturing facility for auto components in India. The facility would

be a mother plant for all of Magna's business divisions in India and also

support smaller units set up in proximity to Magna's customers.

The ACMA estimates that the Indian auto components suppliers to

General Motors would lose Rs 1,500 million in case the company files

for bankruptcy.

The Association of Indian Forging Industry plans to demand relaxation

of banking norms for easy credit, increased government spending oninfrastructure to help gear up the heavy commercial vehicle segment

and bar imports of auto components, especially forgings. The

association is also seeking a bail-out package from the government to

save 700 small and medium forging units from closure.

Auto components makers such as Bharat Forge, Amtek Auto, Mahindra

Systech, Sundram Fasteners, JBM Group, among others, are

increasingly foraying into defence and aviation sectors to de-risk their

business. Also, global aviation companies, especially Airbus, Europe are

planning to source aircraft components from India. This will benefit the

domestic auto components players present in the sector.

In March, the government announced procurement of 15,000 busesworth Rs 48 billion under the JNNURM. This will provide a respite to the

domestic auto components industry, especially manufacturers of air

suspension, seats and air conditioners, as about 20% of the buses

ordered are air-conditioned and low-floor buses; the rest are semi-low-

floor and semi-luxury buses.

Industry: Key financial indicators (%)

Note: Operating profit: PBDIT net of P&E; Net profit: PAT net of P&ESource: CMIE

Parameters Q3FY08 Q4FY08 Q1FY09 Q2FY09 Q3FY09

Growth in net sales 12.45 11.25 18.15 17.6 -13.82

Growth in operating profit 10.97 0.96 20.23 -5.76 -42.5

Growth in net profit 9.44 -7.82 38.99 -23.75 -96.59Operating margin 16.19 15.74 17.04 13.34 10.69

Net profit margin 6.23 6.73 8.59 4.67 0.18

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HR coils 2.00 mm CR coils 0.63 mm

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09


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Banking industry

Highlights

Deposits, credit and growthrates

Movement in call money rates(%)

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European Central Bank decided to reduce the interest rates on the

main refinancing operations, the marginal lending facility and the

deposit facility by 25 basis points each to 1.25%, 2.25% and 0.25%

respectively.

Australia's central bank cut the official cash rate by 25 basis points to3.0%.

Global news

Note: PLR relates to 5 major banksDeposit rate relates to major banks for termdeposits of more than one year maturitySource for all above charts: RBI

Movement in PLR & depositrates (%)

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Third party ATM networks can be accessed by customers free of charge

for customers from April 1, 2009. Initial implementation led to overload

of the National Financial Switch, causing transaction failures.

A number of public sector banks, including Central Bank of India,

Oriental Bank of Commerce, Allahabad Bank, UCO Bank, United Bank

of India and Andhra Bank have reduced their benchmark prime lending

rates by 25-50 basis points.

Few private sector and foreign banks, including HDFC Bank, Axis Bank,Bank of Rajasthan and Citibank also lowered their benchmark prime

lending rates by 25-50 basis points.

The RBI has issued fresh norms for the treatment of provisions for

restructured accounts, standard assets, and NPAs. New norms will help

improve capital adequacy, lower risk-weighted assets, reduce provision

and lower level of net NPAs for banks.

State Bank of India (SBI) has decided to extend the special offer for auto

and home loans till September. Under the scheme, earlier valid till the

end of April, the bank had frozen interest rates on new home loans at

8% during the first year, while the rate on auto loans was fixed at 10%.

SBI has decided to freeze rates on working capital assistance for SMEs at

8% up to September 2009.

Allahabad Bank has entered into an agreement with UAE Exchange &

Financial Services for inward money transfer services under its two

products 'MoneyGram' and 'XpressMoney'.

IDBI Bank will open one branch each in Dubai and Singapore, and a

representative office in Beijing, to establish its presence abroad and

facilitate Indian corporates to raise overseas funds.

IDBI Bank, Federal Bank and Fortis Insurance International have

together invested Rs 2.5 billion in a life insurance venture.

In order to expand its global presence, PNB opened a second branch at

Kowloon, Hong Kong.

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Call money rate-High

Call money rate-Low

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

Apr-08

Jun-08

Oct-08

Jul-08

Sep-08

Nov-08

Dec-08

Jan-09

May-08

Aug-08

Feb-095

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PLR (max) PLR (min)

Deposit rate (max) Deposit rate (min)

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25

27

29

31

15,000

20,000

25,000

30,000

35,000

40,000

%Rs bn

Deposits (LHS) Credit (LHS)

y-o-y growth rates of deposits (RHS)

y-o-y growth rates of credit (RHS)

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09


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Cement industryHighlights

Trend in average wholesalecement prices Mumbai(Rs/bag)

Trend in cement production(mn tonnes)

Source: CMIE

Source: CMIE

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Cement production and despatches in the country grew by 10.1% and

10.0% y-o-y to 18.0 and 18.1 million tonnes respectively in March

2009. During FY09, cement production grew by 7.7% to 181.4 million

tonnes.

