India Morning Report: It’s a Eid Holiday! AAP votes and the beadth of career progression in India

Banking District
Banking District (Photo credit: bsterling)

It’s the first half of the Festive Season wth Navratras and Vijaydashami followed by Eid accounting for school closures and Eid today , usually lost in the break , accounting for a Market Holiday as it does every year in the middle of the week. As usual the reminder that US also had a short week for markets but it was closed for Columbus Day on Monday and it would have been a longer weekend if we adopted such a rationalisation. It is however what worries me that I will take up only today as it is probably more nettlesome  now or at least I can imagine so.

The AAP will get a new fractured coalition in place in New Delhi and even as Bennett Coleman and others tackle the problem of sufficient workforce of college educated journalists, there are oher fractious developments that all arise from the same problems of all and sundry from every discipline xcused to violently fish market into any discussion stopping them from learning about any subject coherently and destroying the remaining memes for growth. This is not the bloomberg/Google video meme but the meme on the flip side of the Breadth of career progression as the first step of primacy of education is more deeply entrenched than statistics would admit to India Inc. That problem of statistics aside, the youth in urban centers are definitely a step closer to youth in cosmopolitan centers than they were and probably as the rural hinterland always keept ties of commerce with small towns the Indian villarge is more a part of the highway story now than it was before the days of 3 PL (GPS/RFID) Logistics and Satellite TV

Consumption data aside, rural inflation is still under 10% and though one can imagine the editorial changing perhaps claiming to a new generation ( that appears for CAT within a month), ducking HDFC Bank ‘s sterling results under the TCS performance was probably more than just a journalistic travesty. HDFC Bank performance was a good showing esp as Derivatives volumes has clipped up to INR 5 Bln in volumes and securitisaion though much maligned can relaly spread liqudity around. The Bank showcased a  bottom of the  cycle 16% retail in growth even as NBFCs like Bajaj Finserv and Bajaj Finance jumped lending and bottomlines like any other growth quarter , ensuring the success of festive season this month and next with the big Deepavali celebrations and then the roll into Christmas and New Year with school holidays.

HDFC Bank may have lost cosmopolitan markets but has not lost its magic and keeps the 30% bottomline growth faith within a reasonable band because of its power of distribution keeping the primacy of retail in the bank at 53% share even as Corporate and Institutional Bank steps up to the plate. Going further into the 20s it would not hurt the bank to get an existence outside ‘branch banking’

‘Siwai ki kheer’ is always a welcome break on Eid and though larger family celebrations are passe in the overall meme of urbanisation, there are hangouts and the 0% durable loans esp on smartphones and cheap car loans ,  and Bollywood will help in no small measure.

Results season is active today with Bajaj Auto, INOX, MindTree and Heidelberg Cement taking pride of place in almost every hourly slot in the day. Unfortunately we do not have results radio.

India FDI: India superpower in application development (E&Y)

China

Even as FDI growth in China continued to grow Services at 15% and manufacturing at less than 5% , its inland provinces will soon get to be the majority FDI destination with the Eastern seaboard share falling below 50% this year.

This year despite teh statistics from the E&Y report the erstwhile no. 4 sector with 33 infra FDI projects is likely to become a major recipient of FDI in value terms thru dedicated Infra Funds incl the ADB-HSBC – IIFCL one

India no. 4 FDI Destination : E&Y

In India however, 146 Tech projects outbid the no. 2 industry in Retail and consumer as the single biggest contributor to FDI. For some strange reason India’s middle class/ consumer for the E&Y team stays stuck at the 2001 figure of 250 million even as it discuesses the Top 5 FDI destinations as those favored by Indian IT

The top five FDI destinations in India are Bangalore, Mumbai, Chennai, New Delhi and Pune. They attract 43 per cent of the investment projects, 34 per cent of the jobs created and 26 per cent of the value of FDI in India.(BS report)

Auto and Healthcare were also pointed out as key destinations in the E&Y survey released by india head Rajeev Memani


The survey also points that private equity (PE) in India has significantly evolved over the last decade. It mentions that 2,000 Indian companies were funded by PE in the last five years and $50 billion was invested from 2007 to 2011. “Despite the ups and downs over the past decade, PE has emerged as a very important investor in India Inc and with the long term India growth story still intact, PE funds continue to look eagerly at investing in India, ” says the report.

India Earnings season: Hero Moto corp expected to grow 16% and profits 28%

In the next few hours Bajaj Auto’s 20% growth will be compared to Hero Motocorp having already beaten its own profit expected with a 22% growth expanding margins to 21.3%

Hero had the largest volume gains in the latest quarter bringing market share back to 40% even as erstwhile partner Honda caught up to a formidable #3 with a 200k per month sales

Bajaj Sales still compare at 68% of Hero’s INR 61 bln for the quarter after Hero grew 16.86% y-0-y, Hero’s profits grew 43% Quarterly volumes were the highest at 1.6 mln units in three months with Bajaj trailing at 1 mln

Its Operating profit margins on adjusted basis counted as low as 12.7% while unadjusted basis still compares at 15.7% against 17.6% for Bajaj Auto strictly on business expenses at both companies

Hero’s sales are higher by 14% over September 2011 but its not known if its shares in the higher margin >125 cc has increased from the low 6% last quarter Bajaj sells 18% in the higher CC categories for its profit margins and has also included growing CV (Auto sales) in these data

India Earnings season: Bajaj Auto below expectations

Revenue was 5% lower than the $1 bln or INR 50.32 bln expected by the street profits lower at $160 mln (from expectations), losing INR 250 mln than the expectations, Derivatives losses were INR 670 mln. November Sales ahd fallen to lower benchmarks of 300k sales per month and the RE 60 launch in December not maintaining the growth it picked up in August 2011

Sales have grown 20% from last year at INR 39.8 bln or 3980 crore then also $1 bln and profits by 22% with EBITDA having growin  despite FX losses

Indian jawans worried by the Chinese?

