Innholdsfortegnelse for 18-Nov-2018 i Business Today

OUR ANNUAL BT 500 issue tracks the stock performance of the top-listed companies in India and also their performance in terms of revenue growth and profit growth, apart from other parameters such as assets and debt. The 12-month period for this year’s study was from October 1, 2017 to September 30, 2018. This allowed us to take the updated financial year results of the top 500 listed companies that form our universe. The numbers point to the fact that optimism, rather than fundamental improvement in business, drove the equity markets in the period under study. The market capitalisation of the top 500 companies went up by 23.4 per cent. The Sensex went up 15 per cent while the Nifty went up by 10.9 per cent. (They have since fallen –…

FORMER SBI chief Arundhati Bhattacharya’s joining the RIL board can’t technically be faulted. She’d completed the mandatory one-year ‘cooling off’. Former foreign secretary S Jaishankar’s ‘cooling off’ was waived allowing him to join Tata Sons. Post retirement jobs are mutually beneficial – bureaucrats’ are paid much higher than they're used to, and the corporate world gains from their experience. An ethics flag is a risk these assignments always run for possible conflict of interest, or even quid pro quos. To pre-empt this the government had stipulated a two-year ‘cooling off’ period for such appointments, subsequently slashed by half. Officials retiring from plum posts should remember that with less oversight comes more responsibility.…

INDIA'S ELECTRIC vehicle story (EV) is unravelling fast. Electric car sales in fiscal 2018 declined 40 per cent – just 1,200 units, even as the government is pushing for at least a third of all new car sales by 2030 to be EVs. This is hardly a surprise for industry watchers. There’ve been many flipflops and still no proper policy. The only silver lining was the doubling in sale of electric two wheelers in the fiscal to over 50,000 units – though this was largely due to the shift from the lead acid to lithium ion batteries. The bottom-line is clear. A proper policy with subsidies and a blue print for setting up charging infrastructure for electric vehicles may not be a prerequisite for two wheelers but without that, the…

One of the points that the Modi government has tried to highlight as its success is the increase in direct tax collections. And some recently released data suggested the same. Direct taxes comprise of corporate tax, personal income tax and other direct taxes. Take a look at the graphic that plots the direct tax-to-GDP ratio. According to it, the direct tax-to-GDP ratio for FY2017/2018 stood at 5.98 per cent of the GDP against 5.57 per cent in 2016/2017. Not surprisingly, it is being claimed as a success by the government. But if we look at the data a little more closely, we might be jumping the gun here. The last time such a huge jump happened was between 2006/2007 and 2007/2008. In 2006/2007, the direct tax-to-GDP ratio was 5.36 per…

The Obesity Trigger A recent report by Cancer Research UK says children who spend at least 30 minutes of their leisure time online every day are twice as likely to spend their pocket money on junk food and thus become overweight. Those spending more than three hours a day online are four times more likely to buy such foods and 79 per cent more likely to be overweight or obese. According to researchers, the findings show the need to protect children from junk food advertisements online. FACEBOOK’S NEXT STEP WEEKS AFTER THE IRISH WATCHDOG DATA PROTECTION COMMISSIONER OPENED A FORMAL INVESTIGATION INTO A RECENT DATA BREACH THAT AFFECTED NEARLY 50 MILLION ACCOUNTS OF FACEBOOK, THE SOCIAL MEDIA GIANT SAYS IT WILL REMOVE FALSE VOTINGRELATED POSTS, LEADING UP TO AND DURING…

FOR DECADES, commercial banks – representing the financial services industry – dominated the market cap game at the stock market. The journey started from public sector banks (PSBs) and later shifted to private banks. As a result, in the past decade, the market has seen wealth creators such as HDFC Ltd, HDFC Bank, Kotak Mahindra Bank and SBI emerge in the Top 10 league, rubbing shoulders with the likes of Reliance Industries, TCS, ITC and HUL. This feat was achieved in part because of more institutional investors reposing their faith in these companies. But this pecking order is set to change in the next decade as new financial services companies are debuting at Dalal Street. In the past two years, the life insurance industry, which earns close to ₹2 lakh…

