finxpress_28october2012

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October 28 ,2012

Company In Focus : Trident Group

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Term of the Week :

INSTITUTE OF MANAGEMENT TECHNOLOGY, GHAZIABAD

Cover Story

Q&A with C. Rangarajan (Chairman Economic Advisory Council)

http://topics.wsj.com/person/R/c.,-rangarajan/

October 28 ,2012

EDITORIAL

PAGE 1 http://www.imtgfinxpress.co.cc

Dear Readers,

Greetings from FinNiche!

It’s been an eventful and invigorating month at IMT. After a series of technical and cultural fests starting with Passion and RISCON’12 and ending with Colloquium, its time to gear up for the second edition of end semesters.

In this edition of FinXpress, we have Trident group as the ‘Company in Focus’. The ‘Term of the Week’ would help to increase your knowledge about ‘Insider Trading’. Apart from this, we will see how Indian stocks ended marginally lower in the ‘Markets This Week’ section, amid weak global cues. The special page features an interview of Mr. C. Rangarajan(CEAC), taking his views on the current status of the economy.

We sincerely hope that the readers will find the content engaging. We would appreciate feedback and suggestions for improvement. We look forward to keeping you updated and adding to your knowledge base. Till then, “Enjoy Reading”!

Yours Sincerely,

The Editorial Board

FinXpress

Ultimate Touch Beauty Parlor 10/27 Raj Nagar, Near Arun Chaat, Ph. No. 4104320

COMPANY IN FOCUS

Trident Group

Overview

Trident Limited, formerly Abhishek Industries Limited, is engaged in the manufacture of terry towel, agro-based paper and yarn. The Company has five divisions: home textile, yarn, paper, chemicals and captive power. The Company operates in three segments: Yarns, Terry Towels, and Paper and Chemicals.

Leveraging business from an expanding product portfolio, Trident Limited, the flagship company of the group, lead by young and dynamic, Abhishek Gupta, MD of the company, is one among the top 5 global terry towel giants of the world. Also, the company is one of the world's largest agro-based paper manufacturers and one of the largest yarn producers in India. Making way in Punjab as an agro-based manufacturer in 1990, the group has diversified and expanded manifold, giving way to businesses based on sustainable growth. Under the dynamic leadership of Mr. Rajinder Gupta, the Chairman of the group, Trident continues to grow embracing new challenges, expanding boundaries and creating new opportunities. With businesses spanning across more than 75 countries, Trident Group today is a USD 1 billion enterprise with an employee headcount of more than 10,000, and providing indirect employment to 20,000 people. Therefore, Trident is a pioneer at implementing sound Corporate Governance as the basic management principle.

Key Segments

Yarn segment is involved in yarn manufacturing. The segment comprises six manufacturing units with an installed capacity of 224,448 spindles and 1,920 rotors.

Terry Towel segment is engaged in towel and dyed yarn manufacturing. The Company’s terry towel manufacturing unit comprises 374 looms with technology from global suppliers. The segment’s products were supplied to globally reputed retail chain stores across 32 countries.

Paper and chemical segments include paper and sulphuric acid. The division comprised paper manufacturing capacity of 175,000 tons per annum and pulp of 125,000 tons per annum. The Company has manufacturing facilities in Barnala, Punjab and Budni, Madhya Pradesh.

October 28 ,2012 PAGE 2 http://www.imtgfinxpress.co.cc


TERM OF THE WEEK : Insider Trading

Insider trading is the buying or selling of a security by someone who has access to material, non-public information about the security. It can be illegal or legal depending on when the insider makes the trade: it is illegal when the material information is still non-public trading while having special knowledge is unfair to other investors who don't have access to such knowledge. Illegal insider trading therefore includes tipping others when you have any sort of non-public information. Directors are not the only ones who have the potential to be convicted of insider trading. People such as brokers and even family members can be guilty. Insider trading is legal once the material information has been made public, at which time the insider has no direct advantage over other investors.

Who is an insider?

Corporate insiders are defined as a company's officers, directors and any beneficial owners of more than ten percent of a class of the company's equity securities. Trades made by these types of insiders in the company's own stock, based on material non-public information, are considered to be fraudulent since the insiders are violating the fiduciary duty that they owe to the shareholders. The corporate insider, simply by accepting employment, has undertaken a legal obligation to the shareholders to put the shareholders' interests before their own, in matters related to the corporation. When the insider buys or sells based upon company owned information, he/she is violating their obligation to the shareholders.

For example, illegal insider trading would occur if the chief executive officer of Company A learned (prior to a public announcement) that Company A will be taken over, and bought shares in Company A knowing that the share price would likely rise.

In the United States and many other jurisdictions, however, insiders are not just limited to corporate officials and major shareholders where illegal insider trading is concerned, but can include any individual who trades shares based on material non-public information in violation of some duty of trust. This duty may be imputed; for example, in many jurisdictions, in cases of where a corporate insider tips a friend about non-public information likely to have an effect on the company's share price, the duty the corporate insider owes the company is now imputed to the friend and the friend violates a duty to the company if he or she trades on the basis of this information.



