Mercuri Business Flash

February 2013

Second Fortnight

FY: 12-13No: 22

Market at a glance – as on 1st March, 2013

Sensex (Peak 21207 on 10 Jan 08) 18,918

Daily turnover (BSE + NSE) - Volume 12,126 Cr

Oil Price (per barrel) – WTI $ 91.02

Gold Rate (per 10 gm) : 22 ct Rs. 27,650

Forex Rate (per U.S $) Rs. 554.90

Forex Reserve (Peak $316Bn as on 23May08) $ 291.91 Bn

Winners and Answers to the last quiz

1 190 Lts

2

Concorde3

The Jurassic Period, of Jurassic Park fame is named for the

Jura Mountains of Switzerland, where may fossils have been found

4 1959 by Fair Child Semiconductor Company

5 Buckminster Fuller

Quiz February I Fortnight – Answers are given below

1. Baby Blue Whale drinks this many liters of milk every day

a. 10 lts

b. 50 lts

c. 190 lts

d. 230 lts

2. For what is the Jurassic period named?

3. What airplane has not been flown commercially since 2003?

a. Concorde

b. Airbus 380

c. Boeing 747d. McDonnell Douglas MD80

4. When was the first integrated circuit made?

a. 1945

b. 1959

c. 1963d. 1969

5. Who invented the Geodesic Dome?

Industry Information

Leading retailer Lifestyle is confident of

meeting the competition that foreign direct

investment in multi-brand retail is expected

to unleash with a combination of strategies

it pursues, including localisation of the

product. “I am not saying I am not worried.

But I am not excessively concerned,”

Lifestyle International Pvt Ltd. (India)

Managing Director Kabir Lumba said,

pointing out that the FDI policy also had a

lot of strings attached. Moreover, only some

brands were keen on India, not all, he

added

Lifestyle is ready to face

competition :

Nestle, the world‟s largest food company,

reported its slowest growth in business and

profits in several years for 2012 as it

continued to underperform multinational

peers such as Unilever and

GlaxoSmithKline Consumer Healthcare in

India. Analysts blame increasing

competition, lack of innovation, parent‟s

indifference and excessive focus on

margins at the cost of volumes among

others as Nestle India last week reported

11% growth in sales for 2012, its slowest in

eight years and far behind Hindustan

Unilever‟s 17% and GSK Consumer‟s 15%

growth. Worse, Nestle India's contribution

to its Swiss parent' s revenues declined to a

meager 1.57% from 1.69% a year ago. In

comparison, Indian units of Unilever, GSK

Consumer and Procter & Gamble have been

significantly increasing share to their

parent's kitty every year.

Nestle Trails Global Peers in

India Yet Again :

After capturing a share of wallets of urban

Indian households, top retail entrepreneur

Kishore Biyani has now trained his sights

on youngsters who constitute almost half of

the country‟s 1.2Bn population. Less than a

year after selling Pantaloons department

store chain to AV Birla Group, Biyani‟s

Future Group is back in the lifestyle market

with a smaller format of casual western

wear for the youth primarily in tier 2 and tier

3 cities. “This is a format for a different

market and an area where we are currently

not present in,” Biyani told ET.

Biyani Back in Market with

New Youth Brand :

Industry Information

Global market research firm Nielsen is set

to survey small grocery or kirana stores

across nearly two dozen Indian cities to

help consumer goods makers target these

outlets more effectively. Trade Dimensions,

the survey which will be carried out over

the next six months and cover each grocery

store in these cities, is the most exhaustive

project of its kind to be undertaken by the

US-based firm that tracks what consumers

watch and buy.

