Wednesday, June 27, 2012





Dr. Manmohan Singh has the reputation of being the Best Finance Minister of India. His earlier tenure was a Grand Success as Finance Minister.

In 1991, Sri P.V.Narasimha Rao, India's Prime Minister at the time, chose Dr.Singh to be his Finance Minister. Back then, India's fiscal deficit was around 8.5 % of  GDP; its Balance of Payments deficit was huge and current account deficit was around 3.5 % of GDP. India's foreign reserves were very low at around US $ 1 billion - just enough to pay for a few weeks of imports. Compared to that situation, today, the RBI and the Government are in a hugely comfortable situation.

The then Prime Minister, Sri P.V.Narasimha Rao was not only an astute Politician but himself a visionary. Except that- he was not a charismatic PM like Rajiv Gandhi. The PM and the FM worked towards making India a vibrant, resilient economy - and they succeeded to a large extent in doing that through imaginative, bold, Policy Framework.

That was then. In due course, Dr. Singh became Prime Minister in UPA I. Again, the financial performance of his Government was very Good. The country moved forward in many ways. GDP growth was impressive.

But, come UPA II, somehow, things slipped. Dr. Singh was mauled by a sort of queer Coalition Politics – in which, Dr.Singh could neither go forward nor backward – but just remain a helpless spectator of the way things slipped out of hand.

First, the Inflation went totally out of hand. Both food inflation and manufactured articles Inflation went out of hand – but major factor for worry was food Inflation.

RBI was using its only weapon, MONETARY POLICY, religiously, in the hope that it will bring down Inflation. And, it never worked. 

More and more monthly dosages of Interest rate hikes followed – but to no effect. But, the High Interest rate regime was having its effect on Growth of manufacturing sector. Even with the imperfect statistics of the ISO, it was becoming evident that Growth in manufacturing sector was suffering seriously. Specifically, Growth in the capital Goods sector was declining seriously. 

The reason was obvious. If Interest Rates, which is the main contributor to the COST OF CAPITAL is too high and the RETURN ON CAPITAL is not high enough to enthuse the entrepreneur to undertake capital building activity, Growth in capital Goods sector is bound to come down. This will have both present and futuristic effect on overall Growth.

But then, RBI is unwilling to bring down the INTEREST RATES. RBI has made a telling point of course. Government is not acting on INFLATION. Neither the Food and Agri Ministry at Centre nor those in states ever made any serious efforts to control FOOD INFLATION through fiscal and administrative measures. 

They should have convened periodical meetings at Minister and secretary levels – to review the Inflation, its causes and possible remedial measures, both fiscal and administrative. This is not happening. On the other hand, everybody is looking to RAIN GOD for solution. This, evidently, is not PLANNING.

In respect of Manufactured articles – the situation is slightly less worse. Consider that IRON ORE  is available in plenty in India – but, it is not available for steel-making in India. Steel manufacturers are forced to import Iron Ore. First it makes our Trade balance worse. Second, it puts pressure on Rupee value, which is going down against dollar every day. 

Ditto for Coal. 

And, Policy measures which are TAKEN – are complicating matters much more than measures not taken. The retrospective change in tax laws, as in case of Vodafone, has sent out negative signals to Foreign Investors. The inability of L.N.Mittal to start a huge steel Plant in Odisha is another. The spat with CAIRN INDIA is yet another.
When a Foreign Investor comes to invest in India, with huge Investment Plans, especially if he is of Indian origin, all decks should be cleared on a FAST TRACK BASIS. India must be known for such fast track clearances for FDI. But, we are gaining the opposite reputation. And, there are accusations that obstructions pour in especially if the Investment comes into states ruled by Non-UPA Governments. 

So, these are some of the disturbing aspects, which are holding down the economy. Today, licences may have been done away with in many areas. But, their place has been taken by CLEARANCES.

Each clearance takes years! There is a huge need to disband most of the clearances and FAST TRACK the justified clearances like environmental clearance. We must look at what countries like US, UK and Germany are doing in such matters. Even China.

For instance, if Reliance or CAIRN or ONGC want to enhance production or dig new wells in Blocks already allocated to them, there should be no need for clearances. Periodical REPORTS must be enough. These companies may need clearances – only if they want to produce LESS!

Why is RUPEE VALUE coming down? Because, people of other countries find Rupee not getting them anything valuable from India. As simple as that. This is the plain, long term reason, why rupee is less valuable and is slipping down in value further. India must promote High Quality goods manufacture even at cottage Industry level. 

Innovation must be given pride of place. Innovation must be seen everywhere. You do not find a single TV Channel, which promotes innovation and suggests methods of making things better. You do not have a single organization – exclusively devoted to making THINGS BETTER – than say, the Chinese and Koreans – and teaching such things in schools, colleges, Industries and so on.

 It is fine to attempt entrance Exam reform into IITs. But, are there IDEAS also,  to make IITs more innovative, more research oriented, and rolling out engineering products which India can be proud of. There is no doubt about their capability. But, their spending on R&D is abysmally LOW. The spending of other Engineering Colleges on  R&D is close to NIL. So is the spending of all Governments – centre and states – in India.

These are the problems that are holding the Economy down.

Now, the turn of events in the Presidential Elections has again brought the Prime Minister Dr. Manmohan Singh into the Finance Minister’s Chair. This is a hugely welcome development.

