Industry

cursor
Strictly for Private Circulation Issue 18 February 2010
CONTENTS

Macroeconomic Update MACROECONOMIC UPDATE

Auto Components 2
Highlights
Banking 3
The Index of Industrial Production (IIP) for December 2009 grew by 16.8%. The indices for
n
Cement 4
the mining, manufacturing and electricity sectors grew by 9.5%, 18.5% and 5.4%
Commercial Vehicle 5 respectively for the same period.

Gems & Jewellery The monthly WPI-Inflation stood at 8.56% for the month of January 2010 as compared to
n
6
7.31% for December 2009. Build-up inflation in the financial year so far was 8.90% as
Hi-Tech 7 compared to a build-up of 1.51% in the corresponding period of the previous year.
Hospitality 8 India's exports increased by 9.3% to US$ 14.6 billion during December 2009, while
n
imports increased by 27% to US$ 24.8 billion during the same period. This resulted in a
IT-Hardware 9
trade deficit of US$ 10.1 billion.
Passenger Vehicle 10 The Cash Reserve Ratio (CRR) was increased by 75 basis points to 5.75% in the third
n
Pharmaceutical 11 quarter review of the Monetary Policy FY10.

Retail 12

Steel 13 GDP: Growth (%) IIP and core infrastructure: Growth (%)
17.0
14
Textile & Garment 14 12
15.0
13.0
10
11.0
8
Two and Three-Wheeler 15 6
9.0
7.0
4 5.0
2 3.0
0 1.0
-2 -1.0
Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10E

-4
Agriculture Industry Services GDP at factor cost
Six core infrastructure IIP

E: D&B estimate Source: Ministry of Commerce and Industry,

Source: CMIE, D&B Industry Research Service D&B Industry Research Service

India's exports & imports (US$ bn) Macroeconomic triad (forecast)

30 30

25 25 Inflation
8.9-9.1%
20 20

15 15
10 10

5 5 Feb-10
0 0
Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Exchange rate Interest rate

$46.20-46.40 3.7-3.9%
Exports (LHS) Imports (RHS)

Source: Ministry of Commerce, D&B Industry Research Service Note: Exchange rate: INR/US$
Interest rate corresponds to yield on T-Bills 15-91 days
Source: D&B Industry Research Service
 AUTO COMPONENTS INDUSTRY

Highlights

Steel prices (Mumbai) (Rs/tonne) WABCO-TVS (India) has entered into an agreement with Mahindra Navistar
n
Automotive for development and supply of air compressor technology for
40000 braking system. Production is expected to start this year.
39000
38000
US-based MAT Holdings is aiming for a two-third increase in turnover to US$ 150
n
37000 million by next year from its auto components business in India. With a view to
36000
increase production in India, the company plans to set up a new plant by 2011.
35000
34000 In order to tap the growing car market, the Advik Group is making a foray into the
n
33000
four-wheeler components segment. It will set up a new plant at Chakan in
32000
31000 Maharashtra at an investment of Rs 350 million, which will have a production
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10

capacity of five lakh units of oil pumps and tensioners. Advik currently has a
HR Coils 2.0 mm CR Coils 0.63 mm
presence in the two-wheeler components segment.

Source: CMIE Industry: Key financial indicators

Parameters Units Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10

Auto Components: Profit margins Net sales Rs mn 73,415.9 74,935.6 80,060.7 92,433.1 84,545.5

(%) y-o-y growth % -13.3 -23.2 -13.9 -4.6 15.2

Operating profit Rs mn 7,986.9 10,040.9 12,806.7 14,943.3 12,935.9

20 7.0
y-o-y growth % -42.6 -36.8 -8.8 12.7 62.0
18
6.0
16 Net profit Rs mn 52.6 1,400.8 4,189.6 5,532.7 4,465.8
5.0
14
y-o-y growth % -99.0 -80.2 -28.1 19.0 8390.1
12
4.0
PBDIT margin % 10.7 13.0 15.5 15.8 15.0
10

8
3.0 PAT margin % 0.1 1.8 5.1 5.9 5.2
6 2.0 Note: Operating profit –PBDIT net of P&E; Net profit – PAT net of P&E
4
Source: CMIE
1.0
2

0
Q2FY09 Q3FY09 Q1FY10 Q2FY10 Q3FY10
0.0
Companies: Key financial indicators
PBDIT margin (LHS) PAT margin (RHS)

Source: CMIE

Bharat Forge: Profit margins (%)

40 16 Note: Operating profit: PBDIT net of prior period and extraordinary items (P&E); Net profit: PAT net of P&E
N.A.: Not applicable as losses were incurred
35 14 Source: CMIE
30 12

25 10

20 8

15 6

10 4

5 2

0 0
Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10

PBDIT margin (LHS) PAT margin (RHS)

Source: CMIE
 BANKING INDUSTRY

Highlights

Deposits, credit and growth rates The RBI increased the Cash Reserve Ratio (CRR) by 75 basis points to 5.75% in the
n
Rs bn % third quarter review of the Monetary Policy, FY10. The increase is effective in two
43,000 43
stages, 50 basis points in the first stage effective from the fortnight beginning
38,000 38

