Ashok Leyland set for bigger role in Indian defence sector

Chennai-based Ashok Leyland Defence Systems Ltd (ALDS) has entered into a tie up with Krauss-Maffei Wegmann (KMW) GmbH and Co KG, Germany, to co-operate in developing advanced defence systems for Indian defence establishment as well as other defence forces worldwide.

A memorandum of understanding (MoU) has been signed between the companies during the International Defence Exhibition in Abu Dhabi, which includes scope in development of artillery systems, combat systems, armoured wheeled vehicles, recovery vehicles, bridge laying systems and other similar products. ALDS is a newly formed arm of Ashok Leyland, a Hinduja Group flagship company, in which it owns a 26 per cent stake.

V Sumantran, chairman, ALDS, said, “This strategic partnership seeks to harness the formidable skills of both companies, namely, the technological bandwidth of KMW and our approach to innovations aimed at cost advantage. For ALDS, this brings a new range of product opportunities with which we hope to fulfill India’s growing Defence needs and over time to address select overseas markets.”

The German firm would provide technology on which a certain amount of customisation would be done and manufactured by ALDS in its existing facility. The details on developing the vehicles and manufacturing are yet be finalised, according to a company source.

“This partnership with ALDS is a further consequent step in KMWs strategy to internationalize its business. Along with ALDS, we are now able to jointly develop future Indian Defence solutions based on our proven and worldwide leading technologies,” said Frank Haun, CEO and President, KMW, in a statement.

KMW, a 170-year-old company, has experience in the market for highly protected armoured wheeled and tracked vehicles. It supplies systems like MBT Leopard 2, the artillery system PzH 2000 and the highly protected Dingo 2 to over 30 countries worldwide.

It has facilities in Germany, Brazil, Greece, Netherlands, Singapore, Turkey and USA with around 3500 employees to manufacture and support products ranging from air-transportable, heavily armoured wheeled vehicles, heavy battle tanks, infantry fighting vehicles and bridge laying systems. Besides, it has wide-ranging system competence in the area of civil and military simulation, as well as in command and information systems and remote-controlled weapon stations with reconnaissance and observation equipment for day and night missions.

Ashok Leyland, in February, 2010, has signed a principles of co-operation with the Paramount Group, South Africa for the development and manufacture of mine protected vehicles in India. A vehicle under this tie up is currently on the developmental process

Vodafone launches 3G service in Uttar Pradesh

Private GSM cellular operator Vodafone Essar today launched its Third Generation (3G) service in Uttar Pradesh (East) circle, which is one of the largest telecom circles in the country with around 60 million subscribers.

In first phase, the service has been launched in Lucknow and Kanpur, while Allahabad and Varanasi would be covered next month. Later on, remaining towns and centres would be included under 3G network.

The company will also sell bundled 3G handsets of own make, besides other leading handset makers, including Nokia and Samsung. The bundled 3G handsets carry price tag upwards of Rs 3,500. Vodafone had already launched 3G service in Chennai and Delhi. Now, UP (E) has three operators offering 3G services viz. Bharat Sanchar Nigam Limited (BSNL) and Aircel.
Vodafone is the largest operator in UP (E) with about 13 million subscribers. The company is offering its subscribers free 3G services till April 10 and the 3G tariff and packages for it would be announced later, circle COO Ravi Santhanam told the media here.

“We have the largest EDGE enabled cell sites in the circle numbering 8,200 and we only need to put 3G antennae and some additional gadgets for 3G,” he added.

Against 2G service, which basically supports voice service, 3G is most suited for high speed data transfers in real time, including video calling, high definition gaming and faster internet providing speeds of up to 21.1 mbps.

Besides, bundled handsets, Vodafone will also vend High Speed Packet Access (HSPA) dongles for laptop/desktop internet users and Mifi device, which is a Wi-fi device providing access to 5-10 nodes for small businesses. “We are targeting first time internet users on mobile phones,” he underscored.

The mobile penetration level is much lower in UP (E) at 40 per cent compared to pan-India average of 55-60 per cent.

I-T, SBI get Rs 2,195 cr from Harshad Mehta's assets

The Mumbai-based custodian released on Wednesday a payment of Rs 2,195 crore, recovered from the sale of Harshad Mehta’s assets to the Income Tax department and the State Bank of India. This disbursement, made against the outstanding dues of Harshad Mehta group, is the largest and one of its kind in the country.

At a meeting held in Mumbai, Satish Loomba, custodian, handed over Rs 1,995.6 crore and Rs 199.25 crore to senior revenue and bank officials, respectively. BP Gaur, director general of investigation (central) and Nilima Mansukhani, chief commissioner of I-T, Maharashtra, received the payment on behalf of the I-T department. SBI’s payments were accepted by B Sriram, chief general manager (securities).

The I-T department has a claim of Rs 20,000 crore on Harsh Mehta and associates, including the compunded interest. The amount being released now is only principal. More such disbursements will follow.