Despite excise duty reduction on bulk cement by the government (in

February 2009), cement prices have gone up by Rs 7.4 to Rs 255.1 per

bag on account of higher demand in March 2009.

Cement capacity utilisation declined to 87.0% during Apr08-Feb09from 96.1% during the corresponding period of the previous year.

Aditya Birla Group's cement production grew by 5.9% y-o-y to 32.4

million tonnes during Fy09.

ACC plans to invest Rs 30 billion to increase production capacity of

cement to 30.5 million tonnes by 2010.

Grasim Industries will commission an additional 3.3 million tonne

clinker facility in Andhra Pradesh by 2010.

Shree Cement has commissioned a clinker manufacturing unit of 1.0

million tonne per annum at a capex of Rs 2.5 billion.

Cement: Production and despatches

Source: CMIE

Company: Cement production (Apr08-Feb09)

Source: CMIE

238.0

240.0

242.0

244.0

246.0

248.0

250.0

252.0

254.0

256.0

258.0

Nov-08

Oct-08

Dec-08

Jan-09

Feb-09

May-08

Jul-08

Sep-08

Apr-08

Jun-08

Aug-08

Mar-09

127.6141.8

155.7

168.3181.4

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

200.0

FY05 FY06 FY07 FY08 FY09

Parameters

Mar-09 FY09

mntonnes

y-o-ygrowth (%)

mntonnes

y-o-ygrowth (%)

Production 18.0 10.1 181.4 7.7

Despatches 18.1 10.0 181.0 7.9

Parameters

Feb-09 Apr08-Feb09

mntonnes

y-o-ygrowth (%)

mntonnes

y-o-ygrowth (%)

Ambuja Cements 3.9 9.9 16.3 4.6

ACC 1.7 2.7 19.0 4.6

Grasim Industries 1.5 6.9 14.6 -0.3

UltraTech Cement 1.4 0.9 14.2 4.7

India Cements 0.8 -6.7 8.3 -0.9


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Segmental growth in CV sales(%)

Source: CMIE

Commercial vehicle industryHighlights

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Demand for commercial vehicles continues to remain depressed. Fiscal

FY09 ended on a poor note, with domestic sales declining by 26.2% to

41,881 units in March. While sales of medium & heavy vehicles fell

steeply by 43.4%, sales of light commercial vehicles declined by 0.2%.

Cumulative sales of CVs during FY09 were lower by 21.7%; sales of

M&HCVs declined by 33.2%, while those of LCVs declined by 7.1%.

After six consecutive years of growth, even exports of CVs posted a

decline, of 27.7% in FY09.The stimulus packages announced by the government have given a

boost to demand for buses; share of buses in domestic CV sales

increased to 17.1% in the March 2009 quarter from 14.6% in the

December 2008 quarter.

To expand reach of vehicle finance, Ashok Leyland has decided to set up

a vehicle finance arm by FY10, with an initial capital base of Rs 1-1.5

billion.

Tata Motors will be setting up a heavy truck manufacturing plant in

Myanmar, with an annual production capacity of 1,500 units. The

project will be funded by the government of India.

Category-wise growth inCV sales (%)

Source: CMIE

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Industry: Key financial indicators (%)

n.a.: Not applicable (losses incurred)Note: Operating profit: PBDIT net of prior period and extraordinary items (P&E); Net profit: PAT net of P&ESource: CMIE

4.5

32.8

-0.4

-33.2

19.7

33.9

12.3

-7.1

-40

-30

-20

-10

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20

30

40

FY06 FY07 FY08 FY09

M&HCV LCV

Trend in monthly CV sales (%)

Source: CMIE

-80

-60

-40

-20

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20

40

60

80

100

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

FY07 FY08 FY09

10.2

38.2

2.1

-24.0

10.7

3.9

26.8

-7.1

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-20

-10

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20

30

40

50

FY06 FY07 FY08 FY09

Goods carriers Passenger carriers

Parameters Q3FY08 Q4FY08 Q1FY09 Q2FY09 Q3FY09

Growth in net sales 4.7 6.8 14.8 1.0 -39.8

Growth in operating profit 0.8 -5.9 -23.5 -19.2 -96.4

Growth in net profit 0.9 -3.2 -34.1 -34.4 n.a.

Operating profit margin 11.6 9.9 7.9 9.0 0.7

Net profit margin 6.1 5.7 3.6 4.0 -8.4


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Foreign exchange earningsfrom tourism in India(US$ mn) FY09

Source for all above charts: Ministry of Tourism

Foreign tourist arrivals in India('000 nos.) - FY09

Hospitality industryHighlights

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In March 2009, foreign tourist arrivals (FTA) declined by 12.9% y-o-y to0.5 million as a consequence of global economic slowdown andMumbai terror attack. During FY09, FTA declined by 2.5% y-o-y to 5.1million.