33,000 33
February 13, 2010, while an increase of a further 25 basis points will take place
28,000 28 effective from the fortnight beginning February 27, 2010.
23,000 23 The WPI projection for end-March 2010 was revised upwards to 8.5% from a
n
18,000 18
projection of 6.5% made in the second quarter review of the Monetary Policy,
13,000 13
FY10.
8,000 8
Jul-09
Jun-09
Feb-09

Sep-09
Oct-09
Apr-09

Jan-10
Dec-09
Mar-09

Nov-09
Aug-09
May-09

Projected Money Supply (M3) growth for FY10 has been reduced and placed at
n
Deposits (LHS)
16.5% from a projection of 18.0% made in the second quarter review of the
Credit (LHS) Monetary Policy.
y -o-y growth rates of deposits (RHS)
y -o-y growth rates of credit (RHS) The projection for indicative adjusted non-food credit growth for FY10 has been
n
reduced to 16% from a projection of 18.0% in the second quarter review of the
Monetary Policy.
HSBC has launched a mortgage loan product that offers loan facility to
n
Movement in call money rates (%) customers against their self-occupied residential properties at a lower rate.
12
Borrowers can reduce their interest payout by maintaining an excess amount in a
current account every month.
10
Punjab National Bank has bought a controlling stake in the small Kazakh lender
n
8
Danabank. Danabank had assets of about $20 million at the beginning of this
6 year, and required to boost its capital to retain its banking license.
4 The RBI has recommended to the finance ministry to allow the ANZ Bank to open
n
2 a branch in Mumbai. ANZ was among the top foreign banks in India, when it
0
made an exit from the country in 2000 after selling its Grindlays Bank unit to
Standard Chartered for $1.34 billion.
Jul-09
Jan-09

Jun-09

Oct-09

Jan-10
Feb-09

Sep-09
Apr-09

Dec-09
Nov-09
Mar-09

Aug-09
May-09

Call money rate - High

Bank of Maharashtra is expected to get the first tranche of Rs 8 billion by end of
n
Call money rate - Low February under the Central Government's scheme of infusing capital in public
sector banks. The bank needs Rs 18 billion to shore up its capital.

Movement in PLR & deposit rates (%)

13

11

5
Jul-09
Jan-09

Jun-09

Oct-09
Feb-09

Apr-09

Sep-09

Dec-09
Mar-09

Nov-09
May-09

Aug-09

PLR (max) PLR (min)

Deposit rate (max) Deposit rate (min)

Note: PLR relates to 5 major banks

Deposit rate relates to major banks for
term deposits of more than one year maturity
Source for all above charts: RBI
 CEMENT INDUSTRY

Highlights

Average wholesale cement
prices – Mumbai (Rs/50 kg bag)
265.0
In its pre-budget memorandum to the finance minister, the cement industry has
n
requested the government to abolish import duty on raw materials such as coal, pet coke
and gypsum since cement as a finished product does not attract duty.

260.0
The Indian National Cement Workers' Federation has submitted its memorandum of
n
demands to the Cement Manufacturers Association (CMA) demanding to raise the
255.0
minimum basic salary to at least Rs 18,200 per month from its present level of Rs 2,125 per
250.0
month. The wage settlement agreement is going to lapse on March 31, 2010, which was
245.0
signed between the workers and manufacturers in 2005.
240.0
The Task Force on cement has recommended the steel and mines departments of the
n
235.0
Orissa government to take steps to convert the non-working limestone mining leases into
230.0 working mining lease for facilitating limestone exploration and excavation. The Task Force
225.0 has also requested the state government to allot limestone mines for the approved
220.0 projects by the State Level Single Window Clearance Authority.
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
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10

Dalmia Cement (Bharat) Ltd has increased its stake in OCL India from 21.7% to 45.4%
n
through an inter se transfer of about Rs 1.77 billion.
Source: CMIE ACC Ltd has acquired Encore Cement and Additives, Visakhapatnam to further
n
strengthen its presence in coastal Andhra Pradesh.
Jaiprakash Associates Ltd (JAL) will invest Rs 45 billion to increase its cement
n
Cement consumption (mn tonnes) manufacturing capacity from 20 million tonnes per annum (mtpa) by March, 2010 to 33
mtpa by March, 2012. It presently has a capacity of 15 mtpa.
20.0
Binani Cement aims to enter the markets of Oman, Kuwait, Sudan, Iraq and South Africa
n
18.0
to offset the economic slowdown in Dubai which had resulted in slump in cement
16.0
demand.
14.0

12.0

10.0

8.0 Cement: Production and despatches

6.0

4.0 Jan-10 Apr09-Jan10

Parameters
2.0 mn y-o-y mn y-o-y
0.0
tonnes growth (%) tonnes growth (%)
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
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09

Production 14.54 14.8 130.67 13.1

Despatches 14.53 14.8 129.97 12.9
Source: CMA
Source: CMIE
Cement: Region-wise scenario (December 2009)
Production Consumption
Regions
mn tonnes % growth mn tonnes % growth

Northern 3.0 -20.8 2.4 -26.8

Western 1.8 -26.7 2.6 -15.3

Central 2.2 -2.9 2.3 -5.0

Eastern 1.9 -18.4 2.3 -6.8

Southern 5.1 3.0 4.7 1.9

Source: CMIE

Industry: Key financial indicators (%)