Harshad Mehta owed Rs 5,200 crore to the government as income tax and Rs 103 crore as wealth tax. When the law took its course, Mehta handed over 51,49,214 shares of 130 companies to the custodian under the Special Court’s March 1994 order. Mehta, who died of a heart attack in Mumbai in December 2001, faced allegations of diverting huge amounts of public money to the securities market. The Joint Parliamentary Committee, set up for the 1992 scam, had estimated the quantum of the scam at approximately Rs 4,400 crore.

The custodian said Mehta did not own any off-shore account or property abroad.

Mehta’s family tried to get interim stay on the payment disbursement. However, the Supreme Court on March 14, while admitting a civil appeal from the Mehta family, denied the stay on the High Court order. The apex court, however, had said if the I-T department and financial institutions are required to bring back the entire or part of the amount disbursed in terms of the impugned order, it shall also include the interest at a rate as may be directed by the court.

Reliance Industries has target of Rs 1080: Anu Jain

Reliance Industries has target of Rs 1080, says Anu Jain, India Infoline.

Jain told CNBC-TV18, "I think the word Reliance itself is working, so it’s not just Reliance; it’s the whole ADAG pack where the word Reliance is. Reliance as such we were discussing last week and we said that Rs 1,048 to Rs 1,050 looks likely and its knocking right there."

She further added, "If it were to hold on to this level, there is resistance at this level but the fact that on a day like yesterday it got managed to on the futures, touched those levels is definitely showing strength. It can face some selling pressure here but the next target is Rs 1,080. So the momentum can pull it up there, definitely looking strong, any dip should be use to get into this stock."

Reliance Industries has target of Rs 1250: Mehta

Reliance Industries has target of Rs 1250, says Devang Mehta, Vice President & Head - Equity Sales, Anand Rathi Financial Services.

Mehta told CNBC-TV18, "We do have a buy call on Reliance Industries and we have been aggressively pushing it to our clients since the last 1 or 2 months, as such the stock had underperformed the broader markets quite regularly in the last 1.5 years. But after the BP deal has been announced a lot of technological hassles have been solved for the company and also the ramp up in production from the KG basin will act as a fuel for the company going ahead."
He further added, "Also the petchem margins, which showed a marked improvement and the polyester price trend also showed that the company would do well from here on. So I guess Reliance Industries would be outperformer going forward and we do have a price started off around Rs 1250 for a one year horizon."

Infosys Technologies (INFY) Trading Near $65.47 Support Level

Infosys Technologies (NASDAQ:INFY) closed Tuesday's downbeat trading session at $66.50. In the past year, the stock has hit a 52-week low of $53.28 and 52-week high of $77.92. Infosys Technologies stock has been showing support around $65.47 and resistance in the $67.23 range. Technical indicators for the stock are Bearish and S&P gives INFY a neutral 3 STARS (out of 5) hold rating. For a hedged play on this stock, look at the Jul '11 $67.50 covered call for a net debit in the $62.40 area. That is also the break-even stock price for this trade. This covered call has a duration of 122 days, provides 6.17% downside protection and an assigned return rate of 8.17% for an annualized return rate of 24.45% (for comparison purposes only). A lower-cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the INFY Jan '12 $45.00 call and selling the Jul '11 $67.50 call for a total debit of $19.25. The trade has a lifespan of 122 days and would provide 3.38% downside protection and an assigned return rate of 16.88% for an annualized return rate of 50.51% (for comparison purposes only). Infosys Technologies has a current annual dividend yield of 0.75%. [ABR-Seven Summits Research]

TCS, Infosys looking good among IT stocks: Ashwani Gujral

In a chat with ET Now, Ashwani Gujral, Chief Market Strategist, ashwanigujral.com, talks about Mahindra Satyam, TCS, Infosys.

ET Now: On the charts Mahindra Satyam, TCS and Infosys?

Ashwani Gujral: Mahindra Satyam 60 has held on in spite of everything but you have better stocks with greater transparency. The situation there is marquee so do not think that will move beyond this 60 to about 70 kind of range in a hurry. So if you have to buy tech I think TCS, Infosys all these companies have corrected so those are good places to be still if you have to be in tech.

Google AdSense: The top 5 optimization tips straight from Google

This morning, I met up with a Google AdSense Optimizer as part of Google’s AdSense in Your City tour. The gist of the tour is to give AdSense adopters a 20-minute, one-on-one meeting with a member of the Google AdSense team. From there, you talk about your site(s), ask any questions you may have upfront, and basically walk away with site-catered professional recommendations straight from those who know AdSense the best.

Lucky for me, my meeting was scheduled for 9:30 AM. I arrived slightly early, met with the person I would be speaking with, and proceeded to enjoy the heck out of a 35-minute session thanks to my arriving early combined with the person after me arriving late. Now, I know quite a lot when it comes to AdSense, but I found out I have quite a bit more to learn yet! While most of the notes I took pertain to personal recommendations that I prefer to keep private, what I can divulge is the contents of a hand-out each attendee was given: A list comprised of “top AdSense optimization tips.” From top to bottom, the document reads as follows:

Top AdSense Optimization Tips
Whenever we meet with publishers, we hear one question over and over again: “How can I use AdSense more effectively to increase my earnings?” We’ve written up our top tips here and encourage you to experiment with them and see how they impact your earnings. Happy testing!

