Fiscal year | CHINDIA ALERT: You'll be living in their world, very soon

14/10/2016

Infosys cuts annual revenue target for 2nd time as U.S. election, Brexit weigh | Reuters

India’s second-largest software services exporter Infosys Ltd cut its fiscal-year revenue growth target for the second time in three months on an uncertain business outlook, sending its shares tumbling more than 5 percent.

Reporting a 6.1 percent rise in second-quarter net profit, Infosys said on Friday it now expected revenue to grow between 8 percent and 9 percent in constant currency terms in the fiscal year to March 31, 2017. Its previous revenue growth target, issued in July, was 10.5-12 percent, already lowered from the up to 13.5 percent it said it expected in April.India’s more-than-$150 billion software services sector depends on North America and Europe for the majority of its revenue. The impending U.S. presidential election and the implications of Britain’s ‘Brexit‘ move to exit the European Union have both weighed on spending by western clients.

Infosys had warned in August it was seeing some “softness” in business after the June Brexit vote in Britain.

Chief Executive Vishal Sikka said in a statement on Friday the revision took into consideration “our performance in first half of the year and the near-term uncertain business outlook”.

After falling as much as 5.3 percent after the guidance cut was announced, Infosys shares were trading 2.6 percent down at 0453 GMT in a Mumbai market that was little changed.

For its fiscal second quarter to Sept. 30, its consolidated net profit rose 6.1 percent from a year earlier to 36.06 billion rupees ($541.51 million), ahead of analysts’ estimates of 35.26 billion rupees. Revenue rose 10.7 percent to 173.1 billion rupees.The company said on Friday it added 78 clients during the three months to September, taking its total number of active clients to 1,136.

($1 = 66.5919 Indian rupees)

Source: Infosys cuts annual revenue target for 2nd time as U.S. election, Brexit weigh | Reuters

Posted in Economics, India alert, Offshoring, Outsourcing, Technology | Leave a Comment »

Tags: affordable housing, Brexit, European Union, Fiscal year, FTSE 250 Index, Galliford Try, Help to Buy, Jean-Claude Juncker, Market sentiment, Twitter

28/09/2016

This Is How India Is Keeping Its Place as Asia’s Fastest-Growing Large Economy – India Real Time – WSJ

What a contrast! See pair of articles – this on on India, the other on China, both from WSJ.

India is on track to keep its spot as Asia’s fastest-growing large economy, the Asian Development Bank said Tuesday.

The Manila-based development lender expects the Indian economy to grow by 7.4% in the year that ends next March, keeping its earlier forecast unchanged in an update to its regional outlook.

The ADB lifted its forecast for China’s growth this calendar year slightly, to 6.6%, but it still expects India’s economic growth to broadly outpace its neighbors’ through 2017. (The comparison isn’t exact. India and other South Asian countries report economic data on a fiscal-year basis. China and others use calendar years.) In Asia, only Myanmar, which is opening up after decades of isolation but remains small by comparison, is expected to expand more quickly, at 8.4%.

The ADB said India’s growth prospects have been buoyed thanks to the enactment of “long-awaited structural reform.”

The bank lauded “strong progress” in restructuring Indian lenders’ balance sheets, which for years have been weighed down by bad loans. Large corporations are also finding ways to reduce debt, the bank said, which could also help resuscitate long-stagnant lending and investment.

Recent legislation that creates a national goods-and-services tax, the ADB said, is “a key step toward a much more integrated, productive economy.”

Other factors, the bank said, should keep Indian consumers spending.Government workers are due to receive a big boost to their pay and pensions, while abundant monsoon rains this summer will likely lift rural incomes.

There are risks, though, the ADB said.

Much of India’s recent growth has been driven by government spending. But that has slowed after a burst of public investment last year. New Delhi this financial year wants to shrink its budget deficit, but so far, it hasn’t raised as much money as expected from selling off stakes in state companies and other assets. That means expenditure may need to be reined in even further.Investment by private companies, meanwhile, has been “listless,” the ADB said.

