H.K. Murthy, Chairman, India Switch: Planning a cheaper option

Five years and several controversies later, India's first shared payment network services (SPNS), Swadhan, may be on the verge of closure. The network, launched by the Indian Banks Association, had at one point 1,000 ATMs, but now is rapidly losing members. The UTI Bank, for instance, has pulled out its 340 ATM from the SPNS system, and the others like the ICICI Bank and the State Bank of India may follow suit. If that happens, Swadhan may collapse.

Just why are the banks pulling out? Because of problems at the service provider, India Switch Company-a four-way joint venture between HMA Group, Financial Software and Systems (FSS), Compaq, and ACI. Soon after installation of the switch for SPNS, differences arose among the partners over ownership and control. Meanwhile, Harish K. Murthy of HMA (he's also the Chairman of India Switch Co.) is planning to launch a cheaper, but parallel network. Nagaraj Mylandla, MD of FSS is responding by bidding for control of Swadhan. If IBA does not decide soon, Swadhan itself may become irrelevant. The 15 banking customers of FSS have 4,000 ATMs between them, compared to Swadhan's 660. So, technically even Mylandla can launch a parallel network. It seems one way or another, Swadhan's dead.

-Nitya Varadarajan

MAX-OVER
Mid-Course Correction
There's action afoot at the Max Group.

Max' Analjit Singh: Quietly effecting a change

At 44, Vivek Jetley is discovering the travails of having to prove that he is married to his wife. The Max India managing director is relocating to the US and needs a marriage certificate for the paperwork. Expect top-level changes in Max after Analjit's favourite lieutenant leaves for cooler climes. For one, Jetley, who has been getting increasingly involved in the running of Max's infotech arm, Max Ateev, will step down as Managing Director of Max India and continue as just the Chief Executive of Ateev.

''I was anyway travelling so much and spending so much time there (the US) that it makes sense to shift,'' says the genial Jetley, who hopes to be in the US by August. Meanwhile, Max is in the process of hiving-off its healthcare division. The other two businesses Max entered after selling its interests in the Mumbai cellular operation Max Touch to partner Hutchison Whampoa, infotech and insurance, were separate companies from the beginning. A separate identity could help the healthcare venture that, reports suggest, could now be headed by Chairman Analjit Singh himself. Singh hadn't responded to a faxed questionnaire when this article went to press, but signs sure suggest a max, sorry, makeover at Max.

-Suveen K. Sinha

HERO HONDA
Wheels Of Fortune
What does the world's largest motorcycle manufacturer do to survive when its winning partnership is over? You'd never guess: make scooters.

Brij Mohan Lal Munjal: Gearing up for life after 2004

Finally, we know how hero Honda plans to face life after 2004-a year when its joint venture with Honda Motor Co of Japan comes up for renewal, and also the year when Honda's fully-owned scooter-making subsidiary in India becomes free to sell motorcycles in India. It's by taking its partner head on-in scooters. In its first acknowledgement that there could still be moolah in scooters, Hero Honda has just completed a market research involving some 70,000 respondents, quizzed on an average for two hours each to spec-out a scooter model. ''This is the biggest exercise of its kind ever undertaken in the country,'' boasts CEO Brij Mohan Lall Munjal.

Meanwhile, the company is making haste to roll out new motorcycle models this year. One, called the Dawn-a 100-cc bike-was launched in April, and replaces Joy, an entry-level bike. The decision to phase out Joy, which sold some 40,000 units in its one-year existence, is uncharacteristic of Hero Honda, which has thrived by selling a small number of models over 17 years of its partnership with Honda. If the Dawn ''does well''-that is sell 10,000 pieces a month, beginning the sixth-it will go on to replace the two other entry-level bikes in Hero Honda's portfolio-CD 100 and CD 100ss.

Two more models will be launched before the fiscal year is through. BT learns that an all-new bike in the 125-cc category may be unveiled in September this year, followed by a 200-cc high-performance bike in March 2003. With the new models, Hero Honda hopes to roll out 1.8 million vehicles in 2002-03, up from 1.4 million last year. That'll give it a 35 per cent share of the overall two-wheeler market. Things look okay on the partner front too. ''Honda wants to cooperate more closely with Hero Honda's operations,'' says K. Suzuki, Senior Managing Director, Honda Motor Company. Some partnerships are made in heaven, right?