1. Maximize your AdSense coverage
In order to maximize your earnings, place three AdSense ad units and three link units on each of your pages. The more ads you display, the more opportunities you have for your users to engage with them.

Also, because some ads are paid on a cost-per-impression (CPM) basis, you will often be paid just for displaying the ads, regardless whether a user clicks on them.

2. Place your ads above the fold
Ads that appear higher on the page perform the best. Place your ads so users can see them without scrolling down the page. The more a user has to scroll before finding your ads, the less likely they are to see them and to click on them.

3. Use the best performing ad units
Our advertisers’ preferred ad units are the Leaderboard (728×90), the Medium Rectangle (300×250) and the Wide Skyscraper (160×600). By using these popular ad units, you’ll be tapping into a larger pool of competing ads. More ad inventory leads to more competition in the ad auction and ultimately results in higher RPMs for our publishers.

4. Show text and image ads
Check your ad units and make sure that you’ve opted-in to displaying text and image ads. By diversifying your ads, you’re able to increase the available inventory for your site. With most text ads paid on a cost-per-click (CPC) basis and most image ads paid on a cost-per-impression (CPM) ad, you can let AdSense determine which ads will maximize your earnings.

5. Complement your content with your ads
Your AdSense ads should fit seamlessly within your site to improve your users’ experience. Blend the color of your ads to match the rest of your site and remove the borders around your ad units to help your ads complement your content and enhance your site.

Bonus Tip: Opt-in to Placement Targeting
Set up Custom Channels in your AdSense account and opt-in to Placement Targeting. Placement targeting allows our advertisers to bid on a specific ad or group of ad placements on your site. Advertisers are usually willing to bid more for targeted units.

IPL association gets much costlier

Firms aren’t complaining, willingly forking over for joining a list of team sponsors.

With cricketers for the Indian Premier League (IPL) tournament being auctioned at record prices, franchisees have raised their fee for team sponsors by 25-30 per cent, compared with the previous season.

The fourth edition of the IPL will run from April 8 to May 22, just six days after the World Cup concludes.

Hero Honda, former sponsors of the Delhi Daredevils team, have signed with the Mumbai Indians for a period of three years, for around Rs 18-20 crore each year, say industry sources. That would make it one of the biggest sponsorship deals in the IPL till date. Apart from the logo on the team jersey, Hero Honda will have significant brand exposure around the home ground, the Wankhede Stadium, along with in-stadium promotional rights. While it could not be confirned, those in the know say the sponsorship includes about Rs 2.5 crore to be paid to the star captain, Sachin Tendulkar.

Franchisees say the top four-five teams will be able to garner around Rs 55 crore each in various sponsorships, significantly higher than the Rs 35-40 crore the best teams were able to get last season. “The top four to five teams are in the highest demand — Mumbai, Chennai, Delhi and Pune and Kolkata. Our assesment is, if you take an average, the 10 teams would be able to get about Rs 45-50 crore each from sponsors, compared to around Rs 35-40 crore last year. So, you are seeing an increase in earnings of 25-30 per cent this year,” says a director of one of the new franchisees.

The view is echoed by others. “We are seeing 20-25 per cent increase in team sponsorships in this edition,” said Raghu Iyer, chief marketing officer for the Rajasthan Royals.

What has made prices go high is the fact that companies and media planners now have a fair idea of the kind of rub-off one can get by associating with IPL teams. “The rates have gone up drastically as IPL has become an established annual sporting spectacle. In the past three years, the brand valuations and the brands associated with the event have gone up. This surge is in line with what IPL is delivering,” Hiren Pandit, managing partner, GroupM, told Business Standard.

So, for instance, the previous season’s winner, Chennai Super Kings, have signed sponsorship deals at rates 30-50 per cent higher than last year. Although most of their sponsors, including Aircel, have renewed their sponsorship at a higher price, the franchisee has also signed the Amrapali Group, a Noida-based real estate developer, as an associate sponsor for Rs 25 crore for a period of three years.

“When it comes to sponsorship deals and rates, advertisers will choose their associations on various factors like region, the performance, the fan base and star power of the team. Mumbai Indians and Chennai Super Kings are storng teams, compared to Kings XI and Deccan Chargers. Hence, these teams have commanded heavy premium ” said an official from a sports marketing agency.

Delhi Daredevils has signed the Muthoot Group as the main team sponsor for this season and Coca-Cola, Idea and Panasonic as associate sponsors. Kings XI Punjab has renewed four sponsors — Emirates, Reebok, USL and Wrigley. Rajasthan Royals have retained HDFC, TCS, Linc Pen and Paras Buildtech and will be finalising another four sponsors by the end of next week.

The two new teams, Kochi and Pune, are also seeking substantial sponsorship deals. Sahara Pune Warriors has managed to rope in Adidas as their apparel sponsor and is cashing in on the fact that it has on-form Yuvraj Singh as their captain. “Sahara has a strong team, plus the matches are going to be held in the D Y Patil stadium in Mumbai, as Pune is not ready. They are seen among the top four to five teams and are looking for a substantial premium for sponsorship,” said a sports marketing agency familiar with the negotiations.

