august 2014 issue 72

cursorIndustry

Issue 72 | Aug 2014CONTENTS

Strictly for Private Circulation

Highlights

MACROECONOMIC UPDATE

Logistics & Supply Chain

Commercial Vehicle

Gems & Jewellery

Hi-Tech

Banking

Hospitality

IT-Hardware

Passenger Vehicle

Textile & Garment

Steel

Retail

Two and Three-Wheeler

2

4

5

7

6

8

3

9

10

11

15

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12

Macroeconomic Update

Auto Components

n Index of industrial production and manufacturing sector continued to grow for the third consecutive month in a row, by 3.4% and 1.8% in Jun-14, as against a decline of 1.8% and 1.7% in Jun-13.

n Mining and electricity sector witnessed growth of 4.3% and 15.7% during Jun-14, as compared to a decline of 4.6% and flat growth, respectively, in Jun-13.

n Capital goods and basic goods sector grew at a 36 and 35-month high of 23.0% (y-o- y) and 9.0% (y-o-y) respectively during Jun-14, whereas intermediate goods sector registered moderate growth of 2.7%.

n WPI inflation dropped to a 5-month low of 5.2% during Jul-14, as against a growth of 5.9% in Jul-13.

n Rate of inflation as measured by CPI (combined for rural and urban) increased to around 8.0% during Jul-14, against 7.5% in Jun-14 and 9.6% during Jul-13.

n In the third bi-monthly Monetary Policy statement, the RBI kept the policy repo rate under the LAF and cash reserve ratio unchanged at 8.0% and 4% respectively, whereas statutory liquidity ratio (SLR) of SCBs was reduced from 22.5% to 22.0%.

n The aggregate deposit and bank credit grew by 13.0% (y-o-y) and 13.3% (y-o-y), respectively in the week ended July 25, 2014 as against growth of 13.1% (y-o-y) and 14.7% in the year-ago period.

n The average value of the Rupee is devaluating against the USD; during Jul-14 the average value of Rupee reached 60.06 against 59.73 in Jun-14. The fall in value of the Rupee continues during Aug-14; on August 13, 2014 it closed at 61.25 per USD.

Healthcare & Pharmaceutical

E: D&B EstimatesSource: CSO, D&B Industry Research Service

IIP and core infrastructure: Growth (%)GDP: Growth (%)

Source: Ministry of Commerce and Industry, CSO

Macroeconomic triad (forecast)

Note: Exchange rate: INR/US$ at month endInterest rate corresponds to yield on T-Bills 15-91 daysSource: D&B Industry Research ServiceSource: Ministry of Commerce and Industry

August 14

India's exports & imports (US$ bn)

Inflation5.1 - 5.3%

Interest rate8.5 - 8.7%

Exchange rate61.20 - 61.40

Exports (LHS) Imports (RHS)

Agriculture Industry Services GDP at factor cost Eight core industries IIP

-1

0

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Q4 FY13 Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 Q1 FY15 E

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25.0

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35.0

Highlights

AUTO COMPONENTS INDUSTRY

Company Net sales

(` mn)

PBDIT (` mn)Net profit

(` mn)PBDIT margin

(%) PAT margin (%)

M R F Ltd 33,369.8 4,890.8 2,302.2 14.7 6.9

Bosch Ltd 23,944.1 4,323.4 3,047.3 18.1 12.2

Apollo Tyres Ltd 23,065.3 2,880.6 1,390.5 12.5 6.0

Exide Industries Ltd 19,123.6 2,911.3 1,853.0 15.2 9.7

J K Tyre & Inds Ltd 15,667.4 1,581.7 388.7 10.1 2.5

Steel prices (Mumbai) (`/tonne)

Rubber prices* (Kottayam)(`/quintal)

*s-4Source for all above charts: CMIE

n The Automotive Component Manufacturers Association of India (ACMA) expects the Indian auto components industry to record growth of 6% during FY15. During FY14, turnover of the industry had recorded a decline of 2% at ` 21.17 billion, over FY13.

n As per the ACMA, at US$ 2.6 billion during FY14, China accounted for the largest share of 21% in India's auto components imports. In FY13, imports from China accounted for 18% of India's total auto component imports.

n Amtek India formed an equal joint venture with Tokyo-based Riken Corporation to build an iron casting foundry in Bhiwadi, Rajasthan. The JV will initially produce 15 lakh iron camshafts a year for the automobile industry and the foundry is expected to start operations by the fourth quarter of 2015. Amtek India expects the JV to consolidate its position in the iron foundry business. The initial capital of ` 0.25 billion will be provided by Amtek India.

n Motherson Sumi Systems Ltd completed a US$ 65.7 million deal for acquiring the wiring harness business of US-based Stoneridge Inc. The acquisition includes six manufacturing facilities located in Portland, Indiana (USA); Chihuahua, Saltillo, Mexico and Monclova in Mexico; as well as an engineering and administrative centre located in Warren, Ohio (USA).

n Honda Motors of Japan plans to make India its manufacturing base for the supply of manual transmissions to emerging markets across Asia and Latin America. It intends to exploit the country's low-cost manufacturing advantage and plans to use its unit in Rajasthan to manufacture and supply manual gears.

n In order to increase its footprint in Europe, Apollo Tyres plans to set up a plant in Eastern Europe to manufacture passenger car tyres and heavy commercial vehicle tyres. The company plans to invest Euro 500 million in the plant which is expected to be completed in 2018, and will roll out an estimated 55 lakh car tyres and 6.75 lakh truck tyres.

