Steel sales zoom in second quarter

New Delhi: Steel majors Tata Steel and Steel Authority of India Ltd on Thursday reported a high growth in steel sales for the second quarter ended September 2010.

The July-September 2010 quarter sales reported by SAIL are the highest ever recorded in Q2. The company registered sales of 3.17 million tonnes in the period under review and in comparison to sales in the previous quarter, SAIL achieved a growth of 30.8 per cent. The company's previous best Q2 sales of 3.08 mt were achieved in 2009-10.

SAIL attributed the sales growth to the higher intake by the construction and manufacturing sectors. This was reflected in higher sales of products such as wire, rounds and bars, structurals, cold roll sheets/coils and galvanised items.

Record Production

Meanwhile, Tata Steel's crude steel and hot metal production figures for the second quarter are the highest ever registered by the company for a single quarter.

The company's hot metal production for the July-September quarter stood at 1.89 mt which is around six per cent higher than the corresponding quarter last year.

The pervious best was in Q3 of the 2009-10 fiscal. Crude steel production stood at 1.72 mt which is around five per cent higher than the corresponding quarter last year.

Tata Steel's total sales for the quarter stood at 1.66 mt which is around 14 per cent higher than the corresponding quarter last year. This includes the highest ever long products sales for a quarter which stood at 0.77 mt.

JSW are yet to compute the production and sales figure for the month of September.

However, the company produced 0.52 mt of crude steel in July 2010, nearly four per cent higher than the corresponding month last year while in August 2010 produced 0.53 mt of crude steel which is around three per cent higher than the corresponding month last year.

GSM operators add 12.4 mn users in Sept

New Delhi: GSM-based mobile operators added 12.4 million subscribers in September to take their total tally to 494 million.

BSNL was the top operator in terms of subscriber addition with 2.3 million users. This is the first time in the last five years that BSNL has emerged the top operator. BSNL now has 72.7 million subscribers and is ranked fourth among GSM operators.

Among the private players, newcomer Uninor ramped up its user base by 2.17 million beating incumbent operators such as Airtel and Vodafone. This is the second consecutive month where Uninor crossed the two-million new subscriber mark. Market leader Bharti Airtel got just over two million new subscribers to take its total user base to 143 million. Vodafone added 1.7 million users in September against 2.3 million in August.

Industry watchers, however, said that the numbers being reported by some of the operators should be discounted by 30-40 per cent since there is no standard reporting norm.

Eros International Media in Rs 640 mn pact with Zee Entertainment

MUMBAI: Eros International Media, a unit of Eros International, said on Friday it has signed a licensing deal worth Rs 640 million with Zee Entertainment Enterprises for exclusive broadcast of some of Eros' films on the latter's television network.

The deal takes Eros International Media's pre-sales revenue visibility for music and television rights in FY11 and FY12 to Rs 2.4 billion, Eros said in a statement.

At 9:11 a.m., the stock was trading at Rs 177.6, up 0.45 in a weak Mumbai market.

Sumitomo to buy Suzlon Energy's Belgian unit

MUMBAI: Belgium-based Hansen Transmissions, in which Indian wind turbine major Suzlon Energy holds a 26% stake, will sell its industrial gearbox-making unit to Japan’s Sumitomo Heavy Industries in an all-cash transaction.

“The proposed transaction values Hansen Industrial Transmissions NV at e75 million (Rs 463 crore) on a cash and debt-free basis, before costs that will be incurred and borne by Hansen Transmissions in connection with the restructuring of HIT prior to completion of the proposed transaction,” Hansen said in a statement.

Proceeds from the deal would be used by Hansen to repay debt. Hansen said the sale of the industrial gearbox unit, called Industrial Transmissions NV, which accounts for almost 16% of the company’s revenues, is aimed at streamlining operations in order to focus more on its core business of manufacturing wind gearbox.

