Tech Mahindra tanks 7% on Q1FY16 revenue, margin warning

Shares of  Tech Mahindra plunged nearly 7 percent Monday after the IT firm warned about its April-June quarter earnings that are expected to be announced in July. The company said Q1FY16 has some headwinds and tailwinds which could see a risk of marginal decline in both revenue and EBITDA margin a sequential basis.

“Seasonally weak mobility business will be a drag on Q1 revenues and EBITDA. H1 B visa costs will be another drag on margins,” it explained. It also said FY16 organic communication growth could remain subdued due to delayed decision making.

After  Persistent Systems and KPIT Technologies , Tech Mahindra is the third company to warn about its weak earnings in the first quarter of FY16.

However, it feels, favourable currency movements could help both revenue and margins. It said the deal pipeline remains healthy and investments in digital technologies, research & development, growth factories will continue in an accelerated mode.

It added that organisation wise, there is renewed focus on improving operational levers and cost control parameters, however the impact is expected to be visible only from Q3FY16 onwards.

However, Sarabjit Kour Nangra, VP Research – IT at Angel Broking has maintained its buy rating on the stock with a price target of Rs 646.

Nangra has also maintained numbers and target for FY2017, though FY2016 could be tweaked. “Also after factoring in marginal improvement in the margins in FY2017, the stock is attractively valued. We have reduced the FY2016 sales and net profit numbers by 5 percent and 6 percent respectively,” he said.

Tech Mahindra also disappointed in the quarter ended March 2015 . It had missed street forecast with the fourth quarter consolidated profit falling 39.2 percent sequentially to Rs 472 crore, dented by lower margin and higher forex loss. “Q4 results were impacted by macroeconomic factors like cross currency headwinds and salary increases,” said Vineet Nayyar, Executive Vice Chairman, Tech Mahindra on May 27.

Rupee revenue grew by 6.3 percent to Rs 6,116.8 crore during January-March quarter compared to Rs 5,751.7 crore in December quarter while dollar revenue climbed 6.5 percent Q-o-Q to USD 984.1 million (which was also below estimates of USD 996 million).

World Bank officials visit bank aided project in villages

A team of officials of the World Bank on Friday visited villages in the district, where the World bank-shared ‘Puthu Vazhvu’ (New Life) project is being executed by the Tamil Nadu Government.

Officials saisd the world bank officials periodically visit villages to give suggestions and monitor the progress of execution of the project, based on Community Driven Development approach.

The project is being implemented in four Panchayat unions, including Sattur, Vembakottai, Watrap and Narikudi.

The officials also gave advice on how best the funds could be used for optimum benefit of the community. The team included WB’s Finance Advisor dhaniya Gupta, puthu vazhvu Project State assessment and Monitoring expert Shivalingam and finance expert Manickam.

The team inspected the functioning of the village poverty eradication associations and were briefed by Ramachanrapuram village panchayat president Vasuki, social audit committee members and women coordination committee members.

The WB officials asked about the working of the project and if the beneficiaries got enough income from the business they were doing.

They visited the field office of the Project where a dicussion was held with field workers. They also gave suggestions after inspecting finance registers.

Shoppers Stop earmarks Rs 60 crore investment for tech push

To drive its strategy of becoming a seamless ‘omni-channel’ retail store by the end of 2016, Shoppers Stop   has earmarked an investment of Rs 60 crore over the next three years to strengthen its technology.

The company will implement its omni-channel strategy in three phases, Govind Shrikhande, Managing Director of Shoppers Stop, told agency on the sidelines of a conference here. “In total, we will invest Rs 60 crore over the next three years,” he added.

In the first phase, the company will focus on its departmental store format, Shoppers Stop, and will strengthen the online presence, offering better navigation and superior assortment, by the end of December.

The second phase is expected to start by January next year focusing on the company’s other formats HomeStop, Crossword and HyperCIty, and is likely to be completed by Diwali. “By September next year, we expect our operations of the physical stores and the online stores to be seamlessly integrated,” Shrikhande added.

