NEWS & VIEWS TODAY = 07th, JUNE, 2012 = MODI – THE MAN FOR PROGRESS = FDI IN PHARMA = HEWLETT PACKARD'S WOES COAL & IRON PRICES ARE SOFTENING = BUT WHAT ARE THE PLANS OF COAL INDIA & NMDC?

NEWS & VIEWS TODAY

07th, JUNE, 2012

MODI – THE MAN FOR PROGRESS

FDI IN PHARMA

HEWLETT PACKARD'S WOES

COAL & IRON PRICES ARE SOFTENING 

BUT WHAT ARE THE PLANS OF COAL INDIA & NMDC?

1.    NEWS :Today’s ET is about Modi. The Headlines are so. The interview with Modi is, as usual, reflective of his clarity of purpose.

Some of his statements are here : 

Iron ore is available in abundance in Odisha. But.. the centre is are opposing entry of steel companies into the state. They don’t want the state Government to perform and they place hurdles. This is naturally making the investors jittery…

…the centre went to the extent of unleashing enforcement agencies on those who promised investments in Gujarat at the vibrant Gujarat meet…

In 2012, we plan for 2015….Gujarat which accounts for 5% of the country’s population, accounts for 16% of the nation’s industrial production and 22% exports…

The Government has no business to be in business. It should play the role of a facilitator…

Country can progress only if we end Red Tapism…

….No Red Tape, only Red carpet  is my policy towards investors…

How can a state which has above 10% Growth in agriculture be seen to be having a bias towards big business?... Mind you, the national average.. is only 3%.

More than 70% of jobs in India are created by my Government…And that is made possible through a decent delivery mechanism..

I am busy making things better in Gujarat. I am 100 % involved in it…I never spare time for issues outside Gujarat..

The past 10 years have been the first riot free decade in the past 400 years. Look at the recorded history of the state from 1736 and you will see riots breaking out at regular intervals..Has any one heard of even curfew being imposed in any town of Gujarat in recent years?

I have picked up statements which I liked most..The readers may like some others..some readers may like nothing at all…depending on their mindset…

I have no doubt that this man is the MOST EFFICIENT CHIEF MINISTER – in any Indian state, though some more contenders are coming up. Putting an end to Red Tapism is putting an end to corruption too…almost so. Some statements may sound like exaggerations.. they may be.. But, he is entitled to make such statements. Be it agriculture or be it Industry..both are flourishing in Gujarat. The only things not flourishing in Gujarat today are – Corruption, red tape, and riots. 

But, Modiji, some like the Tamilnadu CM are intently studying your methods – and could be serious contenders for the top slot in Efficiency soon. Nitishji is another serious contender – but, I only wish, he drops his unnecessary communication gap with you, and others.

We are yet to assess Akhilesh yadav, Mamata etc – for their performance. There has to be a race for progress among states.

But what could be Modi’s weaknesses? I perceive a slight isolationism even within Modi’s own party. It is time Modi reduces his own communication Gap with his Party central leadership – but, the BJP central leadership must make more efforts towards this end too. 

There is a section which still spreads the canard of anti Muslim bias. While one agrees with Modi’s policy of no bias, no partiality towards any Group – yet, A CM must adhere to Raja Dharma of Lord Ram. Manifest your love towards all – in many ways and see that people see it and understand it. Honour Dr.Abdul Kalam, who is the favourite of Both Vajpaee and Advani. Honour Amir Khan, the one serious film maker, who is so nationalistic in his ventures. Honour the best of Muslims (entrepreneurs, poets, artistes and so on) from Gujarat itself – even as part of honouring all other best of Gujaratis.

So,…India needs over 24 Modis – one in each state (each with a different name, like JJ, NK etc)- who are constantly focusing on the progress of their states…and who play less Politics… 

If there are 120 jobs for 100 people in the state – will you still need Reservations for Minorities or even for SC,ST and BCs? These dividers will vanish on their own – if we get these 24 Modis.

2.    FDI IN PHARMA :The  party in Government must always be constantly on the look out for improvements in Government functioning. When it does this – it can always find  areas for significant improvement. Government has formed an inter-ministerial panel – for finalizing Guidelines for FDI in Pharma sector. In my view, Pharma  sector needs no more than 49% of FDI – especially in existing companies. Green field Investments are a different thing. One can go up to 51% there. But, Government needs clarity of thinking in respect of FDI in Pharma sector. Government must insist on a minimum of 25% public participation in every Pharma company (allopathy or ayurvedic) with a capital of over Rs.50 crores. 

