Archive for ‘India alert’

28/07/2015

SpiceJet reports $11.2 million net profit in Q1 | Reuters

Budget airline SpiceJet Ltd(SPJT.BO) reported on Tuesday a net profit of 718 million rupees ($11.2 million) for the three months ending June, after cutting costs and flying more passengers.

SpiceJet aircrafts prepare for landing and take-off at the airport in Mumbai July 15, 2008. REUTERS/Punit Paranjpe/Files

SpiceJet made a net loss of 1.24 billion rupees in the same quarter a year earlier.

India’s second biggest budget carrier by market share, which last quarter made its first profit since 2013, is in the midst of a recovery plan after it almost collapsed late last year.

Under new Chairman Ajay Singh, the airline has cut routes – its capacity is down a third since last year – and costs.

It said on Tuesday that its load factor – the percentage of an airline’s carrying capacity it has filled – rose to 89.8 percent in the quarter, a rise of almost 15 percent from last year.

Sustained profitability has eluded most of India’s airlines for the last few years amid fierce competition for fares and high operating costs, despite the country’s aviation market growing at one of the fastest rates worldwide.

SpiceJet shares jumped after news of the results, ending up 7.4 percent as the wider market .BSESN fell 0.4 percent.

($1 = 63.9400 rupees)

via SpiceJet reports $11.2 million net profit in Q1 | Reuters.

28/07/2015

Maruti Suzuki Q1 profit jumps 56 percent; lower costs, higher sales | Reuters

Maruti Suzuki India Ltd(MRTI.NS), India’s top-selling carmaker, said on Tuesday first-quarter net profit rose 56 percent helped by lower costs, favourable foreign exchange rates and higher sales, but still missed bullish analyst estimates.

A Suzuki badge is reflected on the body of a Maruti Suzuki Eeco car at a Maruti Suzuki stockyard on the outskirts of Ahmedabad April 26, 2013. REUTERS/Amit Dave/Files

Maruti, controlled by Japan’s Suzuki Motor Corp (7269.T), said profit for the April-June quarter was 11.9 billion rupees ($185.94 million), up from 7.6 billion rupees in the same period a year earlier. Analysts had expected a profit of 12.35 billion rupees, according to Thomson Reuters I/B/E/S.

Net sales rose about 18 percent to 130.8 billion rupees, the company said, as India’s car trade continues to grow. India is expected to become the world’s third-largest car market by 2020, moving up three places.

“During the quarter, higher volumes, cost reduction efforts, lower sales promotion expenses, and favourable foreign exchange helped improve the performance,” the company said in a stock exchange statement.

Total expenses as a percentage of net sales fell to 91 percent during the quarter from about 96 percent in the year ago period, while finance costs were halved to 190.4 million rupees. Maruti, which imports certain car components from Japan and also pays royalty to its Japanese parent, Suzuki, is benefiting from the yen’s weakening.

The carmaker, which sells about one in every two cars in India, wants to increase its share of the premium car segment at a time when rivals like Honda Motor Co (7267.T) and Ford Motor Co (F.N) are launching cheaper, compact cars – Maruti’s mainstay.

Maruti has had little prior success in the premium segment and is now planning an aggressive rollout of new vehicles and dealerships to capture buyers with deeper pockets – a move that is expected to boost margins and profits, say analysts.

Next week Maruti will launch the S-Cross – a crossover between a sport-utility vehicle and a hatchback – the first car to be sold at its new Nexa showrooms. These spruced-up showrooms will differ from existing dealerships in design and service, managing director Kenichi Ayukawa said recently.

“It is a very good strategy because as income levels rise we will see that more and more consumers will prefer premium vehicles,” said Nitesh Sharma, auto analyst at Mumbai-based brokerage, Phillip Capital, adding that it will boost margins.

Shares in Maruti, valued by the market at about $20 billion at Monday’s close, were trading 0.5 percent higher at 4,200 rupees a share at 0850 GMT in a weak Mumbai market.

Maruti’s shares have risen more than 25 percent since January – the highest among major automobile companies in India.

($1 = 64.0000 rupees)

via Maruti Suzuki Q1 profit jumps 56 percent; lower costs, higher sales | Reuters.