HR coils 2.00 mm CR coils 0.63 mm

Jul-

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Au

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No

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Dec

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46000

48000

50000

52000

54000

56000

58000Ju

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14,000

16,000

18,000

20,000

22,000

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Auto Components: Key Financial Indicators (Apr-Jun 2014)

Source: CMIENote: Operating profit: PBDIT net of prior period and extra-ordinary items (P&E); Net profit: PAT net of P&E

Deposits, credit and growth rates

Source for all above charts: RBI

Note: Call rates for Aug-14 are up to Aug 11, 2014

Movement in call money rates (%)

Highlights

BANKING INDUSTRY

Note: Data for Jul-14 is as on Jul 25, 2014

n With a view to set up an "anytime anywhere" payment system, the RBI proposed setting up of Bharat Bill Payment System (BBPS). The BBPS would act as an integrated payment platform to facilitate payment of a variety of bills including utility bills, municipal taxes and school/university fees.

n In order to strengthen the financial capacity of district co-operative banks and primary agriculture credit co-operative societies in the state, the Government of Maharashtra approved financial assistance of ̀ 2.31 billion to these institutions.

n With an aim to expand presence throughout India, Tamil Nadu Mercantile Bank announced plans to increase its network from 383 to 800 branches across six states during the next four years. Subsequent to the expansion, the bank aims to achieve a turnover of ̀ 1,000 billion.

n HDFC Bank opened a branch in Dubai to cater to the large Indian diaspora in the city. Through this branch, its third overseas branch after Bahrain and Hong Kong, the bank would provide advisory services on treasury products, trade finance, loans and other related services.

n State Bank of Patiala, an associate of the State Bank of India (SBI), opened 25 branches in July and announced plans to set up another 70 branches across the country by September 2014.

n ING Vysya Bank Ltd selected Bengaluru-based technology services company Mindtree Ltd for its next generation mobility programme. As a strategic digital partner, Mindtree would help create a digital roadmap for the bank and support it in delivering multi-channel and multi-platform banking experience to its customers.

Deposits (LHS) Credit (LHS)y-o-y growth rates of deposits (RHS)y-o-y growth rates of credit (RHS)

Call money rate- High (%)Call money rate- Low (%)

%` bnJu

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02468101214161820

010,00020,00030,00040,00050,00060,00070,00080,00090,000

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Banking: Key Financial Indicators (Apr-Jun 2014)

Net profit: PAT net of prior period and extraordinary items Source: CMIE

Company Net sales (` bn) Net profit (` bn) Net profit margin (%)

State Bank Of India 364.9 33.5 8.2

I C I C I Bank Ltd 117.7 26.6 18.2

Punjab National Bank 115.9 14.1 11.0

H D F C Bank Ltd 112.2 22.3 17.1

Canara Bank 107.0 8.1 6.9

M&HCV: Domestic sales (Nos.)

Highlights

COMMERCIAL VEHICLE INDUSTRY

n Sales of commercial vehicles (CVs) continue to remain subdued, as reflected in the 13.6% (y-o-y) decline in domestic sales in July. Sales of both medium & heavy commercial vehicles and light commercial vehicles recorded declines of 4.4% and 18.3%, respectively.

n During April-July FY15, domestic sales of CVs declined by 15.5% (y-o-y) to 188,950 units. Exports, on the other hand, recorded a strong growth of 19.8% at 25,994 units during this period.

n In order to cater to demand in the emerging mid-premium market segment, Volvo-Eicher Commercial Vehicles launched light and medium duty trucks, the Eicher Pro 1000 and 3000, in Bengaluru.

n Sweden-based commercial vehicle and engine manufacturer Scania plans to commence production at its manufacturing facility in Bengaluru during August 2014. Initially, this facility would have the capacity to produce about 1,500 buses.

n Force Motors announced its plans to invest around ` 10 billion during the next four years on technology advancement, new vehicle development and setting up a dedicated facility in Chennai for assembling engines for BMW vehicles.

Source for all above charts: CMIE

LCV: Domestic sales (Nos.)

Commercial Vehicle Sales (Nos.)

Source: CMIE

Global News

Segments Jul-13 Jul-14 y-o-y growth (%) Apr-Jul FY14 Apr-Jul FY15 y-o-y growth (%)

M&HCV 18,611 17,799 -4.4 74,549 68,214 -8.5

LCV 36,699 29,966 -18.3 149,096 120,736 -19.0

Total domestic sales

55,310 47,765 -13.6 223,645 188,950 -15.5

Exports 6,193 7,247 17.0 21,702 25,994 19.8

Total sales 61,503 55,012 -10.6 245,347 214,944 -12.4

Commercial Vehicles: Key Financial Indicators (Apr-Jun 2014)

Note: Operating profit: PBDIT net of prior period and extra-ordinary items (P&E) & Other income; Net profit: PAT net of P&ESource: CMIE