-Suveen K. Sinha

RENAISSANCE
Jaws I was when Abhishek Dalmia made a play for GESCO. Now the great white is back.

Abhishek Dalmia: Second innings

It's a tame Jaws II, though. For, Dalmia's acquisition of the Coimbatore-based engineering firm Revathi Equipments-his Utkal Investments acquired 40 per cent of Revathi from Swedish transnational Atlas Copco for Rs 29.95 crore-was a peaceful transaction that was concluded after almost a year of negotiations. Financially speaking, Revathi isn't a lemon: its turnover has been a consistent Rs 45-50 crore in the past five years; its profits, Rs 8-9 crore; and it is engaged in the fairly specialised business of making blast-hole drilling rigs used in mining. ''I am in it for the long haul,'' says the raider-turned-peacenik. ''Revathi has a steady business.'' That'll be difficult to argue with although that 'steadiness' went unnoticed by many. Not the late Harshad Mehta, though. The court-appointed custodian still holds the 8 per cent stake in Revathi Mehta acquired!

-Vinod Mahanta

WIPRO
Uncertain Times
Azim Premji's stock takes a beating thanks to his reluctance to guide the markets for the whole of 2002-2003.

Wipro's Azim Premji: Studied silence

Numbers sometimes conceal more than they reveal. The Bangalore-based conglomerate Wipro, known more for its prowess in the sphere of it services, but which also sells soap, vanaspati, bulbs, and fluid power machinery, recorded a turnover of Rs 3,492 crore and a net profit of Rs 885 crore for fiscal 2001-02. Turnover grew by 12 per cent and profit after tax by 32 per cent. So everything must be hunky-dory, right? Not exactly.

Though the figures look impressive compared to the previous year, a more accurate reflection of the prevailing trend is the quarter-on-quarter growth. Wipro Technologies, the division of Wipro that services the requirements of its global it clients, brings in 66 per cent of the company's revenues and 90 per cent of its net profits. So what happens in this division is crucial to the overall health of the company.

So when Azim Premji Chairman of Wipro announced, ''We anticipate to clock in revenues of $123 million in the first quarter of 2002-03 compared to $120.2 million in the previous quarter for Wipro Technologies,'' the markets reacted negatively, with the stock losing 10 per cent on the day of the results. This indicated that the company was expecting a meagre growth of 2.5 per cent on a sequential basis. As it is, Wipro Technologies' revenues in the fourth quarter decreased by 3.4 per cent compared to the third quarter. Margins also inched downwards to 32.17 per cent from 34.4 per cent in the October-December period. Admits Vivek Paul, Vice Chairman, Wipro: ''It's been extremely tough. Though volumes grew by 8.5 per cent, pricing pressures ensured that there was a sequential decrease in offshore pricing by 2.4 per cent and onsite pricing by 4.5 per cent.''

Adds CFO Suresh Senapathy: ''We expect the pricing pressure to continue in the first half of the current fiscal and things will ease only in the second half. That is why we have given guidance for the first quarter only.''

Compared to its peer and competitor, the other major it giant Infosys, which indicated an annual growth of 17 to 20 per cent, Wipro's (lack of) guidance is seen as a sign of the uncertain times it is facing. But the company is sitting on a cash pile of $285 million, which it can use to buy its way to growth. Vivek Paul in the past has indicated as much, saying that the company is looking for the right acquisitions. Till then the markets will be 'Applying (plenty of) Thought' to Wipro's performance.

-Shailesh Dobhal

SHAW WALLACE
Women On Top
Manu Chhabria's wife will steer the Jumbo group.

It's the way the late Manu Chhabria wanted it to be-his wife, Vidya Manohar Chhabria, as Chairperson of the $2-billion Jumbo Group in case he wasn't around. And that's what duly happened last fortnight when Mrs Chhabria was nominated head of the 10 Jumbo group companies in India, which have an estimated value of $600 million (Rs 2,934 crore).

Mrs Chhabria will also take over the Dubai companies. Just as her late husband did, she will run the operations from Dubai.

Mrs Chhabria, who had little to do with the group when her husband was at the helm, isn't planning any drastic changes. Whilst her daughters, Bhavika Godhwani (ed, Hindustan Dorr Oliver), Komal Chhabria Wazir (ed, Shaw Wallace) and Kiran (in Dubai), will likely play a more active role, she has made it clear that the professionals will play a vital role at the group companies. Does that mean Shaw Wallace will at last get a managing director?

-Brian Carvalho