27/07/2015

How Police and the Indian Army Are Dealing With Punjab Attack: In Pictures – India Real Time – WSJ

At least three gunmen stormed a police station in northern India near the border with Pakistan Monday, killing six people—including two policemen—and injuring seven others, in a standoff that continued hours later, a senior Indian counterterrorism official said.



It is such terrible news and I always think back to seeing Roger and Hilary at their home and having a picnic in their garden. They are/were such lovely people. I had the greatest repsetc for Roger and I am only sorry that I didn’t stay in touch.

Punjab police fired to counter the attack on Monday. Agence France-Presse/Getty Images

H.S. Dhillon, head of intelligence for Punjab state police, said the attackers were suspected to have crossed the Indian frontier early Monday.

The deadly incident comes as hostilities between India and Pakistan have worsened in recent weeks, even after a meeting of the countries’ premiers earlier this month sparked hopes of a thaw.

Indian army personnel stood in Dinanagar town, July 27, 2015. Narinder Nanu/Agence France-Presse/Getty Images

India has long accused Pakistan of harboring and aiding militant groups that launch attacks on India, particularly in the northern state of Jammu and Kashmir. Pakistan denies allegations that it supports militant activities against India.

Army personnel take position in Dinanagar town, July 27, 2015. Narinder Nanu/Agence France-Presse/Getty Images

But Monday’s killings were unusual, analysts said, because they occurred in Punjab, where militant attacks have in the past two decades been rare, and could signal an expansion of militancy beyond Kashmir.

Punjab police took position during the attack. Narinder Nanu/Agence France-Presse/Getty Images

Police personnel took aim during the attack. Narinder Nanu/Agence France-Presse/Getty Images

The gunmen, who were wearing military uniforms, opened fire on a bus in Punjab’s Gurdaspur district before heading to the local police station, according to Mr. Dhillon and an eyewitness. The attackers exchanged fire with police inside the station and a standoff that continued into Monday afternoon, Mr. Dhillon said.

via How Police and the Indian Army Are Dealing With Punjab Attack: In Pictures – India Real Time – WSJ.

25/07/2015

Should Britain Pay Reparations to India? Shashi Tharoor Says Yes, Narendra Modi Praises Him, What Do You Think? – India Real Time – WSJ

Should Britain pay reparations to its former colonies, including India? An articulation of why the former holder of empire should make amends, or at least say sorry, for two centuries of colonial rule, has sent a video of Indian law maker Shashi Tharoor viral and opened up a debate in India.

In a 15 minute speech given during a debate at the Oxford Union in the U.K., telegenic and floppy-haired Mr. Tharoor, who is a former foreign minister and a onetime under-secretary-general at the United Nations, argued that “Britain’s rise for 200 years was financed by its depredations in India.”

Speaking in favor of the motion, the opposition Congress party politician said that India’s share of the world economy when the British arrived was 23% but by the time they left it had slipped to 4% because “India had been governed for the benefit of Britain. Britain’s rise for 200 years was financed by its depredations in India.”

“In fact, Britain’s industrial revolution was actually premised upon the de-industrialization of India,” he added.

The YouTube clip of the Congress politician’s oration has been watched more than 1.5 million times since it was uploaded last week, making it one of the most-viewed clips from the Oxford Union, a prestigious debate chamber at the University of Oxford.

A video of Jack Gleeson, an actor explaining to the chamber why he left the Game of Thrones, has over two million views as does one of Sepp Blatter, the FIFA president, impersonating Portuguese soccer player Cristiano Ronaldo.

Others to have appeared at in the red-walled debate chamber in the recent past include Google’s Executive Chairman Eric Schmidt, former U.S. Senator John Edwards, former Australian Prime Minister Kevin Rudd and onetime South African President F.W. De Klerk.

Indian social media lit up with praise for Mr. Tharoor’s eloquence and ability to take on the British establishment: Opposing speakers in the debate included Sir Richard Ottaway, a politician with the United Kingdom’s right-wing Conservative party.

Indian Prime Minister Narendra Modi, who belongs to Congress’s rival the Bharatiya Janata Party, praised Mr. Tharoor for the speech.

via Should Britain Pay Reparations to India? Shashi Tharoor Says Yes, Narendra Modi Praises Him, What Do You Think? – India Real Time – WSJ.