Alternate channels to drive union bank growth

Union Bank of India, one of India's leading public sector banks, is betting big on alternate delivery channels like online banking, phone banking, mobile banking, ATMs and banking correspondents to drive its operational growth.

These alternate channels which till a couple of years back, contributed barely eight per cent of the bank's transactions are poised to account for 45 per cent of its transactions by the end of 2010-11.

The bank is leveraging IT in a major way to expand its volume of transactions from alternate delivery channels. And with mobile banking and financial inclusion emerging as new buzzwords, the contribution to the bank's volume of transactions from these alternate channels is only poised to grow.

"In 2008-09, the alternate delivery channels accounted for only eight per cent of our overall transactions but in the last fiscal, their share jumped to 35 per cent. In the current fiscal, we have achieved 40 per cent of our transactions through such channels and their share is expected to reach 45 per cent by the close of this fiscal”, S Govindan, general manager (personal banking & operations), Union Bank of India told Business Standard.

“Our bank is leveraging technology in a big way to run operations and the migration of our customers to these alternate delivery channels is very high. We have constituted a separate department to oversee the transactions recorded in alternate channels. Though there is no comparable data among PSU banks in business clocked from such channels, we believe that our bank is among the top public sector banks in this category”, he added.

The alternate banking channels are set to play a key role for achieving the Financial Inclusion goals of the bank. Union Bank aims to cover around 3500 unbanked villages across the country by March 2012 as per the target set by Reserve Bank of India (RBI).

In Orissa, the bank would provide banking services to 30 villages in Jajpur district. While 10 villages would have brick and mortar branches, 10 other villages would be served through mobile van banking and banking correspondents would cater to the remaining 10.

Besides, Union Bank, as a part of its Business Process Re-Engineering initiative, has planned 'Project Nav Nirman' to set new benchmarks in customer service.

McKinsey & Company has been roped in as the consultant for working out the modalities of the project. The bank has already started the trial run of the project and its full-scale implementation would take18 months.

“The Nav Nirman project would help us to catapult us to the number one slot in terms of customer service by 2015-16. Under this project, the bank will offer uniform retail banking experience to our customers across all branches.

The bank will be setting up a Customer Service Excellence Academy where our staff will be continuously trained and also a Customer Service Intelligence unit which will give us constant feedback from our customers. Besides, the bank will have back-end research for grievance redressal”, he stated

Ramco Systems plans Rs 40-crore rights issue

Chennai-based IT consulting, products and managed services provider Ramco Systems Limited, part of the over $875-million (approximately Rs 4,000 crore) Ramco Group, is in the process of going in for a rights issue soon to raise anywhere between Rs 35 crore and Rs 40 crore, according to chief operating officer Kamesh Ramamoorthy.

“We are in the final stages of obtaining approval from the Securities and Exchange Board of India. If everything goes well, we should be announcing the issue next month, the proceeds of which will be utilised for promoting and marketing our cloud products in the global markets,” he told Business Standard.

Last year, the company launched its Ramco OnDemand ERP (RODE 2.0) on the cloud and would unveil a product for analytics on the could platform next month. Ramamoorthy said the underlying technology – Ramco VirtualWorks – on which all the company's products were built, was an architecture for cloud.
“So, any product coming out of VirtualWorks will automatically be available on the cloud. Our idea is to make available every month one new product on the cloud,” he added.

Last year, the ERP cloud product contributed two per cent to Ramco’s total revenues and is expected to yield 5 per cent this financial year. “We are expecting this trend to continue or grow in the next couple of years.” At present, the company derives 50 per cent revenues from its traditional ERP product, 25 per cent from aviation and the rest spread over other products.

Stating that the company was seeing more traction for its cloud offering in markets like India and China, especially from the small and medium businesses (SMBs), Ramamoorthy said India (40 per cent) outperformed the US (32 per cent) in terms of the overall revenue contribution and expected the Indian pie to touch 42-45 per cent in two-three years down the line.

Ramco Systems reported revenues of $37 million (approximately Rs 166.5 crore) last financial year. Its revenues for the third quarter ended December 31, 2011, stood at $ 12.67 million (Rs 57 crore). India was the primary revenue generator with 46 per cent, while the US contributed 19 per cent during Q3.

“In the last three quarters, we grew 28 per cent and expect the trend to continue this quarter as well,” Ramamoorthy said. The 11-year-old company employs 1,500 globally. Of this, the research and development strength is one-third (at Chennai), which is a good number for the company for the next two years. There will be a marginal increase of 5 per cent in R&D workforce thereon, he added.

Ramco Systems’ scrip ended the trade at Rs 101.55 on the BSE, up 3.46 per cent over the previous close of Rs 98.15.

Tata Motors spreads wings in Uttarakhand

In the just concluded CII expo at Haridwar, auto major Tata Motors showcased its yet-to-be-launched Ace Zip commercial vehicle.