WHEN CHINA DECIDED to crack down on some of its most polluting industries in 2017, which also included many blast and induction furnace steel plants, steel export from the world’s largest producer halved. This benefitted not just the steel manufacturers in other countries, but also manufacturers of graphite electrode, which is primarily used in the steel industry. Interestingly, there are only five such manufacturers globally, two being from India. The two Japanese firms control 54 per cent of the global market, the US company controls about 23 per cent and the two Indian companies together control another 23 per cent. HEG, one of the Indian manufacturers (other being Graphite India), has reaped the benefits of a sudden change in the complex business dynamics of the industry. The company’s sales jumped…

KAMAL K. SHARMA, Advisor and former vice chairman of India’s second-largest drug company, Lupin Ltd., uses the transformation of India’s two-wheeler market to explain the ongoing global disruption that is giving the country’s pharmaceutical companies a hard time. “When our roads were bad, the Bajaj Chetak scooter became a hit. Over the years, motorcycles gained popularity, and when roads became better and more motorable, electric scooters became popular and obliterated many popular scooter/motorcycle brands and models. Value migration happens in every industry at some point or the other. The generic industry is going through such a transition,” he says. That is why the pharmaceutical and healthcare sector – considered to be broadly insulated from market swings and regarded as a safe investment for stock investors – is the only sector…

THE LIST (1-100 / 500) THE LIST (101-200 / 500) 21% Rise in total assets of Vodafone Idea to ₹96,545 crore; sharpest increase in Top 20 THE LIST (201-300 / 500) 13 Number of companies with more than 70 per cent growth in asset base THE LIST (301-400 / 500) #365 PVR Asset base rises 8.4% to ₹2,276 crore due to various investments made during the year THE LIST (401-500 / 500) 452% Increase in assets of Dish TV (India) from last year For keys to symbols used and other notes, see footnotes on page 86; NA: Not applicable; The list excludes BFSI companies; Standalone data; Source: Ace Equity…

A TAJ HOTELS employee’s accusation of sexual harassment in 2015 against the then MD of the company, Rakesh Sarna, was probably the first time in the recent past, when a woman employee of a company came out in the open and complained about her senior’s inappropriate gestures towards her. The senior management at the Tata Group (then headed by Cyrus Mistry) had commissioned an enquiry against Sarna, which ultimately gave him a clean chit. The unhappy employee put in her papers saying that she no longer felt comfortable working in the Tata Group. Sarna continued in the organisation till the exit of Mistry. He quit citing personal reasons in 2017 after his term ended. Whether the complaint played a role in this is not known. The #MeToo movement where more…

WITH THE SPIKE in air pollution outside, many of us turn to indoor air purifiers for succour and the Mi Air Purifier 2S, from the house of Xiaomi, can be considered a great buy for its smart functionality and competitive pricing. The third-generation air purifier in white sports a compact, squarish tower design, stands 20 inches tall and does not occupy much space. A total of 943 intake holes are spread across its three sides to draw the impure air, pass it through the 360-degree three-layer circular air filter and push the clean air from the top. Unlike the previous model, this one has a circular OLED display that shows real-time PM 2.5 level along with temperature, humidity level, Wi-Fi status and mode. A light sensor helps adjust the screen’s…

WHO IS FEELING good about the economy? Not consumers for sure. All recent consumer confidence surveys have largely reiterated that point. The Reserve Bank of India Consumer Confidence Surveys are probably the most methodical in tracking consumer sentiments. The survey is done quarterly and it involves a sample of over 5,000 consumers in over 10 cities. The RBI consumer confidence surveys track both current sentiment as well as expectations of the future (Future Expectations Survey). For some time now, the sentiment about their current conditions have been low. The expectations of how their lives will be a year hence is also not particularly cheerful, though it is better than most people’s current sentiments. A second survey – monthly and with a smaller sample – the Thomson-Reuters/Ipsos Indian Primary Consumer Sentiment…

THE STRENGTH in the US economy and a spate of Fed rate hikes has left emerging markets vulnerable to FPI outflows. India, due to a surge in oil prices and a falling rupee is at the top of FPIs’ selling radar. Rising bond yields and earning yields’ failure to catch up is another worry. At ₹25,000 crore October’s foreign outflows are the highest in 2018. The silver lining is that retail faith in equity mutual funds is intact despite funds paying poor returns in 2018. This reflects the confidence with which domestic institutions have been pumping money in the stock market, which stands at ₹21,019 crore month-to-date, a jump of 68 per cent over the full last month. The BSE Dollex, a benchmark for FPI returns, has slumped 15 per…