22/07/2015

India’s Labor Force – WSJ

India’s urban women are four times less likely to be in paid work than their male counterparts with the most educated being the least likely to participate in the workforce, the latest figures from India’s labor ministry show.

Meanwhile in rural India, women are marginally more likely to have a job – the ratio of male to female participation in the workforce is 2.6 to 1.

Here are some more findings from the survey.

39%

The proportion of women who have received vocational training were not part of the workforce in 2013/14.

Although women were not asked to give reasons in the survey, Jayan Jose Thomas, an assistant professor of economics at the Indian Institute of Technology in New Delhi and an expert on India’s labor market and industry, said women often face discrimination at work in rural and urban India, including unequal pay.

In urban India, there were also concerns for women’s safety, traveling to and from work and in the workplace. Pushing the figures higher, women who chose to be homemakers were counted as unemployed.

“When you look at the figures for women, you understand the real employment situation in India. You see a huge mismatch,” said Mr. Thomas.

Indian women’s participation in the workforce falls as their education level rises, according to research by Mr. Thomas.

Labor-force participation by women in 2009-10 showed nearly 55% of women with post-graduate level education had not joined the workforce. Most women who didn’t join the workforce said “they are attending to domestic duties.”

524 rupees

The average daily wage for a man educated beyond high school working in an Indian city. That is the equivalent of $8. For women, average earnings were 391 rupees a day.

12 million

The number of people who enter India’s workforce each year. Some argue India’s rigid labor laws, which make it harder to fire employees, may be the reason employers are reluctant to hire full-time staff but Mr. Thomas says, despite official figures showing otherwise, the growth of India’s workforce has stagnated from lack of investment in infrastructure.

Government investment in basic infrastructure, like setting up power plants, needs to take place before the country can realize Indian Prime Minister Narendra Modi’s “Make In India” drive, which seeks to supercharge the country’s manufacturing growth, according to Mr. Thomas.

“India’s infrastructure shortage is so high that you cannot expect private investment to kick-start industrial growth. You need public sector to do the work first,” Mr. Thomas said. “Major initiative has to come from the government.”

5.5 million

Jobs created in India every year. Even though 12 million people join India’s workforce every year, the number of new jobs is much lower. Mr. Modi’s government has set a target of creating 400 million jobs by 2020 to try and narrow the gap.

6.8 %

The proportion of India’s population signing up for vocational training in the country. Among those who successfully train, a large proportion – 75% – find employment.

via India’s Labor Force – WSJ.

21/07/2015

Indian Companies Invest Billions, Create Thousands of Jobs in the U.S. – The Numbers – WSJ

As India attempts to thaw its business environment and attract the interest of foreign companies, a hundred Indian firms have together made investments worth more than $15 billion in America, according to the findings of a new survey by the Confederation of Indian Industries and audit firm Grant Thornton International Ltd.

The findings, which were released in a report titled “Indian Roots, American Soil” on Tuesday, suggest that Indian companies in the U.S., most operating in the information-technology sector, have created thousands of jobs there and show a growing interest in hiring more American workers in the next few years.

Indian outsourcing companies in the U.S. have in recent months been criticized for depending too much on foreign staff — H1-B visa holders – instead of hiring locals.

The 100 Indian companies surveyed are spread across all 50 U.S. states, the report said. Here are the main numbers from the report.

91,000

The survey says Indian firms have created more than 91,000 jobs in the U.S., most of them concentrated in New Jersey, where they have hired over 9,000 people. In California, more than 8,000 people work for Indian companies.

$15.3 billion

The total value of tangible investments – for example in real estate or equipment — made in the U.S. by the surveyed companies. Texas has received the largest amount — almost $3.85 billion from 17 Indian companies, most in the information-technology and telecom sectors. The report didn’t give a timeframe for these investments.

40%

The percentage of surveyed companies that do information-technology business is 40%. The report also highlights the emergence of Indian companies in the pharmaceutical and manufacturing sectors, which each accounted for 14% of the firms surveyed.