The vehicle, which will be launched shortly this year, will have a capacity to carry 500 kg load, the company officials told Business Standard.

With Tata group exploring new investment opportunities in Uttarakhand, its auto manufacturing arm is all set to introduce two to three new models of commercial and passenger vehicles from the Pantnagar manufacturing facility. It has also decided to double its production to 500,000 vehicles from 250,000 vehicles per year.
The company recently introduced a new eight-seater passenger van, ‘Venture’, from Pantnagar.

“We will be introducing two to three new models of commercial as well as passenger vehicles this year,” said the officials. After the production of ultra small car Nano from Pantnagar, the company is now mainly focussing on commercial and passenger vehicles now, they said.

Significantly, the expansion programme of Tata Motors’ Pantnagar plant came close on the heels of a visit of a high level team of top officials of different companies of Tata group like Tata Motors and TCS last month to Dehradun to explore new investment opportunities in the hill state. They evinced interest in different sectors like power, housing, tourism and IT sectors in Uttarakhand as a follow-up to the last November 15 visit of Chairman Ratan Tata here.

Chief Minister Ramesh Pokhriyal Nishank is optimistic the Tata group would undertake substantial expansion at the Pantnagar plant in view of the recent clarification by the Central Board of Customs and Excise that the existing companies are entitled for full excise exemption in case they go for expansion and introduce new models.

Nishank also said he is positive on Tata group making new investments in the hill state. “We are confident that Tata group will invest more in our state besides expanding its existing Pantnagar auto manufacturing plant,” Nishank said. Nishank also said Tata group would continue to produce Nano cars from Pantnagar plant which is all set to become Asia’s biggest auto hub.

Nishank said he was expecting Tata group to invest Rs 10,000 crore in the state, which in turn would create 50,000 jobs.

NTPC to get coal through waterways

For the first time, the country’s largest power producer, NTPC, has tied up with Inland Waterways Authority of India to ensure smooth transportation of coal, besides deciding to import coal directly.

The move was prompted by recurrent congestions on the railways network delaying coal supply to NTPC power plants. The company has often faced problems with acute shortage of coal stocks due to the delays.

NTPC now plans to use waterways as an alternative route for coal supply to projects that are along the national waterways No1. Till now, the Railways have been the dominant mode for transport of coal. “We have already tied up with IWAI to transport coal for the Farraka and Khelgaon projects where there is a congestion on the railways network. This will also be an eco friendly way of transporting coal and will reduce the burden on the railways,” NTPC Chairman and Managing Director Arup Roychoudhury told Business Standard.
Coal meets 80 per cent of the company’s fuel requirement. IWAI, on behalf of NTPC, has floated Requests for Proposal (RFP) for transporting three million tonnes of imported coal annually to NTPC’s power plant at Farakka, West Bengal, for a period of seven years. The company which will be selected will to have to develop logistics and the requisite infrastructure. The shipment of coal through the waterways is expected to be start in 2012.

Coal for three projects — Farakka, Kahalgaon and Barh — will be transported through the waterways. The Farakka project has a capacity of 1,600 Mw for the first phase and 2,100 Mw for the second phase. The Kahalgaon power plant in Bihar has a capacity of 2,340 Mw. The proposed Barh project in Bihar will have a capacity of 2,980 Mw.

The Farakka and Kahalgaon projects have been facing coal shortage for more than a year. “The innovative approach of use of alternate mode of transportation and utilisation of big vessels in mid-sea near Haldia port will open up more opportunity. With plants such as Farakka, Kahalgaon and Barh situated near the Hoogly and the Ganga, coal supply can be augmented through use of waterways,” a company executive said.

Though the RFP has been called for the Farakka plant, the infrastructure and logistics will also be used for other plants near the river. The total transport of coal may be increased to eight million tonnes through inland waterways at a later stage, said an official close to the development.

In 2011-2012, NTPC plans to import 16 million tonnes of coal. Out of this, 12 mt have already been arranged by STC and the rest will be imported directly. The company will float a tender by the March-end to import four million tonnes of coal. NTPC had been importing coal through state-run firms MMTC and STC.

To reduce hurdles while transportation of coal through railways, the company has initiated online monitoring of the movement of coal rakes. The power firm will add 5,500 Mw of capacity in the next financial year and has a target of 75,000Mw by March 2017 from the existing 33,000 Mw. Its coal requirement is expected to increase substantially from the present level of 160 mt.

Honda to step on the gas

Honda, the market leader in two-wheelers globally, is to get aggressive in India after its exit from Hero Honda, its joint venture with the Hero Group. Honda Motorcycle & Scooters India (HMSI), its fully-owned arm set up in 1999, plans to launch two new motocycles every year, expand its reach and bring in a new mass market 100cc bike.

“Honda always wants to be in the Number One position. Right now, we are in the fourth position, not very far from the third player. We want to be among the top three players (in India), and very close to the No 2 player,’’ said Shinji Aoyama, President & CEO, HMSI, in an interview to Business Standard last week.

