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Forget Whistler's Mother, the first flush of Q2 results are an array in grey and black. The tea leaves don't tell us anything we didn't already know. The topline of the 50 companies that had announced their second quarter results by the time this issue went to press grew by a sluggish 11 per cent; their bottomline by 25.83 per cent. Neither came as a surprise: sales growth is always difficult to come by in a slowdown, and as India Inc.'s track-record indicates, companies still have enough operational inefficiencies that can be weeded out to record impressive profitability gains. What's truly significant this past quarter, though, is the over 26 per cent increase in interest expenditure (year on year). Some analysts believe this is the manifestation of a higher credit offtake by companies. Put simply, this could mean companies are borrowing funds to invest in growth-oriented programmes that could pay off in the long term. There's always the chance that this sample has been skewed by the disproportionate number of software services companies, 13. Infosys and Wipro posted great y-o-y figures: 45 per cent and 37 per cent growth in revenues respectively. ''Although we were hit in the telecom area, all other segments like embedded software and financial services performed well,'' says Vivek Paul, Vice Chairman and President, Wipro. Hindustan Lever Ltd has proved to be the surprise package: its topline grew by 7 per cent, which is impressive in the FMCG domain where most sectors are displaying a decline in growth. ''Lever's topline-growth was unexpected,'' admits Shalini Gupta, an analyst at Motilal Oswal Securities, ''but its bottomline growth (14 per cent) is dissapointing''. That means, rather than priming its ops, as it has been prone to do in the past, Lever has finally gotten around to investing in growth. That tale could hold a moral or two for other companies. As for what's next for the economy, your guess is as good as ours. -Vinod Mahanta The Hare
And The Tortoise
Welcome to episode three. Episode one was when Intel pretty much made a habit of whupping AMD in the microprocessor market. That ended last year, when Advanced Micro Devices (AMD) beat the chip-giant by introducing a 1 Ghz chip, and a new chipset-this co-ordinates flow of data through various parts of a computer-technology called DDRAM that doubled the rate at which data was transferred from normal memory chips. The result? AMD's share zoomed some 7 per cent (it currently stands at 22.5 per cent as compared to 16.7 per cent at the end of 2000). Only, in September Intel unveiled the Pentium 4 with the i845 chipset, a combination of a 2 Ghz chip and DDRAM technology. AMD's just-launched competing offering, the Athlon XP 1800 is some 30 per cent slower in clockspeed, but some $200 (Rs 9,600) cheaper. That could explain why AMD Country Manager Sanjeev Keskar says, ''we are going to educate the customers that the clockspeed of the processor is not the right way to compare its performance''. Argues Jayant Murty, General Manager (Marketing), Intel India: ''We believe consumers use a number of criteria, including configuration, price, and frequency.'' Watch this space. -Ashutosh Sinha Executive Tracking
It's open season on finance pros. After 18 long years with the (Ajay) Piramal group, CFO Mahesh Gupta has upped and left and joined the RPG Group. His designation? CFO and member of the management committee. But what of the RPG Group's existing CFO Hari Mundra? Well, the man himself says he is considering a couple of offers but would like to do something on his own. Mundra, the quintessential organisation man, spent 24 years at HLL before moving to the RPG Group. That isn't the only exit at the Piramal Group. Headhunting sources say the CEO of Rhone Poulenc, acquired by Nicholas Piramal in December 2000, has moved to German Remedies as managing director. And in a fortnight of high-profile departures, Lalit Sawhney a HLL-vet who joined the Kerry Packer-HFCL promoted Excel Net Commerce, a company that was to focus on b2b network infrastructure, has bailed out. That doesn't surprise anyone. Nor does his next move. Sawhney has joined the Reliance group as a senior vice president. THE BUZZ
The cryptic official line on the 90-minute meeting Anil Ambani had with West Bengal Chief Minister Buddhadeb Bhattacharya on October 20, was that the discussion did not include Haldia. Although this was Ambani's second meeting with Bhattacharya in a month-the first was on October 2 in Delhi-there could, on the face of it, be nothing to the episode than an assertion of RIL's intent to invest in a state that has recently gone on marketing overdrive. But sources in Writers Building say the state government is not averse to RIL's participation in the recovery of the Rs 5,600 crore Haldia Petrochemicals project.
Coincidentally, Purnendu Chatterjee, the head of The Chatterjee Group (TCG), which owns 43 per cent of Haldia Petrochemicals-the West Bengal Government owns an equal proportion, and the Tata Group owns the rest-has landed in Kolkata and is reportedly seeking an appointment with the cm. Chatterjee wasn't present at the October 18, board meeting that saw the election of consensus candidate and Confederation of Indian Industry Director General Tarun Das as Chairman. Das' mandate is to initiate the financial restructuring of HPL. The project, which was slated to have a debt equity ratio of 1.6:1 has one of 3.69: 1, and the average cost of its Rs 4,268 crore debt is 18 per cent at a time when most companies raise debt for 12-12.5 per cent. Purnendu Chatterjee is all for restructuring debt, but the other partners want to restructure the equity holding pattern, bringing in a strategic partner that can help HPL on the operational front. IOC is one choice for that, but the PSU isn't keen on being part of the project unless it is given a controlling stake. The government and the Tata Group aren't averse to selling their stake provided they are assured of a proper restructuring process (and, needless to add, a fair price for their exit). It is in this context that Ambani's meeting with Bhattacharya becomes significant: Reliance could be the ideal strategic partner for HPL. But no one's telling. -Debojyoti Chatterjee
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