MARKET THIS WEEK

MARKET THIS WEEK

Sensex lost 0.30% from last week and ended the week at 18625.34.

Nifty lost 0.40% from last week and ended the week at 5664.

Overview

The wild swings usually associated with F&O expiry were missing as the Nifty struggled to breakthrough the resistance of 5740. In fact for over a dozen sessions, the Nifty has been in a tight range. With rollovers happening at a premium to the spot index, renewed optimism is seen stepping into the November series. There appears to be an unwillingness to short at higher levels. Investors will adopt a guarded approach ahead of events like the RBI meet next week.

The top gainers for nifty were United Breweries, M&M, and Hero Motocorp. The top losers were Sun TV network and Pantaloon Retail.



Top corporate results this week:

HUL net profit up 17% at Rs.8.07bn

Interim dividend of Rs 4.5 . In addition, Rs 8 per share has been declared as a Special Dividend.

Dabur Q2 net profit up 16.4%

Dabur India declared an interim dividend of 65% for 2012-13. “Continuing with our payout policy, the Board has declared an interim dividend of Re 0.65 per share, aggregating to a total payout of Rs 131.67 Crore,” Dabur India Ltd Chairman Dr. Anand Burman said.

ICICI Bank Q2 cons net profit at Rs23.90bn

Total Income has increased from Rs. 161106.10 mn for the quarter ended September 30, 2011 to Rs. 186094.30 mn for the quarter ended September 30, 2012.

PNB Q2 net profit at Rs10.66bn

Total Income has increased from Rs. 98408.70 mn for the quarter ended September 30, 2011 to Rs. 113264.90 mn for the quarter ended September 30, 2012.


Policy Rates Reserve Ratios Lending Deposit Rate

Bank Rate 9% CRR 4.5% Base Rate 9.75%-10.50%

Repo Rate 8% SLR 23%

Savings Deposit Rate 4.00%

Reverse Repo Rate 7%

Term Deposit Rate

8.50%-9.00%

Margin Standing 9%

Exchange Rate v/s INR Commodities unit Rs./unit % change

Currency Symbol Rate % change Gold 10 gms. 30781 0.00%

US Dollar $ 53.55 0.09% Silver 1 Kg. 58730 0.40%

Euro € 69.60 -0.10% Crude Oil 1 BBL 4671 0.28 %

Dirham AED 14.66 0.23%

Japanese Yen ¥ 0.67 0.41%

Chinese Yuan CNY 8.57 0.30%


http://www.indiainfoline.com/Markets/News/HUL-net-profit-up-17-percent-at-Rs.8.07bn/5529361453

http://www.indiainfoline.com/Markets/News/Dabur-Q2-net-profit-up-16.4-percent/5529353676

http://www.indiainfoline.com/Markets/News/ICICI-Bank-Q2-net-profit-at-Rs19.60bn/5529205913

http://www.indiainfoline.com/Markets/News/PNB-Q2-net-profit-at-Rs10.66bn/5529182582

NEWS OF THE WEEK

Infosys completes acquisition of Lodestone

Infosys, India’s second largest IT services company has completed the acquisition of Lodestone Holding, a Switzerland-based management consulting firm it had announced to acquire last month. Post the acquisition, Infosys intends to retain the brand identity of Lodestone for about a year, according to a senior company official. For the time being, it will operate as a subsidiary of Infosys in Europe.

The acquisition will strengthen Infosys’s management consulting capabilities adding more than 700 experienced consultants and 200 clients in areas such as manufacturing and automotive and life sciences industries, the company said in a statement to the BSE on Monday.

In September this year, Infosys had signed a definitive agreement to acquire Lodestone Holding for a consideration of Swiss Franc 330 million (about $345 million or Rs 1,930 crore) in an all-cash deal. The amount considered for the acquisition is about 1.3 times the revenues Loadstone was expected to garner in calendar year 2012.

Finance Ministry wants to auction all mobile spectrum held by existing telecos

The finance ministry wants all mobile spectrum held by existing cellphone companies to be auctioned when their permits expire in about two years. The suggestion, if accepted, could push up costs for older operators such as Bharti Airtel, Vodafone and Idea.

Under the existing policy, mobile phone companies can pay market rates and retain their 2G when their licences are renewed. But the finance ministry has argued that allowing these firms to retain any part of their spectrum when their permits come up for renewal may result in "licences being treated as in perpetuity".

In a recent letter to the department of telecom, Department of Economic Affairs Secretary Arvind Mayaram said that the spectrum should be sold through an auction so that operators can bid realistically. Mayaram also rejected telcos' arguments where they sought continuity of permits as they had made huge investments for setting up their mobile networks.