84%

That’s the proportion of companies in the survey that plan to make more investments in the U.S. in the next five years. California, New Jersey, New York and Texas are the “most promising states for expected future investment,” the report said.

90%

The forecast for hiring local U.S. employees is also encouraging, the survey reveals. Almost 90% of the companies responded positively when asked if they foresaw hiring locally in the coming five years.

via Indian Companies Invest Billions, Create Thousands of Jobs in the U.S. – The Numbers – WSJ.

21/07/2015

Traveling on India’s Roads Is Getting More Dangerous – The Numbers – WSJ

Traveling on India’s roads is getting more dangerous. In 2014 there were 141,526 deaths due to road accidents in the country, up from 137,423 a year earlier.

Prime Minister Narendra Modi’s government is set to introduce the Road Transport and Safety Bill in the upcoming 18-day session of Parliament, which starts Tuesday.

It would be India’s first separate legislation to govern road safety. Counter-intuitively, the legislation would reduce penalties for offenses such as drunken driving or speeding, but road-safety campaigners say that would make the law more likely to be enforced.

Until then, some numbers from the National Crime Records Bureau that show how safe it is (or isn’t) to travel on India’s roads.

39.2%

The percentage of India’s accidental deaths in 2014 that were the result of traffic accidents.

May

The month in 2014 in which the most traffic accidents were reported in India. Accidents that month accounted for 9.2%, or 44,106 out of 481,805 of the total traffic accidents that year.

3 p.m. – 9 p.m.

The time the largest number of traffic accidents were reported in 2014, making up a total of 34.2% of traffic accidents that year.

2.9%

Amount fatalities from road accidents increased by in 2014, from a year earlier. Road accidents overall increased by 1.8% in 2014.

31.39%

Percentage of road accidents in India in 2014 where at least one person died.

Two wheelers

Type of vehicle most often involved in fatal road accidents. More than one in four (26.4%) of accidental deaths on roads involved motorbikes, scooters and other two wheelers, followed by trucks and lorries at 20.1%, cars at 12.1% and buses at 8.8%. The statistics do not say if this included bicycles.

National highways

Roads which saw the highest number of accidents, contributing to 27.5% of total road accidents. These roads makes up just 1.58% of India’s total road network. State highways had a share of 25.2% of total accidents. The national highways also saw the most fatal accidents – accounting for more than 32.5% of the total deaths on India’s roads in 2014.

Uttar Pradesh

The state with the most road traffic accident deaths in India in 2014 –16,284. Perhaps not surprising, since it is India’s most-populous region. The state was closely followed by Tamil Nadu at 15,190 deaths and Maharashtra at 13,529 deaths.

Speeding

The cause of most road accidents in India in 2014–accounting for 36.8% of total accidents, causing 48,654 deaths and injuring 181,582 people. Dangerous, careless driving or overtaking caused 137,808 road accidents, the data showed, resulting in 42,127 deaths and injuring 138,533 people. Poor weather caused 3.2% of road accidents, while driving under the influence of drugs or alcohol contributed to 1.6% of total road accidents

via Traveling on India’s Roads Is Getting More Dangerous – The Numbers – WSJ.

19/07/2015

Farmer suicides in Karnataka – The Hindu

Is it falling prices? Is it a glut in production? Or are farmers just falling into debt because of aspirational spending? Whatever the reason, Karnataka is again facing the spectre of rising suicides

“Crop loans are difficult to get, but large personal or consumption loans are easily available. This is the surest way to push farmers into deep debt, from which they are unable to recover because their earnings cannot keep pace with agricultural costs.” Photo: K.Bhagya Prakash

Krishna, 32, a farmer in Singamaranahalli, about 30 km from Hunsur in Mysuru district, consumed pesticide and died in the first week of June. The sesame farmer with three acres of land could not survive the debt trap he was in. He had defaulted on repayment to a local cooperative bank, fallen into the clutches of moneylenders, the water table had dropped, and his borewells had run dry. Having lost all hope of repaying the loans, he decided to end it all.

In the last fortnight alone, 50 farmers have committed suicide in Karnataka. The State Agriculture Minister Krishna Byre Gowda admits “it is alarming”. What is puzzling is that cases of farmer suicides had actually dropped over the last two years and have now suddenly begun to increase from mid-June onwards.