JET AIRWAYS is a ticking bomb. The airline is perhaps one step away from being dragged to the bankruptcy proceedings by its lenders or trade partners. So far, Jet has managed to stave off insolvency proceedings by making timely payments to lenders, MROs, OMCs, and lessors. Only its employees – they have not been paid for months – are at the receiving end. Recent reports suggest that the airline is in desperate need of working capital loans. It has asked banks for a moratorium and loan restructure. Jet has also denied reports of the Tata Group acquiring substantial stake in the airline, and is pursuing the sale and-lease-back of 16 wide-body aircraft – Boeing 777 and Airbus A330 – (that it owns) to generate funds. With external factors turning hostile…

TECH GIANTS such as Google and Facebook, it seems, have finally brought user privacy to the forefront. Apple, with its stricter developer policies, has always been seen as a safer platform compared to Google. But with privacy taking centre-stage, and discussion shifting towards safety and security of users, Google, too, is following suit. Recently, it updated the Google Play developer policy and limited the access third party apps get for user data. Now developers will only get access to data which is explicitly needed for the core functioning of the app. With these changes, only limited apps can get access to the user's call logs and SMS on Android devices. Facebook, too, earlier in the year, had restricted access to thirdparty apps and developers after the Cambridge Analytica scandal.…

TESLA POSTS SURPRISE PROFIT IN THIRD QUARTER EV major Tesla posted an unexpected $312 million profit for the third quarter, thanks to a surge in production and sale of its Model 3 sedan. Its revenue stood at $6.82 billion against an estimated $6.33 billion. It was welcome news for investors in spite of manufacturing issues and months of histrionics by CEO Elon Musk. Its shares jumped more than 12 per cent following the announcement. The company had turned a quarterly profit only twice before. NETFLIX ADDS 6.96 Mn USERS IN Q3 Netflix is growing faster than what Wall Street predicted, pushing its stratospheric stock even higher. The world’s largest paid online TV network added 6.96 million users in the third quarter, taking its global total to 137.1 million. The 21-year-old…

The combined market cap of BT 500 companies continues its sharp upward trajectory *1993-96: market value of financial year ended March used to calculate the total for top 500 companies. 1997-2001: average market cap between April 1 and March 31 used. Since 2002: average market cap between April 1 and September 30 used. From 2015, average market cap for Oct-Sept period used. Before 2011, state-run companies were listed separately 72.2% Share of companies that saw growth in their average market cap in Oct 2017-Sept 2018 over the year-ago period 53.9% Share of overvalued stocks – those trading at higher current price-toearnings ratios than the five-year median 11% Increase in total income of BT 500 companies between 2016/17 and 2017/18 BFSI Sector Far Ahead of Others Share (%) of leading sectors…

THE ₹35,218 CRORE-FMCG BEHEMOTH, Hindustan Unilever, is on a high. Not only has the company’s average market capitalisation seen a close to 50 per cent jump in the past year (from ₹2,10,631 crore during the October 2016-September 2017 period to ₹3,15,599 crore in the October 2017-September 2018), it has made it to the top five of India’s most valuable companies (in terms of market cap) after a span of 14 years. After dipping to an all-time low of No. 20 (most valuable company) in 2011, HUL’s market cap had been wavering between the 12th and 13th slots of the “Business Today Most Valuable Companies” list for quite some time. It made it to the top 10 in 2016 and jumped to No. 9 last year. The FMCG major has seen…

COMPANIES MAY like to believe their stock’s price movement on bourses is not a true reflection of their business performance, but for investors it is still a barometer. This is why it was hard to ignore Strides Pharma Science, which posted the biggest fall in average market capitalisation -- 40.2 per cent between October 01, 2017 and September 30, 2018 as compared to the same period last year. Result: its rank in BT 500 slipped from 209 in 2017 to 341 in 2018. BT reached out to Arun Kumar, the group CEO and Managing Director, to understand the reasons behind the slide. “While we don’t comment specifically on the company’s performance on the bourses,” a company spokesperson replied, “we believe that it is a combination of factors.” He explained that…