Aiming for fiscal deficit of 5.3% or lower: Chidambaram

Finance Minister P Chidambaram said he plans to unveil a path to credible and feasible fiscal consolidation, after a government panel warned the country was on the edge of a fiscal precipice because of high subsidies. The panel in September said India should urgently slash fuel, food and fertilizer subsidies to curb a budget deficit that could hit 6.1 percent of the GDP.

Chidambaram said the government is aiming for fiscal deficit of 5.3% or lower for the current fiscal year. He said India has been above 7% for six out of last eight years and there is no reason for despondency despite growth weakness. However, he acknowledged that the slowdown is a matter of concern adding, India is not immune to global developments.

Chidambaram said global problems, high inflation and declining investments were responsible for slow growth. He said that the Reserve Bank's tight money policy dampened growth and investments. “We need to take more steps to contain inflation,” he told reporters, adding it has been a persistent concern for the last few years.



Greece gets two-year extension on bailout

Greece’s Finance Minister Yannis Stournaras claims the country has been granted an extension from international rescue lenders to meet the terms of its bailout programme, signalling progress after weeks of talks to secure emergency loan payments. One of the conditions of Greece’s current 240 billion bailout programme is that it reforms the economy so the country can return to the bond markets to raise money by 2014.

Greece has asked for a two-year extension on this deadline so that it has time to introduce austerity measures and labour market reforms. The government has recently been locked in negotiations with international creditors over a €13.5 billion ($17.56 billion) package of new austerity measures for the next two years.

Sanjeev Goenka buys BPO firm Firstsource for Rs400 crore

India’s fifth-largest business process outsourcing (BPO) firm, Firstsource Solutions has finally got a buyer and the deal values the outsourcing firm at around Rs 650 crore. Kolkata-based Sanjiv Goenka-led CESC will shell out around Rs 400 crore through its wholly-owned subsidiary, SpenLiq for a 49.5 percent holding in the ICICI-promoted BPO firm.

The deal would help Sanjiv Goenka group’s flagship electricity generation and distribution firm CESC to raise funds to repay its debt and provide a part exit to private equity investment firms Temasek and Metavante Investments.

CESC will acquire 34.5 percent in Firstsource through a preferential allotment and a further 15 percent from the existing investors. The open offer price would be Rs 12.10 a share, according to Sebi guidelines. On Thursday, the Firstsource stock closed at Rs 14.24 on the BSE, up 7.63 percent.



COVER STORY

C. Rangarajan is one of Prime Minister Manmohan Singh ’s top economic advisers. Many consider him one of Mr. Singh’s most trusted men when it comes to economic policy.

Q: Do you think the worst is over for the economy?

Mr. Rangarajan: I expect the Indian economy to pick up further. Including this year, we would have had two years of slower growth. From now on I expect the Indian economy to pick up and grow faster. Perhaps, we could see the growth rate between 6.5% and 7% in 2013-14 and then grow faster in subsequent years.

Q: Do you think the recent reforms taken by the government to open up the Indian economy will encourage the Reserve Bank of India to cut interest rates when it holds its next monetary policy review on Oct. 30?

Mr. Rangarajan: The monetary authority has to take into account what is happening in relation to growth as well as to inflation. The latest numbers relating to inflation do not show any weakening. This is an area of concern for the RBI because I think the primary responsibility of the central bank is to maintain price stability.

Inflation could also rise further. But I believe that, starting from December, it may start declining [as some crops were better than expected.] There are also fairly large stocks of food grains. I think that by March 2013, inflation could be at around 7%. [In the year starting in April 2013] we are likely to see inflation come down closer to comfort zone of 5% to 6%.

Q: What impact could global economic developments have on the rupee?

Mr. Rangarajan: The Indian currency is mainly influenced by capital inflows. With current account deficit remaining at a reasonable high level, the value of the rupee is largely determined by the extent of capital flows. In August-September capital flows were reasonably strong and that’s how you found rupee appreciating. My own expectation is that, taking the year as a whole, capital flows will be adequate to cover the current account deficit. Therefore, I see rupee remaining more or less at the current level 53-54 [against the U.S. dollar] during the rest of the year.

Q: Where do you see the macro-economic indicators moving after the recent data releases and the string of reforms announced by the government to boost investor sentiment?

Mr. Rangarajan: We had projected a growth rate of a little over 6.5% some months ago. In the light of recent developments the growth rate during the current fiscal year will be around 6%. Agricultural production could be better than what was expected some months ago because the monsoon improved in August and September. But manufacturing continues to remain an area of concern. During the April-August period, the manufacturing sector according to the IIP index did not show any increase. However, I expect a pick-up in the second half of the current fiscal year [the six months through March 2013]. Last year in the second half, manufacturing growth came down very sharply. Therefore we will have the advantage of a low base. Also there are indications that production in some key sectors like coal is improving.

Source – Wall Street Journal

Q&A with C. Rangarajan (Chairman Economic Advisory Council)




http://topics.wsj.com/person/S/manmohan,-singh/6373

http://online.wsj.com/article/SB10000872396390443524904577651263205081978.html




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