Foreign direct investment in India has remained strong, the bank noted, and New Delhi has been raising limits on foreigners’ stakes in Indian enterprises. But the $63 billion flood of foreign investment seen last year “would be difficult to replicate,” the bank said.

Rapid price growth, too, could continue to weigh on Indian consumers and investors. Inflation in India, which the ADB forecasts at 5.4% this year, remains among the highest in Asia.The nation’s central bank is now actively mandated, for the first time in its history, to keep consumer inflation within a government-set range. “While this is a ground-breaking monetary policy reform, the target of 4% would seem somewhat ambitious,” the bank said.

Source: This Is How India Is Keeping Its Place as Asia’s Fastest-Growing Large Economy – India Real Time – WSJ

Posted in Economics, India alert | 1 Comment »

Tags: Asia, Asian Development Bank, Asian Development Bank Institute, Bocconi University, Central Asia Regional Economic Cooperation Program, Economic growth, Economy of India, Fiscal year, Gross domestic product, Kazakhstan

06/06/2016

Indian Firms Continue to Flounder in the Face of Fantastic Fundamentals – India Real Time – WSJ

India has the highest gross domestic product growth of any large economy; its chronic inflation problem seems under control and it has a relatively business-friendly prime minister. But its companies’ profits remain utterly unimpressive.

The latest round of quarterly results showed once again that whatever is happening with top-line GDP expansion isn’t trickling down to the bottom line.

The profit after tax at the 30 companies that make up the benchmark Sensex rose only 2.7% from a year earlier. That is better than the 9% decline a year ago but a slowdown compared to the previous quarter.

For the full fiscal year ended March, Sensex company profit fell 1.6%–their worst performance in seven years. Official data showed last week that the economy grew 7.6% in the same period.

Profits were pummeled as Indian government-owned banks reported losses as they set aside huge amounts of money for bad loans.

Source: Indian Firms Continue to Flounder in the Face of Fantastic Fundamentals – India Real Time – WSJ

Posted in Economics, India alert | 1 Comment »

Tags: Budget, Central bank, Economic policy, Fiscal year, Gross domestic product, Inflation, Monetary policy, MSNBC, New Zealand Treasury, Risk

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.

Posted in Economics, India alert, Offshoring, Outsourcing | Leave a Comment »

Tags: 1Malaysia Development Berhad, Apple Inc., Athens, CIMB, Dan Gallagher, European Union, Fiscal year, Greece, IPhone, The Wall Street Journal

09/07/2015

How India Could Be Hit by Chinese Stock Slide – India Real Time – WSJ

The dive in Chinese markets on Wednesday may have rattled investors across the globe, but prospectors in India need not panic: any trickle down impact of the crisis on the South Asian nation will be limited to certain sectors.

The Shanghai Composite index has lost around a third of its value over the past month and concern is growing that Beijing’s failure to prop up its equity markets means it will be unable to push through its broader agenda of liberalizing the economy to mitigate the country’s slowing growth.

India’s metals companies are likely to be affected the most as China is the world’s biggest importer of steel and iron ore. Any further slowdown in China’s economy will bring down global prices, hurting Indian firms’ profitability.

Meanwhile, luxury-car manufacturers are also likely to take a hit. Tata Motors 500570.BY +1.62%’ share price has already lost about 8% in the past two trading sessions on concerns that the problems in China could further worsen the slowdown in demand for its Jaguar Land Rover luxury cars there, which is now the single-largest market for JLR.

But long-term effects are expected to be minimal. India’s benchmark S&P BSE Sensex index has gained about 5% during the past month.

Though India’s benchmark index fell 1.7% yesterday, analysts and fund managers attribute it to a domino effect from China that won’t last. India’s improving domestic fundamentals are capable of thwarting a similar meltdown.

“India is relatively better off among the emerging markets as we don’t have too many negatives compared to other countries,” said Deven Choksey, managing director of Mumbai-based brokerage K.R. Choksey Shares and Securities.

