Mumbai, July 26
Maruti Suzuki, India’s top car maker, beat estimates with an 18 per cent rise in its fiscal first quarter net profit on Tuesday that coincided with another interest rate hike by the Reserve Bank of India that made the outlook for the car sector murkier.

The company reported net profit of Rs 549 crore ($124 million) for its fiscal first quarter ended June 30, 2011 up from Rs 465 crore a year earlier. Sales climbed 3.3 per cent to Rs 8,320 crore.

Net profit for April-June was helped by Rs 180 croreof other income, mainly due to higher returns on the company's investments, compared with Rs 100 crore in the year-ago quarter.

Car makers in the country are seeing a drop in demand amid surging interest rates and fuel prices in the world’s second-fastest growing auto market after China.

The demand outlook has weakened further after the RBI surprised investors by raising interest rates by 50 basis points on Tuesday, showing unexpected resolve in fighting persistently high inflation.

"The surging interest rates accentuates the problem for companies, especially in a market where customers are very sensitive to prices," said Vijay Chugh, a sector analyst with Ambit Capital In Mumbai.

Indian car sales, which grew at a breakneck 30 per cent in the fiscal year that ended in April, are now expected to grow by just 10 to 12 per cent this fiscal year, down from an earlier forecast of 16-18 per cent, an industry group earlier said.

Car sales in Asia's third-largest economy, which in June saw their slowest pace of growth since March 2009, are driven by a burgeoning middle class that mostly relies on bank loans for purchases.

Petrol and diesel prices have also gone up in recent months, putting increased pressure on wallets.

"It will be a challenging demand environment for automobile companies this year," Chugh said, adding that increasing competitive pressure will also weigh on the financial performance of companies like Maruti Suzuki.

Maruti expects the higher interest rates to dent investor sentiment, but expects demand to pick up momentum during the festive season that starts in September and peaks in November after Diwali.

"It is unfortunate that interest rates are moving up so frequently. So, there is bound to be an impact on consumer sentiment," Maruti's Chief Financial Officer Ajay Seth told Reuters in a phone interview.

Maruti, 54.2 per cent owned by Japan's Suzuki Motor, said vehicle sales fell nearly 1 per cent from the year-ago quarter to 281,526, while higher commodity costs weighed on margins.

Maruti also faced more than $90 million in lost output this quarter as a 13-day strike by employees at one of its facilities crippled production.

Shares ended down 0.4 per cent at Rs 1,176.95 on Tuesday, after having risen as much as 1.7 per cent earlier in the Mumbai market that closed 2 per cent down. — Reuters

Mumbai, July 26
RBI governor D Subbarao today said growth concerns were always on the central bank's radar and it will shift from the tight money policy stance only if economic expansion falls consistently below 8 per cent, which was not the case as of now.

Allaying fears that RBI may be myopic towards slowdown in growth momentum in trying to tame inflation, Subbarao said, "I want to assure all of you that growth is never far away from our policy radar screen. We are always worried about it. But we have to balance between growth and inflation. And now inflation is significantly above our comfort level."

Subbarao added, “We have to understand that certain moderation in growth is an inevitable price we have to pay for bringing down inflation in the short-term, but it is something that will make growth in the medium growth more sustainable."— PTI

New Delhi, July 26
India, the world's second-largest sugar producer and largest consumer, may decide on allowing more sugar exports after September, Minister of state for food consumer affairs and public distribution KV Thomas said today.

"We are not in a hurry at all (for more sugar exports) as global prices are likely to remain steady until January," Thomas told reporters.

The country is likely to have 5.9-6 million tonnes of stocks at the start of the next sugar season, beginning October 1, which will be sufficient to meet peak festival season demand, he said.

Thomas also said the government may consider allowing additional sugar exports when the current sugar year ends.— PTI

Washington, July 25
Debt default. A ratings downgrade. Political deadlock. Such terms, once associated primarily with the developing world, now abound in the mighty US.As the US Congress flirts with the once-unthinkable prospect of not paying the country's bills, the heated battle over a usually routine vote to lift the country's debt ceiling is dealing another blow to America's image.

For political economy experts who have spent their careers focused on the emerging world, Washington's protracted debt stand-off is all too reminiscent of the divisions more typical of developing-country politics.

"We attend a lot of meetings with Latin Americans and we used to complain to them about the problems they had, and now they like to say to us: 'That sounds just like the US'," said Peter Hakim, head of the Inter-American Dialogue, a policy group in Washington. "What's really shocking is the inability to reach agreement. All of a sudden the US is a democracy that is unable to find a compromise. We're polarised."

Given that the US is home to not only the world's largest economy but also it’s most liquid and safe debt market, the repercussions of a US financial meltdown are potentially much larger than a more contained emerging-markets crisis.— Reuters

New Delhi, July 26
The government today announced restoration of incentives on export of cotton and cotton yarn following a sharp fall in domestic and international prices of the commodities.