The company is targeting up to 10 per cent of its sales to come from online in the next three years, he said. “Currently, online sales account for under 1 per cent of our sales. However, going forward, Shoppers Stop will open fewer physical stores to reorganise its operations, and given that given that there aren’t many places on offer.”

Over the past three years, the K Raheja Corp Group promoted retailer has opened only 36 new stores.

“However, in the next three years, we are likely to see only 18 new stores. So the speed at which we will add physical stores is reducing,” Shrikhande said.

Shoppers Stop, which has 72 stores operational currently, will have about 90 outlets in the next three years across the country, and “omni-channel will give Shoppers Stop access to 8,000 pin codes across India,” he said.

In all other formats, the company will open about 5-8 stores a year, he indicated. “So, across all formats we will open 10-12 store every year, while earlier the speed was 15-16 stores a year. This is because there are not that many places on offer,” he said.

In the second phase of its omni-channel journey, the company plans to invest in warehouse management systems to strengthen supply chain, and subsequently in master data management, he added.

Tax collection in Delhi grew at 2.64% in 2014-15

Tax collection of Delhi government registered a growth of 2.64 per cent in 2014-15 down from 10.61 per cent in 2013-14, as per the Economic Survey tabled by the government on Wednesday.

As per the survey, stamps and registration fees recorded negative growth of 4.34 per cent in 2014-15. Tax collections under Motor Vehicle Tax, State Excise and VAT recorded a growth of 10.61 percent, 8.59 percent and 2.03 percent respectively.

Luxury Tax, Entertainment Tax, Betting Tax, etc registered a growth of 6.2 per cent during 2014-15. Entertainment tax including Cable TV Tax recorded the lowest growth of 3.28 per cent during 2014-15.

The fiscal deficit of Delhi during 2014-15 was at Rs 221.25 crore which is 0.049 per cent of GSDP as compared to the estimated all states figure of 2.35 percent of GDP during 2014-15 (BE).

Unlike earlier Central Finance Commissions, Delhi has not been covered under the recommendations of 14th Central Finance Commission (14th CFC) whose term covers the period from 2015-16 to 2019-20, thus losing out on dispensations like share in Central Taxes, Grants-in-aid for Local Bodies on account of basic and performance grants, grants for Calamity Relief, revenue deficit gap grants etc.

Now, Delhi only gets discretionary grants in lieu of share in Central Taxes and that too is stagnant at Rs 325 crore since 2001-02.

Bank of Baroda declares dividend of Rs 3.20 per share

State-run Bank of Baroda   (BoB) on Wednesday announced a dividend of Rs 3.20 per share for financial year 2014-15.

“The shareholders have approved declaration of dividend at Rs 3.20 per equity share on the face value of Rs 2 per share for FY15, which works out to be 160 percent,” said Bank of Baroda Managing Director Ranjan Dhawan at the lender’s Annual General Meeting here.

Dhawan informed shareholders about the global and national economic scenario and said the bank’s financial performance was good in the last fiscal despite adverse economic conditions in the country.

Various initiatives have been taken by the bank in respect of use of technology to enhance customer service by promoting the use of alternative delivery channels, he said.

Sun TV down 9%; PM against any kind of ban

There are reports in the media that suggest the Prime Minister’s Office is in sync with Home Ministry’s view of not allowing Sun TV licence renewal. But CNBC-TV18′s Shereen Bhan has learnt from highly placed sources within the Government of India that the Prime Minister is not necessarily in favour of a ban –any kind of ban.

It is understood that an informal communication has been sent out to ministers urging them not to speak out even on the Maggi controversy because it is harming investor sentiment. The Sun TV issue was also brought at an investor conference in San Francisco on Wednesday  morning where concerns were raised about the road ahead and the uncertainty surrounding the company.

Sources said the Finance Minister reiterated his point of view that he doesn’t believe that the case will stand the test of a court of law.  With the I&B ministry backing renewal of Sun TV’s license, the matter could very well land in court.