Hansen also plans to reduce its wind turbine gearbox manufacturing capacity by 1,100 mw, from 8,700 mw as on September 30, 2010, by discontinuing operations at its Edegem plant.

“This reduction in capacity will help reduce the level of overcapacity in Hansen Transmissions’ remaining facilities and is reflective of the continued volatility and uncertainty in the global wind energy market,” it said in the statement.

Hansen’s performance has been plagued by poor sales amid low demand from the wind energy market, even as debt on its book remained high.

High debt, poor sales spur move

Hansen’s revenues in the year ended March declined 12.6% to e532.4 million (Rs 3290 crore). The company’s net financial debt stood at e128.8 million (Rs 796 crore) as on March 31, 4% higher than a year ago.

Suzlon Energy’s subsidiary, AE-Rotor Holding, sold a 35.22% stake in the Belgium-based gearbox maker through secondary market deals for $370 million (Rs 1,632 crore) in November. Suzlon has stated that it plans to sell the balance stake to exit its holding in Hansen completely.

“Suzlon is clearly keen to exit Hansen, but they are waiting for the right valuations. The exit from the industrial gearbox business by Hansen may help command better valuation for the company,” said Krishnakant Thakur, a Mumbai-based analyst with Quant Broking.

Suzlon Energy had acquired Hansen Transmissions in 2006, with the aim of backward integration at a time when component supply fell short of demand. High debt and poor sales have forced Suzlon Energy to put its holding in Hansen on the block.

Havells bets on Sylvania to light up brand image

LONDON: Electrical equipment major Havells India plans to bring brands from its international subsidiary Havells Sylvania to India early next year, with five swish new showrooms in major cities and a big advertising blitz, at a market entry cost of e20 million.

“Sylvania will become the face of the Havells group for lighting products in India. The brand existed through a licensing agreement many years ago, and there’s still consumer recall,” says Anil Gupta , joint managing director of Havells, sitting with group patriarch Qimat Rai Gupta in the company’s brand new EMEA headquarters in the City of London.

In India, Sylvania will focus on retail oriented brand play, and promote its other brands, Concord and Lumiance, with the architectural segment. In Europe, Sylvania’s portfolio of brands, especially Concord, has provided high-end lighting solutions to places like the Louvre in Paris, Tate Modern and Barbican Centre in London. Havells own lighting products will continue to be sold under its current brand.

The India launch is part of a new-found focus on emerging markets at the $1-billion-plus Havells group. It has set up operations in Malaysia, and will soon hit Indonesia, Chile and Peru. Currently, East Euro PE contributes 10% to Sylvania’s sales, and the plan is to grow this to 25% in three years. Next year, the focus is on Africa, mainly Nigeria, Ghana, Kenya and Tanzania. The company has also opened an office in China, but Mr Gupta says that for organic growth in China, he will need a local acquisition opportunity.

Behind all this flurry of expansion is a bitter lesson that many Indian corporates have had to learn — going global isn’t just about making a fancy acquisition and leaving it alone. The Guptas wanted to go global in 2006 and bought Sylvania from a consortium of PE companies.

Operating in Europe and Latin America, Sylvania went into a tailspin post-recession in 2008, mainly in Europe. “When we bought the company, we insisted on retaining the top management based in New York, as bankers and investors were not very confident we could manage it. There was no integration till the crisis. That was a big mistake,” says Mr Gupta, admitting that the group’s lack of prior international experience was a factor.

Sales in the European and Latin American markets dropped by almost 20%, and in FY10, the group reported a combined loss of `240 crore. Although the Indian operation reported a net profit of `230 crore, Sylvania closed the year with a net loss of `470 crore. “We took a knock in the markets after 2008 as investors thought Sylvania would be a drag on the parent, and weren’t sure that an Indian company could achieve a turnaround,” says Mr Gupta.

In 2008, the Guptas decided to manage the business hands on, sack the New York-based top management, and infuse its European white elephant with large doses of desi-style speed and hustle.