Company Net sales (` bn)Operating

profit (` bn)Net profit (` bn) PBDIT margin (%)

PAT margin (%)

Tata Motors Ltd 77.0 -3.2 3.9 -4.2 4.2

Ashok Leyland Ltd 24.8 1.2 -0.7 4.7 -2.8

Force Motors Ltd 5.5 0.4 0.2 6.7 3.5

S M L Isuzu Ltd 3.4 0.4 0.2 10.4 6.9

n The Hinduja Group introduced the first pure electric buses with zero tailpipe emissions in London. The British built Optare MetroCity are single deck buses manufactured by Optare Plc, a part of the Hinduja Group. These buses are currently on trial in London.

n Tata Motors Ltd selected Russia-based LLC 'TML TRUCK RUS' as the official distributor for its light, medium and heavy commercial vehicles in the Russian Federation. Under the partnership, TML TRUCK RUS would establish monobrand outlets in Moscow and Saint Petersburg, a warehouse for spare parts and 60 touch points in key regions during the next five years.

Jul-13

Jul-14

Aug-13

Sep-13

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Nov-13

Dec-13

Jan-14

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0

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Highlights

GEMS AND JEWELLERY INDUSTRY

Gold prices in Mumbai market

Gems & jewellery exports (` bn)


Gems & jewellery imports (` bn)

n The Reserve Bank of India removed the ` 1 lakh ceiling on loan against jewellery where the borrower repays all dues in one go on maturity of the loan. Further, the RBI has left it to banks to decide on the quantum of loans against pledge of gold jewellery for non-agricultural use and capped the tenure at 12 months.

n In its effort to expand its network of showrooms across India and the Middle East and to convert its customer service centres to mini diamond outlets to make diamonds available to the customers at affordable rates, Kerala-based gold jewellery major Kalyan Jewellers plans to invest ` 15 billion this year. The company plans to initially invest ̀ one billion for the programme which is called 'My Kalyan', for changing over 350 customer centres in Kerala, Tamil Nadu and Karnataka. It plans to set up 1,000 such centres across India by 2016.

n As per the Gems and Jewellery Export Promotion Council (GJEPC), total imports of gems & jewellery increased by 1.62% (y-o-y) to US$ 8.58 billion during April-June 2014. Exports of gems and jewellery increased by 0.60% to US$ 8.42 billion during the same period.

Price (LHS) Change (RHS)

`/10 gm %

Gems & Jewellery: Key Financial Indicators (Apr-Jun 2014)

Note: Operating profit: PBDIT net of prior period and extraordinary items (P&E) & Other income; Net profit: PAT net of P&ESource: CMIE

Company Net sales (` mn)

Operating profit (` mn)

Net profit (` mn)

PBDIT margin (%)

PAT margin (%)

Titan Company Ltd 28,914.4 2,743.8 1,772.7 9.5 6.1

P C Jeweller Ltd 13,230.2 1,476.5 695.9 11.2 5.2

S R S Ltd 10,207.2 396.5 165.6 3.9 1.6

Asian Star Co Ltd 5,850.3 227.8 102.5 3.9 1.8

Shrenuj & Co Ltd 5,825.1 361.1 52.7 6.2 0.9

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Highlights

HEALTHCARE & PHARMACEUTICAL INDUSTRY

n In a move aimed at checking over-pricing by pharma companies, the National Pharma Pricing Authority (NPPA) has sought the cooperation of state governments in setting up NPPA cells in various states at an initial investment of nearly ` 10 million. The NPPA is also in the process of developing a software that will collect every detail on drug companies pertaining to production and pricing of essential drugs, manufacturing facilities, etc.

n The Pharmaceuticals Export Promotion Council (Pharmexcil) has identified two new ports, Krishnapatnam in Andhra Pradesh and Kattupalli in Tamil Nadu, for export and import of drugs. The new ports have to be notified by the Ministries of Commerce and Health and the Drug Controller General of India for import and export of drugs under the Drugs and Cosmetics Act.

n As part of its strategy to expand its branded generics business, Strides Arcolab announced the acquisition of Bafna Pharmaceuticals' India-branded generics business, which will be transferred to a special purpose vehicle (SPV). Bafna will continue to manufacture drugs for the SPV, in which Strides will hold 74% stake, with Bafna holding the remaining 26% stake.

n Glenmark Pharmaceuticals announced plans to establish its first manufacturing facility in the US, with an investment of five billion. The `proposed facility, which would produce injectables, topicals and oral solids, is expected to commence production by the end of FY14.

n Sun Pharmaceutical Industries acquired Pharmalucence, the US-based injectables manufacturer. With the acquisition, Sun Pharma will gain Pharmalucence's R&D expertise and manufacturing facility.

n Ranbaxy Laboratories signed a licensing agreement with Canada-based Cipher Pharmaceuticals Inc to exclusively market its isotretinoin capsules, used to treat acne, in Brazil. As per the deal, Ranbaxy would be responsible for gaining regulatory approval in Brazil, while Cipher would supply the product.

n Aimed at expanding its anti-diabetes portfolio, Lupin signed a marketing deal with South Korea-based LG Life Sciences to market and sell LG's anti-diabetes drug Insulin Glargine in India. Lupin will sell the drug under the

TMBasugine brand name in India.n Three Indian pharmaceutical companies, Cipla, Aurobindo and Emcure,

signed new sub-licensing agreements with UN-backed Medicines Patent Pool (MPP) for the production of low-cost generic HIV medicines - atazanavir and dolutegravir. The medicines would be supplied to developing countries.

n Cipla, through its subsidiary Cipla Europe, inked a partnership with US-based BioQuiddity Inc to sell the latter's post-surgical pain management product

TMOneDose ReadyfusOR in Europe.