He was and perhaps, is the Best Finance Minister of India. Now, he is also the Prime Minister. 

He will start performing from Day one. He has started identifying the Problems and solutions already.

Reforms will flow in quickly. I would not call them reforms. They are the needed measures. We may differ from him on a few. But, overall, the direction will be straight forward and intentions will be very clear. No Politics will play in development, if Dr. Singh has his way.

In addition to his individual performance as Finance Minister, one looks forward to him to lead his Food and Agri Ministry, Industry Ministry, commerce Ministry – in fact, all economic Ministries – more aggressively than before and ensure that appropriate Policy Actions come from them too, quickly. 

He must also carry the RBI with him – and convince them TO BAT FOR GROWTH – by reducing the Interest Rates sufficiently – not just in token. But simultaneously, he must get his Food and Agri Ministry to convene at least one Meeting at Minister/secretary level with all states – to manifestly tackle the FOOD INFLATION PROBLEM.

Good Luck, Prime Finance Minister!

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Monday, June 25, 2012


Venus Remedies Limited
NSE Symbol        VENUSREM

Venus Remedies is one of the promising companies in the Pharma sector. Its Results for Q4 FY 12 and for FY 12 are analyzed below with the previous and corresponding periods :
Q4 FY 12 vs Q3 FY 12  vs Q4 FY 11

Net Sales in Q4 FY 12 stands at Rs.114.63 Cr; compared to Rs.95.42 Cr in Q3 FY 12 (up by 20.13%); and compared to Rs.96.46 Cr in Q4 FY 11 (Up by 18.83%).
Materials consumed in Q4 FY 12 stands at Rs.64.65 Cr; compared to Rs.52.86 Cr in Q3 FY 12 (up by 22.31%); and compared to Rs.57 Cr in Q4 FY 11 (Up by 13.41%).
Employee benefits in Q4 FY 12 stands at Rs.6.09 Cr; compared to Rs.6.19 Cr in Q3 FY 12 (down by -1.63%); and compared to Rs.5.66 Cr in Q4 FY 11 (Up by 7.47%).
Depreciation in Q4 FY 12 stands at Rs.2.19 Cr; compared to Rs.2.65 Cr in Q3 FY 12 (down by  -17.16%); and compared to Rs.2.53 Cr in Q4 FY 11 (down by   -13.26%). It is not clear why depreciation is coming down.
Other expenses in Q4 FY 12 stands at Rs.19.9 Cr; compared to Rs.16.81 Cr in Q3 FY 12 (up by 18.36%); and compared to Rs.14.01 Cr in Q4 FY 11 (Up by 42.06%).
Total expenses in Q4 FY 12 stands at Rs.92.84 Cr; compared to Rs.78.21 Cr in Q3 FY 12 (up by  18.71%); and compared to Rs.74.35 Cr in Q4 FY 11 (Up by 24.87%). The more than proportionate increase in total expenses compared to net Sales is mainly due to OTHER EXPENSES.
Profit  from operations in Q4 FY 12 stands at Rs.21.78 Cr; compared to Rs.17.21 Cr in Q3 FY 12 (up by 26.55%); and compared to Rs.22.11 Cr in Q4 FY 11 (down by -1.48%). Due to more than proportionate increase in Expenses, Profit from operations is down compared to the corresponding Quarter, though, it has increased handsomely over the preceding Qttr.
Finance costs in Q4 FY 12 stands at Rs.6.97 Cr; compared to Rs.6.68 Cr in Q3 FY 12 (up by 4.37%); and compared to Rs.5.29 Cr in Q4 FY 11 (Up by 31.86%).
Profit before tax in Q4 FY 12 stands at Rs.15.08 Cr; compared to Rs.        11.04 Cr in Q3 FY 12 (up by 36.55%); and compared to Rs.16.92 Cr in Q4 FY 11 (down by-10.91%). PBT also has fallen compared to corresponding Qtr due to higher expenses and Higher Finance costs; though, the increase is good compared to preceding Qtr.
Tax expense  in Q4 FY 12 stands at Rs.-0.48 Cr; compared to Rs.0.71 Cr in Q3 FY 12 (down by -168.27%); and compared to Rs.3.37 Cr in Q4 FY 11 (down by   -114.35%).
Net Profit in Q4 FY 12 stands at Rs.15.56 Cr; compared to Rs.10.33 Cr in Q3 FY 11 (Up 50.6%); and compared to Rs.13.55 Cr in Q4 FY 11 (Up 14.84%). Lower Tax Expense has pushed up the Net profit handsomely over previous and corresponding Qtrs both.
Basic EPS in Q4 FY 12 stands at Rs.15.97; compared to Rs.11.3 in Q3 FY 12;      and Rs.14.84 in Q4 FY 11.
Public holding (%)in Q4 FY 12 stands at 65.58%