Nielsen Plans to Survey Kirana

Stores to Study Buying Habits :

The heads of General Electric and Vodafone

have added their voices to the growing

negative commentary about India‟s

business climate, piling the pressure on the

government to draw a line under this

discourse in its upcoming budget. On

22Feb, GE Chairman and CEO Jeffrey

Immelt said there was growing concern

among American and European CEOs

about India‟s business climate and warned

against policies that were unfair and bad for

much–needed investment. “If you put

yourself in the shoes of an American or a

European CEO, most of the articles (in the

press) have been negative. That has clearly

concerned people,” said Immelt, adding

that next week‟s budget must address the

concern of foreign investors and push

infrastructure development

GE, Voda CEOs Slam Unclear

Policy Regime :

Its cool quotient may be fraying at home,

but Apple‟s iPhone has become the second-

largest smartphone brand in terms of

revenue and the fifth-largest by volume in

India, muscling its way up the league tables

helped by an advertising blitzkrieg and

some aggressive pricing. Yet-to-be-

released data from industry trackers and

mobile retailers is expected to show that

Apple has dislodged BlackBerry and

wrested revenue market share from No. 1

Samsung in the last quarter of 2012, no

mean feat, analysts say, for a company that

has long viewed India as a non-priority

market. In fact, just six months ago, Apple

CEO Tim Cook was quoted as saying India

did not have high potential in the

“intermediate term”.

India Bears Fruit for Apple :

Undeterred by the “worst environment the

market has seen in the last 50 years”,

Daimler India Commercial Vehicles plans to

truck on with its strategy, and launch one

truck variant a month over the next 17

months from its Oragadam plant near here.

“Despite the shady and extremely

challenging truck market, we have not

reduced our production plan. Our next

launches will include 9 - 12 tonne vehicles

and tractor trailers,” said Marc Llistosella,

Managing Director and CEO, Daimler India,

a wholly-owned subsidiary of German

truck-maker Daimler AG.

Daimler promises a new

variant every month :

Industry Information

Automakers Renault and Nissan will set up

a 300-seater knowledge processing unit in

Chennai‟s Mahindra World City Special

Economic Zone, according to three persons

with direct knowledge of the development.

According to the plans, Renault-Nissan

could later ramp up the strength of the unit

to 3,000 people. A ballpark calculation

suggests that the initial investment would

be `40Cr, including rent and other

amenities.

Renault-Nissan JV to Set up

KPO Unit in Chennai :

The ministry of heavy industries is drafting

a policy framework that will provide a norm

for manufacturers of hybrid kits that enable

existing passenger cars to convert into

hybrids. This new technology kits that

Indian joint ventures such as KPIT

Cummins and Bharat Forge are at an

advance stage of manufacturing would lead

to significant improvement in fuel

efficiency. A retrofitted hybrid kit will

provide at least a 15-25% higher fuel

mileage in existing cars. The new proposal

will give a fillip to existing vehicle owners

keen on converting to hybrid vehicles by

deploying a parallel system that co-habits

with existing power systems.

Soon, You Will be Able to

Convert Your Car into Hybrid &

Save Energy :

Industry Information

German automobile major Mercedes-Benz

launched its latest product from the G-class

sport utility vehicles (SUVs), the G63 AMG,

in India. The G-wagen (Gelandewagen or

cross country vehicle), in its 34 year of

series production, is the longest serving

vehicle in series production. The G63 AMG

launched here on 19Feb is priced at `1.45Cr

(ex-showroom Mumbai) and replaces the

earlier G55 AMG.

Merc launches high-end SUV :

Civil Aviation Minister Ajit Singh has said

that he was “not opposed” to Malaysian

group AirAsia‟s alliance with the Tata group

to set up a new low-cost carrier in India, but

indicated that he would have preferred it

more if the country‟s preeminent

conglomerate had started its own airline. In

his first comments on the development,

Singh said the purpose of a recent policy

change in the civil aviation sector, which

allows foreign airlines to own up to 49% of

an Indian carrier, was to increase

investment in existing Indian carriers.

Would be Nice if Tatas Set Up

Own Airline - Ajit Singh :

Tata group company Voltas on 21Feb

announced joining hands with Swiss textile

equipment maker Benninger AG for

distribution, sales and marketing of its

products in India. In a statement issued

here, Voltas made the announcement about

the agreement. “The co-operation will focus

on leveraging Benninger‟s ability to provide

leading edge products and the long-

standing expertise in continuous wet

processing, while building on Voltas‟

established sales and marketing network

across the country,” the statement said.