Trend in Drugs and Pharmaceuticals export

Value (LHS) Growth (RHS)

Trend in Drugs and Pharmaceuticals import


Value (LHS) Growth (RHS)

` bn %

%` bn

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Drugs & Pharmaceuticals: Key Financial Indicators (Apr-Jun 2014)


Company Net sales (` bn)Operating profit

(` bn)Net profit (` bn)

PBDIT margin (%)

PAT margin (%)

Lupin Ltd 30.0 10.2 10.2 33.9 33.9

Dr. Reddy'S Laboratories Ltd 26.9 8.1 6.0 30.1 21.7

Ranbaxy Laboratories Ltd 21.8 8.5 7.6 38.8 33.8

Aurobindo Pharma Ltd 19.5 5.9 3.9 30.1 20.0

Cadila Healthcare Ltd 11.1 2.6 2.0 23.7 17.5

Highlights

HI-TECH INDUSTRY

Parameters

Aircraft traffic Passenger traffic Cargo traffic

Nos.y-o-y

growth (%)Nos.

y-o-y growth (%)

Tonnesy-o-y

growth (%)

Domestic traffic 107,561 6.3 11,903,000 5.5 80,000 24.8

International traffic 28,236 1.9 4,225,400 6.6 130,600 9.4

Total airport traffic 135,797 5.3 16,128,400 5.8 210,600 14.8

Civil aviation: Cargo statistics(freight tonne km andmail tonne km in mn)

Civil aviation: Load factor (%)


n With an aim to reduce the cost of flying and operating airports, the Government of India plans to build small airports with basic facilities in small towns. According to the Airports Authority of India, these airports will lack conveyor belts, arrival lounges and air-conditioning facilities. Moreover, only one air traffic control tower would serve a number of such airports.

n Hindustan Aeronautics Limited partnered with the Bangalore Chambers of Industry and Commerce and the Society of Indian Aerospace Technologies & Industries to form a non-profit organisation for developing skills and improving employability in the aerospace and aviation sector. This organisation is expected to train approximately 0.4 million people in 90 different trades during the next ten years.

n Philips Lighting India partnered with the entertainment company Disney India to create LED lighting products for kids. The new range of products combines Philips' lighting and Disney's characters. The new Philips and Disney Imaginative Lighting range of products would be available exclusively on Amazon India's e-commerce platform.

n Following the announcement in the Union Budget which enabled manufacturers to sell products online, Japanese consumer durables company Panasonic Corporation announced its plans to launch an online portal, E-Store, to sell products directly to consumers. The E-Store would sell products such as kitchen and home appliances, washing machines and air conditioners manufactured in India.

n With a view to increase market share in the geyser market, Kochi-based consumer electrical and electronics firm V-Guard Industries Ltd launched Pebble, a new range of water heaters that use engineered polymer anti-corrosion technology.

Freight tonne km (LHS) Mail tonne km (RHS)

Passenger load factor Weight load factor

Civil Aviation: Airport Traffic Statistics (May 2014)

Source: CMIE

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0.0

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Financial Performance: Jet Airways (India) Ltd

-35.0

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36

38

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Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15

%` bn

Net sales (LHS) PAT Margin (RHS)

Note: Net profit: PAT net of prior period and extraordinary itemsSource: CMIE

Highlights

HOSPITALITY INDUSTRY

Foreign tourist arrivals in India('000 nos.)

Source: Ministry of Tourism

Foreign exchange earnings

Source: CMIE

Growth in foreign tourist arrivals (%)

Source: Ministry of Tourism

n As a part of its expansion strategy, Starwood Hotels & Resorts plans to have up to 65 operational properties in India by the end of 2015. The international hospitality major, which currently operates 39 hotels in India, is looking to have a total of 100 hotels in its Indian portfolio by 2015, including operational hotels and those in the pipeline.

n The Embassy Group announced the launch of Hilton Bangalore Embassy GolfLink, at an investment of ` 3.5 billion, marking its entry into the hospitality sector. The hotel property is developed by the Kelachandra Group and Embassy Group.

n In line with its global expansion plan, Just Falafel, the Middle East fast food chain tied up with a property developer and hospitality company Prism Properties to enter the Indian market. The street food provider will soon open its first outlet in Bengaluru.

n Global hospitality major InterContinental Hotels Group (IHG) signed a management agreement with New Delhi-based real estate developer Sikka Promoters Pvt Ltd to develop a 150-room hotel under the company's Crowne Plaza brand in Noida. The Crowne Plaza Taj Expressway Noida, which is expected to open in 2018, will be the second IHG hotel in the city.

n Mahindra Holidays & Resorts India Ltd's wholly-owned subsidiary MHR Holdings (Mauritius) Ltd acquired 100% stake in Covington S.a.r.l, Luxembourg.