“Honda always wants to be in the Number One position. Right now, we are in the fourth position, not very far from the third player. We want to be among the top three players (in India), and very close to the No 2 player,’’ said Shinji Aoyama, President & CEO, HMSI, in an interview to Business Standard last week.
“The short term plans will not be driven by events at Hero Honda but long term, there will be a huge difference. Single-mindedly, the world leader will think differently. Things will change dramatically,’’ said Naresh Rattan, head of marketing & sales, HMSI.

Till now, Honda Motor Company was operating in India through both Hero Honda and HMSI. A joint working group decided on the line of models for both. The ventures were not to disturb each other, but play a complementary role, so that together Honda enjoyed a 60 per cent market share. ‘‘That horizon will change. Honda will bring in more core products now,’’ said a senior Honda executive.

Aoyama said Honda would like to fill the gaps in its portfolio. ‘‘Whatever we didn’t not have in our product portfolio, we would like to fill. For instance, we would like to enter the inexpensive product segment, and bring in a core product in the entry-level 100cc segment. This product will make us really aggressive (in the market),’’ he said. It has a 110cc bike in the Twister, but it’s a niche product targeted at urban youngsters. It is clear that Honda is looking for a more mass market bike.

However, Honda doesn’t believe the time is yet right to get aggressive. Its priority would be to address the huge backlog in orders. None of its bikes are available off-the-shelf and have waiting period from two to three months. Honda’s second factory will come up at Tapukara in Alwar district in Rajasthan by July-August. Aoyama says it will take Honda at least two years to ensure supply matches demand.

Despite its technological strengths—many in the industry believe Honda has the best four-stroke technology—it won’t be easy. It will have to contend with well-entrenched brands like Hero Honda’s Splendor and Passion, and now Bajaj’s Discover. Honda, however, believes it can overcome these with better quality of products and distribution. ‘‘In a decade, we can change the entire market situation,’’ said Aoyama.

He believes the real demand for its products is much more but the short supply makes his dealers miss potential sales. ‘‘We are selling 700,000 units of the Activa a year. If we didn’t have production constraints, we could easily sell a million units. We are selling 300,000 units of the Shine a year, which we can easily double,’’ said Aoyama. HMSI has about 400 dealers and an equal number of service centres. He now plans to add 200 dealers or service centres every year.

HMSI will push exports from India to markets which show a preference for India-made bikes that combine style, mileage and performance. Besides neighbouring countries, it includes markets in Latin America, where Chinese bikes are not preferred. Last year, it exported 75,000 bikes and this is expected to rise to 100,000 bikes this year, 150,000 next year and 200,000 the year after. For now, Africa is not on its radar or mandate, where Bajaj Auto has made significant inroads.

Jyothy Fabricare eyes buys in Delhi, Mumbai

Jyothy Fabricare Eyes Buys In Delhi, Mumbai - As part of overall expansion plan, Jyothy Fabricare Services (JFSL), a subsidiary of Jyothy Labaratories Ltd (JLL), is eying two acquisitions, one each in Mumbai and Delhi. The acquisitions, of two laundry chains, will be completed shortly, adding close to 70 outlets to JFSL’s current 30. The Mumbai chain, according to sources, has five to six outlets, while the Delhi chain has around 60. The acquisitions are likely to cost JFSL under Rs 50 crore. JFSL is in the process of raising Rs 100 crore by offloading 26% stake to the private equity arm of financial major IL&FS. (Business Standard)

Axis PE Rejected US PE Firms' Buyout Proposal - William Knight, a UK-based former director of Axis Private Equity who resigned last week, has cited the board’s decision to reject a new buyout proposal from a US-based PE major as the reason for his departure from the company. Axis PE’s board turned down an offer from the US-based PE major to buy its infrastructure fund citing a low valuation. A proposal was made by the US PE major, which handles about $7 billion under management, in February-end. (Business Standard)

Entegra To Raise Rs1,500Cr Though Private Placement - Renewable energy development firm Entegra today said it has decided to raise Rs 1,500 crore through private placement of shares or follow on offer. The board of directors of Entegra granted permission for further follow on issue of equity shares or any other convertible instrument on private placement basis or qualified institutional placement. With a portfolio that spans the entire gamut of renewable energy solutions, Entegra aims to energise the future with clean, green, sustainable and cost-effective renewable energy solutions. (Business Standard)

Dabur Eyes More M&As In Personal, Healthcare - Dabur India, the fast-moving consumer goods major, plans a turnover of Rs 5,000 crore for 2011-12, with more acquisitions in the personal and healthcare segments. The size might vary somewhere between Rs 50 crore and Rs 500 crore. It could even go higher, depending upon the brand and the company. In January 2011, the company made its second overseas acquisitions by buying US-based personal care firm, Namaste Group, for Rs 451 crore.  (Business Standard)

