B U S I N E S S | Monday, November 30, 1998 |
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Corporate sales grow, earnings fall:
ICICI NEW DELHI, Nov 29 Corporate performance deteriorated in the first half of the current fiscal with net profits of companies declining by 1.7 per cent on sales growth of 12.2 per cent, a study by ICICI has said. 200 rubber units shift from Punjab JALANDHAR: About 200 rubber units here have left Punjab to set up shop in Haryana, Rajasthan and UP due to substantial subsidy, relief in taxes and C forms available in these States. |
Inflation declines sharply to 8.54 pc NEW DELHI, Nov 29 After touching a three-year high last week, the annual rate of inflation fell sharply by 0.31 points to 8.54 per cent for the week ended November 14, as signs of easing of food prices emerged for the first time. Cement exports to drop by 40 pc NEW DELHI, Nov 29 Cement exports from the country are likely to drop by 40 per cent in the current fiscal due to falling prices brought about by the South East Asian currency crisis, an apex chamber has said. |
Corporate sales grow, earnings fall: ICICI NEW DELHI, Nov 29 (PTI) Corporate performance deteriorated in the first half of the current fiscal with net profits of companies declining by 1.7 per cent on sales growth of 12.2 per cent, a study by ICICI has said. The net profit of 710 companies dropped from Rs 16,026 crore in the first half of 1997-98 to Rs 15,750 crore in the current half, while net sales increased from Rs 1,93,675 crore to Rs 2,17,268 crore during the period, the ICICI study on corporate performance for the first half of 1998-99 has said. Profit margins also came under pressure with net profit margin declining from 7.7 per cent in the first half of 1997-98 to 6.6 per cent during 1998-99. The bottomline was adversely affected due to low growth in sales and high growth in total expenses, interest costs and taxes. The ICICI study included 710 companies, out which 676 were private companies and the balance 34 were public sector units. While the overall performance of the corporate performance was subdued, private sector was even less satisfactory with net profits declining by 5.2 per cent on net sales growth of 9.9 per cent. Sectorwise analysis revealed that steel, cement, commercial vehicles, auto-ancillaries and paper were the worst-affected while software, construction and plastics products reported the highest growth in sales and net profits. Public sector units witnessed a higher growth in sales and other income. But due to higher increase in total expenses, there was a drop in profits margins to 7.8 per cent from 8.9 per cent in first half of 1997-98. However, growth on net profits was marginally positive for these companies due to good performance of the petroleum related and telecom companies. If these two industries are excluded, net profits would have declined by 22.9 per cent for the public sector, it said. Overall the private sector performance was evenly distributed with large companies (sales over Rs 250 crore) registering the highest decline of 6.1 per cent in net profit followed by small companies (sales below Rs 50 crore), 4.3 per cent drop, and medium companies (sales between Rs 50-250 crore) profits down by 2.4 per cent. While medium size companies had the highest growth in net sales at 11.6 per cent followed by large and small companies with growth of 9.9 per cent and 4.2 per cent respectively. The ICICI study said
industries like drilling, plastics, aluminium,
two-wheelers, pharmaceuticals reported growth both in
sales and net profits, while tea, tyres and electrical
equipment reported high growth in profits despite low
growth in sales. |
200 rubber units shift from
Punjab JALANDHAR: About 200 rubber units here have left Punjab to set up shop in Haryana, Rajasthan and UP due to substantial subsidy, relief in taxes and C forms available in these States. The export of rubber goods to Nepal, Bangladesh and other countries has stopped. In addition to the loss of foreign exchange, personal loss in income to the owners of the units and setback to employment opportunities, the State Government has suffered a huge revenue loss. According to the President of the Jalandhar Chamber of Commerce and Industry, Mr Avnish Arora, the delay on the part of the State Government to abolish the C form along with the reduced CST of 2 per cent, will push this industry to a point of no return. Mr Arora says that there is an impending danger of unemployment to 8,000 to 10,000 skilled and unskilled workers engaged in the rubber industry of Punjab. According to another unit owner, Mr Vinod Ghai, the rubber industry of Punjab buys its raw material from far-off states like Kerala and West Bengal. The transportation cost and incentives given by other states have made the rubber industry of Punjab unviable. The landed cost of products from Punjab after