Parameters Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10

Growth in net sales 10.4 13.6 23.4 17.5 9.7

Growth in operating profit -18.5 8.1 34.9 57.1 16.5

Growth in net profit -18.5 15.4 47.4 70.0 5.8

Operating profit margin 23.0 28.1 32.4 32.1 25.0

Net profit margin 10.9 13.4 17.3 16.5 10.5

Note: Operating profit –PBDIT net of P&E; Net profit – PAT net of P&E
Source: CMIE
 COMMERCIAL VEHICLE INDUSTRY

Highlights

M&HCV: Domestic sales (Nos.) Domestic sales of commercial vehicles jumped to 53,539 units in January, as
n
compared to sales of 23,170 units in the same month of 2009. Higher sales
were recorded in both, M&HCVs and LCVs.
30000

25000
For the period during April–January FY10, domestic sales of commercial
n
vehicles recorded sharp growth of 30.4%.
20000
After remaining depressed in the first half of FY10, CV exports recorded growth
n
15000
in the second half up to January. Cumulatively, exports for the period during
10000
April–January FY10 were 7.4% lower over exports in the corresponding period
5000 of FY09.
0
Ashok Leyland announced that it will hike prices of its vehicles by up to 15%
n
Jan-10
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09

once the new emission norms come into effect from April.
Mahindra & Mahindra launched a mini-truck Maxximo, at a price of Rs 2.79
n

Source: CMIE
lakh.
Tata Motors will be developing a new global platform for its range of
n
commercial vehicles in India to cater to the domestic and emerging markets,
LCV: Domestic sales (Nos.) with vehicles in the 3.5-9 tonne segment. The new range is being developed by
the company in partnership with its Korean subsidiary Daewoo.
Daimler AG of Germany is developing a truck specifically for the Indian market
n
30000
that is likely to be launched in India by 2012.
25000
20000
15000
10000 Commercial vehicle sales (Nos.)
5000
0
Jan-10
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09

Source: CMIE

Source: CMIE

Industry: Key financial indicators

Note: Operating profit: PBDIT net of prior period and extraordinary items (P&E); Net profit: PAT net of P&E
N.A.: Not applicable as losses were incurred
Source: CMIE
 GEMS AND JEWELLERY INDUSTRY

Highlights

Gems and jewellery exports With demand for diamonds and diamond jewellery having witnessed a fall in the
n
(Rs billion) US – the world's largest market in terms of sales - the Gems and Jewellery Export
Promotion Council is trying to explore newer markets such as China, Middle East
and Russia to boost exports.
140.0
The Gems and Jewellery Federation has approached the Ministry of Finance to
n
127.6 128.0

120.0 110.4 106.8

114.2 115.4 make modifications in proposals in the DTC (Direct Taxes Code). The federation
100.0
85.6
79.6 83.5 has opposed to the levy of 2% tax on gross assets and 10% tax on all payments
80.0
made for gold, diamonds, jewellery etc.
68.0

60.0 53.4 48.8 56.0

Leading jewellery retailer Tanishq has announced the launch of affordable

40.0
n
20.0
0.0 diamond jewellery. The jewellery, to be retailed in the price range of Rs 999-
Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09
Sep-08

Oct-08

Nov-08

Dec-08

1,500, is mainly targeted towards youth. This move is expected to enable the
company to expand its clientele, of which youth currently holds a small share.
Diamond jewellery of the company currently retails from Rs 5,000 and goes up to
several lakhs.
Tanishq recently launched Tanishq Celeste, an online service, available at select
n
Tanishq retail stores, which allows the customer to browse through a virtual
Gems and jewellery imports
(Rs billion) online inventory of over 20,000 solitaires.
A three day exhibition on gems and jewellery was organised in Kochi (Kerala) to
n
promote jewellery trade in the regions of South India.
120.0 110.7
The Manipal Institute of Jewellery Management has announced plans of
n
100.0 conducting seminar on diamonds so as to aid jewellers and customers to acquire
80.0 69.1 knowledge on evaluation of diamonds and other gem stones.
60.0 54.5
48.6
41.9 42.7 44.2 42.1
36.1 36.8 36.6 36.6
40.0
23.5
20.0
Trend in gold and silver prices
0.0
Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09
Sep-08

Oct-08

Nov-08

Dec-08

Category Units Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09

Gold Rs/10 gm 14,741.7 14,947.5 15,741.9 15,872.5 17,024.4 17,175.1
y-o-y growth % 13.2 26.8 28.8 24.0 40.4 32.7
Silver Rs/Kg 22,373.5 23,573.3 26,319.0 27,353.2 28,213.2 28,381.9
Source for all the above charts: DGCI&S y-o-y growth % -11.3 7.5 30.6 45.8 64.1 63.4
Note: Prices are for Mumbai market
Source: CMIE

Industry: Key financial indicators (%)

Parameters Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10

Growth in net sales 23.0 32.9 42.6 32.9 42.6

Growth in operating profits 10.5 14.7 70.8 14.7 70.8

Operating profit margin 4.1 4.1 4.1 4.1 4.1

Net profit margin 1.9 2.3 2.4 2.3 2.4

Note: Operating profit: PBDIT net of P&E; Net profit: PAT net of P&E
Source: CMIE
 HI-TECH INDUSTRY