Voltas partners Benninger AG :

Industry Information

Country‟s largest software services firm

Tata Consultancy Services on 18Feb said it

is expanding its operations in the UK with a

new delivery centre in Liverpool. The new

facility in Liverpool will be fully operational

in Jul this year and will house over 300

employees, TCS said in a statement. The

company has invested in a new delivery

centre in Liverpool, dedicated to delivering

government services that require Impact

Level 3 (IL3) security constraints, it said.

TCS plans to use the facility to deliver

services to the Home Office, following a

multi-million, multi-year contract that was

awarded in Nov‟12, to manage the

technology needs and support services of

the newly formed Disclosure and Barring

Service (DBS), the statement added.

TCS Expands UK Ops, Sets Up

New Centre in Liverpool :

Azim Premji has become the first Indian to

sign up for the Giving Pledge, an

undertaking by large-hearted billionaires to

dedicate a majority of their wealth to

philanthropy. The Wipro founder and

chairman, who has already committed

nearly `9,000Cr to the cause of education,

will direct more of his charitable giving to

the endowment supporting his

philanthropic foundation, Premji wrote in a

statement.

Premji Ist Indian to Sign Up for

Charity Pledge :

The slight improvement in profitability at

Indian software services companies during

the Dec quarter is only a flash in the pan,

and margins are headed inexorably

downwards, analysts said. For more than a

decade, software companies enjoyed

among the highest profitability levels for

any industry, adding to their allure, but a

confluence of forces is swiftly pushing

margins down to levels seen for businesses

dealing in commoditised goods such as

textiles.

Indian IT in Losing Battle on

Margin Front :

1. The gravity mapping satellites of NASA ended the successful mission to moon by crashing

on the rim of water. What is the name of these gravity mapping satellites of NASA

2. Scientists in the months of December revealed a planet that could support life. Orbits a

sun-like star near the Earth. What is the name of the star around which this planet was

found orbiting ?

3. Name of the book on NSC Bose that was presented to the president of India at

Rashtrapathi Bhavan on Feb’13 by professor Anita B Pfaff

4. Name the court that ordered India to go ahead with the development of Kishanganga

Hydro Electric Project in Gurez Valley near Bandipura in North Kashmir

5. Name the table tennis player, who is credited as the architect of the famous Ping-pong

Diplomacy between China and USA

Industry Information

In the wild, it is a common strategy for the

predator to single out the weakest prey

animal and chase it down for a kill. In the

cut-throat market for outsourcing deals,

too, it works much the same way, and a

wounded Hewlett-Packard is fair game for

Indian software companies desperate to win

new contracts. “Indian outsourcing

companies are aggressively attacking HP.

which is a very vulnerable target right now,”

said Peter Bendor-Samuel, founder and

chief executive officer at Everest Group, a

Dallas, Texas-based outsourcing advisory

and market research firm.

Indian IT Waiting to Pounce on

HP Deals :

Hewlett-Packard (HP) Chief Executive

Officer Meg Whitman said the world‟s

largest personal-computer maker will

evaluate selling small businesses or

projects that don‟t fit its plans while

keeping its main operating divisions.

Whitman‟s remarks came in an onstage

interview with Katy Huberty, an analyst at

Morgan Stanley, at the securities firm‟s

technology conference on 26Feb in San

Francisco. They echoed comments she

made on the company‟s quarterly earnings

call on 21Feb. In a regulatory filing on

27Dec, HP said it would consider disposing

of “assets and businesses that may no

longer help us meet our objectives”.

HP CEO Meg Whitman all Set

to Evaluate Sale of Small

Businesses :

Microsoft Chairman Bill Gates said he was

not satisfied with the company‟s pace of

innovation over the last few years, and that

it had mishandled its early mobile strategy.