FY 2012 vs FY 2011  vs FY 2010  vs FY 2009

Net Sales in FY 2012 (on standalone basis) stands at Rs.405.19 Cr; compared to Rs.357.27 Cr in FY 11 (Up by 13.41%); compared to Rs.311.93 Cr in FY 10 (Up by 29.90%); and compared to Rs.264.51 Cr in FY 09 (Up by    53.18%). Thus, Net Sales has been registering gradual and consistent increase over the last 3 years.
Consumption of Raw Materials in FY 2012 (on stand alone basis) stands at Rs.235.07 Cr; compared to Rs.    203.79 Cr in FY 11 (Up by 15.35%); compared to Rs.188.39 Cr in FY 10 (Up by 24.78%); and compared to Rs.166.79 Cr in FY 09 (Up by 40.94%).
Employees Cost  in FY 2012 stands at Rs.20.58 Cr; compared to Rs.20.88 Cr in FY 11 (down by -1.45%); compared to Rs.17.92 Cr in FY 10 (Up by 14.86%); and compared to Rs.11 Cr in FY 09 (Up by  87.09%).
Depreciation in FY 2012 stands at Rs.10.11 Cr; compared to Rs.8.44 Cr in FY 11 (Up by 19.91%); compared to Rs.11.69 Cr in FY 10 (down by       -13.46%); and compared to Rs.4.43 Cr in FY 09 (Up by 128.15%).
Other Expenditure in FY 2012 stands at Rs.67.99 Cr; compared to Rs.54.93 Cr in FY 11 (Up by 23.77%); compared to Rs.37.33 Cr in FY 10 (Up by        82.10%); and compared to Rs.32.16 Cr in FY 09 (Up by  111.38%).
Total Expenditure in FY 2012  stands at Rs.324.72 Cr; compared to Rs.284.13 Cr in FY 11 (Up by 14.28%); compared to Rs.249.14 Cr in FY 10 (Up by 30.34%); and compared to Rs.206.16 Cr in FY 09 (Up by 57.5%).
Profit from Operations in FY 2012 stands at Rs.80.85 Cr; compared to Rs.73.14 Cr in FY 11 (Up by 10.54%); compared to Rs.62.79 Cr in FY 10 (Up by    28.76%); and compared to Rs.58.35 Cr in FY 09 (Up by 38.56%). Total expenses has grown more than proportionately compared to total sales. Therefore, growth in Profit from operation has not been commensurate with Growth in Sales.
Interest in FY 2012 stands at Rs.25.7 Cr; compared to Rs.18.71 Cr in FY 11 (Up by 37.38%); compared to Rs.13.96 Cr in FY 10 (Up by 84.16%); and compared to Rs.9.34 Cr in FY 09 (Up by 175.29%). Interest Costs have grown  much more than proportionately.
Profit before tax in FY 2012 stands at Rs.55.15 Cr; compared to Rs.54.76 Cr in FY 11 (Up by 0.72%); compared to Rs.48.95 Cr in FY 10 (Up by 12.66%); and compared to Rs.49.26 Cr in FY 09 (Up by 11.97%). The Growth in Interest Costs has brought down the PBT considerably.
Tax Expense in FY 2012 stands at Rs.5.12 Cr; compared to Rs.7.28 Cr in FY 11 (down by -29.63%); compared to Rs.7.91 Cr in FY 10 (down by  -35.21%); and compared to Rs.3.73 Cr in FY 09 (Up by 37.5%).
Net Profit   in FY 2012 stands at Rs.50.03 Cr; compared to Rs.47.48 Cr in FY 11 (Up by 5.37%); compared to Rs.41.05 Cr in FY 10 (Up by  21.88%); and compared to Rs.45.53 Cr in FY 09 (Up by 9.88%). Overall, Net Profit growth over last 3 years has not been impressive.
Face Value is Rs.10. per share. Paid-up Equity stands at Rs.9.74 Cr
Reserves in FY 2012  stands at Rs.300.35 Cr; compared to Rs.233.27 Cr in FY 11 (Up by 28.76%); compared to Rs.171.47 Cr in FY 10 (Up by 75.16%); and compared to Rs.134.73 Cr in FY 09 (Up by 122.93%).
Public Shareholding at the end of FY 2012 stands at 65.58%.
Basic EPS in FY 2012 stands at Rs.54.43; compared to Rs.52.01 in FY 11; Rs.48.45 in FY 10; and Rs.53.86 in FY 09. Improvement in annual EPS over last 3 years has not been very impressive. Growth in Sales has been quite good.
PE RATIO : The 52 week high price  is Rs.276 and the 52 week low price is Rs.149 (on FV of Rs.10) and the Last Price is Rs.218.00. The last year Basic EPS was Rs.54.43. Hence, PE Ratio works out to 4.01.
The company has been successful in its research for drugs – and in securing Product Patents. Its future can be excellent – if only, it can succeed on the marketing front as well. But so far, success on marketing front has been SLOW. Given the nature of its Patents, if the marketing efforts succeed, the results could move to a much higher level.
At current PE Ratio, it appears to be a GOOD BUY for medium to long term investors.