Foreign exchange earnings from tourism industry decreased by 1.7%y-o-y to US$ 10.5 billion during FY09.

Kerala tourism industry registered revenue growth of 14.8% toRs 131.3 billion in 2008 owing to healthy growth of (14.2% to 7.6

million) tourists' arrivals during the same period.In March 2009, Roots Corporation, a subsidiary of Indian Hotels

thCompany, launched its 17 'Ginger brand hotel in Mangalore. Thecompany intends to take the total number of hotels under this brand to30 by 2010.

Fortune Park Hotels is planning to open four new hotels in Mussoorie,Jaipur, Bangalore and Manipal by July 2009.

Leela Group, which currently has five hotels and resorts in India, isplanning to invest Rs 25 billion for opening five more hotels across thecountry by 2012.

BPTP, a real estate developer, is planning to build five star hotel (with

500 rooms) in Noida before the Commonwealth Games (2010), with anapproximate investment of Rs 6 billion.

Geneva-based Global Franchise Architects (builds, operates andfranchises brands such as Coffee World, Pizza corner, The Donut Bakerand The Cream & Fudge Factory) is planning to develop 100 outlets inIndia by August 2009.

Dish Hospitality is planning to invest Rs 2 billion for restaurantexpansion by 2010.

Vikram Chatwal Hotels, a division of Hampshire Hotels and Resorts,plans to open 'Dream brand of hotels across various cities in thecountry (including Bangalore, Mumbai and New Delhi) with aninvestment of Rs 50 billion.

Tourism statistics

Mar-09 FY09

Valuey-o-y

growth (%)Value

y-o-ygrowth (%)

Foreign tourist arrival (mn) 0.5 -12.9 5.1 -2.5

Forex earning (US$ bn) 0.9 -7.6 10.5 -1.7

Source: Ministry of Tourism

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Mar-09

Global hotel performance February 2009

Region Occupancy (%) ARR (US$)

Asia-Pacific 59.0 114.8

America 53.7 102.7

Europe 53.3 119.1

Middle East/Africa 63.4 163.5

Note: Occupancy (%) = Rooms sold divided by rooms available multiplied by 100.Average Room Rate (ARR) = Room revenue divided by room-night sold.Source: STR global

Parameters


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IT hardware industryHighlights

Domestic computer hardware& peripheral production(Rs billion)

Source: CMIE

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Intel India launched netbooks featuring Atom processors in the state of

Tamil Nadu. These netbooks were launched with the objective of

providing the experience of computing to first time users. The device is

expected to be priced at Rs 12,000.

HCL Infosystems entered into a tie up with NDS to offer technological

solutions to local cable TV operators and enable them to launch digital

services (including IPTV). This move will help the cable operators to

expand their market share.

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Global sales of semiconductors declined by 5.4% y-o-y to US$ 255

billion in 2008 from US$ 240.5 billion in 2007. This decline can be

attributed to the global economic slowdown leading to tepid demand

in the second half of 2008.

Microsoft Corp. introduced a new range of server systems called

Windows Server 2008 Foundation targeted towards small businesses

as a move to curb competition from companies selling low ended

servers and to curtail the usage of pirated Windows software in these

products. The servers, capable of accommodating up to 15 users, will be

bundled with licensed Windows software and priced at US$ 1,000.

Dell Inc. launched world's thinnest notebook under the brand Adamo.

The 0.65 inches thick notebook will feature a 13.4 inch screen and a

128 gigabyte solid state drive. The device is expected to retail at US$

1,999.

It has announced plans of introducing a new line of servers and storage

products targeted towards cost conscious companies to garner more

market share in view of intense competition in the server market.

After witnessing Apple's success in the cell phone market with iPhone,

many personal computer manufacturers are contemplating the

manufacture of smart phones. These smart phones are slated to beequipped to handle not only internet browsing but also provide video

conference facility.

Global news

Company: Key financial indicators (October-December 2008)


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CompanyNet sales(Rs mn)

Operatingprofit

(Rs mn)

Netprofit

(Rs mn)

Operatingprofit

margin (%)

Net profitmargin

(%)

T V S Electronics Ltd 371.2 -29.7 -57.9 -8.0 -15.6

V X L Instruments Ltd 204.4 23.8 0.3 11.6 0.1

Vintron Informatics Ltd 5.8 0.1 -1.8 1.7 -31.0

Priya Ltd 515.4 11.2 -0.4 2.2 -0.1

Gemini Communication Ltd 406.3 159.0 52.4 39.1 12.9

Mar-08

May-08

Aug-08

Jan-08

Feb-08

Apr-08

Jun-08

Jul-08

Sep-08

Oct-08

Nov-08

Dec-08

2.12.0

4.1

1.6

2.3

2.6

2.22.4

3.2

2.3

2.6

2.51.8

0.0

1.5

3.0

4.5

6.0

Jan-09


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IT-ITeS industryHighlights

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Tech Mahindra, the IT arm of Mahindra and Mahindra, won a bid for

31% shareholding of Satyam Computer Services for Rs 17.5 billion. This

deal will enable the company to become India's fourth largest IT firm (by

market capitalisation) from its previous position at number seven.