Highlights
Civil aviation: Cargo statistics
(freight tonne km and mail Boeing has formally signed a contract with Hindustan Aeronautics Ltd for the
n
tonne km) Indian company to provide weapon bay doors for eight P-8I long-range maritime
million
30.0
%
60.0
reconnaissance and anti-submarine warfare aircraft that will be delivered to the
40.0 Indian Navy.
25.0
20.0
The Rajiv Gandhi International Airport (RGIA) has become the first airport in the
n
20.0 0.0
Public Private Partnership (PPP) model to achieve IMS certifications comprising
-20.0
15.0
-40.0
Quality, Safety and Environment management systems. It has received
10.0 -60.0 International Quality Management standard ISO 9001:2008, Environment
-80.0 Management Standard ISO – 14001:2004 and Occupational Health and Safety
5.0
-100.0 Management standard BS OHSAS 18001:2007.
0.0 -120.0
SKS Logistics aims to make a foray into the aviation business by entering into the
n
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09

helicopter chartering space by March, 2010.

Freight tonne km (LHS) Mail tonne km (LHS)
Freight tonne km y-o-y growth (RHS) Celebi Holding, Turkey is aiming to invest US$100 million in the domestic
n
Mail tonne km y-o-y growth (RHS)
aviation sector during the year. The planned investment includes about US$ 50
Source: CMIE
million in developing the international cargo terminal at Delhi and about US$ 25
million each in Delhi and Mumbai airports to provide services.
LG India plans to spend Rs 14 billion over 3 years to hike capacity and set up a
n
Civil aviation: Load factor (%) third factory, possibly in Chennai. The company has set a revenue growth target
80.0
of 45% for 2010.
70.0 Whirlpool India aims to expand its market share in the air conditioning market
n
60.0 from around 5% currently to 15% by 2012. To achieve this target, the company
50.0 plans to appoint around 1,500 dealers in over 200 cities by 2010.
40.0
Consumer electronics manufacturers such as LG, Godrej & Boyce, Videocon and
n
30.0
Whirlpool are contemplating to undertake up to 5% hike in prices of their
20.0
products such as refrigerators, washing machines, air conditioners and flat panel
10.0
displays, by March, 2010.
0.0
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09

Passenger load factor Weight load factor

Civil aviation: Airport traffic statistics (October 2009)
Source: CMIE Aircraft traffic Passenger traffic Cargo traffic
Parameters
y-o-y y-o-y y-o-y
Nos. Nos. Tonnes
growth (%) growth (%) growth (%)
Domestic traffic 87,180 3.2 7,797,159 27.6 61,213 29.0
International traffic 24,490 6.4 2,860,244 11.4 105,880 11.1
Total airport traffic 111,670 3.9 10,657,403 22.8 167,093 17.0
Source: CMIE
 HOSPITALITY INDUSTRY

Highlights

Foreign Tourist Arrivals in Indian Railway Catering and Tourism Corporation (IRCTC) has announced to flag
n
India ('000 nos.) off a special train on February 21 at Madurai that will tour several places of tourist
and pilgrim interest in the country for sixteen days. Starting at Madurai, the train
700
will tour Ajanta and Ellora caves, Sanchi Stupa, Naimisaranya, Ayodhya,
646

547
Allahabad, Varanasi and Gaya, before reaching Chennai.
600
The Central Government has sanctioned Rs 220 million to develop three tourist
528 491 n
500 422 418 435 446

348 342 350

circuits in Arunachal Pradesh. The circuits Doimukh – Sagalee - Pakke Kessang -
400
299 328
Seppa, Daporijo - Nacho via Taliha and Siyum, and Ziro – Palin – Nyapin – Sangram
– Kaloriang, cover six districts.
300

200
Fortune Park Hotels Ltd, a wholly-owned subsidiary of ITC Ltd, is developing 25
n
100
hotels across the country and is aiming at completing the projects within the next
0
18-24 months. In 2010, ten hotels will be added to its existing network of 32 with
Jan-10
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09

2,600 rooms in 28 states.

The Gateway Hotels, part of Taj Hotels and Resorts, announced the signing of its
n
second hotel in Mumbai. The hotel, developed in association with Sunshine
Housing Pvt Ltd, will have 200 rooms, an all-day dining restaurant, a bar and
Foreign Exchange Earnings (FEE) banqueting facilities.
Sea Rock Hotel in Mumbai is expected to open in 2013, after remaining shut for
n
Rs bn %
70 70 almost two decades. The new owner of the property, Indian Hotels Company Ltd,
is planning to redevelop the property, to house a convention centre, a shopping
arcade and large suites. Construction is expected to begin in this calendar year.
50 50

30 30
The heritage wing of the Taj Mahal Palace & Tower hotel in Mumbai, scheduled
n
10 10 to open in phases, is now planned to be opened completely in one go on Labour
Day - May 1 this year.
Jan-10
Jan-09
Feb-09
Mar-09
Apr-09