22-06-2012          Date of Annual General Meeting is fixed as September 28, 2012. Register of Members and Share Transfer Books shall remain closed from September 24, 2012 to September 28, 2012 .
21-06-2012          Recommended a dividend of 30% i.e. Rs. 3/- per share for the financial year ended March 31, 2012.
12-06-2012 "Venus Remedies bags another patent grant from South Africa".
24-04-2012       "Innovative Solution for alleviating Cancer".         
10-04-2012       "Venus Remedies "Vancoplus®" gets Patent from Australia".
19-03-2012       "Venus's ACHNIL,BioSpectrum Product of the Year 2012".        
06-02-2012       "Venus Remedies to enter Japan market with patent approval for its novel research product 'Vancoplus'".
13-12-2011      "Emerging Company of the year 2011, Venus Remedies Limited".
07-12-2011    "Venus Remedies wins "India Manufacturing Excellence Award 2011".
15-11-2011    "Venus Remedies receives Market Authorisation for Meropenem in UK & New Zealand".
05-10-2011          "Pharmexcil felicitates Venus Remedies with "Patent Award" in Gold Category".
29-08-2011          "Venus Remedies' anti cancer product DOCETAXEL receives market authorisation in Europe".         
26-07-2011          recommended a dividend @ of 30% i.e. Rs. 3/- per share for the financial year ended March 31, 2011
11-07-2011        "Venus launches its patented research product "ACHNIL" in India".
24-05-2011     "Venus Remedies' 'ACHNIL', once-a-day painkiller, gets EU Patent".
11-05-2011          "Venus Remedies Limited wins Gold Medal for TROIS under DST-Lockheed Martin India Innovation Growth Program 2011".
26-04-2011          "Venus Remedies successfully completes Phase I & II Clinical Trials of TUMATREK (VRP1620), cancer detection molecule".
04-04-2011          "Venus Remedies Limited Wins QC-100 TQM (Total Quality Management) Award in Gold Category From Geneva".

What the company says :-
From Chairman’s Statement : we have filed for more than 341 patent applications and we received 75 product patent approvals (from international and domestic regulatory bodies).
Besides this, we have entered into the exclusive marketing of products in select geographies. We have also capitalised on significant industrial opportunities through agreements with reputed pharmaceutical companies.
As a result of all this, today we are enjoying global visibility and respect that I am sure will translate into enhanced returns.
Much of what we expect to achieve has been enshrined in our The Mission 2015:
  • We wish to grow our team from 1,500 to 4,000 members.
  • We wish to graduate every department into an independent profit centre.
  • We wish to generate IPR-led wealth of US$1 billion.

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Wednesday, June 20, 2012




BJP led NDA has finally decided to support Sri P.A.Sangma, as the Presidential candidate. 

Purno Agitok Sangma was born September 1, 1947 in  Meghalaya. He is a former Speaker of Lok Sabha and Chief Minister of Meghalaya. He was a co-founder of the Nationalist Congress Party (NCP) and was a member of the Lok Sabha for eight terms, i.e. 6th, 7th, 8th, 10th, 11th, 12th, 13th, and 14th Lok Sabha. Currently he represents the Tura (ST) constituency in the West Garo Hills district in the eighth Meghalaya Legislative Assembly. After completing his graduation in (B.A. (Hons.) from St. Anthony's College, Shillong, he went to Dibrugarh University in Assam for his Masters degree in International Relations. Subsequently, he also obtained a degree in Law (LL.B).

 He was Speaker of the Lok Sabha ( May 25, 1996 – March 23, 1998 ); Minister of Information and Broadcasting (1995–1996 );  Minister of Labour and Employment (February 1995 – September 1995); Chief Minister of Meghalaya ( February 6, 1988 – March 25, 1990 );

He has offered himself for contesting the Presidential Elections. NDA  has dithered and dithered and finally zeroed in on him as its Candidate.

From the beginning, three potential candidates were evincing interest in contesting in varying Degrees. Pranab Mukherjee was the choice of UPA. UPA was dithering much like the NDA, but, Mamata’s moods clinched his candidature finally. 

NDA’s first choice was Abdul Kalam. Personally, if I am to vote, I would still go for Abdul Kalam as the No.1 choice. But, Kalam, having been in the office of President, does not want embarrassment in losing an election for the same post. And, that is quite understandable. If UPA also had accepted his candidature, he might have agreed to stand for the election. 

Pranab Mukherjee is of course a versatile Politician, reasonably Non-Controversial, and as Political commentators say, he is of the Rajya Sabha Type, not Lok Sabha Type – which is a great praise only for a presidential candidate. He can be a good Presidential Candidate. But then, UPA somehow, does not seem to understand the need for consensus – on crucial issues – like the Presidential Election, speaker election, Lok Pal Bill and so on. Before open declaration of Pranabda’s candidature, Congress must have reached out to BJP for their approval. In fact, from day one, Congress and BJP must have sat together to arrive at such a consensus.

There were (and are) many in NDA who were (and are) good friends of Pranab Mukherjee. At that point of time , P.A.Sangma was not much in the Picture. But then, the way, UPA went about declaring Pranabda’s candidature first, NDA had no option but not to accept the candidature of Pranabda, despite his obvious Credentials. That was not the way, a consensus was ever reached.

It cannot accept the Congress Nominee but Dr.Kalam is unavailable. And, P.A.Sangma is available. Looking at his credentials, I don’t think, any one can say that he is not suitable as President. He has more education, more experience and more public life than many Past Presidents. As Speaker, he had shown excellent temperament in reaching out to all Political parties. Another strong Point in his favour is – North eastern region needs to come into the Central Focus of India, and this is very important for India, for many, many reasons. Who else can better accomplish that, than P.A.Sangma?

So, why not P.A.Sangma, as presidential Contestant of NDA? Why Not?

I think, NDA seems to have done the right thing. This, I feel in retrospect. But, when the decision was not there – I thought not contesting against Pranabda would be wiser for NDA. Not anymore. I think, this contest is good.  

P.A.Sangma may win or lose – which is not the main thing. That India has a presidential candidate from Meghalaya, who has vast support all over India – is the main thing.

Whoever wins, India will have a GOOD PRESIDENT.