With a truncated Indian Military team visiting China after the refusal to allow an Arunachal Pradesh domiciled major general, a shameful saga comes on the near border of Bangladesh.

NDTV unfortunately does not allow embedding videos in stream..here ‘s the link http://www.linkedin.com/news?viewArticle=&articleID=5565400729113333765&gid=1003&type=member&item=89933801&articleURL=http%3A%2F%2Fwww%2Endtv%2Ecom%2Farticle%2Findia%2Fgraphic-video-shows-border-security-force-jawans-torturing-victim-168266&urlhash=pWbo&goback=%2Egmr_1003%2Egde_1003_member_89933801

India could also be missing out on the new democratic set up in Myanmar because of this fragmentation / decimation of its military strength and or fractured mandate in the budgets struggling with welfare reform?

Meanwhile China’s statements on positive progress on the indo China border should not be taken so seriously by Indian commentators as China is decidely militarily aggressive on home continent both on sea

Deutsch: 47. Münchner Sicherheitskonferenz 201...
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and land, using POK for its latest travel routes to Central Asia and Pakistan, enabling military transport and support from/to Pakistan

The two days of boundary talks between Special Representatives – National Security Advisor Shivshankar Menon and Chinese State Councillor Dai Bingguo – in New Delhi resulted in the signing of an agreement for setting up a mechanism to avert any untoward incident on border.

Read more at: http://www.ndtv.com/article/india/positive-progress-made-in-sino-indian-boundary-talks-china-168226&cp

A surfeit of Launches in 2012

The Indian Auto Expo has Tata JLR ditching Detroit to jump into its Asia home with the Ssangyong  M&M combination readying the Korando launch in the country and the GM reintroducing the Sail as a Chevy brand and the Wuling Vans from its Asia portfolio

The RE60 basis for new Renault Nissan Car

Currently an offering from the 40,000 units a month three wheeler stable of Bajaj Auto, the $3000 vehicle may be presented for public governments to replace three wheeler populations, Production is scalable to 500k units a year from existing 3 wheeler facilities and its Carbon footprint is the ultimate selling option for the company and buying governments/auto drivers at 60g

English: Bajaj auto rickshaws in Adama, Ethiopia.
Image via Wikipedia

National Manufacturing Policy / Zones

The NIMZ cities identified in the latest manufacturing policy area compendium of all identified microsites and

English: A new train, made in Germany by Bomba...
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large successes of India in manufacturing policy over the last decade. Japan funded Delhi Mumbai infra corridor, the industrial zone at Manesar or the village Dholera in Gujarat identified for investment can start in quick time. The Dedicated Freiht Corridor needs $7-8 bln, the DMIC even $40 bln or INR 2 Tln for itself, Japanese providing $10 bln and Private sector to be willing ot invest the rest

With a new Land acquisition bill, which nevertheless does not make it easy for someone to single handedly establish or grow a city in the wilderness( attract good talent for one, attract suppliers and ensure all resources in supply for another)  is still as difficult but where land acquisition and construction for manufacturing can begin like in Manesar, Haryana or Dholera , Gujarat can show the way to others if done right. Unfortunately winners do not include last decades export successes like Textiles and Auto ancilliaries and Services will be denied its place in the sun if it remains a National “manufacturing” Policy. The Buddh International Arena in UP near New Delhi with a NCR, Delhi address tag is a great success showcase for others.

Also, like Indian banks being told off in foreign lands, foreign banks in India like ICBC and CCB that have just opened should not be allowed to club their business with that of the parent country as it will stifle local opportunity esp where such large investments are expected by local satraps and a regular scam-o-rama is keeping the media busy from 2G to Mamta Banerjee Europe , in contrast has global companies and diaspora ( not remittances) that make such partnerships with banks global in thei rvery nature instead. Sadly some of them will leave or forfeit plans of growing in retail if they ever nodded to RBI

A couple of other ‘contradictions’ have to be managed in India, including letting farmers a share of real estate profit with the new bill in hand allowing prices without governemnt interference, delevraging required in the real estate satraps specialised for such acquisition incl DLF, JSW and maybe JP ( not delevraging but has hands fuull) or the new crop wlike India bulls and Adani which have to bear the blame for endless delays in the Power sector or the consumption successes like PVR and mall owners who are making profits only in the super luxury investments. Also India’s labor participation rates could soon be dropping below 65% ( nearly a low 60% in the mediterranean Euro crisis owners) and US that provided a great land of opportunity for educated talent from this country, also suffering a low participation rate of 64%

Interesingly India’s export growth, still keeps machinery in the largest categories, and should soon include

The Rashtrapati Bhawan which is the residence ...
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pharmaceuticals as well. Perhaps Farming can be mechanised, along with Textile cities and Auto ancilliary dreams. Loan mela, anyone?

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