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Sportking to invest 50 cr on
Economy to grow 7.8 pc this fiscal: CII
India, BIMSTEC members to ink deal
GSPCL, Gail sign pact |
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Wipro signs pact to market services in the UAE
Stock market likely to be range-bound
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Sportking to invest 50 cr on expansion plans Ludhiana, February 8 It would create direct employment opportunities for at least 500 persons besides indirect jobs, says Mr Raj Awasthi, Chairman-cum-Managing Director of the company. In an interview to the TNS, Mr Awasthi said, “We are eagerly awaiting for the end of quota system by next year, and are gearing ourselves to explore the export market. Though we are skeptical about the end of quota system, as the USA and European union may adopt non-trading barriers to curb the Indian exports, yet if allowed we will divert towards exports.” He admitted that since exports from Bangladesh, Sri Lanka, Nepal and some countries in South African countries were not constrained by quota system, the Indian manufacturers were finding it hard to increase their exports despite the competitive edge. Stiff competition and fall in dollar value had adversely affected the profit margin of exporters. However, he said, due to growing incomes, good monsoon, and growing consciousness for branded garments, the manufacturers were finding it more attractive to sell their garments in the domestic market. The company had so far registered an average growth rate of 12 per cent in sales during the past many years, he said. The company was expecting a substantial increase in growth rate this year. Mr Awasthi disclosed that the Sportking had recently tied up with the Disney Group of the USA to sell their garments under Disney’s 14 brands. Another agreement had been signed with the Warner Brothers Group to use their brand name for the domestic market. “We expect sales of our garments under these foreign brands to touch Rs 2 crore by the end of this year. Since the Warner Group has plans to launch its own 24 cartoon network channel in India soon, we expect a major jump in sales under that brand.” In North India, the company was selling garments under Sportking and Mentor brands in middle-income group. In comparison to high-end brands like Adidas, Nike and other brands, the company was selling its readymade garments at a lower price. The company’s turnover had increased from around Rs 10 crore to over Rs 300 crore within a decade. It was exporting garments worth Rs 10 crore annually to the European and US markets. The group had employed around 5,000 employees at its three plants in Ludhiana, one dyeing unit, yarn unit and 26 outlets spread across all the major towns in North India. The Sportking had set up exclusive showrooms in Delhi, Noida, Ludhiana, Jalandhar and Jaipur. The company had plans to open four new outlets, including one at Chandigarh by April this year, he said. The group was currently manufacturing all sorts of readymade garments for kids, women and men, besides yarn for other manufacturers. The product range included inner thermal wear, T-shirts, trousers, track suits, pullovers, shorts, casual dresses, jackets and other garments. The company had its in-house designing team and R&D centre that worked on new designs and products. About the problems being faced by the company Mr Awasthi said, “We do not face any major problems, except that due to low quality of life, the professional engineers and designers do not want to stay here for long. For instance, we recruited 35 designers from NIFT institutes in Delhi, Hyderabad and other cities. Within an year all except four left the company and the city as well. ” He lamented that despite competitive pay packages in the industry, the manufacturers at Ludhiana found it difficult to retain good professionals. “If I could find a good team of designers, the total turnover of our garment division would have increased by ten times,” he added. High level of pollution, traffic congestion, lack of night life and other basic amenities in the region were the main hurdles in attracting good employees to the region, he said. Regarding the financing of its expansion project, Mr Awasthi said,“We have no plans to enter the primary market, rather we will use internal resources and bank loans. Since we are successfully brining the cost of production down by 5 to 7 per cent every year, there is no dearth of financial sources.” With an annual advertising budget of about Rs 1 crore, the company was making efforts to strengthen its brand in the market, said Mr Awasthi.