Indian IT and BPO firms are providing flexible payment options to their

global clients in view of ongoing economic slwodown. This move has

helped Indian players to get new clients while simultaneously enabling

the clients to spread the cost over a long period of time instead ofpaying one lumpsum amount.

HCL Technologies won a US$ 350 million contract from Reader's Digest

for supporting the latter's IT services for a period of seven years.

Leading Indian IT companies like Wipro, Infosys and MindTree are

increasing off shore work so as to shield their margins in the face of

rising demand for a cut in billing rates.

MindTree, Bangalore based IT firm, has decided to restructure its

business operations into five independent business units IT services,

product engineering (including R&D and outsource product

development), testing, infrastructure management and technical

support (IMTS) and knowledge services. This move will enable thecompany to compete with both large and small niche players.

HCL Technologies won a five year contract from Microsoft Corp worth

US$ 170 million. As per the deal, HCL is required to provide technology

services for Microsoft's online service business. HCL also entered into a

US$ 100 million contract with Xerox Corporation. The deal would

require HCL to centralise and standardise infrastructure of Xerox's data

centres for a period of six years.

IBM entered into a seven year deal with Sun Life Financial to manage

latter's IT operations in Canada and the US. The company also entered

into a Rs 2.5 billion deal with Bharti Infratel to manage the latter's IT

requirements.

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ITeS-BPO: Share of engineeringservices, R&D and softwareexports

E: EstimateSource: NASSCOM, D&B Industry Research


Company: Key financial indicators (October December 2008)

4 4.9 6.4 7.3

1.3 1.6 2.2 2.3

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FY06 FY07 FY08 FY09E

Exports Domestic sales

CompanyNet sales(Rs mn)

Operatingprofit (Rs mn)

Net profit(Rs mn)

Operatingmargin (%)

Net profitmargin (%)

C M C Ltd 1817.1 316.7 233.6 17.4 12.9

Oracle Financial ServicesSoftware Ltd

5930.3 1962.9 1770.3 33.1 29.9

Patni Computer Systems Ltd 4363.9 1101.5 614.8 25.2 14.1

Prithvi Information Solutions Ltd 5596.0 159.6 56.6 2.9 1.0

Teledata Informatics Ltd 1580.7 199.3 98.2 12.6 6.2

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Passenger vehicle industry

Highlights

Trend in passenger vehiclesales (%)

Source: CMIE

Passenger vehicle statistics

Source: CMIE

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The recovery in passenger vehicle sales seen in February was only short-

lived, as sales once again declined in March, by 1.2%. While sales of

passenger cars increased by a marginal 0.4%, sales of multi-utility

vehicles declined by 8.6%.

In FY09, domestic sales of PVs posted marginal growth of 0.1%, as

compared to healthy growth of 12.3% in FY08. However, exports

posted whopping growth of 53.7%, on the back of surge in car exports.

Car companies hope to drive sales on the back of new models, and havehence lined up several new launches for 2009.

SkodaAuto India expects to record single-digit growth in sales in 2009,

after posting growth of close to 40% in 2008. Meanwhile, luxury

carmaker Porsche expects its sales in India to grow by 20% this year.

PV companies continue to tie up with public sector banks to expand

their reach. In March, Hyundai Motor India entered into tie-ups with

Canara Bank, Bank of Baroda, Corporation Bank and Bank of India,

while Mahindra & Mahindra tied up with Corporation Bank in April.

New launches planned for 2009

n.a.: Not availableCompiled by D&B Industry Research Service

Cars: Category-wiseperformance: FY09 (%)

Source: CMIE

Segmental growth in PVsales (%)

Source: CMIE

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FY07 FY08 FY09

Period

Production Domestic sales Exports

Vol. (nos.)y-o-y

growth (%)Vol. (nos.)

y-o-ygrowth (%)

Vol.(nos.)

y-o-ygrowth (%)

Mar-09 190,987 7.2 164,916 -1.2 33,787 34.0

FY09 1,838,697 3.4 1,551,880 0.1 335,739 53.7

Category Sales growth

Mini -29.0

Compact 3.1

Mid-size 7.1

Executive -20.3

Premium 34.1

Luxury -12.3

Company Brand SegmentLaunch

datePrice

Audi India Q5 SUV Jun-09 n.a.

Fiat India Bravo Hatchback 2009 n.a.

Grande Punto Hatchback 2009 n.a.

General Motors IndiaChevrolet

CruzeSedan 2009 n.a.

n.a. Small car 2009 Below Rs 4 lakh

Honda Siel Cars India Jazz Hatchback Mid-2009 n.a.

Hyundai Motor India Diesel i20 Small car 2009 n.a.