paying central sales tax and freight is higher than that of products manufactured in other states. The Jalandhar rubber industry manufactures mainly rubber footwear i.e. hawai chappal and canvas shoes. While the canvas shoes are fast becoming outdated with the advent of sports shoes, the hawai chappal is losing out in competition. The rubber industry of Kerala has priced out products from Jalandhar in Kerala, Andhra Pradesh, Karnataka and Tamil Nadu and is fast making inroads into Maharashtra, Madhya Pradesh and Gujarat. The rubber industry in Delhi, UP, Rajasthan and Haryana is dominating in their respective states. The rubber industry of Calcutta is dominating in the eastern and north-eastern states and the result is that the rubber industry of Punjab is left with no area where it can sell its products, says Mr Arora. Until the state government
abolishes the C form with the reduced CST of
2 per cent, this industry cannot survive. |
Inflation declines sharply to 8.54 pc NEW DELHI, Nov 29 (PTI) After touching a three-year high last week, the annual rate of inflation fell sharply by 0.31 points to 8.54 per cent for the week ended November 14, as signs of easing of food prices emerged for the first time. Annual inflation, based on the wholesale price index (WPI), fell by 0.31 percentage points to 8.54 per cent (provisional) from 8.85 per cent (p) the week before. Compared to this the inflation was at 3.92 per cent a year ago. The 8.85 per cent touched last week was the highest in 163 weeks, the previous highest was 9.01 per cent recorded in September 23, 1995. For the first time, there has been signs of prices of vegetables and edible oils, which had witnessed unprecedented rise in the past four months, finally easing. Prices of vegetables came down by 4.8 per cent, while that of edible oils fell by 2 per cent during the week. The index for all commodities (base:1981-82=100) during the week declined by 0.1 per cent to 359.7 (p) from 360.2 (p) in the previous week. However, inflation based
on consumer price index for industrial workers (CPI-IW)
is ruling much higher at 16.3 per cent in September
compared to just 8.2 per cent for the month on WPI. |
Cement exports to drop by 40 pc NEW DELHI, Nov 29 (PTI) Cement exports from the country are likely to drop by 40 per cent in the current fiscal due to falling prices brought about by the South East Asian currency crisis, an apex chamber has said. While the world cement trade was estimated at 100 million tonnes, India exported only four million tonnes in 1997-98 and is likely to come down to two million tonnes this year, FICCI said here today. The demand for cement in the domestic market dropped from 10 per cent last year to around 6 per cent in 1997-98, the chamber said in a communication to Union Industry Minister Sikander Bakht. Proposing a four-point package to prop up the cement industry, including a suggestion to reduce excess tax element on cement for bringing down the price, FICCI said while the wholesale price index of all commodities increased, that of cement declined, affecting a number of manufacturing units. The industrys hopes have been belied and is faced with excess capacity and serious demand-supply mismatch. The problem of cement industry has been further aggravated due to the rising input cost, FICCI said. Tax levies on cement were very high at 65 per cent of ex-factory prices which was higher for any country for a consumer item. Adding woes to the industry, this years Budget restricted the Modvat claim on duty paid on inputs to 95 per cent, resulting in a loss of Rs 10 for every tonne of clinker, a raw material used for cement manufacturing. This would increase the burden on the cement plants at a time when they are faced with low prices. In addition, incentives for using waste materials in the eco-friendly process will also be lost, the chamber said. FICCI said steps should be taken to focus more attention on mass housing and infrastructure development. This included construction of concrete roads at least for national highways and expressways, power houses and housing. |
Singapore takes a bitter medicine SINGAPORE, (AFP): Singapore Prime Minister Goh Chok Tong has said that the governments new $ 10.5 billion (6.35 billion US) cost-cutting package is not a guarantee for economic recovery. The cost-cutting package is not a miracle cure to get us out of recession but decisive cost-cutting measures will certainly improve the viability of manufacturing production and business operations, Goh said. It will also buy some time for our companies to rationalise their operations and expand into new markets, he said at a community function on Saturday. The cost-cutting steps announced on Tuesday included sweeping pay cuts for civil servants and private-sector workers to help pull the island out of recession and sharpen its competitive edge against lower-cost