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Economy to grow 7.8 pc this fiscal: CII New Delhi, February 8 “In view of the strong performance in the services sector, we have raised our estimate to 7.8 per cent. GDP growth in the first half has been 7.0 per cent and since agricultural growth should strengthen further over the next two quarters, we expect overall growth in the second half to be higher”, the CII said in its “State of the Economy” report for the quarter ending December 2003. In the previous quarterly report, it had pegged the GDP growth figure at 7.2 per cent. In 2004-05, the CII expects industry and services to continue their strong performance and as per its preliminary estimate pegged the GDP growth for the coming fiscal year at 6.7 per cent. “We believe this is a conservative estimate, given that there is an upside for industrial growth depending on the extent to which investment spending picks up”, the CII said. At the same time, apex industry association did not believe that the surprise policy announcement and the interim budget were pre-election handouts given at the cost of fiscal prudence. “We believe not. For one tariff reductions are welfare enhancing once customer interests are taken into account, they are not transparent enough to get votes for the government. Secondly, in view of the excellent GDP growth, the buoyancy in the economy will help revenue collection”, it said. The GDP growth in first two quarters this fiscal was 7 per cent and as agriculture growth was expected to strengthen in second half, overall growth in second quarter was expected to be higher, CII said in its economy survey. “The industrial recovery, which began in second quarter of 03-04, is yet to peak and growth rates are expected to peak even further over the forthcoming year,” the chamber said. “Given that domestic investment cycle is turning and international growth is on upswing, positive factors favouring growth currently far outweigh the risks.’’ Net tax revenues of the Centre not only exceeded Budget estimates in absolute terms — by over Rs 33 billion — but also as percentage of GDP to 6.8 per cent to 6.7 per cent Budget. Non-tax revenues were higher by over Rs 57 billion than assumed in the Budget largely due to higher dividends and profits of PSUs as well as the inflows on account of unified telecom licenses. The CII said with sale of 10 per cent equity in GAIL and ONGC collections from disinvestment would exceed the target of Rs 132 billion by Rs 13 billion. Due to the debt swap programme conducted with the states, the revised estimates for loan recoveries as well as loans to states were much higher than budgeted. The improvement in the quality of the deficit was also apparent while revenue to GDP ratios had improved, the government’s plan expenditure had not been compromised. The balance of payments data for the first half of 03-04 showed that imports growing sharply and exports growth slowing down resulted in decline in surplus in current account.
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India, BIMSTEC members to ink
deal
Phuket, Thailand, February 8 The proposed agreement faced rough weather yesterday after founding member Bangladesh refused to sign the pact at the last moment leaving four members - India, Thailand, Myanmar and Sri Lanka showing interest in initialling it. However, this morning Bhutan and Nepal, who formally joined the grouping 48 hours ago, decided to be a part of the pact. Under the deal, BIMSTEC’s more developed nations India, Sri Lanka and Thailand would commit to abolish tarrifs by 2012 while the three less-developed members Myanmar, Bhutan and Nepal would have another five-year grace period. Tariffs would begin to be reduced in mid-2006 with products designated for ‘fast-track’ treatment to be traded on a zero-tariff basis by mid- 2009 for the three developed members and by mid-2011 by the other countries. Bangladesh pulled out yesterday after demanding compensation for any revenue lost as a result of dropping tariffs, sources told PTI. Under the FTA the products except those included in the negative list would be subject to tariff reduction or elimination on two tracks - ‘fast track’ and ‘normal track.’ For India, Sri Lanka and Thailand the timeframe would be July 1, 2006 to June 30, 2009. For Bangladesh, Myanmar, Nepal and Bhutan the time frame would be July 1, 2006 to June 30, 2011. For products under ‘normal track’, the time frame for India, Sri Lanka and Thailand will be July 1, 2007 to June 30, 2012 and for Bangladesh and Myanmar, Bhutan and Nepal July 1, 2007 to June 30, 2017. Bangladesh today cited procedural problems for its inability to sign the agreement. A Bangladeshi delegate said that the country’s Commerce Minister was unwell and the Commerce Secretary had gone on Haj. Meanwhile, foreign ministers discussed six major areas where cooperation was possible among member countries. The leaders spoke on the need for open skies to enhance tourism, transportation, closer cooperation in fisheries as there was potential in Bay of Bengal. —
PTI
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GSPCL, Gail sign pact
Ahmedabad, February 8 The agreement for purchase of one MMTPA from Gail was signed by Gail Chairman Proshanto Banerjee and GSPCL Chairman C K Koshy here last night. Speaking on the occasion, Mr Banerjee said this was the third and largest RLNG gas agreement signed with Gujarat for gas consumer of the country. Mr Koshy said the GSPC currently sold about four million cubic metres per day of gas and the purchase of RLNG from Dahej would increase the volume of gas to be sold by cent per cent. Gujarat Minister for Power and Energy Saurabh Patel who was present at the agreement signing ceremony said that Chief Minister Narendra Modi wanted Gujarat to become the peteronet capital of the country and signing of this agreement was an indication to fulfill his dream. —