Maruti Suzuki India Ritz Small car May-09 Rs 4-5 lakh

Porsche India Panamera Sports car Oct-09Rs 1.42-2.02

crore

Toyota Kirloskar Motor Fortuner SUV Sep-09 Rs 20 lakh

7.2

22.3

12.5

1.6

10.3

13.3

11.3

-7.9-10

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FY06 FY07 FY08 FY09

Cars MUVs


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Pharmaceutical industryHighlights

Trend in new introductions(NIs) of drugs (nos.) - 2008

Segmental share of newintroductions (NIs) of drugs-2008

Source: ORG-IMS December 2008(MAT)

Source: ORG-IMS December 2008 (MAT)

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In February 2009, domestic retail sales of formulations grew by 13.3%(in value terms), as per ORG-IMS audit.

Exports of pharmaceuticals grew by 44.6% to US$ 1.01 billion inDecember 2008 (highest in first nine months of FY09), while duringApril-December 2008, exports registered growth of 19.6% to US$ 6.4billion.

Lupin has acquired a 51% stake in Multicare PharmaceuticalsPhilippines, Inc. Multicare Pharmaceuticals has presence in branded

generics with special focus on women's health and childcare segment.Lupin has entered into an alliance with Natco Pharma to jointlycommercialise the generic version of FOSRENOL (lanthanum carbonate)tablets, used in the treatment of chronic kidney disease.

US-based biotechnology firm Novavax has entered into a collaborationwith Cadila Pharmaceuticals. The joint venture will develop andcommercialise Novavax's seasonal influenza virus-like particles basedvaccine candidate and Cadila's therapeutic's vaccine candidates againstcancer.

Jubilant Chemsys and Jubilant Biosys (subsidiaries of JubilantOrganosys) have entered into a drug discovery alliance with Orion,Finland.

Matrix Laboratories has received US FDA approval to marketEmtricitabine and Tenofovir Disoproxil Fumarate Tablets (used intreatment of HIV infection) in the US.

Ranbaxy Laboratories has received US FDA approval to marketTopiramate tablets, used in treatment of epilepsy, in the US.

Ranbaxy Laboratories to launch Olvance' an anti-hypertensive drug(which was originally discovered by Daiichi Sankyo) in India.

Glenmark Pharmaceuticals new molecule-GRC 10693, (indicated forthe treatment of neuropathic, osteoarthritis and other inflammatorypain disorders), has completed phase I clinical trials in Europe.

Suven Life Sciences has completed phase I clinical trial for its new

molecule -SUVN 502 (indicated for treatment of Alzheimer's disease) inSwitzerland.

Chronic segment27%

Acute segment73%

Fed xExpress

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Table: Top 10 brands (2008)

Source: ORG-IMS December 2008 (MAT)

Brand Super group Manufacturer Market share (%)

COREX Respiratory Pfizer 0.6

VOVERAN Analgesic Novartis Pharmaceuticals 0.5

PHENSEDYL COUGH Respiratory Piramal Healthcare 0.5

HUMAN MIXTARD30/70 Anti-diabetic Abbott Laboratories 0.4

ZIFI Anti-infective FDC 0.4

TAXIM Anti-infective Alkem Laboratories 0.4

AUGMENTIN Anti-infective GlaxoSmithKline Pharmaceuticals 0.4

MOX Anti-infective Rexcel Pharmaceuticals 0.4

DEXORANGE Gynaecology Franco-Indian Pharmaceuticals 0.4

MONOCEF Anti-infective Aristo Pharma 0.4

0

20

40

60

80

100

120

Chronic segment Acute segment

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08


11/16

Power generation (billion units)

Power industryHighlights

PLF of thermal plants (%)

*Source: CMIE, CEA

Provisional

*ProvisionalSource: CEA

Trend in energy deficit - All India(%)

Source: CMIE

n

n

n

n

n

n

n

NHPC Ltd is expected to enter into a joint venture with Orissa

government for setting up power projects in the state. Moreover, repair

and maintenance work for the projects in the state will also be carried

out under this joint venture.

Neyveli Lignite Corporation Ltd (NLCL) is planning to set up a new

company called NLC Videsh Ltd to handle the significant quantity of

coal required for its coal-fired 1,000 MW thermal power stations in

Tuticorin.Bharat Heavy Electricals Ltd (BHEL) is set to double the capacity of its

Tiruchirappalli (Trichy) unit in two phases. This unit manufactures high-

pressure boilers for thermal units.

NTPC is planning to acquire 4 and 2 coal blocks in Indonesia and

Mozambique respectively later this year to raise its generation capacity

by 22,430 MW in three years by the end of the eleventh five year plan.

NTPC Ltd, NHPC Ltd, Damodar Valley Corporation (DVC) and

PowerGrid Corporation of India have signed a joint venture agreement

for setting up a domestic power equipments testing facility with an

investment of Rs 2 billion. This will reduce the delays in power projects

due to absence of a proper equipment testing facility in the country.This facility will be used for short circuit testing in the country.

