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3 Q R E S U L T S No surprises, yet The performance so far has been as expected. Q4 looks ominous, though. To analysts watching corporate report cards, the third quarter has been a tame one. Predictably, all the software companies came out with sterling results, and the traditional manufacturing and marketing firms saw their fortunes soar or sag, depending on how fickle consumers behaved in their industries. On the whole, BT's sample of 100 companies showed a 23 per cent jump in sales and a 30 per cent growth in earnings. ''There is very little in the q3 results that throws you off gear,'' admits Vetri Subramaniam, CIO, sharekhan.com.
Two surprises deserve special mention. One is Digital Equipment, which wowed shareholders with a 188 per cent jump in annual earnings to Rs 16.58 crore. The other surprise was Reliance Petroleum, which surged ahead of parent Reliance Industries in terms of sales. RIL itself reported a 21 per cent jump in net. The infotech pack romped home more than comfortably. Infosys reported a 136 per cent climb in sales, Satyam Computers a not-so-bad 87 per cent, and Wipro 41 per cent. Net profits were stellar too, with Infosys and Satyam boosting earnings by 125 per cent each, and Wipro by 325 per cent, although a large part of it was due to the proceeds from the sale of Wipro Net, a group company. Says Subroto Ray, Head of Research, dba Securities: ''The order booking and productivity has been high as expected.'' Things have been far from happy in the auto sector. Tata Engineering slipped deeper in the red with a Rs 121 crore loss, while two-wheeler giant Bajaj Auto posted a sharp fall of 77.9 per cent in net profits. The industry's Mr. Consistent a.k.a. Hero Honda Motors, however, cruised home with a 44 per cent rise in both sales and net profits. In FMCG, there were mixed results, with Marico and Colgate-Palmolive both reported better net profits, but Nirma (despite higher sales) reported a squeeze. Will q4 be better? -Vinod Mahanta S O F T W A
R E P I R A C Y Two months after the National Association of Software and Service Companies (Nasscom) announced a reward scheme for information about software piracy, it is still waiting for a deep-throat winner. Sure, calls on the hotline-set up in 1994-have been coming (in December alone Nasscom received 386 calls). But none of it has led to any major bust. Says Dewang Mehta, President, Nasscom: ''We will continue to educate the public with seminars and information mailers to make them understand the criminal and civil liability of piracy.'' The industry has plenty of reasons to be worried. Nearly 60 per cent of the market for software in India is believed to be pirated, resulting in a loss of Rs 900 crore. In the past, Nasscom has worked with the police in various metropolises to carry out raids, but this is the first time it is rewarding people reporting piracy. Says Craig Tegel, MD (South Asia), Adobe Systems: ''Such a thing (informant reward) does work. All the Business Software Alliance (BSA) organisations in different parts of the world have a similar strategy.'' But the pirates aren't running scared yet, since a large part of their 'business' is done in small towns, whereas the efforts of Nasscom and BSA are concentrated on urban areas. Nasscom plans to get more aggressive in its campaign. For now, it is keeping its ear to the ground. -Ashutosh Sinha F I N A N C E
Usually, the success rate in asset recovery is low-between 20 and 25 per cent-and the fee (charged by Kotak) for recovery varies between 5 and 25 per cent of the amount recovered. It's no easy work, though. On behalf of the clients, Kotak first initiates negotiations, does aggressive follow-up, and brings intense legal pressure on the debtor. When all that fails, it will press for liquidation of assets. At that point, most debtors make a settlement. But some others won't. Gupta knows that only too well, which is why he is talking of raking in only Rs 10 crore this fiscal. But with Rs 60,000 crore of bad debt floating around in the finance industry, Kotak surely has a lot of good money in the making. -Dilip Maitra P O L I C Y