Magma Fincorp To Securitise Portfolio - Magma Fincorp, a non-banking finance company (NBFC) funding equipment and small and medium enterprises, plans to securitise an asset portfolio of about Rs 2,500 crore for the current financial year. This is about 45% of the loans it had made in 2010-11. Earlier in the year, it had done securitisation for about Rs 1,800 crore. (Business Standard)
Hinduja Group In Talks With Overseas Players For Aerospace Foray - The Hinduja Group has drawn up big plans to enter the aerospace business. The group is in talks with a couple of American and European aerospace companies to assemble fixed wing aircraft and helicopters in India for both civilian and military applications. A new company will be created for the business in which Ashok Leyland Ltd will hold equity along with other Group outfits. (Business Line)

Israel’s Defence Firm Ness Plans India JV - Israel’s Ness Technologies Inc. is exploring forming a joint venture with an Indian state-owned defence company or a private technology company as it looks to expand in the burgeoning defence market for command and control systems. The company’s Indian arm currently caters to the local defence market only via government-to-government deals. (Mint)

Sugar industry appeals again for exports under OGL

Sugar industry has made a fresh plea for allowing exports under open general licence (OGL), especially when the international prices have surged from $690 a tonne to $760 a tonne in one week.

Representatives of Indian Sugar Mills Association and National Federation of Cooperative Sugar Factories, who did not want to be identified, told Business Standard “The government does not want to take any risk and thus currently is in the midst of collection of state wide sugar production figures. There are reports that India may not achieve sugar output target of 25 million tonnes but will be able to reach between 22.5 million tonnes and 24.5 million tonnes. The next meeting of empowered group of ministers is yet to be fixed.”

They said the industry wants the Centre to take the decision of exporting 500,000 tonnes at the earliest. Subsequently, the Centre needs to allow exports of 1 million tonnes in the next two months.
Sources said the Centre would soon hold a meeting with the state sugar commissioners to ascertain sugar production during the ongoing sugar season. “A final call on sugar exports will come only after that. About 13.5 million tonnes have been crushed till February 15,” sources noted.

Industry sources said sugar production in Uttar Pradesh is expected to be 7 million tonnes. “However, if UP mills stop crushing season in the first week of April then the sugar production will be quite less compared to the target of 7 million tonnes," sources said.

As far as Maharashtra is concerned, it was estimated to be 9.5 million tonnes but it was later revised to 9.1 million tonnes after the unseasonal rains hit the sugarcane growing areas in November last year.

India world's top buyer of conventional weapons

India has emerged as the largest importer of conventional arms, accounting for nearly a tenth of all arms transfer between 2006 and 2010, according to a Swedish think-tank. China was a distant global No. 2, at six per cent.

In its latest arms transfer report published yesterday, the Stockholm International Peace Research Institute (Sipri) also said 20 per cent of all arms’ movements between 2006 and 2010 ended in India, China or Pakistan. “Indian imports of major conventional weapons are driven by a range of factors. The most often cited relate to rivalries with Pakistan and China, as well as internal security challenges,” said Siemon Wezeman of the Sipri Arms Transfers Programme.

As an importer, India is demanding offsets and transfers of technology to boost its own arms industry, and, in order to secure orders, major suppliers are agreeing to such demands.”
Speaking to Business Standard from Stockholm, Wezeman said these new trends in Asia show lack of progress in the bilateral talks between India, China and Pakistan on border tensions and the lack of confidence-building measures in the region.

The volume of deliveries to India in 2006–10 was 21 per cent higher than in 2001–2005. Aircraft accounted for 71 per cent of imports, with deliveries in 2010 of 35 Su-30MKI and 10 MiG-29SMT combat aircraft from Russia, as well as a second Phalcon airborne early warning aircraft from Israel.

Russian reliance
Another interesting trend noted in this report is that despite the US being the single largest source of arms supplies in the world, the two largest importers, India and China, have received more than three-fourth of their supplies from Russia. India imports 82 per cent of its list from Russia. South Korea and Pakistan have relied on the US as their main source.

Despite being the second largest importer of arms in the world, China has also emerged as a major supplier to Pakistan, almost the same level as US imports to Pakistan.

An estimated 39 per cent of Pakistan’s imports came from the US and 38 per cent from China. Britain (six per cent) and Israel (three per cent) are the second and third largest suppliers of arms for India.

Wezeman said that unlike India, which pays for most of its arms, Pakistan received its supplies as aid (from countries like the US).

The Sipri report is based on information available in the public domain on arms deals. Wezeman said two prominent “block spots” in the world arms movements map were China and North Korea, where accurate information is not available readily. “Deals emerging from India and Pakistan are quite open, while in the case of China, we don’t know what they are planning to buy,” he said.

The average volume of worldwide arms transfers in 2006–10 was 24 per cent higher than in 2001–2005. The major recipient region in 2006–10 remained Asia and Oceania (43 per cent of all imports), followed by Europe (21 per cent), the Middle East (17 per cent), the Americas (12 per cent) and Africa (seven per cent).

The USA remains the world’s largest exporter of military equipment, accounting for 30 per cent of global arms exports in 2006–10. During this period, 44 per cent of US deliveries went to Asia and Oceania, 28 per cent to the Middle East and 19 per cent to Europe.

Sipri is an independent international institute, dedicated to research into conflict, armaments, arms control and disarmament. Its work is mostly funded by the Swedish parliament.