All power grid operators have to maintain ideal frequency starting from

49.2 hertz as against 49.5 hertz at present after implementation of New

Central Electricity Regulatory Commission (CERC) norms from April 2,

2009 in the country.

PowerGrid Corporation of India would borrow US$ 1 billion each from

World Bank (WB) and Asian Development Bank (ADB) to partly finance

its Rs 550 billion investment plans till 2012.

60.0

65.0

70.0

75.0

80.0

85.0

90.0

Mar-09*

Apr-0

8

May

-08

Jun-08Jul-08

Aug-08

Sep-08

Oct-0

8

Nov-0

8

Dec-08

Jan-09

Feb-09

Dec-07

Jan-08

Feb-08

Mar-08

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

Apr-0

8

May

-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-0

8

Nov-0

8

Dec-08

Jan-09

Feb-09

Mar-09*

Dec-07

Jan-08

Feb-08

Mar-08

Apr-0

8

May

-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-0

8

Nov-0

8

Dec-08

Jan-09

Feb-09

Mar

-09

52.0

54.0

56.0

58.0

60.0

62.0

64.0

66.0

FY08 Apr08-Jan09

Power generation

Source: CMIE

Fed xExpress

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Parameters

Jan-09 Feb-09 Mar-09 Apr08-Mar09

mnkWh

y-o-ygrowth

(%)

mnkWh

y-o-ygrowth

(%)

mnkWh

y-o-ygrowth

(%)mn kWh

y-o-ygrowth

(%)

Thermal 53,212.5 4.63 49,519.8 1.83 56,316.9 8.05 589,731.3 5.5

Hydro 6,993.3 -12.36 6 ,594.7 -6.14 7 ,064.1 -7.49 113,016.7 -8.43

Nuclear 1,107.9 -19.11 921.8 -24.29 1 ,358.3 1.45 14,692.7 -12.42

Al l India 61,443.6 1.84 57,121.7 0.25 64,819.4 5.87 723,338.6 2.68


12/16

Retail industryHighlights

Growth of Food & groceryvertical vis-a-vis clothingand accessories in organisedretail (%)

FDI inflows into single-brand

retailing (Rs million)

Source: Company announcements

Source: Images F&R Research andD&B Industry Research Service

n

n

n

n

n

After months of frozen recruitments, many big retailers have started re-

hiring. The Future Group is looking to employ about 1,600 people for 8

of its stores to be launched by June 2009.Yum! Restaurants

International, owner of brands such as KFC, Pizza Hut and Taco Bell, is

also looking to hire about 1,500 front-end staff. Spencer's Retail is

planning to hire about 1,400, while Mahindra & Mahindra's retail

venture will add about 100 people for its Mom & Me stores.

Walmart, the world's largest retailer, is now ready to make an officialentry into India, 30 months after it inked a JV with Bharti Enterprises.

The first Cash & Carry wholesale store of Bharti Walmart joint venture is

slated to be launched in April, 2009 in Amritsar, Punjab. The C&C store

in Amritsar is part of the three stores being planned by the joint venture

for opening during FY10.

Retailers are in the process of altering their strategies to fight the

slowdown. PRIL is going to rechristen itself as Future Markets Consumer

Good (FMCG) Ltd and is planning to independently raise Rs 15 billion for

its business expansion. Aditya Birla Retail Ltd, which had closed 70 of its

unviable stores, will be re-launching its current stores with a new look

and branding.

Hit by the slowdown, retailers are now looking at private labels to boost

their bottomlines. Most retailers expect their private label offerings to

contribute between 20% and 40% to revenues. Private labels

constitute 10-12% of the organised retail product mix.

The Mobile Store, an Essar venture, has entered into the private label

segment with its own brand of mobile phones 'Ray' with a mid-price

range of Rs 5,000-10,000. The company is also looking forward to sell

refurbished phones, the first of its kind in India.

Fed xExpress

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Major expansion plans of retailers

n.a.: Not availableSource: Company announcements

11.63

733.09

258.67

4.90

100

200

300

400

500

600

700

800

Q4FY08

Q1FY09

Q2FY09

Q3FY09

0

10

20

30

40

50

60

70

80

2005 2006 2007

Clothing & accessories

Food & Grocery

Company Format/Vertical No. of stores Deadline

Big Bazaar Hypermarket 30 2009

Cookie Man Food & Beverages 250 2011-12

Promart (Provogue) Apparel Retailing 10 n.a.

Lifestyle Department Store 35 2011

Home Centre Home Improvement 15 2011

Lite Bite Foods(Dabur)

Food & Beverages 200 2013

Florsheim Footwear 2 2009

Celios (PRIL) Fashion 15 2009

Gitanjali Jewellery Retail 30 Aug 2009


13/16

Fed xExpress

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Steel industryHighlights

Trend in HRC and CRCprices-Mumbai (Rs/tonne)

Source: CMIE

Source: CMIE

Product-wise proportion inexports in FY08 (%)

n

n

n

n

n

n

The last quarter of FY09 witnessed substantial rise in steel consumption

to over 15,000 tonnes from around 14,200 tonnes in the December

2008 quarter.