What's the problem? Apparently, India is believed to be geologically poor when it comes to fuel oil. To evoke interest, a couple of strikes must be made. Notes Sundeep Bhandari, CEO, Petrodrill, a New Delhi-based consultancy: ''It's like a beehive. Once you find something, everyone else will flock.'' Efforts, however, are on to sell India as a major destination for the oil industry. The ministry has reduced the delays involved in signing the Production Sharing Contracts, and it even offers an attractive financial package. But the catch is that even some other countries like Kazakhstan offer similar incentives. Petroleum Minister Ram Naik isn't letting that cap his spirit. Encouraged by the response it has received at the recent roadshows in London and Houston, the ministry is confident of a roping in companies this time round. Nearly 150 people participated at each of these roadshows, with representatives from Cairn Energy, TotalElfFina, Texaco, Shell International, Premier, Philips Petroleum, British Gas, BP (formerly British Petroleum), and Marubeni. Besides, the discovery of oil, and now gas, in the Cauvery Basin (CBSO2) by Cairn Energy has created a flutter among oil majors. But big excitement can be created only by a significant strike. This could come from the deep-water blocks (DW1) in Krishna-Godavari basin offered in the previous round. Cairn Energy has undertaken a $50 million work programme for the first phase, and ministry officials feel that the results of this would finally turn the tide in favour of India. Says a senior official engaged with NELP ii: ''We can't change the geology. We can change the pace, ease, and attraction of doing business in India.'' What the ministry also has going for it is the fact that many of the blocks being offered are in known oil-bearing provinces. One good find, and the others should come flocking for black gold. -Ranju Sarkar V O L V
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But there's a long road ahead of Uppal. Less than a quarter of fleet owners in India are 'organised'; the majority are those who own just one or two trucks. Besides, the sheer size of capital investment in a Volvo truck is (relatively) so high that achieving conversion is a tall order. Ergo, Volvo focuses more on the cost of truck ownership over its commercial life rather than the initial investment. Simultaneously, Volvo is trying to broaden its product portfolio. In commercial vehicles, it plans to launch buses (priced at about Rs 36 lakh), besides pushing construction equipment and marine engines. The former already accounts for a quarter of its turnover. But as Uppal clarifies, the Indian subsidiary's bread and butter will continue to be the truck business. Therefore, the vendor base is being increased from 75 to 100 in a bid to up localisation of components and reduce costs. The Indian operations will also act as a global sourcing base for all Volvo plants worldwide to help build volumes for Indian vendors. It's a long haul, alright. -Venkatesha Babu
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Desperation, sometimes, can be a good
midwife to new opportunities. A year-and-a-half ago, Kotak Mahindra
Finance set up a debt recovery cell to call in Rs 100 crore that various
debtors owed it. Success triggered inspiration, and the cell has since
grown into a full-fledged consultancy for Non-Performing Assets (NPA), or
debt recovery. Today, the 20-member cell manages eight clients (five banks
and three non-banking finance companies) and their NPA base of Rs 200
crore. ''We offer them complete consultancy for bad asset recovery, but
everything we do is strictly within the framework of the law,'' says Dipak
Gupta, Head of the recovery cell.
All talk and no show don't oilmen impress.
That's what the Ministry of Petroleum discovered when it decided to use
the Petrochem 2001 show last month as a forum for hardselling its
exploration licences-for the second time, under the New Exploration &
Licensing Policy (NELP). The oil companies made their intentions more than
clear. Except for the handful who already have offices in India, none of
the oil majors showed up. So, is NELP 2 headed the NELP 1 way, which saw
Reliance and ONGC bag most of the blocks on offer? ''The response will, at
best, be moderate to poor,'' says Ajit Kapadia, CEO, Hindustan Oil
Exploration Company.
Ravi Uppal's isn't the easiest of jobs. As
the CEO of Volvo India, Uppal has been trying to proselytise truck users
in the country. For about two-and-a-half years, he's been urging fleet
owners to graduate from Telco and Leyland's two- and three-axle trucks to
the Swedish company's multi-axle (six or more) beauties. Depending on how
you look at it, he hasn't done badly. Volvo has put more than 750 of its
fh12s and fm7s on the road. And considering that each of these trucks
costs anywhere upwards of Rs 25 lakh, Uppal might as well have sold 2,250
of the two- and three-axle trucks. Says he: ''We exceeded our volume
target for 2000, by nearly 65 per cent, and we are projecting a 50 per
cent growth this calendar.''