May-09

Jun-09
Jul-09
Aug-09

Sep-09

Oct-09
Nov-09
Dec-09

-10
- 10

Hotel Leela Venture which runs The Leela Palaces, Hotels & Resorts, is planning to
n
- 30 -30
raise up to $160 million through a mix of Qualified Institutional Placement (QIP)
- 50 -50 issue and Foreign Currency Convertible Bonds (FCCBs).
Foreign exchange earnings (LHS)

Growth rate (RHS)

Source for all above charts: Ministry of Tourism

Growth in Foreign Tourist Arrivals

25%
20%
15%
10%
5%
0%
-5% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
-10%
-15%
-20%

2008 2009

Source: Ministry of Tourism

 IT HARDWARE INDUSTRY

Highlights

Domestic computer hardware & Lenovo has announced plans of shutting down its plant located in Baddi,
n
peripheral production (Rs billion) Himachal Pradesh. The plant, set up in 2007, employed around 20 people and has
a capacity of 1 million units. The company will now focus on building capacity at
6.0
its plant in Pondicherry which currently employs around 100 people and has a
capacity of three million units of desktops and notebooks.
4.5
3.7 Lenovo launched two new notebooks as a part of its ThinkPad Edge series. These
n
3.1 3.0 notebooks are specifically targeted at small and medium business (SMB) in India.
2.8
3.0 2.6 2.5
2.3 2.3
2.22.1
The company plans to expand its market share in the Indian SMB segment to
1.8 1.9 1.8
double digits from the current share of 2-3%.
1.5
Hewlett-Packard India, a major player in printing solutions, has announced plans
n
of tapping the growing demand for printers from the SMB segment and has
0.0
dropped prices of three of its top-selling printers to Rs 5,999.
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09

Source: CMIE
Industry: Key financial indicators (%)
Parameters Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10

Growth in net sales -2.1 1.8 1.4 -1.9 0.1

Growth in operating profits -9.8 -6.5 50.5 -16.4 7.2

Operating profit margin 6.7 6.1 7.4 5.8 7.3

Net profit margin 0.7 -0.1 1.5 0.1 1.8

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

Global news

Apple Inc launched a new device 'iPad' tablet in San Francisco. The device,
n
featuring a 10 inch screen with touch screen interface and wireless connectivity,
is designed for handling all types of programmes from electronic books and
newspapers to games and videos.
 PASSENGER VEHICLE INDUSTRY

Highlights

Passenger cars: Domestic sales General Motors India will double production from its Talegaon facility from
n
(Nos.) March onwards. The company also plans to hire 800 people in the next 7-8
months. Maruti Suzuki India also plans to hire 950 people in the next fiscal year.
180000

160000
Toyota Kirloskar Motors expects to double its sales in the next 5-7 years, driven by
n

140000
its Etios cars, which is scheduled for launch in India at the end of this year. Etios is
a compact car developed by Toyota specifically for the Indian market.
120000

100000 Volkswagen AG plans to make India a low-cost manufacturing hub catering to

n
80000 select export markets. The company will export fully-built models and completely
60000
knocked-down kits of its hatchback, Polo, to South East Asia, Middle East and
40000
Africa, from its Pune plant, from the second quarter of next fiscal.
20000 Luxury carmaker Mercedes-Benz India is looking at achieving double-digit
n
0 growth in 2010 on the back of new launches, as against a decline of 10%
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10

recorded in 2009. SkodaAuto India plans to sell 20,000 cars in 2010, after selling
16,000 cars last year. British luxury sports carmaker Aston Martin Lagonda is
Source: CMIE
firming plant to enter the Indian market.
In the quarter ended December 2009, Maruti Suzuki India and Mahindra &
n
Mahindra recorded net sales growth of 62.2% and 56.0%, respectively. Their
Utility vehicles: Domestic sales profits, both at the operating and net levels, recorded sharp increase.
(Nos.)
30000
Passenger vehicle sales (Nos.)
25000
Y-o-Y
Y-o-Y Apr08- Apr09-
Segments Jan-09 Jan-10 growth
growth(%) Jan09 Jan10
20000 (%)
Mini 5,571 6,495 16.6 42,878 48,623 13.4
15000
Compact 80,913 106,207 31.3 706,178 904,704 28.1

10000
Mid-size 20,159 27,165 34.8 191,655 217,400 13.4
Executive 3,017 4,730 56.8 26,687 36,120 35.3
5000 Premium 598 1,247 108.5 7,145 8,953 25.3
Luxury 42 61 45.2 842 1,014 20.4
0
MPV 10,193 15,580 52.8 87,214 119,527 37.1
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10

Passenger cars 120,493 161,485 34.0 1,062,599 1,336,341 25.8

Multi-utility vehicle 16,887 26,120 54.7 179,780 219,250 22.0
Source: CMIE
Domestic sales 137,380 187,605 36.6 1,242,379 1,555,591 25.2
Exports 21,616 38,616 78.6 275,664 369,181 33.9
Total sales 158,996 226,221 42.3 1,518,043 1,924,772 26.8
Operating profit margin (%)
Source: CMIE
18%