neighbours. Goh said the new strategy forged through national consensus is Singapores strong signal to the world that we are willing to take bitter medicine when the situation calls for it. Malaysia TOKYO, (PTI): Malaysias gross domestic product (GDP) declined by 8.6 per cent in the third quarter compared with a year earlier, but grew by 2.3 per cent from the previous quarter, Central Bank Governor Ali Abul Hassan Sulaiman said on Saturday. Stating the GDP results at a press conference, Hassan attributed the severe contraction to the tight monetary policy implemented during the first half of this year and also to the stronger base last year which led to a 7.5 per cent GDP growth for the third quarter. For the second quarter of 1998, the GDP contracted by 6.8 per cent compared with the year before, while the contraction for the first quarter was 2.8 per cent. Trade barriers BEIJING, (PTI): Even as Sino-Japanese bilateral trade has slumped this year, China has urged Japan to remove its discriminatory trade barriers so as to offset the negative impact of the Asian financial turmoil, an official report said on Sunday. Quoting officials from Chinas Ministry of Foreign Trade and Economic Cooperation, the report said Japan has adopted discriminatory practices against some Chinese textile products and also against Chinese rice in Japans public bidding for rice import quotas. Chinas currency BEIJING (PTI): Chinas currency will face mounting pressure for appreciation rather than depreciation over the next two years, an economist with the Hong Kong and Shanghai Banking Corp (HSBC) has predicted. Continuously falling prices, a growing trade surplus and the need for the central bank to offload part of its foreign currency reserves will push the Renminbi yuan to rise between 10 and 15 per cent, according to Joe Zhang, head of China Research of HSBC Securities Asia. Zhang believes Chinas price deflation will continue in the next several years, largely due to Chinas hefty grain reserves and improved agricultural and industrial productivity. Growth to fall DHAKA (IANS): Bangladesh will not reach its targeted economic growth in the current financial year due to the devastating floods that ravaged the country, the World Bank has said in its periodic economic update. The longest lasting floods affected the countrys economy severely. The GDP (gross domestic product) growth rate would decline to 3-4 per cent from 5.6 per cent in 1997-98, it said. The GDP growth target for fiscal 1998-99 was set at 6 per cent. The bank update said the floods damaged an estimated 15,000 kilometres of roads, 14,000 schools, hundreds of bridges and culverts and nearly 500,000 homes. |
Morepen Lab I deposited Rs 5000 (Rupees five thousand only) through M/s Bajaj Capital Ltd. 89-91, Sector 17-D, Chandigarh to M/s Morepen Laboratories Ltd, 22, Kasturba Gandhi Marg, New Delhi as fixed deposit scheme for six months. The deposit had matured on 1.7.1998 and I discharged the FDR No. CHDDX 00560 for repayment to the company on 15.6.1998. I have requested the company several times for my payment, till to date I have not received that. Satish Kumar Reliance Cap I sent 100 shares of Reliance Capital Ltd. having distinctive Nos. 1284484845 to 128448584 and folio N0. 079079685 on 09.7.98 for transferring the same in my favour.Despite many reminders,I am still awaiting my shares. Sanjeev Aggarwal Reliance Ind I deposited debentures of K series numbering 10 of Reliance Industries Master Folio N0 34713723 to M/s MTM Finance & Mgt Consultants Pvt. Ltd, SCO No. 1046-47, Sector 22-B, Chandigarh. Despite many reminders, I have not received the redemption amount so far. B.R. Abbi Videocon Intl I sent two nos bond certificates bearing Nos. 000055334 and 000055353 of 100 bonds each in February 98 for redemption due on 20.2.98 to Videocon International Ltd. The folio Nos. are 10001416 and B 0001419. Despite 10 reminders, I have not received the amount. Baldev Singh DCM I hold 10 NCDs of Rs 1000 each of series A for 17 months and 25 days of DCM Ltd, New Delhi with folio No. 201833 dated 20 February 1997 and distinctive No. NCDS 181699 to 181708. These were due for redemption on 14.8.98. Despite sending duly discharged and signed original letter of allotment on 27.7.98, the said company has not redeemed NCDs so far. Gyan Mohan II I invested Rs 10,000 with DCM Ltd, New Delhi in NCDs series A for 17 months 25 days. Its redemption was due in the middle of August, 98. Despite sending the NCDs duly discharged on 13.7.98, the DCM Ltd. has not made payment of NCDs with Folio No. 106021. Chaman Lal Bhasin, DCM Fin I deposited Rs 6000 with DCM Financial Services Limited, 75, Amrit Nagar NDSE-I New Delhi-3 for one year vide FDR 52501 on December 5, 1996. The repayment cheque was due in December 1997 but I am yet to receive that amount. |
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