New Delhi, July 5
Forecast for the second quarter earnings of the current financial year will be at a multi-quarter low as the overall slowing economy continues to take its toll on corporate earnings estimates.

According to a research by IDFC Securities, the Sensex earnings growth expectation is at 2.2 per cent year-on-year, the lowest in the past 12 quarters.

Commodities are expected to report earnings de-growth of 4.8 per cent year-on-year while earnings of non-commodities are likely to be stronger at 5 per cent. While consumer goods and pharmaceuticals are expected to report strong earnings growth, but the auto, metals and power sectors should witness weak bottomlines.

Overall, growth continues to be adversely affected as reflected in several macroeconomic indicators such as quarterly GDP growth, PMI indices, core industries data and industrial production.

With wholesale inflation on a decline, the Reserve Bank of India had taken cognisance of weakened growth and declining inflation and signalled a shift in its policy to support investment-led growth with consecutive repo-rate cuts.

The report says considering the non-transmission of rate cuts to the economy (banks not passing on rate cuts to customers), the RBI indicated limited room for further monetary action in its last policy review. Further, due to the recent sharp depreciation of the rupee raising the possibility of higher imported inflation, the scenario of pause in further monetary action looks more likely.

In its preview of the information technology sector, Kotak Securities expects a subdued performance with volumes of the top four companies to rise by 1-3 per cent.

The report says the overall demand scenario has remained stable over the quarter. While the economies of the USA and EU may take long to improve, the stimulus measures taken by them have eased concerns of catastrophic defaults or bankruptcies and helped them to stabilise. This may prevent demand from falling in the foreseeable future.

However, it adds that there is considerable unease over the proposed Immigration Bill in the US, which may weigh on the sector.

New Delhi, July 5
The Foreign Investment Promotion Board (FIPB) today cleared seven foreign direct investment (FDI) proposals in Indian pharmaceutical companies, while deferring three cases on concerns of ownership control.

“The FIPB has considered all the applications, and taken decisions on merit ... We have cleared seven proposals and deferred three,” a Finance Ministry official said after the meeting of the board.

The FIPB, headed by Department of Economic Affairs Secretary Arvind Mayaram, discussed 30 FDI proposals, including 10 from the pharma sector.

"In cases where issues related to control were there, the decision in those cases has been kept in suspension till the review process is completed by the Department of Industrial Policy and Promotion (DIPP). We will wait for a final policy decision," the official said without disclosing the proposals that were cleared by the board.

The proposals which were discussed at the meeting today include that of Singapore's GlaxoSmithKline Pte Ltd, USA's Mylan Inc, Mauritius-based Castleton Investment Ltd, Mumbai- based Ferring Therapeutics and Hyderabad-based Verdant Life Sciences.

Currently, India permits 100 per cent FDI in the pharma sector through an automatic approval route in the new projects but the foreign investment in the existing pharma companies are allowed only after the approval of the FIPB.

The government is likely to soon finalise a FDI policy with regard to existing drug companies.

The DIPP had earlier raised concerns over spate of acquisitions of domestic pharma firms by multinationals. — PTI

Chandigarh, July 5
Going through a phase of slow growth and keen on attracting Indian entrepreneurs to set base in Scotland, the Scottish government has expressed its concern to the UK government over the proposal to introduce UK visa bonds for Indians.

The director (north and east India), Scottish Development International, Rooma Kumar Bussi, said after the UK visa bond controversy, wherein the Home Affairs Department of the UK government was proposed to ask Indians visiting the UK to file a bond of 3,000 GBP, the issue had been taken up by the Scottish government with the UK Government.

“The issue can impact the trade relations between India and Scotland. Thus, the issue was raised and concerns of the Scottish government were addressed suitably," she said.

The proposal for the pilot, which came to light last month, had caused a furore in India as the UK has a huge Indian diaspora. The UK and India have been trying to boost trade ties, and following the visit of UK Prime Minister David Cameron earlier this year, both India and the UK hailed that a new era of the UK-India trade had been heralded. According to the British government’s website, the bilateral trade between India and the UK touched 16.4 billion pounds in FY12. The bilateral trade between India and Scotland is estimated at 380,000 GBP, with trade balance so far being in the favour of India. The trade between India and Scotland is growing at a rate of 15 per cent on year-on-year basis.

Scotland’s engagement with Indian entrepreneurs and its focus on attracting investment, especially that gets high value jobs, comes at a time when the Scottish government is making an economic case for independence, before the referendum for independence from the UK in 2014. As a result, there is a lot of importance being accorded to trade with India. “The Scottish Development International is looking at potential investors to invest in the UK and also scouting for business alliances with companies in Punjab. We are looking at companies which have high growth potential and also have the capability to create high value jobs, so we are offering regional selective assistance — a kind of capital subsidy, besides tax concessions to companies whose proposals are accepted by the council," said Bussi.