The decision to restore the Duty Entitlement Pass Book (DEPB) scheme on cotton yarn would be on a retrospective effect basis from April 2011 and on cotton from October 2010, Commerce and Industry Minister Anand Sharma said.

"I have taken a composite review of cotton and cotton yarn industry over the last few days. Both of these segments have faced huge fluctuation in the international and domestic prices," said Sharma, who also holds the charge of the Textiles Ministry.

He said the government policy has been calibrated over the last one year. Cotton yarn has been placed on Open General Licence (OGL) for exports from April 2011.

Therefore, the DEPB, tax refund scheme for exporters, has been made effective from that date.

The government had withdrawn the tax refund benefit on cotton and cotton yarn in April last year.

Welcoming the move, Confederation of Indian Textiles Industry said that it will give relief to the cotton yarn sector as it was making losses due withdrawal of export incentives and had huge inventories.

Exports of cotton were disincentivised by virtue of export tax, following a sharp rise in prices in January, 2011. Prices took a reverse turn by end of March and fell sharply both in the global and domestic market and have stayed there.— PTI

New Delhi, July 26
Media and entertainment firm UTV Software Communications Ltd today said Walt Disney Co has offered to buy out stakes held by public shareholders and other promoters of the company in a deal valued around Rs 2,000 crore.

Subsequent to buyout of the public shareholders by Walt Disney Company (South East Asia) Pte Ltd, a promoter group firm, the company will be delisted from both the Bombay Stock Exchange and the National Stock Exchange, it said.

"The delisting proposal entails an offer to acquire all outstanding equity shares held by public shareholders in the company," UTV said in a filing to the Bombay Stock Exchange.

Walt Disney is the majority shareholder in UTV Software Communications with 50.44% stake. The board of directors has approved the delisting offer and acquiring shares from public at a price not exceeding Rs 1,000 per equity share. — PTI

New Delhi, July 26
State-run power equipment major BHEL today reported an over 22 per cent jump in net profit to Rs 816 crore for the three months ended June, helped by higher sales and better cost management efforts.

The company's sales in the first quarter of the current fiscal climbed to Rs 7,433 crore from Rs 6,761 crore in the year-ago period, it said in a statement.

The good quarterly profit has been mainly attributed to increased sales and prudential cost management efforts, especially in tackling material expenses.

"With this, BHEL has maintained its track record of earning profits uninterruptedly for nearly four decades without a break... BHEL's turnover has increased by three times and net profit by four times in the last five years," the statement noted.

New York, July 26
After earning billions of dollars as returns on investments by him as also outside investors, George Soros has hanged his boots as a fund manager for outsiders and would now focus only on his family's money.

Soros, the 81-year old legendary investor with numerous successful investments across the world, including in India to his credit, will return nearly $1 billion to the outside investors having put in their money in his fund for investment purposes.

However, an estimated investment portfolio worth about $25 billion of his family would continue to be managed by the legendary investor. The investors have been informed about the decision through a letter by Soros.— PTI

Chandigarh, July 26
Connect is all set to launch its wireless broadband service in Punjab. The company is a dominant player in data service segment in the state, and hopes to increase its penetration by launching its wireless broadband service next month.

Initially, the company will be launching its services in Chandigarh and its periphery, Patiala, Ludhiana, Jalandhar and Amritsar. After covering these cities, the service will be rolled out across Punjab in the second phase.

Prem Ojha, business head, Connect Wireline and Broadband, said: “The service will be launched by mid August. Since the economies of scale are better for launching these services in high rise buildings and row houses, we are initially targeting these customers, and will be launching it for the retail customer in the second phase,” he said. In the first phase itself, Connect is investing Rs 50 crore, and as we expand, the investment will go up, he added.

Ojha said that though the internet penetration in Punjab (over 14 per cent) was much higher than the national average, there was still a large uncaptured market share.

“We have a 30 per cent market share in wireline broadband retail customers, and a 45 per cent share in the wireline broadband enterprise customers. Though another telecom operator is already offering WiMax, but it is in select places. Ae hope to improve our market share tremendously,” he said.

New Delhi, July 26
Salt-to-software conglomerate Tata group has emerged as the country's most trustworthy corporate house, while the two Ambani groups are lagging way behind, a new survey said today.

In the survey conducted by Equitymaster, more than 61 per cent participants voted Tatas as the most trustworthy and transparent group in terms of their financial reporting. The groups led by Mukesh and Anil Ambani could garner less than 2 per cent votes each in the survey, which ranked them at 6th and 8th positions, respectively. The survey ranked HDFC group as third most trustworthy after Tatas and Infosys. L&T and TVS groups followed at 4th and 5th.— PTI