“We didn‟t miss cellphones, but the way

that we went about it didn‟t allow us to get

the leadership. It‟s clearly a mistake,” Gates

Microsoft‟s former CEO, said in a rare

interview with CBS. Gates hedged

questions on whether he was happy with

Chief Executive Steve Ballmer‟s

performance. He said Ballmer had achieved

a lot but that both he and Ballmer were not

satisfied. “Ballmer and I are two of the most

self – critical people I know,” Gates said.

Microsoft Made Errors in Early

Mobile Strategy - Gates :

Industry Information

Top performing executives in India Inc are

likely to walk away with a

disproportionately higher share of

increment payouts this year, more than ever

before. Officials from a cross section of

companies, including HDFC Bank and ICICI

Bank in financial services, Ashok Leyland

among manufacturers and Dabur, LG and

Shoppers Stop in the consumption space

told ET reporters that they will reward top

talent disproportionately more than other

executives.

Top Talent to Get Better Salary

Hikes Than Rest :

Tata Group watchers say new chairman

Cyrus Mistry may seek insights from Tata

Log, a book by Harish Bhat, Tata Global

Beverages MD and former Titan COO, about

the strategic and operational challenges

that Tata companies faced during Ratan

Tata‟s tenure. Brand experts believe Mistry,

who took charge of the group in Dec, needs

to rejuvenate India‟s best-known brand, too,

because it is facing some challenging times

both in domestic and international markets

and is at a crossroads today.

Tata’s Old Pillars Need to

Emulate TCS, Titan :

Shah Rukh Khan's Red Chillies

Entertainments has named Venky Mysore

as the Chief Executive Officer. Mysore will

take full responsibility for all the operations

of the production house, in addition to his

current role as CEO and MD of the Kolkata

Knight Riders. Mysore comes with over 25

years of experience in the financial services

industry across several global markets. He

has held several leadership positions in the

US, Canada and Asia. He has been the CEO

and MD of KKR since October 2010 and has

lead KKR to become a successful and

profitable businesses, also the defending

Champions of IPL.

KKR CEO Venky to Take

Charge of Red Chillies Too :

Industry Information

Brand valuation tools gain wider acceptance as they

offer top management numbers instead of abstract

forms to value and re-invent brands. A Brand Finance

study shows exactly how top brands have been

impacted by global and local events

Value of Top Brands Hit By Scams, Slump :

Five out of India‟s ten most valuable corporate brands

-- Tata Motors, Reliance Industries, State Bank of India,

Indian Oil and Bharat Petroleum – have seen value

erosion over the past three years, according to a

Brand Finance study available exclusively to ET. Tata

Motors saw its brand value drop by over 1,000Cr, but

still managed to remain at the top as India‟s most

valuable corporate brand. RIL and SBI, the next two on

the most valuable brands list, also saw an erosion in

brand value in the 2013 list

Most Valuable Brands Strained :

The postal department plans to enter the banking business with the Reserve Bank of India deciding to grant new bank

licences to entities with credible track-record.

Consultant appointed

Sources said the Department of Posts, which has a strong foot print in rural areas, has appointed Ernst and Young

(E&Y) as the consultant for the proposed „Post Bank‟. “Ernst and Young is expected to submit a detailed project report

by Apr, after which all the necessary measures will be taken up to apply for banking licence,” a source at the Ministry of

Communications and Information Technology told PTI.

Coming soon, Post Bank of India :

Industry Information

LifeCell International, a company that offers

stem cell banking facilities, has raised 35Cr

in a first round of funding from Helion

Venture Partners. LifeCell, which was

initially looking to raise up to $10Mn, will

now use this round of funding to expand its

facility in Gurgaon and develop novel cell

based therapies. “We are debt-free, growing

at about 50% year-on-year. The stem cell

market in India is extremely under-

penetrated, and this round of funding will

help us in achieving our long-term goals,”

said Mayur Abhaya, chief executive officer

of LifeCell International. So far, the stem

cell market in India has been confined to

storage of umbilical cord blood and dental

stem cells.