He said investors will give preference to the ongoing reform process in India and key legislation such as the Land Acquisition Bill and the Goods and Services Tax Bill, rather than global events.

Analysts said upcoming corporate earnings will also matter more to Indian stock prices than the Chinese turmoil. Though corporate earnings are expected to take some time to improve, analysts are confident that a sharp recovery in profits is likely from the second half of this financial year. The January-March period was the worst earnings season in the past two years.

“Both (China and India) can’t be compared and, in fact, the developments in China will only serve to reinforce confidence in India and India’s market structure,” said Aashish Somaiyaa, chief executive of Motilal Oswal Asset Management Co.

In fact, foreign investors, who own about 43% of the publicly-traded shares of companies in the Sensex, have invested about $600 million already in July, after pulling out nearly $1.8 billion in the previous two months.

And domestic investors have not lost faith in the Indian story as they have poured in nearly $2.4 billion into stocks since May.

“Whenever there is a correction in [the] Indian market, we are getting more enquiries,” said Nandkumar Surti, chief executive of J.P. Morgan Asset Management India Pvt. Ltd.

via How India Could Be Hit by Chinese Stock Slide – India Real Time – WSJ.

Posted in China alert, Chindia Alert, Economics, India alert, stock market | Leave a Comment »

Tags: Austria, Automotive industry, Brazil, China, Fiscal year, India, Jaguar Land Rover, Magna International, Magna Steyr, Tata Motors

01/04/2015

India aims to raise exports to $900 billion by 2019/2020 | Reuters

India aims to raise its exports to $900 billion by fiscal year 2019/20, the government said in a statement on Wednesday.

A man walks past steel rims and parked cars at a dock yard at Mumbai Port Trust in Mumbai November 17, 2014. REUTERS/Shailesh Andrade/Files

India’s total exports were $465.9 billion in the 2013/14 fiscal year that ended on March 31, 2014, the statement said.

In the first 11 months of the 2014/15 fiscal year that ended on Tuesday, merchandise exports stood at $286.58 billion, government data showed.

Merchandise exports account for about one-fifth of the $2 trillion Indian economy.

via India aims to raise exports to $900 billion by 2019/2020 | Reuters.

Posted in Economics, exports, India alert | Leave a Comment »

Tags: BSE SENSEX, Christine Lagarde, Economy of India, Federal Reserve System, Fiscal year, Gross domestic product, India, International Monetary Fund, Merchandise exports, Narendra Modi

19/06/2014

Plotting the Shape of India’s Recovery – India Real Time – WSJ

Optimism abounds in India following Narendra Modi’s unexpectedly strong election victory. It’s still early days, but the new government’s priorities and coherence are a breath of fresh air.

As India’s economy gets back on its feet, one question is whether the recovery will be shaped like a U, a V or a square root. In other words: Can growth rebound as quickly and strongly as it did after the global financial crisis?

Unfortunately, the answer is no: India’s recovery will be gradual and uneven, at least in the near term. Growth will accelerate sharply from fiscal 2016 onward.

It’s worth recalling the sting from the global financial crisis. Gross domestic product growth, as measured by production, plunged to 5.8% on-year in the final quarter of 2008, from 9.8% in the second quarter. Growth in expenditure GDP – a less reliable measure – dropped even more, to 1.5% on-year from 8.1%.

The main casualty was growth in gross fixed capital formation, which typically enhances an economy’s productive capacity. This fell from 13.9% in the second quarter to 2.1% in the fourth quarter – then declined by nearly 10% in early 2009.

Afterward, both capital formation and GDP recovered rapidly in a classic V-shaped pattern. Production GDP growth, which fell to 6.7% in fiscal 2009, averaged 8.8% a year in the next two fiscal years. Gross fixed capital formation averaged nearly 10% growth per year in fiscal 2010 and 2011, a swift recovery that hinted the economy was once again on an elevated trajectory — though policy paralysis later shortchanged it.

via Plotting the Shape of India’s Recovery – India Real Time – WSJ.