2011 2012 2013 2014

Foreign exchange earnings (LHS) Growth (RHS)

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Hospitality: Key Financial Indicators (Apr-Jun 2014)

Note: Net profit: PAT net of prior period and extraordinary itemsSource: CMIE

Company Net sales (` mn) Net profit (` mn) Net profit margin (%)

Indian Hotels Co Ltd 3,978.0 -121.0 -3.0

E I H Ltd 2,841.2 64.1 2.2

Mahindra Holidays & Resorts India Ltd 1,861.6 204.2 10.7

Hotel Leelaventure Ltd 1,554.4 -1,746.2 -111.0

Thomas Cook (India) Ltd 1,506.9 360.6 23.5

` bn

Highlights

Domestic computer hardware& peripheral production (` bn)

IT HARDWARE INDUSTRY

n Linksys, a subsidiary of US-based Belkin International Inc, expanded its portfolio of business networking products with the introduction of managed switches in the Linksys Business product line-up. The new managed switches would be available in a 28 and 52-port rack mountable chassis, with and without Power over Ethernet Plus models.

n Samsung Electronics Co Ltd launched its new ultra-slim portable DVD writers, the SE-218GN and SE-208GB optical disc drives (ODDs), for its Ultrabook laptops. These drives are equipped with Smart Power Technology that enables low-power consumption and Smart Archive Technology.

n Intel Corporation launched a new range of business-class Solid-State Drive (SDD), the Intel SSD Pro 2500 series. These SSDs are self-encrypting drives (SED) that use hardware-based 256-bit encryption to protect data. The new series would be available in capacities ranging from 120GB to 480GB.

Global News

n In order to tap into the growing market for small form personal computers (PCs) and home theatre PCs, Taiwan-based ASUSTeK Computer Inc launched Chromebox in India. The Chromebox is a compact home or office computer that runs on Chrome operating system and comprises Haswell processors. The Chromebox would be launched in three variants with starting price of ` 21,000.

Source: CMIE

IT-Hardware: Key Financial Indicators (Apr-Jun 2014)

Note: Operating profit: PBDIT net of prior period and extraordinary items (P&E) & Other income;Net profit: PAT net of P&ESource: CMIE

CompanyNet sales (` mn)

Operating profit

(` mn)

Net profit(` mn)

Operating profi t margin

(%)

Net profitmargin (%)

T V S Electronics Ltd 596.7 33.8 1.6 5.7 0.3

Smartlink Network Systems Ltd 271.6 -54.1 20.8 -19.9 5.8

V X L Instruments Ltd 175.6 0.8 -0.2 0.5 -0.1

Zenith Computers Ltd 105.3 20.0 1.2 19.0 1.1

Zen Technologies Ltd 36.6 -61.1 -60.9 -166.9 -136.9

Jun

-13

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-13

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Ap

r-14

May

-14

3.3

1.9

2.42.7

1.7 1.7

3.0

1.92.1

3.0

1.5 1.6 1.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jun

-14

Highlights

LOGISTICS & SUPPLY CHAIN INDUSTRY

n The boom in the online retailing space is encouraging logistics providers to increase focus on this segment. Patel Integrated Logistics is contemplating to enter the e-commerce space with a dedicated last-mile delivery vertical in order to tap the growing e-tailing market. New Delhi-based supply chain and logistics solutions provider Holisol Logistics expects its revenue to grow by over 60% to ` 0.40 billion during the current fiscal year, driven by the increasing popularity of online shopping in India. The company plans to open two large multi-user fulfillment centres in Bengaluru and Kolkata, along with seven smaller centres in other parts of the country.

n Agri-logistics firm Shree Shubham Logistics plans to expand its warehousing footprint by adding about 3.5 lakh tonnes in capacity across six states, including Uttar Pradesh, Delhi, Kerala and Andhra Pradesh, by next year. This will mark the company's entry into the southern states. The company intends to invest ̀ two billion for setting up the additional capacity.

n Chennai-based container logistics operator the Sattva Business Group bought back 23% stake in its subsidiary Sattva CFS & Logistics from Eredene Capital of London for Pounds 1.9 million. The Sattva Group operates a container freight station in Vichoor, north Chennai.

n Transport and logistics provider Groupe CAT now manages the spare parts distribution for Toyota in the south of France. The company now moves 100% of the carmaker's spare parts throughout the country. In addition to the 320,000 packages distributed in northern France, the company's Cargo Logistics division will handle an annual volume of 350,000 packages as part of the latest deal.

Global News

Logistics*: Key Financial Indicators (Apr-Jun 2014)

*Transport logistics servicesNote: Net profit: PAT net of prior period and extraordinary itemsSource: CMIE

Company Net sales (` mn) Net profit (` mn)Net profit margin

(%)

Container Corpn Of India Ltd 12,696.7 2,618.8 19.4

Allcargo Logistics Ltd 2,646.8 200.7 7.4

Blue Dart Express Ltd 5,269.5 341.6 6.4

Transport Corporation Of India Ltd 5,202.0 159.9 3.1

Gateway Distriparks Ltd 528.2 252.4 36.2

PASSENGER VEHICLE INDUSTRY

Highlights

Utility vehicles: Domestic sales(Nos.)