PTI
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Wipro signs pact to market services in the UAE
Dubai, February 8 Mr Azim Premji, Wipro’s Chairman, said the deal would allow Wipro to contribute to IT transfer to the region and to “technical resource development to build a rich IT-talent pool in the UAE.” Sheikh Nahyan bin Mubarak Al Nahyan, Minister of Higher Education and Chairman of the Colleges, signed the Memorandum of Understanding yesterday with Wipro on behalf of the Centre of Excellence for Applied Research and Training (CERT). Officials said the deal involved intensive development and marketing of IT consulting, solutions and services to customers in the region as well as technology transfer through participation of nationals in various stages of the project. India’s leading IT company, Wipro Infotech, a division of the $ 660 million Wipro Ltd. Corporation, which offers high value corporate information technology products, solutions and services, has a been marketing its services in the Middle East from its Middle Eastern operation at Dubai Internet City (DIC). A statement said the CERT and Wipro would collaborate, develop and implement consulting, solutions and services for educational institutions, corporations, industry and government entities in the region. The agreement would also provide consultancy, applied research services and training in information and communications technology. “The CERT continues to play an important role in the areas of knowledge and technology transfer. This partnership with Wipro is another milestone in our ongoing quest to bring excellence to the training, consulting and research services CERT provides to the UAE industry and community,” Sheikh Nahyan said. “As both the CERT and Wipro share the commitment to pursue excellence and continuous quality improvement with integrity in leadership, I expect this partnership to be strategic in effective technology transfer as well as in providing world class IT solutions, services, and training to the region.” —
PTI
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Stock market likely to be range-bound During the last fortnight the stock market was extremely volatile and yet it moved in a narrow range. Volatility has been marked largely in the intra-day fluctuations. The Finance Minister’s interim Budget had not much effect on the market. Even good results announced by the corporate sector had been ignored. Now, that the House of people had been dissolved and the next general elections were expected to be held by mid-April and first week of May, the market was likely to go flat. Last week, the market had lots of intra-day swings but the volume of business was quite low. The projection that the market would go flat was based on a number of factors. First, many IPOs would suck up investable funds, both from retail investors and mutual funds. Secondly, the interim Budget proposals in most cases were no better than the projections made by the Finance Minister about what the government would do after the post-election period, in case the NDA returned to power. This was particularly true of such announcements as extension of long-term capital gains tax exemption for another three years and no-tax on equity mutual fund returns to the investors. This concession would require fresh legislation from the Parliament. Thirdly, apart from uncertainty that naturally accompanied general elections to the Lok Sabha, there was hardly any trigger to push up the market during the next two and a half months. The third quarter results had been announced in most of the cases and the fourth quarter results would be available only after April 10. Another reason was the uncertainty about the US Presidential elections that were due in October and the possible curb that may be placed on outsourcing by US corporate companies as a part of the electioneering strategy by the US government. While the short-term prospects of the stock market were not very bright and the market was likely to stay range-bound and flat, the long-term prospects were bright. The economy was doing well and the data available from the interim Budget confirmed it. DSP Merrill Lynch, on the basis of a survey, had indicated that the Sensex was expected to touch 7000 points mark in the next 12 months and the market would be driven by rising growth in the economy. The survey also indicated that during the short term the market was expected to be ranged-bound between 6200 and 5500 points. Bonus issue Jubilant Organosys has announced a bonus issue in the ratio of 3 for 5. Workhardt Pharma will be considering a bonus issue in its board of directors meeting on February 12. Glaxo Smithkline Glaxo Smithkline Pharma has announced excellent annual results with increase in net profit of 42 per cent (before exceptionally item). It has raised the dividend from 70 per cent to 100 per cent. The managing director of the company has also indicated that in view of its ample funds available with the company, it may consider buy-back of equity shares from the minority shareholders. Its equity capital is Rs 74.48 crore as against Rs 593 crore free reserves. Its EPS for 2003 is Rs 23.1 (as against Rs 13.2 last year). Pick up blue chips The economy is doing well and the future prospects of both the economy and the stock market are bright. It is, therefore, proper to pick up fundamentally strong first-rank blue equity scrips from the market during the next two months. It is not the time to book profit in equity shares except in companies that are fundamentally weak and have dark future. The only possible danger to the stock market is withdrawal of the FIIs, which, however, is unlikely. In fact during the last two months 14 new FIIs have registered themselves with SEBI. |
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Ludhiana, February 8
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