If it is P.A.SANGMA, India will have more of North East all over India   – and that is wonderful for India in many ways.

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Monday, June 18, 2012

RBI Mid-Quarter Monetary Policy Review: June 2012 = Good Analysis = Disappointing Decisions = Satisfies Neither INFLATION CONTROL nor GROWTH Criteria = Emphasis on SUPPLY SIDE is Forceful & Timely

RBI Mid-Quarter 

Monetary Policy Review: June 2012

RBI has released its Mid-Quarter Monetary Policy Review today. None of the expectations of the Market and India Inc are met by RBI in this Mid-quarter review. 

Very Recently Standard and Poor had downgraded India to BBB- category. Now, Fitch, another rating agency, has also moved towards downgrading the outlook on India to BBB-. It is said to be the 4th Agency to downgrade India. Can India ignore these downgrades anymore? These are a sort of CONSENSUS OPINION of all these reputed RATING AGENCIES.

The downgrade is not just an opinion for the guidance of international Investors. It is a stern advice to India – to perform – instead of giving reasons for failure. 

We, in India, are especially prone to cite, Greece, Europe, US and other nations for our Ills. That won’t do. We must look at our failures more closely. Within India, we tend to point fingers at opposition Parties, CAG, CVC, etc – for the Government’s non-performance. Indirectly, even the allies too come in as another cause for non-performance.

But, the Rating Agencies take a non-nonsense approach. Did you or did you not perform? Results speak. Not excuses.

It is in this context, that we view the RBI’s Mid-Quarter review.

If RBI’s Monetary Policy is solely, or even primarily responsible for INFLATION, it has not been able to tame the bull of INFLATION for nearly two years now, with its sole weapon of Monetary Policy. So, it has to take the Blame – and cannot shift the Blame to the Government or any others.

The implicit assumption in this argument is – that INFLATION CONTROL is susceptible to INTEREST RATE and CRR manipulation. Bank Deposits, which are part of M3 are subject to some level of control of the RBI.  But, India is not a highly monetized economy where, most money is in Banks. Most money is in fact with people, all the time. Many structural problems exist which prevent most money from entering into and staying in Banking channels.

But, RBI has huge control on “ADVANCES” to Corporates (big, medium and small scale) and Individuals, as Banks have become the primary source of such Advances to Corporates and Individuals. These advances are mostly for capital Investment related items or working capital related items – and very little relates to consumption expenditure, which is the culprit in INFLATION. So, by channeling funds to capital asset creation purposes, RBI can fuel Growth, or, alternatively, by reducing funds supply, or making the funds costlier, RBI can cut off funds for Capital Investment Purposes. It can either fuel Growth or it can curtail Growth. In my opinion, these are the two things that RBI Monetary Policies can achieve.

As for INFLATION, it is fueled by Governments in many ways, and therefore only Governments can reduce INFLATION – in the Indian context (where most money is outside Banking channels).

So, in Indian Context, it is difficult to blame RBI for INFLATION. It is also unfair to say that – RBI’s Monetary Policy is the only or fittest answer to INFLATION. At least, RBI is not solely responsible for Inflation and therefore, it cannot curb Inflation solely.

The Keynesian Economics works only when most money flows through Banking channels – not when it is in free market place where no controls exist. Well, I do understand that pure Economic Gurus will still want to see Monetary Policy working effectively - to curb Inflation in India.

Now – we will see the latest Policy Review of RBI :

RBI is strongly emphasizing the need for SUPPLY SIDE MEASURES to control Inflation. It would seem to us that unless Government initiates effective supply side Measures, RBI does not feel safe enough to reduce the Interest Rates.

The Policy Paralysis is most visible in the lack of these supply side Measures. There is a strong FOOD INFLATION – in double digits for many months. Yet, have any of us heard any fiscal or administrative measures (from central and State Governments) to CONTROL FOOD INFLATION in last one and a half years, when RBI was raising Interest Rates for curbing Inflation? 

Was there a conference of the central and state Food and Agri Ministries at Minister / secretaries levels (or both) to review the FOOD INFLATION, its causes, possible remedial measures, food items which are most susceptible for Inflation, increasing indigenous production, importing items under shortages, removing transport and other bottlenecks, improving storage facilities, improving acreage for shortage items – and such other measures – to boost supplies?

RBI was hinting at the need for supply side measures in earlier reviews too. But, they are yet to come forth. These are the need of the hour.

While the need for supply side measures needs that much of emphasis from RBI, and must be appreciated, especially in respect of FOOD INFLATION, yet, it is difficult to agree with RBI that continuance of present High Interest Rate regime is of any Use for Inflation Control.

Inflation is unlikely to respond to these High Interest Rates – as it did not in the past too – especially in the Indian Context. But, GROWTH has certainly started responding to the high interest Rates by decelerating to lower and lower levels.

It is no one’s contention, that RBI’s Rates alone are responsible for Growth levels coming down; it is basically the continued non-attention to supply side measures that is responsible for both Inflation and falling Growth levels.

RBI’s perception that –“ Notwithstanding the moderation in core inflation, the persistence of overall inflation both at the wholesale and retail levels, in the face of significant growth slowdown, points to serious supply bottlenecks and sticky inflation expectations” is largely true and indisputable.

But, it is difficult to agree with RBI’s further perception that “further reduction in the policy interest rate at this juncture, rather than supporting growth, could exacerbate inflationary pressures.” 