Cement prices climb without respite

Since the Union Budget’s presentation in end-February, cement companies have accelerated price increases. Last fortnight witnessed all-India average prices going up a little over 10 per cent and set to hit Rs 300 for a 50-kg bag soon.

Currently, the all-India cement price is Rs 290 a bag; it was Rs 255 a bag two years earlier. Industry experts said the first three quarters of the current financial year did not see higher profits for companies. In the second quarter, marked by the monsoon, several regional cement makers had slipped into the red, with operational losses.

The Mumbai market again took the lead in raising prices last week.

Cement companies raised their prices, pushed the retail level to Rs 305 a bag. In Kolkata, it is around Rs 295; in the north, at Rs 285. In the south, cement is available at an average of Rs 285 — in Kochi at Rs 315, in Bangalore at Rs 280 and in Hyderabad at Rs 265 a bag.

CEOs of large and mid-sized companies across the region that Business Standard spoke to rejected the possibility of any reduction in prices till May, before the monsoon sets in.

“Cement prices will either go further up or stabilise at current levels. But there is no room for prices to slip,” said the top executive of a company having its operations in the north.

During the monsoon period, the all-India price had collapsed to as low as Rs 215 a bag. It rose to Rs 225 in December. But since the beginning of the current calender year, the average price has risen by Rs 65 a bag, or 30 per cent.

The managing director of a west-based cement major justified the price rise. “We did not get any relief from the government in the Budget. Input costs are on the rise and demand, too, has improved, taking prices further up.”

He said manufacturers cannot operate for long at low prices, as it would adversely impact the margins.

However, contrary to companies’ views, industry analysts say the recent surge in prices is “unjustifiable”.

“The recent price hike across the regions is not a function of growth in demand. Rather, it is on the back of the strict supply discipline adopted by the manufacturers,” said the research head of a Mumbai-based broking house.

Another analyst at a domestic brokerage said even after taking into consideration the price implications due to budgetary measures, the rise should not have been more than Rs 4-5 a bag. However, the actual rise is Rs 30 a bag. She added the recent hikes would certainly help companies come up with reasonably good profitability, if they can sustain the higher prices.

The December quarter was marked with a dip in sales on a year-on-year basis in two of its months. In November and December, cement sales dipped 5.6 per cent and 2.9 per cent, respectively.

At the beginning of the current quarter, sales were marginally up by 1.7 per cent. It only improved in February, as consumption grew 7.2 per cent. However, the overall sales growth till date for the current financial year is only 4.4 per cent, not even half of the industry’s previous expectation of a 10 per cent growth in 2010-11.

The current quarter’s capacity utilisation is estimated at 80 per cent, with the effective capacity at 260 million tonnes.

Renault to launch 5 new models

French car major Renault is set to launch five new cars before 2012. The company, which is setting up a Rs 4,500 crore car manufacturing plant at Oragadam along with its Japanese partner, has said it is targeting 70,000 units over next four to five years.

Speaking to Business Standard, Marc Nassif, managing director of Renault India, said, “On the industrial side, our plan to invest Rs 4,500 crore before 2015 is clear, with the Japanese partner Nissan, at Oragadam, near Chennai for setting up a manufacturing unit with a capacity of 400,000 vehicles a year.

First model from Renault for India will be Fluence, by mid-2011, is on track. India has confirmed with Brazil and Russia as a top priority for Renault expansion.”
Ashish Sinharoy, vice president - communications and corporate affairs, Renault India said the company has set a target to capture five per cent of Indian car market by 2020. He added, the company would launch five models and has set a sales target of 70,000 units by 2014.

The company is planning to launch Renault Fluence, a luxury sedan by mid-2011, followed by Renault Koleos, a high-end compact SUV in October this year.

He added, Renault would add seven to 10 dealers in India by mid-2011 and by 2012, it would be increased to 70. By which, “We will cover 80 per cent of the car buying geography in the country,” said Sinharoy.

He added that the company’s target would be an average car buyer (mid and upper middle class). “High end segment is not part of company’s DNA,” he said.

Asked whether the company would look at exports from Oragadam facility, Sinharoy, said that the company is not looking at exporting from India for now, as the facility is primarily meant for domestic market.

It may be noted, the French-major Renault along with Nissan Motor India Private Ltd (NMIPL), a 100 per cent subsidiary of Nissan Motor Limited Japan, was incorporated in 2005 to make Chennai a strategic hub for production, R&D and exports for Nissan.

In February 2008, Nissan, together with its global alliance partner Renault signed a MoU with Government of Tamil Nadu to set up a manufacturing plant at Oragadam, near Chennai with an investment of Rs 4,500 crore over a period of seven years.

On March 17, 2010, the Renault-Nissan alliance plant was inaugurated in a record time of 21 months since its groundbreaking ceremony in June 2008. The Plant has an initial capacity of 200,000 units per year and can reach 400,000 units per year in full capacity in the future.

Later, due when the financial melt down had hit the global auto industry, in April 2009, the company said that though the production has been suspended the company would continue to invest in building infrastructure for the plant, to be used at a later date.