Two years later, after pumping in e40 million, shutting three plants in the UK, Costa Rica and Brazil, cutting 1,400 jobs, revamping operations, and scrapping things like annual budgets and business plans, Mr Gupta says sales are on an upswing, and Sylvania will break even in 2011.

The finishing touch to the restructuring is the move to London as a European HQ, from a somewhat small village outside Frankfurt , to be closer to a financial and talent centre. “We had very good managers in Sylvania, but they were not thinking like entrepreneurs. That’s changed, I think,” says Mr Gupta. Sylvania employees say that this is the first time in years they’ve got an owner committed to growth, instead of being owned by PE funds.

Havells Sylvania contributes almost 50% to the company’s sales and going forward Mr Gupta hopes that it will contribute up to 30% to profits. Most of the growth is expected to come from emerging markets, and leveraging the strengths of both Havells and Sylvania.

Infosys net profit rises 13% in Q2; scrip falls 3.39%

Infosys Technologies (INFOSYS.BO : 3076.15 -108.1), India's second-largest software exporter, overshot market expectations on Friday, posting a 13% rise in net profit year-on-year and 16.7% growth on a sequential basis, reflecting robust demand. It increased its annual revenue forecast to $5.95-6 billion, up 26-27%.

The board has proposed an interim dividend of Rs 10 per share on the face value of Rs 5 each and a 30th year special dividend of Rs 30 per equity share. After the results, Infosys hit an all-time high of Rs 3,249 on the BSE (^BSESN : 20125.05 -372.59), before closing at Rs 3,076. The scrip shed 3.39% during the day.

After several quarters of single-digit growth, Q2 revenues grew 12.1% from the previous quarter. However, the management, known for its conservative approach, cautioned that double-digit growth would be tough to achieve in the quarters ahead.

Almost all verticals, including telecommunications, retail, manufacturing and BFSI, exhibited strong growth. Europe, as a geography, grew 18.1%, indicating its growing importance to India's software fortunes.

Utilisation rates rose to a high of 81.7% thanks to growth in business volumes. Attrition has risen to 17.1%, though officials maintained that it was not something to be alarmed about.

Nokia Siemens, Ericsson bag Vodafone 3G order

The country's second largest GSM operator Vodafone Essar has roped in Nokia Siemens Networks (NSN) and Ericsson as partners for its 3G network across India. The company didn't disclose the financial details of the deal. While Ericsson bagged the contract for three metros, NSN was awarded the contract for the remaining six circles.

Vodafone Essar had won the 3G spectrum for nine of the 22 circles across the country for Rs 11,618 crore, the second highest payment made by a private telecom operator for the spectrum. Marten Pieters, managing director, Vodafone Essar, said, "Globally, Vodafone provides enhanced 3G experiences to a large base of customers. India is now ready for 3G, and we are committed to offer similar high-quality 3G services to our Indian customers. Ericsson and Nokia Siemens are specialists in this area and we view this as a very strategic alliance, in order to deliver and maintain a high quality network which customers will expect from Vodafone."

While Ericsson has been selected to provide exclusive 3G services in Mumbai, Delhi and Kolkata, NSN will implement and manage its 3G network in the rest six circles of Tamil Nadu, Gujarat, Maharashtra, UP(East), rest of Bengal and Haryana. Vodafone will utilise this latest HSPA technology to deliver services like video telephony, mobile broadband, mobile TV and others.

Urs Pennanen, India head, Nokia Siemens commented, "We are committed to implement a smart 3G network for Vodafone Essar, based on our global experience and local expertise and resources in India. We are fully geared for a speedy implementation of the 3G network, utilising existing GSM investments for reduced total cost of ownership to the operator. The subscribers will enjoy exciting new mobile broadband services and a seamless interoperability between 2G and 3G."

AI passenger revenue up 24% in Apr-Aug

Air India on Wednesday claimed 24% increase in passenger revenue during April-August as compared to same period last year---a performance expected to help it secure government fund.