On the back of fall in international prices, domestic steel manufacturers

are likely to negotiate price cuts of as much as 40-70% on key raw

materials like iron ore and coking coal in their annual contracts for FY10.

JSW Steel Ltd is likely to open 600 outlets in rural areas across the

country to cater to the rising demand in these areas, which haveremained largely insulated from the slowdown; the company is looking

at replacing asbestos sheets with steel sheets as cement prices continue

to remain firm.

Essar Steel Ltd has kicked off its steel processing facility in Chennai,

which has a processing capacity of 0.25 MT steel per annum. This

processing centre would provide customised products especially

electrical steel products, mainly to vehicle manufacturers like Ashok

Leyland, TVS and Hyundai Motors.

Tata Steel Ltd is planning to achieve cost savings of 1 billion at its UK-

based subsidiary Corus in FY10, in response to the downturn in the

European markets. The company has already achieved cost savings ofaround 650 million up to March, 2009. These savings have been

gained by cost reduction steps and flexible product mix in line with

customer needs.

SAIL's Bhilai Steel Plant is expanding its railway facilities to meet the

additional requirements expected to come from the projected increase

in rail borne traffic on completion of its expansion plan by FY12.

Steel: Demand-supply dynamics ('000 tonnes)

* Provisional; # EstimateSource: JPC

0.0

10,000.0

20,000.0

30,000.0

40,000.0

50,000.0

60,000.0

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Prices of 1.00 mm CR coils

Apr-08

May-08

Jun-08

Jul-08

Mar-09

Prices of 2.00 mm HR coils

63.627.2

9.2

Flat products

Long products

Intermediate products

Period Production Consumption Imports Exports

Apr-08 4,338 4,165 360 375May-08 4,380 4,412 469 289

Jun-08 4,637 4,613 381 356

Jul-08 4,685 5,280 620 275

Aug-08 4,782 4,980 595 295

Sep-08 4,808 5,080 661 320

Oct-08* 4,944 4,670 478 370

Nov-08# 3,999 3,870 653 330

Dec-08# 5,537 5,675 558 320

Jan-09* 4,690 4,615 225 200

Feb-09* 4,703 4,980 525 250

Mar-09* 4,890 5,570 250 370

FY09 56,393 57,910 5,775 3,750


14/16

Textile & garment industryHighlights

Textile exports forApr08-Dec08 (US$ million)

Garment exports forApr08-Dec08 (US$ million)

Textile and garment imports

for Apr08-Dec08 (US$ million)

Source for all charts above: DGCI&S

Fed xExpress

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Company: Key financial indicators (October December 2008)

Note: Operating profit PBDIT net of P&E; Net profit PAT net of P&ESource: CMIE

Production of man-made fibres: October December 2008

Source: Office of Textiles Commissioner

Textiles production: November 2008 -January 2009

Source: CMIE

n

n

n

n

n

The Indian Industries Association (IIA) has recommended the Uttar

Pradesh government for setting up a textile park in the district of

Farrukhabad, known for textile printing. As per IIA estimates, around

250 textile entrepreneurs are willing to relocate to the proposed textile

park.

The Ministry of Finance has announced suspension of repayments of

loans acquired under TUFS for a period of one year to provide relief to

the industry plagued by global economic slowdown.The Jharkhand government has announced plans of equipping local

weavers with latest technology to enable them to improve the quality of

their products and update them with latest fashion trends. This will

facilitate higher sales for the weavers.

According to Powerloom Development and Export Promotion Council

(PDEXCIL), the powerloom sector has remained impassive to the

financial crisis in the US due to a robust domestic demand and its

success in keeping costs under control as compared to the handloom

sector.

High cotton prices in the domestic market have forced players

(especially denim manufacturers) to source cheaper cotton from USmarkets.

Category Units Nov-08 Dec-08 Jan-09

Spun yarn 000 tonnes 311.6 325.79 309

y-o-y growth % -0.5 -5.04 -9.41

Fabrics mn sq mtr 4431 5007 4545

y-o-y growth % -2.4 8.1 -2.9

Category Units Oct-08 Nov-08 Dec-08Synthetic mn kg 62.8 37.0 70.7

y-o-y growth % -24.8 -52.9 -14.0

Cellulosic mn kg 84.1 52.1 86.1

y-o-y growth % -21.6 -48.8 -18.9

Company nameNet sales(Rs mn)

Operatingprofit (Rs mn)

Net profit(Rs mn)

Operating profitmargin (%)

Net profitmargin (%)