Passenger cars: Domestic sales(Nos.)


Passenger vehicle sales (Nos)

Maruti Suzuki India Ltd: Profit Margins (%)

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-13

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Ap

r-14

May

-14

Jun

-14

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

Jul-

14

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-13

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Ap

r-14

May

-14

Jun

-14

0

10,000

20,000

30,000

40,000

50,000

60,000

Jul-

14

5.8

5.9

6.0

6.1

6.2

6.3

6.4

6.5

6.6

0

2

4

6

8

10

12

14

Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15

PBDIT Margin (LHS) PAT Margin (RHS)

Segments Jul-13 Jul-14y-o-y growth

(%)Apr-Jul FY14

Apr-Jul FY15

y-o-y growth (%)

Micro 2,052 875 -57.4 6,017 3,904 -35.1

Mini & Compact 98,108 100,390 2.3 421,358 435,330 3.3

Super Compact and Mid Size 29,276 34,578 18.1 130,869 135,482 3.5

Executive 1,471 1,861 26.5 6,389 6,725 5.3

Premium 350 169 -51.7 1,117 672 -39.8

Luxury, Coupe Roadster & Exotics 0 0 - 1 0 -100.0

Vans 18,066 16,617 -8.0 67,075 58,901 -12.2

Passenger cars 149,323 154,490 3.5 632,826 641,014 1.3

Multi-utility vehicles 37,911 44,945 18.6 161,834 173,741 7.4

Domestic sales 187,234 199,435 6.5 794,660 814,755 2.5

Exports 57,335 55,499 -3.2 189,525 196,806 3.8

Total sales 244,569 254,934 4.2 984,185 1,011,561 2.8

New Launches: Luxury Vehicles

Variant Company Price (ex-showroom)

A3 Audi ` 28.95 lacs (P); `22.95-32.66 lacs (D)

Jaguar XJ Jaguar Land Rover ` 93.74 lacs (D pr emium); ` 100.45 lacs (D portfolio)

Macan Porsche ` 1.11 cr (T urbo); ` 1.00 cr (S D)

Active Hybrid 7 Series BMW ` 1.35 cr

CLA 45 AMG Mercedes Benz ` 68.5 lacs

Note: P-Petrol; D-Diesel

n In July, domestic sales of passenger vehicles grew by 6.5% at 199,435 units. During April-July FY15, cumulative domestic sales of passenger cars grew by 1.3% (y-o-y) while domestic sales of multi-utility vehicles grew by 7.4% (y-o-y). The exports of passenger vehicles recorded growth of 3.8% (y-o-y) at 196,806 units during April-July FY15.

n Aimed at increasing its market share in the highly competitive Indian market, Volkswagen announced investment plans to the tune of ̀ 15 billion over the next six years. The investment is expected to fund greater localisation and new product development. The company decided to employ a higher number of locally-made parts in cars sold in India, in a bid to cut costs and push sales.

n Pune-based Force Motors, which plans to launch its new off-road vehicle, Gurkha in September, is targeting sales of around 2,400 units in the first year of launch and the company is looking at garnering a market share of 20% in the off-road vehicle segment. The company plans to utilise both its passenger vehicles and commercial vehicle sales network to market the off-roader model in India.

n In view of the subdued market conditions in India, Fiat Chrysler has deferred plans to launch its global brand JEEP in India this year.

n Maruti Suzuki India signed an MoU with Muthoot Vehicle and Asset Finance Ltd (MVFL). The 'Muthoot Maruti Gold to Car Scheme' will provide 100% finance for Maruti customers across Kerala. The vehicles would be funded by MVFL and the down payment for it would be financed by Muthoot Finance.

Source: CMIE

Highlights

RETAIL INDUSTRY

n Keeping up its 'outdoor' image, footwear and apparel brand Woodland announced plans to launch adventure sports equipment such as kayaks and mountain bikes. The company announced investments worth ` one billion within two years for establishing 8-10 concept stores in major cities in India. Woodland is also contemplating on making a foray into the footwear and apparels segment for kids.

n Aimed at bringing medium, small and micro enterprises (MSME) online, Bengaluru-based online retailer Flipkart signed an MoU with the Ministry of Labour and Employment's Directorate General of Employment & Training (DGET). Flipkart will provide training to people from rural and semi-urban areas through government-run institutes, who could possibly be employed by the company or be allowed to sell their wares on its platform. The company plans to train at least 50,000 students by December.

n Global fashion brands such as Replay jeans, Energie apparel and Salvatos flip-flops, which shut Indian operations due to various reasons, are re-entering the country exclusively through online channels such as Flipkart, Myntra, etc.

n Jabong.com, the online fashion retailer, announced plans to introduce private label brands in the next few months. The company is setting up a design studio in London for this purpose.

n Hyderabad-based fast food chain Hello Curry is likely to expand operations to Bengaluru by the end of this year. Hello Curry is also negotiating with venture capitalists in the US to raise Series A funding, to the tune of ` 0.40 billion.

n Online portals Flipkart and OLX signed a unique marketing partnership that would deal in persuading consumers to upgrade by buying new products from Flipkart and selling used products on OLX.