16%

14%

12%

10%

8%

6%

4%

2%

0%
Maruti Suzuki M&M

Q3FY09 Q3FY10

Source: CMIE
 PHARMACEUTICAL INDUSTRY

Highlights
Drugs and pharmaceuticals
import
Trend in pharmaceutical sales In December 2009, domestic secondary sales grew by 27.6% (in value terms), as
n
growth (%) per ORG-IMS audit.
Some of the major pharmaceutical companies like Panacea Biotech, Nicholas
n
35.0
Piramal, Cadila Healthcare, Cipla and Dr Reddy's are lobbying against
30.0
29.2
27.6 government decision to continue with lower excise rate of 4% which was slashed
from 16% in last year's budget as a stimulus package for the pharmaceutical
25.0
industry. These companies have their manufacturing units in tax haven states like
20.0 18.4 18.3
16.5
20.4 Uttarakhand and Himachal Pradesh and expect that reduced excise duty has
15.0 13.6
15.0
wiped out the advantage enjoyed by pharmaceutical units established in these
two states and could result in closure of many manufacturing units.
10.0 13.6 9.8
7.2 10.2 10.1
8.9
nUS-based Purdue Pharma Products LP and UK-based Napp Pharmaceutical
5.0
Group have sued Lupin Ltd and its US subsidiary, Lupin Pharma Inc, for
0.0
-0.8
attempting to manufacture and market the generic version of the analgesic
tramadol ER (brand name-Ultram ER) which infringes patent coverage of the
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09

-5.0
innovator.
Source: CMIE
nStrides Arcolab Ltd has obtained USFDA grant to market its generic injectible
drug– labetalol hydrochloride. The drug is expected to be launched shortly.
Labetalol is the third product to be launched under the partnership between
Strides and Sagent Pharmaceuticals Inc. of USA.
Trend in drugs and pharmaceuticals nThe Government is planning to set up a Rs 3,000 crore pharma fund to promote
export innovation, research and development (R&D) in drug discovery. The proposed
fund is expected to focus on key areas such as biologics. Biologics are medical
USD mn
6000.0
%
35.0
products synthesised from living organisms and used in the treatment and
5091.3 prevention of diseases.
30.0
5000.0
4153.0
25.0
nThe Delhi High Court has dismissed an appeal by multinational drug-maker Bayer
4000.0
3175.8
Corporation regarding its advanced renal cancer drug Nexavar after 5 years of
legal tussle with Cipla on product patent issue.
20.0
3000.0 2443.8
15.0
Cipla has maintained its top position in the domestic market for the 12 months
2060.8
2000.0
n
10.0
ended December, 2009, with a market share of 5.38% ahead of Ranbaxy and
1000.0
5.0
GSK which recorded share of 4.91% and 4.35% respectively as per data from
0.0 0.0 ORG-IMS. The table below provides the sales performance of top 6
FY05

FY06

FY07

FY08

FY09

pharmaceutical companies.
Pharmaceutical export (LHS) Growth rate (RHS)

Source: CMIE Sales performance of top six pharmaceutical companies during 2009
No of Domestic Market Growth
Company
products Turnover (Rs mn) share (%) (%)
Cipla 924 21,552.9 5.4% 18.0%
Ranbaxy 565 19,682.4 4.9% 13.7%
GSK 177 17,431.5 4.4% 18.0%
Piramal Healthcare 750 16,442.6 4.1% 22.8%
Zydus Cadila 735 14,848.4 3.7% 21.2%
Sun Pharmaceuticals 516 14,498.3 3.6% 22.9%
Source: Media

Industry: Key financial indicators (%)

Source: CMIE
 RETAIL INDUSTRY

Highlights

Net margins of major retailers Pantaloon Retail has posted an increase of 11% for Q3FY10 in same-store sales
n
Q3FY10 (%) in the lifestyle segment as compared to the previous year for the same
period.The share of the lifestyle segment went up from 27% in Q3FY09 to 29%
9.0
in Q3FY10.
8.0

7.0
Shoprite Holdings, the South Africa-based retailer has called off its franchisee
n
deal in India with real estate developer, Nirmal Lifestyle Group. Shoprite's
6.0
forayed into India through the franchise route in 2004 but since then the retailer
5.0
has not been able to expand beyond the first store in Mumbai.
4.0
The debt ridden retailer, Subhiksha, has reopened its first store in Chennai. The
n
3.0
store is located at Thiruvanmiyur in Chennai — at its first ever outlet. The
company this time will operate as cash and carry model i.e. the store will not
2.0

1.0
directly engage with customers. The company has changed its logo and
0.0
PRIL Shopper's Trent Kouton's Archies rechristened itself to 'Subhiksha Maligai Arisi Mandi'.
Stop

Source: CMIE

Major expansion plans of retailers

Average prime mall rentals Company Format/Vertical No. of stores Deadline

in major cities (Rs/Sqft/month) Trent Department Store 11 March 2011

350 Essar Hypermart Steel retailing 15 2010

300 Manyavar Apparels 30 March 2010

Eyewear and
250 Titan 80-100 March 2011
Timewear
200
Source: Company announcements
150

100 Company: Key financial indicators (October-December 2009)

50
Net sales Operating profit Profit after tax
0 Company y-o-y growth y-o-y y-o-y
Rs million Rs million Rs million
a
e
CR
i