Helion Backs LifeCell Intl :Mitra Biotech, a Bangalore based company

that focuses on personalised cancer

therapy, has developed a technology that

will help to make anti-cancer drugs faster

and cheaper. The technology submitted for

peer evaluation in scientific journals

recently could lead to significant reduction

in cost of cancer-treatment drugs, said

industry experts. Mitra, founded in 2008 by

a team of Harvard and MIT researchers, has

developed „OncoprintR‟, a technology that

allows doctors to predict the effect of drugs

on a cancer patient, based on the nature of

the tumour.

Mitra Biotech Develops Techno

logy for Better, Cheaper

Cancer Drugs :

Drug firm Abbott India on 20Feb reported

34.95% increase in net profit at `49.77Cr for

the fourth quarter ended 31Dec. The

company had posted net profit of `36.88Cr

in the same period of 2011, Abbott said in a

filing to the BSE. Net sales of the company

rose to `437.52Cr in the fourth quarter,

compared to `383.60Cr in the same period

of 2011. For entire 2012, the company

posted net profit of `144.70Cr, compared to

`120.39Cr in 2011. Net sales of the company

for the year rose to `1,613.09Cr, compared

to `1,445.57Cr in 2011. The company‟s

board, which met on 20Feb, approved final

dividend of `17 per equity share of `10 each

for 2012. Shares of Abbott on 20Feb closed

at `1,401.25 on the BSE, up 2.49% from its

previous close.

Abbott India Q4 Net Rises 35%

to `50Cr :

Industry Information

Britain suffered its first ever sovereign

ratings downgrade from a major agency on

22Feb when Moody‟s stripped the country

of its coveted top – notch triple-A rating,

dealing a major blew to Finance Minister

George Osborne. Moody‟s said weak

prospects for British economic growth,

which have thrown the government‟s deficit

reduction strategy off curse, lay behind its

decision to cut the rating byone notch to

Aal from Aaa.

Moody’s strips U.K of Aaa

rating :

Global ratings major Standard & Poor‟s

(S&P), which has threatened to downgrade

the country‟s sovereign rating to junk, on

25Feb, said it sees economic growth

improving to 6.4 per cent next fiscal. The

agency also retained its growth forecast for

the current fiscal at 5.5 per cent, half-a-

percentage-point above the readings by the

Central Statistics Office. “The increased

government welfare spending because of

the next general elections, improvement in

private consumption, lower interest rates

and a better show by agriculture will lead to

the growth number going up to 6.4 per cent

in 2013-14,” agency‟s credit analyst Geeta

Chugh said.

S&P sees 6.4 per cent growth

in next fiscal :

The hostile environment in China for their

enterprises is making Japanese companies

look at India. Their renewed interest could

be capitalised by India by improving the

power situation and putting in place

procedures that are faster and more

transparent. Yasuyuki Kitamura,

representative, Singapore office of the

Kanagawa Prefectural Government of Japan

underscored this in an interaction with The

Hindu on the sidelines of a two-day Japan-

India SME conference that began here on

18Feb.

China pushes Japanese

companies closer to India :

THE NEXT BUSINESS FLASH WILL FOLLOW ON 16TH

MARCH, 2013

Model granny of the digital era :

The Information Technology Department of the State can think of making her its poster figure.

Rosakutty, before she passed away last Saturday, a few days short of her 110th birthday,

was, perhaps, one of the biggest advertisements of the reach of IT education in the State.

It was in 2005 that Rosakutty, a resident of Kothad village, shot to fame. A granny with

stretched earlobes and heavy gold earrings, clad in the traditional Christian attire of white

„mundu‟ and „chatta,‟ coming to the local Akshaya centre to take her first lessons in

computers at the age of 106 was not a common sight. It turned her into a celebrity overnight

with the local and the global media coming to her doorstep to tell her story to the world.

After a while, she became an absolute natural before the lens. “She even used to sing songs

for the reporters who came to see her,” Pushkin, one of her grandchildren, recollects.

India Positive :