Retail Trading: Key Financial Indicators (Apr-Jun 2014)

Note: Net profit: PAT net of prior period and extraordinary items N.A.: Not applicable (losses incurred)Source: CMIE

Parameters UnitsFuture Lifestyle

Fashions LtdShoppers Stop

LtdPantaloons Fashion

& Retail LtdTrent Ltd

Net sales ` million 6,991.4 6,098.7 3,860.2 3,220.0

y-o-y growth % 10.0 14.1 12.1 27.6

Net profit ` million 35.6 7.5 -780.9 -90.6

y-o-y growth % -53.7 -67.5 N.A. N.A.

PAT margin % 0.5 0.1 -20.2 -2.7

HighlightsTrend in HRC and CRC prices-Mumbai (`/tonne)

Finished steel consumption

STEEL INDUSTRY

n Steel Authority of India Ltd is likely to invest around ̀ 1.5 trillion to increase its hot metal making capacity from 23 million tonnes per annum (mtpa) to 50 mtpa, planned under ongoing modernisation and expansion by 2025.

n As per the World Steel Association, during January-June 2014, India produced 41.28 million tonne of steel, 1.4% higher as compared to the year-ago period.

n In an effort to provide individual home builders in semi-urban and rural markets with affordable steel solution, Tata Steel launched Pravesh Doors, a steel door that has the looks of wood. The product will first be marketed in West Bengal, following which the company plans an all-India launch.

n JSW Steel plans an investment of US$ 22 billion over the next ten years to increase its overall steel manufacturing capacity to 40 million tonnes per annum (mtpa) in order to retain a market share of 13-14%. Currently, the company has an installed capacity of 14.3 mtpa.

n JSW Steel aims at obtaining at least half of its iron ore requirements in Karnataka from captive sources. The steel major currently buys iron ore from the open market in India and some from abroad in the absence of its own iron ore mines to feed its plants located in Karnataka, Maharashtra and Tamil Nadu.

HR Coils (2.00 mm) CR Coils (1 mm)

Production (LHS) Growth (RHS)

n Jindal Steel and Power acquired 100% stake in Australian mining and exploration company Legend Mining's iron ore project in Cameroon for ` one billion. The acquisition was done in an attempt to secure raw material for JSPL's recently commissioned two million tonnes per annum (mtpa) steel plant in Oman.

n In view of the rising consumer demand, Tata Steel is increasing production at its plant in the northeast of England, as compared to its nominal 170,000 tonnes per year capacity.

n Tata Steel launched an innovative high-strength steel product, DP1000HY-GI in London. The product will allow automotive manufacturers to make lighter components and create relatively complex shapes.

Global News

'000 Tonnes %

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-13

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Ap

r-14

May

-14

Jun

-14

42,000

44,000

46,000

48,000

50,000

52,000

54,000

56,000Ju

l-14

Jun

-13

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-13

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Ap

r-14

May

-14

-2

0

2

4

6

8

10

12

14

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Jun

-14

Steel: Key Financial Indicators (Apr-Jun 2014)

Note: Operating profit: PBDIT net of prior period and extraordinary items (P&E) & Other income; Net profit: PAT net of P&ESource: CMIE

Company Net sales (` bn)

Operating profit (` bn)

Net profit(` bn)

PBDIT margin (%)

PAT margin (%)

J S W Steel Ltd 115.5 24.6 8.0 21.3 6.9

Steel Authority Of India Ltd 113.4 11.3 5.3 10.0 4.6

Tata Steel Ltd 104.7 32.6 22.7 31.1 19.9

Jindal Steel & Power Ltd 35.8 11.9 3.1 33.3 8.5

Bhushan Steel Ltd 28.0 7.2 -1.4 25.5 -5.1

Highlights

n The Ministry of Textiles has set an export target of US$ 45 billion for textile products and US$ 17.2 billion for readymade garments for FY15.

n The Government of India allocated ` 119.52 billion under the Revised Restructured Technology Upgradation Fund Scheme (RR-TUFS) to be

thimplemented during the 12 Five Year Plan period to modernise the powerloom sector in the country.

n The Ministry of Textiles launched the central management information system (MIS) for the Integrated Skills Development Scheme (ISDS), which

thaims to train 1.5 million persons in textile and allied sectors during the 12 Five Year Plan. Developed with a view to monitor the progress of the scheme, the MIS would ensure greater transparency and skills exchange.

n The Government of Jammu and Kashmir announced a revival plan to modernise and upgrade the Government Silk Factory Rajbagh and Woolen Mills Bemina through an expenditure of ` 224.8 million and ` 180 million, respectively. The revival plan is aimed at enabling these factories to produce a variety of woolen and silken fabrics on a larger commercial scale.

n With an aim to develop, promote and market quality Indian handloom and handicraft products in India and abroad, the Central Cottage Industries Corporation (CCIC) signed a Memorandum of Understanding (MoU) with the Ministry of Textiles. Through the MoU, CCIC also seeks to strengthen and expand its marketing network.

n Textile firm Sangam India announced its plans to make a foray into the seamless garment segment with an investment of ` 1.2 billion. Besides modernising the processing division, the company intends to set up 10,000 spindles for slub yarn and a mercerise unit. The project is expected to be completed by March 2015.