BUSINESS TODAY has been ranking India’s largest companies – BT 500 – since 1993 based on their market capitalisation. In the early days we based it on the market cap of the companies as on March 31. Like in everything else, there is change. In 1997, we took a close look at the methodology to make the first change. We then started ranking companies based on their market cap during the fiscal – April 1 to March 31. In 2002, we began using average market cap between April 1 and September 30. In 2016, we reverted to the 12-month ranking, taking the period from October 1 to September 30. This gives you the advantage of looking at not just the 12 months’ numbers but also the most recent numbers from…

THE LIST (1-100 / 500) THE LIST (101-200 / 500) ₹55,568cr Aggregate profit of four state-owned oil companies in the Top 20 list THE LIST (201-300 / 500) 155% Rise in Tata Chemicals’ profit during 2017/18, the steepest in the Top 50 list THE LIST (301-400 / 500) 67 Number of companies with net profit of ₹1,000 crore or more THE LIST (401-500 / 500) 137 Number of companies whose profits fell from last year For keys to symbols used and other notes, see footnotes on page 86; NA: Not applicable; The list excludes BFSI companies; Standalone data; Source: CMIE Prowess & Ace Equity…

WI-FI CANNOT BE everywhere, all the time, in spite of attempts to ensure seamless, always-on connectivity. Still, there are objects for which connectivity is especially empowering. A group of researchers at the University of Washington have been working on bringing connectivity to 3D-printed objects and giving them physical data analytics capabilities via wireless mode so that there is no need for conventional electronics. The researchers have adopted a method called backscatter communication and sensing, and use conductive plastic filaments. The design detects a variety of bidirectional, linear and rotational movements, and enables data capture and storage for retrieval when outside of wireless coverage. The ensemble was demonstrated and could detect when a pill bottle was opened, for example. A person using a bottle (with the system fitted into it) may…

OF THE THREE IPHONES announced recently, the iPhone XR is the most affordable. The basic 64 GB variant costs `76,900, about `23,000 less than the new flagship XS, again the 64 GB version (we refrain from discussing the XS Max as it is the bigger version of the XS). Both the XR and the XS share many core features, namely, the iOS 12, a seven-nanometre A12 bionic chip, wireless charging, FaceID, selfie camera and the upcoming dual-SIM support. But there are a few differences. The XR sports a glass front and rear with an aerospace-grade aluminium band and comes in six attractive hues – the classic white and black, funky blue, coral, yellow and elegant red. The 6.1-inch liquid crystal display – Apple calls it Liquid Retina – with 326…

MOLECULAR-LEVEL targeted therapy is often used for personalised cancer treatment, with or without hormonal therapy and chemotherapy, says Dr Mithua Ghosh, Director, Clinical Diagnostics, at Strand Life Sciences. For instance, HER-2 protein is found in excess on the surface of some types of cancer cells. Specialists think this may cause them to grow and spread more quickly. So, targeted medications such as trastuzumab are used to treat conditions (especially certain breast and stomach cancers) that overexpress HER-2. Although targeted therapy is known to improve survival rates in certain types of cancer – lung, renal, breast, colorectal, liver, thyroid and melanoma, for instance – long-term survival or a complete cure remains elusive, says Dr Ghosh. The answer may lie in further understanding and evaluating the biology of cancer and the subsequent…

India Moving: A History of Migration By Chinmay Tumbe Publisher: Penguin Viking Pages: 304 Price: ₹599 IN KOTTAYAM, KERALA, two young men from Uttar Pradesh wash a dozen cars a day. The owner of the car wash charges `200 a car and gives them half and a room to stay in, they inform me. Elsewhere in the town, men from the northeast work at fruit shops, stores, hotels and restaurants. They, of course, illustrate a striking phenomenon – that of north Indians invading God’s Own Country. Over two million of them work there, reckons migration scholar Chinmay Tumbe. That is no surprise. In Kerala, labour commands a daily wage of over `800 versus under-`200 in impoverished Uttar Pradesh. What’s more, Indians have migrated for centuries, Tumbe’s debut book points out.…

SEPTEMBER QUARTER earnings have been mixed so far with no major disappointments or surprises. Net profit of 126 BSE500 companies that had declared results as of October 26 evening rose 14.1 per cent year-on-year on the back of 25.3 per cent jump in net sales. However, after excluding banking, financial services and insurance players and oil firms, numbers turn bleaker, with the combined net profit of 95 companies rising 6.72 per cent even as revenues rose 16 per cent during the period. In our sample, excluding BFSI and oil firms, 48 companies have reported a drop in profit margins. A cause of worry for domesticfocused companies could have been the rise in input costs and interest outgo. Some firms, such as HUL, GSK Pharma and Adani Ports, saw less-thanexpected results…