It will not exacerbate Inflationary pressures by itself – but these pressures will depend on the continued lack of supply-side measures mostly, as earlier acknowledged by RBI itself. 

While all statistical Info that RBI has  looked at, do reflect Inflationary pressures and decelerating Growth – its final conclusion that a cut in rates will add to Inflationary pressures now and will not support Growth – is not LOGICAL.

RBI must look at India’s  recent , say, one year experience in Inflation.

Food Inflation was going UP and DOWN with supplies COMING DOWN or GOING UP in the market place. When Vegetable or pulses supply increased in market, food inflation came down and when the supply dwindled, Inflation went up. Interest rates are nowhere in the Picture in all this.

When we look at manufactured articles, there too, demand and supply factors are playing it out in market place in a different way. Let us look at Auto sector for example. Given the price rises in raw materials and parts, there was no way that Auto manufacturers could lower prices. But, many were  and are reducing PRODUCTION. Growth was and is suffering. Inflation was and is not coming down.

Big Industries are postponing enhancement of capacities. The same thing must also be happening in medium and small sector in a bigger way. This is dangerous for future growth.

Growth is getting depressed at present and likely to get further depressed in future. This is what the Rating Agencies have also felt, while downgrading India's outlook to negative.

And, this is happening independent of Inflation – due to factors like raw Material price rises and high cost of capital.

The irony is – even while expressing serious concern about INFLATION, RBI and the Government are in a hurry to raise prices of Petrol, Diesel and Gas. The rise in prices of these basic goods will fuel an INFLATION SPIRAL, spreading to many other products and many sectors. Yes. An adjustment in their prices is needed – but only when Inflation is around 3% to 4% - not when it is hovering between 7% to 10%.

This way, with immediate increase in prices of Petrol, Diesel and Gas, the Inflationary Pressures will mount heavily and uncontrollably, across several sectors. This cannot be construed as REFORMIST. A reform must strengthen economy. This will not. Because, the timing is absolutely wrong. There should be no more stoking of Inflationary pressures from Government’s side at this point.

The TOP PRIORITIES at this point of time are three :

a.    Governments at Centre and States must not stoke Inflationary Pressures at this point of time – especially by raising the prices of Government controlled articles / products.  This should wait for a better day, when Inflation is around 4%. Let subsidies continue for some time. Heavens will not fall till such time. This will be a sound Policy for the present.

b.    Governments at Centre and States must initiate all supply side measures  - for all Inflation prone-articles – which action should be reasonably independent of the expectations from the RAIN-GOD. Waiting for RAIN GOD is not a Governmental action. Reasonable Imports, expansion of indigenous production, expansion of acreage through suitable incentives, lesser taxes at state and central levels, adequate storage  facilities and so on must be initiated quickly.

c.    Government and RBI must both resuscitate Growth in all sectors – so that India will again reach double digit Growth. This definitely needs RATE CUT from RBI so that cost of capital becomes more reasonable for manufacturers. Many Industry leaders have spoken of this in recent past.  It is also necessary to see the needs of Medium Scale and small scale Industries which will surely benefit hugely from the Rate Cut. If Indian Interest Rates are far more than that of, say, the Chinese, a measure like FDI IN RETAIL –which is often talked about, will crowd out all Indian products from Indian markets and the Foreign retailer will certainly replace them with cheaper Chinese and other products in Indian Markets. And, India will buy those cheaper foreign products, in preference to costlier Indian Products. We must make Indian Products cheaper and competitive by reducing the cost of capital.

Many Pundits frequently cite the argument of FINANCIAL INCLUSION, in which Government disburses huge sums under schemes like NREGS.

No one can be against either Financial Inclusion or NREGS – but, the only point is that - every rupee spent from the consolidated fund can not only benefit the poor, but also produce long term, useful, productive  assets for the country. 

Government must Introduce strong Productivity into these schemes. A Budget deficit arising from such productivity is worthwhile, while a deficit arising from pure doles is dangerous for the country.  The wastages in many states’ schemes are even more glaring in this respect and need to be made productive. In comparison to them, NREGS is definitely a far better scheme.

Now, Let us look at RBI’s final decisions  :

Monetary and Liquidity Measures

On the basis of an assessment of the current macroeconomic situation, RBI has decided to:
(i)                   keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.75  per cent of their net demand and time liabilities; and
(ii)                  keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.0 per cent.
Consequently, the reverse repo rate under the LAF will remain unchanged at 7.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at  9.0 per cent.

PS :- There is no denying the fact that every RBI review is full of enlightening facts and great Analysis. It is just that some things are beyond its control.

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Sunday, June 17, 2012

TATA MOTORS = Sales Performance = APRIL & MAY 2012 = summary of Annual Performance for FY 2012


APRIL & MAY 2012

April 2012 Sales

Total sales (including exports) of commercial and passenger vehicles in April 2012 were 60,086 vehicles, lower by 7% over April 2011. Domestic sales of  commercial and passenger vehicles for April 2012 were 57,305 nos., lower by 5% over 60,125 nos., sold in April last year.

Commercial Vehicles

Sales of commercial vehicles in April 2012 in domestic market were 34,647 nos., lower by 6%, compared to 36,738 vehicles, sold in April last year. LCV sales were 24,818 nos., a growth of 9%, compared to 22,802 vehicles sold in April, last year. M&HCV sales stood at 9,829 nos., lower by 29%, compared to 13,936 vehicles sold in April, last year.