Fabrics production(Million sq. metres)

Cotton and Synthetic yarn production ('000 tonnes)

TEXTILE & GARMENT INDUSTRY

Cotton yarn production Synthetic yarn production

Jun

-13

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-13

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Ap

r-14

May

-14

4,600

4,800

5,000

5,200

5,400

5,600

5,800

6,000

Jun

-13

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-13

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Ap

r-14

May

-14

0

50

100

150

200

250

300

350

400

Textiles & Garments: Key Financial Indicators (Apr-Jun 2014)


Company Net sales (` bn)

Operating profit (` bn)

Net profit(` bn)

PBDIT margin (%)

PAT margin (%)

Vardhman Textiles Ltd 14.5 2.8 1.1 19.6 7.3

Grasim Industries Ltd 14.4 1.4 1.1 9.8 7.1

Arvind Ltd 12.8 2.0 1.1 15.3 8.6

Welspun India Ltd 9.5 2.3 1.1 23.8 10.9

S R F Ltd 9.4 1.7 1.0 18.1 10.2

Jun

-14

Jun

-14

Three-wheeler: Domestic sales(Nos.)

Two-wheeler: Domestic sales (Million)

Highlights

TWO-WHEELER AND THREE-WHEELER INDUSTRY

Source for above charts: CMIE

Two Wheelers & Three Wheelers

Source: CMIE

Segments

Jul-14 Apr-Jul FY15

Vol (Nos)y-o-y

growth (%)

Vol (Nos)y-o-y

growth (%)

Domestic Sales

Two wheelers 1,287,462 13.7 5,256,429 13.7

Three wheelers 51,461 23.8 172,780 15.0

Exports

Two wheelers 222,583 42.1 814,855 32.7

Three wheelers 37,198 50.2 124,961 5.3

Two & Three Wheelers: Key Financial Indicators (Apr-Jun 2014)


Company Net sales (` bn) Operating profit (` bn)Net profit

(` bn)PBDIT margin

(%)PAT margin

(%)

Hero Motocorp Ltd 70.4 9.5 5.6 13.5 7.9

Bajaj Auto Ltd 52.5 9.3 7.4 17.6 13.5

T V S Motor Co. Ltd 23.0 1.2 0.7 5.3 3.1

Eicher Motors Ltd 7.5 1.9 1.3 24.9 17.5

n In July, domestic sales of two-wheelers grew by 13.7% at 1.29 million units. Cumulative domestic sales of two-wheelers during April-July FY15 grew by 13.7% at 5.26 million units. During April-July FY15, exports of two-wheelers recorded growth of 32.7% at 0.81 million units.

n Eyeing a leadership position in the fast growing scooter market in India, Honda Motors announced plans to set up the world's largest scooter plant in Gujarat. The proposed plant is expected to have an annual production capacity of 12 lakh units, involving an investment of ̀ 11 billion.

n Hero MotoCorp's proposed bike manufacturing plant in Dharwad district in north Karnataka has not only been approved by the Karnataka government but also received various tax breaks. The proposed plant, to be built at an investment of ` 20 billion, is expected to have a production capacity of 1.8 million units annually and a long-term potential for creating 20,000 jobs.

n Ahead of the upcoming festive season, Hero MotoCorp announced plans to launch three new bikes by September. The Passion Pro TR, Splendor Pro Classic and the Xtreme Sports are likely to be launched by September.

n Royal Enfield, part of Eicher Motors, appointed The Corbeta Group as its exclusive distributor for the company's proposed bike launches in Colombia in this year. The Corbeta Group will set up exclusive retail stores to market Royal Enfield's range of motorcycles. After the commercial launch later this year, Royal Enfield intends to launch its Bullet, Classic and Rumbler range of motorcycles in 350cc and 500cc displacements and the Continental GT 535cc cafe racer in Colombia.

n Domestic sales of three-wheelers grew sharply by 23.8% at 51,461 units in July. Cumulative domestic sales during April-July FY15 grew by 15.0% at 0.17 million units. During April-July FY15, exports also rose by 5.3% at 0.12 million units.

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-13

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Ap

r-14

May

-14

Jun

-14

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Jul-

14

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-13

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Ap

r-14

May

-14

Jun

-14

0

10000

20000

30000

40000

50000

60000

Jul-

14

D&B's Industry Research Service (IRS) provides comprehensive industry analyses with focus onthe strategic considerations. D&B's IRS employsan integrated framework to analyse industry attractiveness in terms of its future growth potential, competitive intensity and risk assessment.

The reports' in-depth analytical content would provide valuable insights to financial institutions, banks, equity broking houses, and corporates towards accurate & informed decision making. The reports would also be useful to the industry practitioners, academicians & scholars.

D&B's IRS also provides independent business environment analysis with focus on macroeconomic and business forecasting, and works closely with the clients towards meeting their strategic & business requirements.

D&B's IRS offers the following sector/ industry reports either as a bundled suite or individual reports:

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Auto Components

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Core Sector

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Steel

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august 2014 issue 72

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