In other words, these must always be LISTED COMPANIES. De-listing must not be permitted and 25% public participation must always be there in such companies – especially in a sector like PHARMA – wherein public purpose, is very significant and sensitive. There must be independent directors – and prices must be subject to scrutiny of regulators. Some foreign companies especially are prone to price their products sky-high, much beyond the reach of the ordinary patients who need them. Indian Market is Huge and export market for Indian pharma products is much more so. A 49% FDI is good enough attraction to be offered to Pharma companies.

Any way – Government needs kudos – for initiating a process which can bring much needed FDI and better technologies too.

3.    HEWLETT-PACKARD : HP is a Huge Fortune 500 company – and is in trouble. It is laying down big numbers of work force. Its New CEO, Meg Whitman says, reviving HP will be challenging. Will it come back on to the track or will it slide down still – is anybody’s guess.

4.    COAL PRICES & IRON ORE PRICES : These are coming down in international Markets. COAL INDIA however is not becoming any more efficient. Government must appoint sufficient number of INDEPENDENT DIRECTORS from user Industries on to the COAL INDIA BOARD. 

Since NMDC’s iron ore prices are likely to be higher, Indian steel companies may now have option to import the ore at cheaper cost. Why can’t NMDC and Coal India supply adequate quantity at more reasonable prices? 

In the mean while, India imports what is available in India in Plenty!

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NMDC LTD - QTRLY RESULTS - Q3 FY 2012 - 3rD Q/E dEC,2011 - NET SALES UP 8%YoY; NPT UP 22.45% YoY

NMDC Limited

NSE Symbol        NMDC

NMDC LIMITED has declared Good Results for the third quarter ending Dec, 2011.

Net Sales in Q3 FY 12 stands at Rs.2821.95 cr – down by     -7.85% from Q2 FY 12; up by 1.41% from Q1 FY 12; and up by 7.66% from Q3 FY 11.

Raw Materials, in Q3 FY 12 stands at Rs.65.19 Cr – up by 11.51% from Q2 FY 12; up by 41.63% from Q1 FY 12; and up by  13.43% from Q3 FY 11.

Other Expenditure, in Q3 FY 12 stands at Rs.396.03 Cr – up by 4.99% from Q2 FY 12; up by 11.95% from Q1 FY 12; and down by  -16.33% from Q3 FY 11.

Total Expenditure, in Q3 FY 12 stands at Rs.595.70 Cr -  down by -9.65% from Q2 FY 12; up by 6.04% from Q1 FY 12; and down by  -6.15% from Q3 FY 11.

Profit from Operations, in Q3 FY 12 stands at Rs.     2226.25 Cr – down by  -7.35% from Q2 FY 12;  up by 0.24 % from Q1 FY 12; up by  12.07% from Q3 FY 11.

Other Income, in Q3 FY 12 stands at Rs.525.39 Cr – up by  4.46% from Q2 FY 12;  up by  18.91% from Q1 FY 12; and up by  78.27% from Q3 FY 11.

Profit before tax, in Q3 FY 12 stands at Rs.2751.64 cr – down by           -5.31% from Q2 FY 12; Up by 3.34% from Q1 FY 12; and up by  20.62% from Q3 FY 11.

Tax expense, in Q3 FY 12 stands at Rs.892.83 cr – down by  -5.3% from Q2 FY 12;  up  by 3.63% from Q1 FY 12; and up by  16.99% from Q3 FY 11.

Net Profit, in Q3 FY 12 stands at Rs.1858.81 cr – down  by  -5.31% from Q2 FY 12; up  by 3.2% from Q1 FY 12; and up by  22.45% from Q3 FY 11.

Basic EPS  stands at Rs.4.69 in Q3 FY 12; Rs.4.95 in Q2 FY 12; Rs.4.54 in Q1 FY 12; Rs.3.83 in Q3 FY 11.

At this rate, the annual EPS may amount to  Rs.18.87 on a Face Value of Rs.1.

The current Market Price is Rs.185   – while the  52 week high price is Rs.305 and the  52 week low price  is Rs.135.60.

The PE Ratio comes to 9.80.

ANNOUNCEMENTS

BY NMDC

31-01-2012          Nmdc approved payment of 2nd Interim Dividend @ Rs. 1/- per share of Rs. 1/- each on the paid up Equity Capital of the Company for the year 2011-12. The Interim Dividend would be paid/ dispatched to the eligible members on and from February 24, 2012.  