The suicides point to two things: first, a serious agrarian crisis shaped by an increase in cultivation costs and a decline in agricultural income, which is pushing farmers into a debt trap; and second, the sociological pressures that farmers face because of the disparity between their income and those in urban areas.

Vivek Cariappa is an organic farmer from Mysuru. He talks of the insecurity among farmers because neither the State nor institutional mechanisms have been able to address the crisis.

It is difficult to get crop loans, he says, but loans for consumption goods like cars, or personal loans for weddings and festivals are easily available. It is the surest way to push farmers into debt.

In Panakanahalli in Mandya district, Mahesh took a loan for his sister’s marriage. In Kestur village of Chamarajanagar district, Nanjundaiah borrowed Rs. 30,000 from a bank and Rs. 4 lakh from moneylenders to get his daughters married. Both farmers were unable to repay the loans and committed suicide.

The problem is also sociological: Farmers who aspire to the lifestyle of salaried persons end up taking loans, sometimes at 60-80 per cent interest rates, and become prey to loan sharks.

“ There is a serious agrarian crisis with an increase in agricultural costs and a decline in earnings. There is also sociological pressure ”

For most farmers across the State, what were once considered luxury items such as cars have now become aspirational necessities. Kurubur Shanthakumar, President of the State Sugarcane Growers’ Association, talks of how he followed his father’s footsteps and became a farmer, but his son wanted to study in Mysuru. This ended up costing Shanthakumar a sizeable sum of money. The pressure is most severe in areas close to the big urban centres of Mysuru and Bengaluru, but is true in general all over, points out G.K. Veeresh, former chairman of the State government’s committee that studied farmer suicides in 2002.

Then, mono-cropping had been seen as a major cause for suicides. Mr. Veeresh talks about how farmers had a tendency to focus on a single crop if it had seen commercial success. The problem was, when it failed, they faced total collapse. More than land holding, says Mr. Veeresh, crop planning is the bigger issue. Farmers must be educated to see the long-term benefits of “multi crop-multi income” farming.

But this time around, the farmers who committed suicide don’t appear to have stayed with one crop. Yes, some sugarcane farmers have faced a major crisis after sugar factories, mostly owned by powerful politicians, defaulted on payments, but they have not accounted for the majority of suicides.

T.N. Prakash, Chairman, Karnataka Agriculture Price Commission, speaks of the urgent need to address the issue of rising input costs when incomes stay stagnant. One suggestion Mr. Prakash makes is interesting. He says that the Agriculture Price Commission could instead become a commission for agricultural cost, prices and farmer’s incomes, which would give it more authority to implement suitable measures.

Another reason could be a glut in production. Mr. Cariappa and Mr. Shanthakumar point out that the State, despite having records of the area under sugarcane cultivation and the crushing capacities of sugar mills, has turned a blind eye to excessive cultivation. This has kept prices low enough to benefit the sugar mills owned by politicians.

This glut is true for cotton, tobacco and other crops as well. Excess production helps processing industries, as it ensures that the prices of raw materials stay low and they profit from it. There is also “mass hysteria” when a farmer commits suicide, and it may result in others taking the same step. Politics over farmer suicides and the wide publicity they get tend, in a way, to “glorify” suicides and worsen the situation, says Mr. Veeresh.

via Farmer suicides in Karnataka – The Hindu.

13/07/2015

The Seven Signs of India’s Outsourcing Apocalypse – The Numbers – WSJ

After years of success, the outsourcing industry is under stress as the market shrinks and spending falls. Indian companies say their business models, built on cheap labor, are under threat from a shift to cloud computing, where clients ditch server rooms and bespoke software. Here’s how the outsourcing industry has shrunk in the past several years.

$120.4 billion

The value of outsourcing deals worldwide in 2014, down from $206.8 billion in 2010.

1,144

The number of outsourcing deals signed globally in 2014. The deals are down 61% from 1,805 deals in 2010, KPMG data shows.

$552 million

The average value of the world’s 100 largest outsourcing deals in 2012. Since then, the average size has fallen and was at $452 million in 2014, according to International Data Corp.