Passenger Vehicles

The passenger vehicles business reported a total sale and distribution offtake of 23,658 nos. (22,658 Tata + 1,000 Fiat) in domestic market in April 2012, lower by 7%, compared to 25,436 nos. (23,387 Tata + 2,049 Fiat) in April last year. Sales of Tata passenger vehicles for April 2012 are at 22,658 nos., lower by 3%, compared to 23,387 nos., sold in April last year. Sales of the Tata Nano were 8,028 nos., lower by 20%, compared to 10,012 nos., sold in April, last year. The Indica range sales were 6,913 nos., higher by 63%, over 4,250 nos., sold in April, last year. The Indigo range recorded sales of 3,669 nos., lower by 31%, over 5,282 nos., sold in April, last year. The Sumo/ Safari/ Aria/ Venture range accounted for sales of 4,048 nos., a growth of 5%, over 3,843 nos., sold in April, last year.

Jaguar Land Rover sales in India continued their upward trend.


The company's sales from exports at 2,781 vehicles in April 2012 are lower by 35% compared to 4,258 vehicles in April last year.

Group global wholesales in April 2012

Tata Motors Group global wholesales, including Jaguar Land Rover, were flat at 87,377 nos., in April 2012. 

Global sales of all commercial vehicles - Tata, Tata Daewoo and the Tata Hispano Carrocera range - were 38,008 nos., in April 2012, lower by 8%. 

Global sales of all passenger vehicles were at 49,369 nos. in April 2012, higher by 7%. 

Global sales of Tata passenger vehicles and the distribution offtake in India of Fiat cars were at 24,226 nos., lower by 9%, over April 2011. 

Global sales of Jaguar Land Rover in April 2012 were at 25,143 vehicles, higher by 29% over April 2011. Jaguar sales for the month were 3,603 nos., higher by 17%, while Land Rover sales were 21,540 nos., higher by 32%.

May 2012 sales

Tata Motors' total sales (including exports) of Tata commercial and passenger vehicles in May 2012 were 64,347 vehicles, higher by 4%, over May 2011. The company's domestic sales of Tata commercial and passenger vehicles for May 2012 were 60,128 nos., higher by 6%, over 56,571 nos., sold in May last year.

Cumulative sales (including exports) for the company for the fiscal are 124,433 nos., lower by 2%, over 126,353 nos., sold last year.

Commercial Vehicles

The company's sales of commercial vehicles in May 2012 in the domestic market were 39,625 nos., a 7% growth, compared to 37,170 vehicles, sold in May last year. LCV sales were 27,174 nos., a growth of 26%, compared to 21,638 vehicles sold in May, last year. M&HCV sales stood at 12,451 nos., lower by 20%, compared to 15,532 vehicles sold in May, last year.

Cumulative sales of commercial vehicles in the domestic market for the fiscal are 74,272 nos., a growth of 1% over last year. Cumulative LCV sales are 51,992 nos., a growth of 17% over last year, while M&HCV sales stood at 22,280 nos., lower by 24%, over last year.

Passenger Vehicles

Sales of passenger vehicles for May 2012 are at 20,503 nos., a growth of 6% over 19,401 nos., sold in May last year. Sales of the Tata Nano were 8,507 nos., higher by 31%, compared to 6,515 nos., sold in May, last year. The Indica range sales were 5,467 nos., lower by 1%, over 5,497 nos., sold in May, last year. The Indigo range recorded sales of 3,397 nos., lower by 20%, over 4,268 nos., sold in May, last year. The Sumo/ Safari/ Aria/ Venture range are flat at 3,132 nos., in this month.

Cumulative sales of passenger vehicles were 43,161 nos., higher by 1%, compared to 42,788 nos., till May last year. Cumulative sales of the Nano are flat at 16,535 nos. Cumulative sales of the Indica range are 12,380 nos., higher by 27%. Cumulative sales of the Indigo family are 7,066 nos., lower by 26%. Cumulative sales of the Sumo/Safari/ Aria/ Venture range are 7,180 nos., higher by 3%.

Jaguar Land Rover sales in India continued their upward trend.


Sales from exports at 4,219 vehicles in May 2012 are lower by 24% compared to 5,534 vehicles in May last year. Cumulative sales from exports for the fiscal at 7,000 nos., are lower by 29% over 9,792 nos., in FY 11.

Group global wholesales vehicles in May 2012

The Tata Motors Group global wholesales, including Jaguar Land Rover, were 96,089 nos., in May 2012, higher by 12% over May 2011. Cumulative sales for the fiscal are 182,466 higher by 7% compared to the corresponding period in 2011-12. 

Global sales of all commercial vehicles - Tata, Tata Daewoo and the Tata Hispano Carrocera range -- were 45,025 nos., in May 2012, a growth of 3%. Cumulative sales for the fiscal are 83,033 nos., lower by 2%. 

Global sales of all passenger vehicles were at 51,064 nos. in May 2012, higher by 21%. Cumulative sales for the fiscal are 99,433 nos., higher by 16%.

Global sales of Tata passenger vehicles were at 20,970 nos., for the month, higher by 6% over May 2011. Cumulative sales for the fiscal are flat at 44,196 nos.