NEW PERSPECTIVE WHAT: DEBT RELIEF WHEN: Nov 5, Washington WHAT TO LOOK FOR: High household debt is a problem in many economies and evidence from the global financial crisis suggests that high household debt-to-GDP ratios can be an important source of financial instability. In this policy research talk, economist Martin Kanz will provide new perspectives and explore the impact of debt relief. RIGHT NUMBERS WHAT: CFO SUMMIT WHEN: Nov 15, Mumbai WHAT TO LOOK FOR: The theme of the summit is “Navigating Business in a Turbulent World”. It will focus on challenges faced by CFOs vis-à-vis impact of global forces on the Indian economy. It will discuss ways to define the changing role of the CFO in the current economic scenario. FAST TRAINS WHAT: HSR AND QUALITY OF LIFE WHEN:…

WHILE ADDRESSING SHAREHOLDERS IN JULY, Mukesh Ambani portrayed the present era as the “Golden Decade of Reliance”. His reasons – telecom start-up Reliance Jio posted profit in first year of commercial operations; earnings of the petrochemicals vertical grew to the size of Reliance Industries’ (RIL’s) biggest business, refining; and cash flow reached a level where the company can clear its net debt of ₹1.8 lakh crore in less than three years. RIL recorded a 30.5 per cent rise in consolidated revenue to ₹4,30,731 crore in 2017/18, thanks to onstreaming of greenfield petrochemicals projects at Jamnagar and rise in prices of refined petroleum products. The net profit rose 20.6 per cent to ₹36,075 crore, largely because of high gross refining margins(GRM) of $11.6 a barrel. RIL became the second $100-billion company…

IN MID-SEPTEMBER, the Department of Investment and Public Assets Management, or DIPAM, asked ONGC to buy back government shares by the end of November. The government is looking to earn ₹4,800 crore from this financial jugglery. But this has made the management as well as investors jittery. The government owns a 67.45 per cent stake in ONGC. Earlier, DIPAM had toyed with an idea of selling a 5 per cent equity in stock markets, but later realised that a buyback might get it more money than what hard-nosed investors would pay. DIPAM, worried over the stiff disinvestment target of ₹80,000 crore for 2018/19, has sent buyback diktats to Oil India and Indian Oil too from where it aims to raise ₹1,100 crore and ₹4,000 crore, respectively. DIPAM officials say buybacks…

THE LIST (1-100 / 500) THE LIST (101-200 / 500) 65% The share of top 50 companies in aggregate income THE LIST (201-300 / 500) 4 oil companies are among the top five income earners THE LIST (301-400 / 500) ₹1,331cr Techno Electric & Engineering’s total income sees the highest growth THE LIST (401-500 / 500) -36.9% Reliance Communications sees the steepest fall in income For keys to symbols used and other notes, see footnotes on page 86; NA: Not applicable; The list excludes BFSI companies; Standalone data; Source: Ace Equity…

Offer access to a helpline or an external consultant where employees can share experiences, views and can speak independently as it is often difficult to speak to HR or manager. Provide counselling services to the perpetrator and also the victim to close the loop so the former understands the gravity of the situation, a healing environment in the company is created and there is rehabilitation for both. Organise workshops for employees regarding appropriate workplace behaviour…

WHEN COAL TURNED GOLD: The Making of a Maharatna Company BY PARTHA SARATHI BHATTACHARYYA PUBLISHER: Penguin Portfolio Pages: 288 Price: `699 STORIED GOVERNMENT enterprises are either too glorified or too harshly criticised by those who care to document them. But this book is not just another memoir penned by a retired bureaucrat about his three-decade-long professional life and the company he served. What Partha Sarathi Bhattacharyya, former Chairman and Managing Director of the central public sector enterprise Coal India (CIL) tells us is an intriguing evolution from a loss-making entity to India’s third largest profit-making CPSE. CIL is a bellwether and accounts for 15 per cent of the cumulative net profits of 174 profitable CPSEs (out 257 operating ones). Around 84 per cent of India’s coal output comes from its mines,…