"The passenger revenue grew by Rs 830 crore in the first five months of the fiscal on the back of surge in traffic," official sources said.

A ministerial panel to oversee the performance of the airline has linked any further monetary help to the carrier with its ability to cut cost and increase revenue.

The civil aviation ministry is expected to approach the Union Cabinet for further equity infusion into Air India soon to tide over the financial crisis. The airline is estimated to have an accumulated loss of over Rs 12,000 crore as on March 2010.

Almost all the domestic carriers have witnessed a sharp increase in passenger numbers resulting into significant improvement in their yield. The three full-service carriers Air India, Jet Airways and Kingfisher Airlines- have seen improvement in yield on international sectors also. Air India's international yields increased by 13.6% during April-August with domestic yield registering 14.9% growth.

SCL plans Rs 40-cr greenfield facility

Chennai: Sundaram Clayton Limited (SCL), part of the TVS group and the holding company of TVS Motor, is planning to invest around Rs 100 crore in several projects including a greenfield facility at Oragadam with an outlay of Rs 40 crore. The investment would be spread over for the next two years, said Venu Srinivasan, chairman, SCL.

The new facility would manufacture heavy truck parts and other automotive components including pipes, brackets and aluminum die-casting. The company order book this year included new customers such as Daimler (India and EU) and Nokia Siemens as well as from existing customers like Cummins, Volvo, TVS Motor, WABCO-TVS, Hyundai, Honda and Ford.

“These orders are expected to carry a cumulative potential of Rs 375 crore in the next five years,” Srinivasan said.

To cater to the demand, the company’s planned facility at Oragadam would manufacture heavy truck parts and other automotive components including pipes, brackets and aluminum die-casting.

Srinivasan said the company had set a business target of Rs 725 crore for the current fiscal and Rs 1,000 crore turnover in the next two years. The company’s sales remained stagnant at Rs 492.67 crore in 2009-10 as against Rs 492.36 crore a year ago.

On the exports front, Srinivasan said the demand for commercial vehicles in US and Europe continued to be depressed. North American class-8 trucks market shrunk 42 per cent, while that of class 5-7 trucks dropped by 38 per cent. European medium and heavy trucks also reported 60 per cent drop. “This had resulted the company reporting a 12 per cent drop in the fiscal to Rs 172.72 crore,” he said.

For the current fiscal, the company has set an export target of Rs 200 crore. Srinivasan said, “Key export markets of the company — the US and Europe — are expected to grow moderately during 2010.”

Punj Lloyd arm partners French nuke engg firm

New Delhi: Punj Lloyd-group firm PL Engineering Ltd and the Indian unit of French nuclear engineering firm, Nuvia, signed an agreement on Wednesday to form a venture for nuclear engineering and support services.

The proposed venture, which is slated to have a 50:50 equity structure, is being formed to capitalise on an expected surge in demand for nuclear energy-related services in India.

The agreement will lead to the creation of a new joint venture company to deliver quality nuclear engineering and operational support services to the global market, a joint statement from the companies said.

The joint venture will focus initially on providing services to the growing Indian nuclear sector and will later look at the global market.

Mr Atul Punj, Chairman, Punj Lloyd, said, “It's not just India that has very aggressive plans but globally countries are now talking more and more aggressively about ramping up into the nuclear sector, which is arguably considered the greenest energy that exists today… The venture will focus on providing services to the Indian nuclear energy sector and may expand its offerings to the global market.”

Punj Lloyd and Nuvia will hold equal stake in the new venture, the Nuvia Group Chairman, Mr Jerome Stubler, said at a press conference.

Nuvia, part of French construction and concession company Vinci SA, offers engineering and support services to nuclear power producers, power plant operators and turnkey contractors.

The companies are working on the broad size of investments and the process will be completed in 120 days, Mr Punj told reporters.