17-01-2012          NMDC acquires 50% equity stake in Legacy Iron Ore Limited, Australia

11-01-2012          Nmdc has incorporated a Special Purpose Vehicle (SPV) company by the name of NMDC Power Ltd. on December 12, 2011 for the purpose of setting up a Power Plant for captive power supply to the 3 MTPA Integrated Steel Plant being constructed at Nagarnar . The company is presently a wholly owned subsidiary of NMDC and by virtue of Section 617 of the Companies Act ,1956; it is also a Government company . Certificate of Commencement of Business was issued on December 29, 2011

11-01-2012          Nmdc has signed the contract for By Product Plant (BPP) Package for the upcoming 3 MTPA Integrated Steel Plant at Nagarnar, with the Consortium lead by M/s Shriram EPC Limited (SEPC) on January 10, 2012. The total cost of the package is Rs.509.00 crores. The BPP unit is an important installation in integrated steel making, which processes valuable raw Coke Oven gas from coke ovens to yield by products like TAR, Naphthalene and Sulphur besides clean coke oven gas used in the fuel gas network of the Integrated Steel Plant.

12-11-2011          NMDC and Severstal Sign an Implementation Protocol in Moscow in the presence of the Hon'ble Minister of Steel

31-10-2011          Nmdc has approved an Interim Dividend of Rs. 1.00 per equity share of Rs.1/- each on the paid up Equity Capital of the Company for the financial year 2011-12.

21-10-2011          Nmdc has signed the Share Subscription Agreement with Legacy Iron Ore Ltd., Australia on October 20, 2011 for holding 50% of the total shares in the capital of Legacy Iron Ore Ltd., Australia, at a price aggregating to A$ 18.89 mn subject to approval of Shareholders of Legacy, Australian Stock Exchange, approval of FIRB and other compliances as applicable in this regard.

07-09-2011          NMDC SIGNS CONTRACT AGREEMENT FOR THE COKE OVEN COMPLEX PACKAGE

05-09-2011 NMDC SIGNS CONTRACT AGREEMENT FOR THE RAW MATERIAL HANDLING SYSTEM PACKAGE

06-06-2011          NMDC has signed a non-binding memorandum of Understanding (MOU) with Australian Stock Exchange listed Minemakers Limited to establish the roadmap for its participation in development of the Wonarah phosphate deposit located in Northern territory Australia. Under the MOU, NMDC and Minemakers will undertake a joint feasibility study into the agreed aspects of the development of the Wonarah deposit. Upon successful completion of the feasibility study, NMDC proposes to acquire 50% equity in the Wonarah project and participate in the development of the project. This acquisition will enable NMDC's entry in Australia's largest known undeveloped phosphate deposit and contribute towards securing supplies of this critical raw material for the Indian fertilizer industry. The acquisition is subject to the results of the feasibility study and all statutory and mandatory approvals.

31-05-2011          NMDC SIGNS CONTRACT AGREEMENT FOR THE COUNTRY'S LARGEST BLAST FURNACE

31-05-2011          KICK OFF MEETING FOR SETTING UP POWER PLANT FOR NMDC STEEL PLANT

31-05-2011          NMDC'S BEST ANNUAL AND 4TH QUARTER RESULTS EVER

26-05-2011          Nmdc has signed a Memorandum of Understanding (MoU) with Legacy Iron Ore Limited (Legacy), Australia to acquire 50% of the Company (Legacy) enabling NMDC's entry in the Australian resource sector. By this investment, NMDC would expand its geological footprint and position itself for the acquisition of additional mineral assets in iron ore and coal in Australia. The above is subject to due diligences and necessary approvals.

RESULTS TABLE

NMDC	31-Dec-11	30-Sep-11	%DIF1	30-Jun-11	%DIF2	31-Dec-10	%DIF3
Net Sales	282195	306232	-7.85	278261	1.41	262122	7.66
Increase in SIT /WIP	-3889	5686	-168.4	-107	3534.6	-3457	12.5
Raw Materials	6519	5846	11.51	4603	41.63	5747	13.43
Employees Cost	13891	13443	3.33	12923	7.49	10909	27.34
Depreciation	3446	3238	6.42	3379	1.98	2939	17.25
Other Expenditure	39603	37722	4.99	35377	11.95	47334	-16.33
Total Expenditure	59570	65935	-9.65	56175	6.04	63472	-6.15
Profit from Operations	222625	240297	-7.35	222086	0.24	198650	12.07
Other Income	52539	50294	4.46	44182	18.91	29472	78.27
Profit before tax	275164	290591	-5.31	266268	3.34	228122	20.62
Tax expense	89283	94276	-5.3	86153	3.63	76319	16.99
Net Profit	185881	196315	-5.31	180115	3.2	151803	22.45
Face Value (In Rs	1	1	0	1	0	1	0
Paid Up Equity	39647	39647	0	39647	0	39647	0
Basic EPS	4.69	4.95	-5.25	4.54	3.3	3.83	22.45
Public Holding (%)	10	10	0	10	0	10	0

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