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It's
real. Apart from the rare sector like fast Moving Consumer Goods
(FMCG), most others seem to have left the worst behind them-going
by results for the April-June quarter. Software, that bellwether
of stockmarkets everywhere is back in the groove. The big companies
have witnessed a growth in volumes that should-keep your fingers
crossed here-be a precursor to price stabilisation. ''The big guys
are getting bigger,'' says Enam Securities Software Analyst Pramod
Gupta. ''They're getting a larger chunk of business.''
Another bellwether sector,
auto, gave more reason to hope for a better fiscal. Of the results
out at the time this magazine went to press, Tata Engineering reported
a pre-tax profit of Rs 38.85 crore (compared to a loss before tac
of Rs 98.90 crore for the same period last year). M&M posted
a post-tax profit of Rs 7.7 crore for the quarter (a loss of Rs
29.6 crore last quarter). And a resurgent TVS Motor managed to up
sales for the quarter (as compared to Q1, 2001-02) by 53 per cent;
profits by 150 per cent.
The trend of a happy quarter was further borne
out by the results of pharmaceutical companies. Ranbaxy (its post-tax
profits soared by a staggering 190 per cent as compared to the same
quarter last year), Cipla, and DRL increased sales as well as profits.
''There is an overall improvement in the sector and it is exports
that are driving growth,'' explains Shahina Muqaddam, a Pharma Analyst
at Motilal Oswal Securities.
And even in the scorched FMCG sector, analysts
point out, companies that didn't push products to the trade through
innovative promotional schemes (and in the absence of any real upturn
in consumer demand), fared better than those that did. ''The fact
that Britannia has done better than its peers is no accident,''
says Shalini Gupta, Director, SG Pai Investments. ''The company
has been very careful to not over-promote its products.''
If the drought doesn't play spoilsport, then,
the July-September quarter will spell out R-E-C-O-V-E-R-Y in bold
letters. Right now, there's just a suspicion of it.
-Vinod Mahanta
INFOSYS
The I-Machine Purrs On
A sexual harassment suit in the US and some
bad press about a Kenyan project won't affect God's Own Company.
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| Infosys: God's
own company is finding the glare a trifle harsh |
It was a double
whammy of sorts for Infosys. First, Phaneesh Murthy, its hotshot,
38-year old head of worldwide sales and marketing based in Freemont,
California, US resigned in the wake of a sexual harassment suit.
Then reports of a controversy surrounding its inability to deliver
on a $6 million project for Kenya Commercial Bank made it to the
Indian press. Pushed along by the general meltdown in global stockmarkets,
the Infy scrip dipped from Rs 3,215.5 on July 23 to Rs 3,016 on
July 26, before moving up to Rs 3,082 on July 29.
The company is confident that it can meet its
projections for the year. ''We reaffirm our revenue guidance,''
says CEO Nandan Nilekani. ''Portfolios have been re-allocated and
we have (new) people in place to replace Phaneesh.'' Basab Pradhan
takes charge as head of worldwide sales, CFO Mohandas Pai will now
be Chairman of Progeon, Infosys' Business Process Outsourcing play,
Sanjay Joshi becomes Chief Marketing Officer, and the delivery part
of Communication and Product Services, is to be handled by founder-director
S.D. Shibulal.
Analysts agree with the company's assessment
that no long term damage has been done. ''It (Murthy's resignation)
will impact Infosys marginally but not in the long term.'' As for
the reports on the Kenyan controversy, Girish Vaidya, Head (Banking
Business Unit), Infosys, says "the project is very much on
and even the bank has contradicted the reports.'' For a company
with a squeaky clean image (and for a company used only to good
press), all this must be a new experience.
-Vinod Mahanta
EXECUTIVE
TRACKING
Lotto Converts
There are a whole lotta lotto converts
out there.
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| Shreekant
Gupte: Great gambler |
Surely,
Shreekant Gupte, the former head of Marico's nature care division,
must be a gambler. What else can explain his decision to move from
the FMCG middle-weight to the Modi Lottery Project a Lalit Modi
initiative (Gupte has signed on as CEO). The size of the lottery
market in India is a staggering Rs 50,000 crore and Modi's online
lottery business hopes to take a chunk out of that (much like Subhash
Chandra's Playwin Infravest has done). Gupte has a long (and admirable)
CV: an IIT-IIM combo, stints with Asian Paints, Sherwin Williams
in Saudi, Garware Paints, Marico, and now this. The buzz is Gupte
was not head-hunted by his wife, Korn/Ferry's Ketaki Gupte.
There's more news on the non-HLL Fast Moving
Consumer Goods front. TVS Electronics CEO K.S. Ramesh-he moved from
Reckitt Benckiser-has signed up with Chennai-based giant killer
Cavin Kare as CEO. And Cadbury has a new hr head, Radhakrishna Menon
who moves from a similar position with a GE subsidiary in Amsterdam.
Searches, as we've said all along, have become truly global.
-Seema Shukla
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