(%) growth (%) growth (%)

at
ba

or

na
N

lk
al
um

en

Ko
ng

Ch
M

Archies Ltd. 473 14.4% 69 11% 39 2.1%

Ba

Q2 FY10 Q3 FY10 Celebrity Fashions Ltd. 668 2.7% 16 n.a. -51 n.a.
Kewal Kiran Clothing Ltd. 389 9.8% 92 106% 64 109.2%
Source: Cushman & Wakefield
Koutons Retail India Ltd. 2698 11.6% 493 13% 158 18.6%
Pantaloon Retail (India) Ltd. 19128 25.4% 2034 29% 507 49.9%
Provogue (India) Ltd. 1231 21.3% 139 50% 89 22.4%
Shopper'S Stop Ltd. 3826 14.1% 465 103% 192 382.7%
Store One Retail India Ltd. 41 -69.1% -70 n.a. -126 n.a.
Trent Ltd. 1547 22.6% 120 211% 45 -23.7%
Vishal Retail Ltd. 3008 -15.4% -1510 n.a. -1818 n.a.
n.a. depicts growth not calculable due to loss.
Note: PBDIT net of P&E; PAT net of P&E
Source: CMIE
 STEEL INDUSTRY

Highlights
Trend in HRC and CRC
prices-Mumbai (Rs/tonne) Adhunik Corporation has been allotted 505 acres land (major part of its
n
required land of 700 acres) at Raghunathpur, West Bengal by West Bengal
41,000 Industrial Development Corporation (state government's nodal agency for
40,000
industrial development) for its proposed Rs 70 billion steel and power venture.
39,000

38,000
The project includes setting up of 1.1 MT, 1,000 MW and 1.0 MT capacity steel
37,000 plant, captive power plant and cement plant, respectively.
36,000
35,000
Steel Authority of India (SAIL) said that it had recently discussed with POSCO to
n
34,000 revive Kulti works. However, it rejected any possibility to form joint venture with
33,000
POSCO at Kulti in West Bengal.
32,000

31,000 Essar Steel Ltd (ESL) is planning to issue bonds worth US$ 1 billion in overseas
n
30,000
markets to raise capital to fund its capex plans. ESL is planning to raise its
Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

capacity from 15 MT to 24 MT in the next few years. This investment also

HR coils (2.00 mm) CR coils (1.00 mm)
matches the capital investments made by its competitors like Tata Steel Ltd,
Source: CMIE SAIL and others.
POSCO has rejected any possibilities to shift its proposed 12 MT steel plant at
n
Orissa to Kulti in West Bengal.
Trend in monthly finished steel
The Karnataka government has issued a preliminary notification to acquire
n
consumption
4,800 acres in Kuduthini in Bellary district for the 6.0 MT steel plant of
'000 tonnes %
8,000.0 60.0 ArcelorMittal group with a proposed investment of Rs 320 billion.
7,000.0
50.0 Bankura DRI Mining Manufacturers Company Ltd (Special Purpose Vehicle
n
6,000.0
40.0
created by 6 West Bengal based sponge iron makers) signed a 30-year
5,000.0
agreement with India Resources Ltd (Australia) for building, developing and
4,000.0 30.0
operating an underground captive coal mine at Biharinath block in Ranigunj
3,000.0
20.0 coalfield in West Bengal. The cost of mining development is estimated to be
2,000.0
10.0
over Rs 1 billion.
1,000.0

0.0 0.0
Jindal Stainless Steel Ltd may raise about US$ 50 million via qualified
n
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09

institutional placement (QIP) route to meet its lenders' conditions under the
Finished steel consumption (LHS)
corporate restructuring programme.
y-o-y growth (RHS)
The Securities and Exchange Board of India (SEBI) has fined the Bhushan Group
n
Source: CMIE of companies for violations of provisions of the SEBI takeover regulations in
their acquisition of Orissa Sponge Iron and Steel Ltd (OSISL). Bhushan failed to
make a public announcement on January 29, 2010 regarding exceeding the
threshold limit of 15% stake in OSISL.

Company: Key financial indicators (October-December 2009)

Operating Operating Net profit
Net sales Net profit
Companies profit profit margin margin
(Rs mn) (Rs mn)
(Rs mn) (%) (%)

Steel Authority Of India Ltd 98,786.8 25,784.4 12,687.6 26.1 12.8

Tata Steel Ltd 63,748.8 21,569.0 9,281.9 33.8 14.6

J S W Steel Ltd 46,129.9 11,179.9 4,100.7 24.2 8.9

Ispat Industries Ltd 21,985.1 4,145.8 14.3 18.9 0.1

Note: Operating profit – PBDIT net of P&E; Net profit – PAT net of P&E
Source: CMIE
 TEXTILE & GARMENT INDUSTRY