Century Enka Ltd 2585 109.9 -99.1 4.3 -3.8

Garden Silk Mills Ltd 4186 589.8 204.2 14.1 4.9

Raymond Ltd 3578.8 276.7 -142.8 7.7 -4.0

S Kumars Nationwide Ltd 3815.7 573.3 105.9 15.0 2.8

S R F Ltd 4186.2 964.9 374.8 23.0 9.0

6972.45 7114.33

2000

3000

4000

5000

6000

7000

8000

Apr-Dec07 Apr-Dec08

6,678

7,227

2000

3000

4000

5000

6000

7000

8000

Apr-Dec07 Apr-Dec08

1,800 1,830

400

600

800

1000

1200

1400

1600

1800

2000

Apr-Dec07 Apr-Dec08


15/16

Highlights

Three-wheeler: Domestic sales(units)

Two-wheeler: Domestic sales(million units)

Source: CMIE

Source: CMIE

n

n

n

n

n

n

n

n

After witnessing a sharp decline in the third quarter of FY09, domesticsales of two-wheelers picked up in the last quarter, and ended the fiscalwith decent growth of 2.6%, over FY08.

Motorcycles sales remained almost at the same levels of FY08, whilesales of scooters and mopeds registered a decent y-o-y growth of 9.2%and 4.7%, respectively.

Exports of two-wheelers showed a strong improvement of 22.5% y-o-y

in FY09.Honda Motorcycle and Scooter India (HMSI) launched a new version ofits flagship ungeared scooter Activa at a price of Rs 41,062 (ex-showroom Hyderabad). The company is planning to enter the100ccmotorcycle segment this fiscal, with a model which will be pricedaround Rs 40,000.

Bajaj Auto has been granted patent for its 'ExhausTEC' technology usedin its two-wheelers, from The Indian Patent Office. This technology hasbeen employed by Bajaj in almost all its models since 2004.

The TVS Group is planning to set up a two-wheeler loan financecompany, with a capital base of around Rs 890 million.

HMSI is phasing out its only geared scooter model Eterno from thisfiscal. This decision has been taken mainly due to falling sales of thismodel.

Domestic sales of three-wheelers witnessed a decline of 4.1% y-o-y inFY09. This decline was primarily due to 34.5% drop in sales of goodscarriers. However, healthy 12.7% growth in passenger carriers saleshelped to negate this decline in three-wheeler sales to some extent.

Source: CMIE

Fed xExpress

R

Comment

The two-wheeler industry's performance in FY09 has been in line with D&BIndustry Research Service's expectations. Going forward, demand for two-wheelers is expected to witness healthy recovery mainly on the back of

softening of interest rates and implementation of the Sixth Pay Commissionrecommendations. However, the concerns arising due to poor sentimentsdue to job uncertainties and slowdown in economic growth will continue topose some vulnerability in growth.

Two-wheeler sales Three-wheeler sales

Two-wheeler and Three-wheelerindustry

Mar-09 FY09

Vol(Nos)

y-o-ygrowth

(%)

Vol(Nos)

y-o-ygrowth

(%)

Motorcycles 522,000 3.0 5,835,169 1.2Scooters 86,744 4.5 1,145,818 9.2

Mopeds 43,094 7.6 431,214 4.7

Electric vehicles 2,179 117.5 25,513 49.5

Total domestic 654,017 3.7 7,437,714 2.6

Exports 69,521 -7.6 1,004,252 22.5

Total 723,538 2.5 8,441,966 4.7

Mar-09 FY09

Vol(Nos)

y-o-ygrowth

(%)

Vol(Nos)

y-o-ygrowth

(%)

Passenger carriers 26,340 25.2 264,402 12.7

Goods carriers 6,780 -22.0 84,902 -34.5

Total domestic 33,120 11.4 349,304 -4.1

Exports 7,710 -27.0 148,074 4.8

Total 40,830 1.3 497,378 -1.6

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Nov-08

Oct-08

Dec-08

Jan-09

Feb-09

Mar-09

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Nov-08

Oct-08

Dec-08

Jan-09

Feb-09

Mar-09


16/16

D&B's Industry Research Service (IRS)provides comprehensive industry analyseswith focus onthe strategic considerations. D&B's IRSemploysan integrated framework to analyse industryattractiveness in terms of its future growthpotential, competitive intensity and riskassessment.

The reports' in-depth analytical contentwould provide valuable insights to financialinstitutions, banks, equity broking houses,and corporates towards accurate &informed decision making.The reports would also be useful to theindustry practitioners, academicians &scholars.

Textiles &Garments

TechnicalTextiles

MMF

Textiles

Auto

Passengervehicle

Commercialvehicle

2 & 3- wheeler

AutoComponents

Services

Banking

Hospitality

Retail

Chemical

Organic Chemical

Pharmaceutical

Infotech

IT - ITeS

IT Hardware

Core Sector

Cement

Steel

Power

For more information, please contact - Priyanka Badlani: 022 6680 1313 & Punit Somani: 022 6680 1326

Dun & Bradstreet Information Services India Pvt. Ltd.,

ICC Chambers, Saki Vihar Road, Powai, Mumbai 400 072Tel: 91-22-28574190 / 92 / 94 Fax: 91-22-28572060 Email: d&[email protected] www.dnb.com

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