Posted in Economics, India alert | Leave a Comment »

Tags: Economic growth, Economy of India, Financial crisis of 2007–2008, Fiscal year, GDP, global financial crisis, Gross domestic product, Gross fixed capital formation, India, India’s economy, Narendra Modi

03/03/2014

* India Looks Set to Miss Growth Target – India Real Time – WSJ

Disappointing growth in the September-December quarter means India’s economy will likely fall short of even its reduced target for the year.

The Ministry of Statistics and Programme Implementation last month projected gross domestic product growth of 4.9% for the fiscal year ending March 31. Until then, the Finance Ministry had been predicting growth of 5% or slightly more — down from a forecast of6.4% earlier in the year.

Data Friday showed India’s economy grew 4.7% in the three months to December, after expanding 4.8% and 4.4% in the first two quarters of the fiscal year. That means the economy would have to grow 5.7% in the current quarter – highly unlikely — to hit the full-year mark of 4.9%.

“The economy appears to be at a standstill, both in terms of investments and consumption,” said Anjali Verma, a Mumbai-based economist at brokerage PhillipCapital. “The numbers have been very tepid, and it’s unlikely we’ll see much improvement soon.”

Some economists already are writing off this quarter, as corporate and government decision makers are expected to delay big projects until after national elections that must take place by the end of May.

Businesses are essentially in a holding pattern until they know the next government’s economic policies.

via India Looks Set to Miss Growth Target – India Real Time – WSJ.

Posted in Economics, GDP, India alert | Leave a Comment »

Tags: Anjali Verma, Asia, December, Economy of India, Finance Ministry, Fiscal year, Gross domestic product, India, India’s economy, Ministry of Statistics and Programme Implementation, mumbai

18/02/2014

UPDATE 1-Coal India units see double-digit output growth in 2014/15 | Reuters

The expected production jump will help India keep a lid on imports of coal, which have surged in recent years due to regulatory, environmental and land acquisition delays in starting new mines at home.

Coal India Limited (Photo credit: Wikipedia)

Mahanadi Coalfields, a Coal India unit with operations in the eastern state of Odisha, expects output to rise to 135 million tonnes next fiscal year from about 114 million this year, Director Of Operations A.K. Tiwari told Reuters.

via UPDATE 1-Coal India units see double-digit output growth in 2014/15 | Reuters.

Posted in coal, Economics, India alert | Leave a Comment »

Tags: Coal, Coal India, Coal India Limited, Fiscal year, India, Mahanadi Coalfields, Mahanadi Coalfields Limited, Odisha

11/02/2014

UPDATE 1-India IT sector exports seen picking up pace in FY15-Nasscom | Reuters

IT services exports in 2014-15 are forecast to rise to as much $99 billion, according to the National Association of Software and Services Companies (Nasscom).

NASSCOM 2010 (Photo credit: markhillary)

The increase in growth rate compares with an estimated 13 percent rise in fiscal 2014, the lobby added.

“Clearly compared to what we saw in the industry 12 months ago to now, we are seeing a far more positive momentum in our major markets,” Nasscom Chairman Krishnakumar Natarajan, also chief executive of IT firm Mindtree Ltd, told reporters.

Last month, the International Monetary Fund raised its global economic growth forecast for the first time in nearly two years.

India’s biggest IT services outsourcing firms, Infosys and Tata Consultancy Services, have forecast stronger growth for IT spending in the next fiscal year by their main customers in Europe and the United States.

via UPDATE 1-India IT sector exports seen picking up pace in FY15-Nasscom | Reuters.

Posted in Economics, India alert, IT, Technology | Leave a Comment »

Tags: Fiscal year, India, Infosys, International Monetary Fund, Krishnakumar Natarajan, Mindtree, Mindtree Ltd, Nasscom, National Association of Software and Services Companies, Tata Consultancy Services, United States

CHINDIA ALERT: You'll be living in their world, very soon

Chindia Alert: You’ll be Living in their World Very Soon

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