Highlights
Textile exports (US$ billion)
The Textiles Ministry is contemplating setting up of textile parks in Marathwada
n
6 and Vidarbha (Maharashtra). These two regions are the largest cotton
5.15364 producing regions of Maharashtra and opening of textile parks is expected to
5
give a huge boost to the textile industry in these regions.
4.10329
4 The Government of Orissa has announced plans of spending an amount of Rs
n
1.85 billion to give a fillip to the textiles and handlooms sector. The amount will
3
be spent over the next five years in areas like textiles, sericulture and
2 handlooms. This fund will focus on areas like technology upgradation, capacity
building, research and development as well as entering into agreements with
1
retail houses to facilitate marketing of the products.
0
Apr08 -Sep08 Apr08 -Sep09
Alok Industries Ltd has partnered with Asia Bridge as a private equity player for
n
its retail subsidiary Alok H&A which is engaged in the business of cash and carry
business of garments and home textiles. Alok Industries has planned an
expansion strategy of increasing its number of stores to 1,000 in the next three
Garment exports (US$ billion)
years from the current 150 stores.
5.5 Alok Industries has also earmarked an amount of Rs 1-2 billion for FY11
n
5.4052
5.4 towards capital expansion. This amount, funded through internal accruals, will
5.3 be used for streamlining operations of the company.
5.2

Production of textiles
5.1

4.86873
4.9 Category Units Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09
4.8
Spun yarn 000 tonnes 339.2 351.3 348.3 345.0 345.0 344.1
4.7
y-o-y growth % 0.3 7.7 9.1 12.2 12.2 9.6
4.6
Apr08 -Sep08 Apr08 -Sep09 Fabrics mn sq mtr 5,260 4,974 4,793 5,035 5,035 4,875

y-o-y growth % 24.0 16.7 7.4 17.3 17.3 5.2

Source: CMIE

Textile and garment imports Industry: Key financial indicators (%)

(US$ billion) Parameters Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10

1.5 Growth in net sales 2.0 1.2 5.7 13.3 21.2

1.45767
Growth in operating profit -33.0 5.7 47.7 57.8 88.3
1.45

Operating profit margin 8.3 10.3 14.3 2.3 2.3

1.4
Net profit margin -4.0 -2.4 1.4 2.3 2.3
1.35
Note: Operating profit: PBDIT net of P&E; Net profit: PAT net of P&E
1.3 Source: CMIE
1.2534
1.25

1.2

1.15

Apr08 -Sep08 Apr08 -Sep09

Source for all the above charts: DGCI&S

 TWO-WHEELER AND THREE-WHEELER INDUSTRY

Highlights

Two-wheeler: Domestic sales In January 2010, domestic sales of two wheelers witnessed strong growth of
n
(in million)
43.4%. This growth was driven by strong performance from motorcycle,
0.9 mopeds and scooters segments.
0.8
Two-wheelers exports also grew at a strong rate of 28.2% during January
n
0.7
2010, as compared to the same month in the preceding year.
0.6

0.5
Honda Motorcycle and Scooter India (HMSI) is planning to expand its Manesar
n

0.4
plant which currently has a production capacity of 1.5 million units. HMSI is
0.3 expecting to achieve a sales target of 12.5 million this fiscal.
0.2
Bajaj Auto has announced the launch of the all-new Pulsar 135 Light Sport (LS)
n
0.1
which the company claims is first of its kind in terms of styling.
0
Domestic sales of three-wheelers also witnessed strong growth of 46.5% y-o-y
n
Jan-10
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09

in January 2010. This growth was driven by strong rise in the domestic sales of
Source: CMIE both passenger carriers and goods carriers.
Exports of three-wheelers also observed strong rise of 78.3% on y-o-y basis in
n
January 2010.
Three-wheeler: Domestic sales
(Nos.)
45,000
Two-wheeler sales Three-wheeler sales
40,000 Jan-10 Apr09-Jan10 Jan-10 Apr09-Jan10
35,000 Y-o-Y Y-o-Y Y-o-Y Y-o-Y
Segments Vol Vol Segments Vol Vol
growth growth growth growth
30,000 (Nos) (Nos) (Nos) (Nos)
(%) (%) (%) (%)
25,000 Motorcycles 650,633 43.7 5,990,371 24.2 Passenger carriers 31,317 48.3 289,084 35.1
20,000 Scooters 139,016 44.8 1,157,916 20.9

15,000 Mopeds 44,734 41.4 462,197 31.7 Goods carriers 7,405 39.1 71,386 -1.1

10,000 Electric vehicles 0 -100.0 3,001 -86.9

5,000
Total domestic 834,383 43.4 7,613,485 23.7 Total domestic 38,722 46.5 360,470 26.0
Exports 89,159 28.2 938,394 8.8 Exports 18,829 78.3 136,929 4.6
0
Total 923,542 41.8 8,551,879 21.9 Total 57,551 55.6 497,399 19.2
Jan-10
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09

Source: CMIE

Source: CMIE
Industry: Key financial indicators (%)
Company Name Net sales PBDIT Net profit PBDIT Net margin
(Rs mn) (Rs mn) (Rs mn) margin (%) (%)

Bajaj Auto Ltd. 32,955.5 6,777.1 4,400.1 21 13

Hero Honda Motors Ltd. 38,270.3 6,609.2 4,762.3 17 12

T V S Motor Co. Ltd. 10,894.5 678.3 226.3 6 2

Source: CMIE
 Textiles &
Garments
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provides comprehensive industry analyses
with focus on
the strategic considerations. D&B's IRS Technical
employs Textiles

an integrated framework to analyse industry

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potential, competitive intensity and risk MMF Passenger
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The reports' in-depth analytical content Commercial

would provide valuable insights to financial vehicle

institutions, banks, equity broking houses,

and corporates towards accurate &
informed decision making.
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