9

The number of outsourcing deals made in 2014 worth $1 billion or more, the lowest in more than a decade. Big outsourcing deals are rarer, and are being won by fewer companies – five of those deals were made by International Business Machines Corp., according to International Data Corp.

20%-30%

The amount Indian outsourcing contract values fall when they are renewed, according to Emkay Research. As the work gets scarcer, clients bargain harder on prices.

$21,307

The average annual salary of a software developer in India, according to job search website Naukrihub.com. That’s in contrast to the $93,350 average annual salary of a developer in the U.S., according to the Bureau of Labor Statistics. Outsourcing companies say that clients are demanding quicker results and fewer, more experienced staff, forcing Indian outsourcers to hire more in the U.S. and Europe. As a result, Nasscom estimates that only 200,000-220,000 outsourcing jobs will be added in India in 2015 compared with 273,000 new jobs in 2011.

More than 50%

Amount revenue growth at India’s outsourcing giants has fallen since 2008. Tata Consultancy Services said sales grew 15% for the financial year that ended in March, compared with the financial year ending March 2008 when sales grew 37%. Infosys said revenue rose 6% last financial year, down from 19% growth in 2008.

via The Seven Signs of India’s Outsourcing Apocalypse – The Numbers – WSJ.

13/07/2015

Under a Cloud: Outlook for India’s Outsourcers Looks Gloomy – India Real Time – WSJ

Investor fears that growth in India’s outsourcing industry is slowing down appear all but confirmed.

Tata Consultancy Services Ltd., India’s biggest outsourcer by revenue, reported its first results for the fiscal year of 2016 late last week.

The Mumbai-based company met analyst expectations, with a 12.9% rise in its first-quarter net profit. A bigger concern is slowing sales growth, a sign that the company is finding it harder to grow its business. Tata’s revenue grew by 3.5% in the three-months through June, down from 5.5% growth over the same period the previous year.

The slowdown spooked investors: TCS is an industry bellwether.

After the results, Tata’s shares closed down 2% on Friday, below the benchmark S&P BSE Sensex that closed up 0.3%. Competitors Infosys Ltd. and Wipro Ltd. are set to report results next week.

Analysis by The Wall Street Journal of revenue and profit data from India’s top-three outsourcing firms since March 2014 shows that TCS is not alone.

Other Indian firms are also not just struggling to return to the lightning growth they experienced in the ‘90s, they are moving further away from it.

With the exception of the three-month period ending September 2014, when the weakening rupee helped boost their bottom lines, revenue and net income at TCS, Wipro and Infosys has been slowing, data showed.

All three have seen their revenue growth since March 2014 turn south.

So what’s behind the deceleration?

One reason: a change in the way multinationals spend on technology.

In the past two years, many firms have resumed spending on technology after cutting back in the wake of the 2008 financial crisis, say Indian outsourcers.

Clients increasingly want solutions that use new technologies like data analytics software that help them analyze customer data or save on costs associated with procurement and logistics, and Indian outsourcers are not as good at this compared to their global competitors, say technology purchasing managers.

And, instead of employing large technology firms to run their back-end systems, the firms have increasingly signed up for pay-as-you-go services on the cloud—where servers and software are accessed via the Internet rather than on local networks or personal computers.

In the fight to regain ground, TCS is boosting its spending on digital technology, like big data, mobile app development and cloud computing.

On Thursday, for the first time, the company disclosed how much.  TCS said that it earned about $2 billion in revenue from digital technologies in the three months through June. That figure indicated that the Indian company was earning a small but significant part of its revenue from new technologies, including software that helps firms analyze social media or spending patterns for retailers.

In a further shift toward digitizing its business offering,  TCS will also train 100,000 people in digital technologies in the fiscal year 2016.

TCS Chief Executive N. Chandrasekaran said the Indian outsourcing giant would reach its target of earning more than $5 billion from digital technologies in the next four years. Revenue from this segment is growing at double-digits on a quarter-to-quarter basis, he said.

With its $4.08 billion in cash, left after paying huge dividends and industry-beating wage hikes, TCS could reach that target sooner than expected if it buys firms specializing in digital services, analysts say.

via Under a Cloud: Outlook for India’s Outsourcers Looks Gloomy – India Real Time – WSJ.

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