She said the Scottish companies involved in research and development, medical technology, education and food and drinks sector were already forging tie-ups with companies in Punjab. She said the council was conducting a market research for the Scottish textile companies to forge business partnerships with the textile companies in Punjab.

New Delhi, July 5
Anglo-Dutch consumer goods giant Unilever PLC has increased its stake in the Indian arm Hindustan Unilever Ltd (HUL) to 67.28 per cent, following an open offer which commenced on June 21 and closed yesterday.

The company fell short of its target as it had planned to hike the stake in HUL to 75 per cent through the open offer from the earlier stake of 52.48 per cent.

“Based on the shares tendered which represent 14.8 per cent of HUL, Unilever would increase its stake from 52.48 per cent to 67.28 per cent,” Unilever Plc said in a statement.Shareholders of HUL te ndered 319,699,278 shares during the tender period for the open offer, it added.

“The offer price of Rs 600 per share values the transaction at approximately Rs 191.8 billion (Rs 19,180 crore) or 2.45 billion euros (based on prevailing foreign exchange rates),” the company said.

Commenting on the development, Unilever CEO Paul Polman said, “We are pleased to have received such a good response to our voluntary open offer and that — as a result — we will significantly increase our stake in Hindustan Unilever, an excellent Indian business with a proud heritage and the potential for attractive long-term growth.”

The company said on completion of the verification of shares tendered, the details of the final acceptance will be communicated by Unilever PLC on July 11.

“The payment for shares tendered and accepted will be completed on or before July 18, at which point Unilever PLC will acquire full beneficial ownership of the shares tendered and accepted in the open offer,” it added.

The open offer was first announced on 30 April 2013 and is being managed by HSBC Securities and Capital Markets (India) Private Ltd.

HUL's portfolio includes leading brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Sunsilk, Pepsodent, Closeup Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall's and Pureit.

The company, which employs over 16,000 employees, posted net sales of Rs 26,317.15 crore for the 2012-13 fiscal. Shares of HUL were trading at Rs 600.75 on the BSE in morning trade, up 2.27 per cent from its previous close. — PTI

New Delhi, July 5
The country’s largest two-wheeler maker Hero MotoCorp (HMC) today announced its foray into the African continent with the launch of its brand and products in Kenya where it has also set-up an assembly unit as part of its global expansion plans.

The company’s operations are slated to commence in Burkina Faso and Ivory Coast next week, HMC said. In Kenya, HMC has partnered with Ryce East Africa to sell its two-wheelers in the country. Under the alliance, Sameer Group, which is a part of Ryce East Africa, has been appointed as the authorised distributor of Hero MotoCorp range of two-wheelers in Kenya. These products will be distributed through a network of outlets spread across the country.

Commenting on the development, HMC Managing Director & Chief Executive Officer Pawan Munjal said: “We are delighted to see brand Hero make its debut in the African continent with the first launch in Kenya. This is a strategic market for us in our overall plan for the continent, which is why we are also starting our first Africa CKD assembly operations here.” The company, however, did not share the capacity of the Kenyan assembly plant. — PTI

BRIEFLY

Re down 9 paise, ends at 60.22 vs $
Mumbai: After a day’s respite, the rupee today declined by nine paise to 60.22 in volatile trade on fresh dollar demand from importers even as the RBI possibly intervened to arrest the slide in the local currency. The drop was also limited by fresh capital inflows and firm local stocks. — PTI

Chandrashekhar to be Nasscom chief
NEw Delhi: Nasscom today said Former telecom secretary R Chandrashekhar will be the president of the IT software services industry body after Som Mittal’s tenure ends in January 2014. Chandrashekhar said, “Nasscom is a good organisation and I have had the pleasure of engaging with it in my diverse roles with the government. I am honoured to be leading it and I look forward to work with Som, the Executive Council and other stakeholders to build on the excellent work done and drive the vision and strategy for the industry in its next phase of growth and evolution.” — TNS

Mercedes E-class rolls out
Chandigarh: With the launch of five models this year, Mercedes Benz India is looking at a double digit growth in sales. The company will increase its presence in 10 cities with the opening of 10 new dealerships. This was stated by Mercedes Benz India CMD Eberhard H. Kern on the sidelines of the launch of Mercedes E-class here on Friday. He said in the first six months of the year, the company has already managed to get an impressive growth of 16 per cent. “We grew by 32 per cent in the last three months,” he said. — TNS