Global sales of Jaguar Land Rover in May 2012 were at 30,094 vehicles, higher by 35% over May 2011, driven by the Range Rover Evoque and the 12MY Jaguar product. Jaguar sales for the month were 4,342 nos., higher by 3%, while Land Rover sales were 25,752 nos., higher by 42%. Cumulative sales of Jaguar Land Rover for the fiscal are 55,237 nos., higher by 32%. Cumulative sales of Jaguar are 7,945 nos., higher by 9%, while cumulative sales of Land Rover are 47,292 nos., higher by 37%.


Consolidated revenue (net of excise) for FY 2011-12, was Rs. 165,655 Cr posting a growth of 35.6% over Rs. 122,128 Cr for FY 11.

Consolidated Profit before Exceptional item and Tax was Rs 14,366 Cr, posting a growth of 40.8% over Rs 10,206 Cr in FY 11. 

Consolidated Profit before Tax (PBT) for the year was Rs. 13,534 Cr, compared to Rs. 10,437 Cr for FY 11.

Consolidated Profit for the period (after tax and post minority interest and profit in respect of associate companies) was Rs.13,517 Cr, as compared to Rs. 9,274 Cr in FY 11.(46% growth)

Tata Motors Stand-alone Financial Results
for the Year ended March 31, 2012

The standalone revenues (net of excise) for FY 2011-12, at Rs. 54,307 Cr posted a growth of 15.3% over Rs. 47,088 Cr in FY 11.

The Standalone Profit before Tax (PBT) for FY 2011-12 was Rs. 1,341 Cr, compared to Rs. 2,197 Cr for FY 10-11. 

The Standalone Profit After Tax for FY 2011-12 was Rs. 1,242 Cr, as compared to Rs.1,812 Cr in FY 10-11.

The Standalone Profit Before Tax and Profit After Tax for FY 2011-12 were impacted by Exceptional items of Rs 585 Cr (Rs. 147 Cr in FY 2010-11) on account of exchange loss (net) including on revaluation of foreign currency borrowings, deposits and loans arising from the depreciation of Indian Rupee (INR) and provision made for certain investments in 100% subsidiary Tata Hispano Motors Carrocera SA, Spain arising from continuous underperformance impacted by challenging market conditions. 

Tata Motors' sales (including exports) of commercial and passenger vehicles for FY 2011-12, stood at 926,353 units, representing a growth of 10.7 % as compared to the corresponding period last year. 

The commercial vehicles sales during FY 2011-12 increased by 15.7 % to 530,204 units, as compared to the corresponding period last year. The Company's market share in commercial vehicles was 59.4% for FY 2011-12. 

Passenger vehicles, including Fiat and Jaguar and Land Rover vehicles distributed in India :-Sales for FY 2011-12 grew by 4.0% to 333,044 units, as compared to the corresponding period last year. Focused marketing initiatives and network actions have positively influenced sales. The market share in passenger vehicles stood at 13.1% for FY 2011-12 largely driven by sales in the recent quarters. 

Jaguar Land Rover PLC - (figures as per IFRS)

The recently launched new products continue to receive positive response. The newly launched Range Rover Evoque, clocked approximately 60,217 wholesale units till March 2012. Sales from China region grew strongly and comprised 19.0% of total volumes for the Quarter ended March 31, 2012 as against 12.8% for the corresponding period last year.

Jaguar Land Rover sales for FY 2011-12, stood at 314,433 units, the highest ever, representing a growth of 29.1% as compared to the corresponding period last year supported by new product actions and strong demand in China and other developing markets. The Jaguar volumes for the period stood at 54,039 units and Land Rover volumes stood at 260,394 units.

The revenues for FY 2011-12, at GBP 13,512 million represented a growth of 36.9% over GBP 9,871 million in the corresponding period last year. Operating margins for the FY 2011-12, stood at 15.0% and an Operating Profit (EBITDA) of GBP 2,027 million, a growth of 35.0% over GBP 1,502 million in the corresponding period last year. The Profit before Tax (PBT) for FY 2011-12 is GBP 1,507 million as compared to GBP 1,115 million for FY 10-11. The Profit After Tax for FY 2011-12 is GBP 1,481 million as compared to GBP 1,036 million in FY 10-11.

In March 2012, JLR announced that it has signed a joint venture agreement with Chery Automobile Company Ltd to build vehicles for the Chinese market which is currently under the process for regulatory approvals by the Chinese authorities.

In March 2012, JLR approved the consolidation businesses of Jaguar Cars Limited and Land Rover into one legal entity to be named Jaguar Land Rover Limited. The consolidation is expected to become effective later this year.

Tata Daewoo

Tata Daewoo Commercial Vehicles Co. Ltd. registered net revenues of KRW. 767 billion, and recorded a Net profit of KRW 3.6 billion in FY 2011-12.

Tata Motors Finance

Tata Motors Finance Ltd, the Company's captive financing subsidiary, registered net revenues of Rs. 2,018 Cr and reported a Profit After Tax of Rs. 240 Cr in FY 2011-12.


Recommended dividend of Rs 4/- per Ordinary Share of Rs 2/- each and Rs 4.10 per 'A' Ordinary Shares of Rs 2/- each. 

VIEWS :- TATA MOTORS is powering itself Globally with strong product base. The May sales are strong and likely to continue further in coming months.

If China  loves Evoque, there is no reason why other countries will fail to love it. Its strong technology strengths will eventually propel it to the front in India too. It is a GOOD BUY for medium to long term Investors.

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