See industry growing 5-6% in FY16: United Breweries

Kalyan Ganguly, MD,  United Breweries Limited is confident of a 5-6 percent industry growth and 16 percent EBITDA margin growth for the company in FY16.

The first quarter was a bit lack luster for the company because of unseasonal rains in WB and Karnataka, dispute between income tax department and corporation in Andhra Pradesh, pricing issues in Odisha etc, says Ganguly.

The liquor firm reported a standalone net profit of Rs 48.13 crore for the quarter ended March 31, 2015. It had posted a net profit of Rs 67.71 crore in the January-March quarter of 2013-14.

When asked if the company was looking for any capital infusion, Ganguly denied saying they were not looking for any partners and that they were adequately capitalized currently.

L&T looks to sell 10% in Nov-Dec IPO for tech unit

Industrial conglomerate Larsen & Toubro  is looking to list its technology subsidiary L&T Infotech in a public offer that will likely come out by November or December this year, chairman AM Naik told CNBC-TV18′s Latha Venkatesh and Reema Tendulkar in an interview.

L&T Infotech notched up net profit of USD 120 million on revenues (USD:INR = 63.5) on revenues of USD 810 million in fiscal year 2014-15, he said. For 2015-16, the firm is targeting profit of USD 141 million and revenues of USD 950 million.

“Our EBITDA margins are 20 percent. We will be investing heavily in technologies such as digital but hope to continue to maintain margins at 20 percent,” he said.

CRISIL up 4.5%, shareholders approve buyback of shares

Moneycontrol Bureau

Shares of  CRISIL  rose 4.5 percent Monday after its shareholders approved the company’s buyback of equity shares through postal ballot on June 15.

“Shareholders approved the buyback of equity shares by the company of its fully paid up equity shares of a face value of Re 1 each, through the stock exchange mechanism, for an amount not exceeding Rs 102 crore, at a price not exceeding Rs 2,310 per share from the open market through BSE and NSE, in accordance and consonance with the provisions contained in the Buy-Back Regulations and the Act,” said the company in its filing.

The board of directors had approved the proposal for buyback of shares on April 28, 2015. The company said the buyback will effectively utilise surplus cash available with the company and improve company’s value for shareholders.

At 12:30 hours IST, the scrip of CRISIL was quoting at Rs 1,959.65, up Rs 56.20, or 2.95 percent on the Bombay Stock Exchange

Financial Tech signs pact to sell 16.6% stake in IEX

Financial Technologies   India Ltd (FTIL) today said it has entered into a new share purchase agreement with four companies to sell 16.6 percent stake in Indian Energy Exchange Ltd (IEX) for Rs 357.06 crore. The earlier agreement that was signed on November 5, 2014 “stands terminated” and the new agreement will be closed within 60 days, subject to certain technology-related conditions and regulatory approvals, it said in a BSE filing. FTIL is divesting its stake in IEX following the direction from regulator Central Electricity Regulatory Commission’s (CERC) in May last year in the wake of the Rs 5,600 crore payment scam at FTIL’s group firm NSEL.

“We have entered into a new share purchase agreement with DCB Power ventures Ltd, Kiran Vyapar Ltd, Agri Power and Engineering Solutions Pvt Ltd, Aditya Birla Capital Advisors Pvt Ltd (for and on behalf of Aditya Birla Trustee Company Private Ltd, trustees to the Aditya Birla private Equity Fund I and Aditya Birla Pvt Equity Sunrise Fund) for sale of 16.6 percent stake for Rs 357.06 crore,” FTIL said in the filing. The company and few purchasers would make efforts to sell the balance stake in IEX, which will be kept under escrow as per the terms of the new agreement, it added. FTIL owns nearly 26 percent stake in the energy bourse.

In November, FTIL had signed a pact to sell its entire stake in IEX to a clutch of investors, including TVS Shriram Growth Fund, for Rs 576.84 crore. In the filing, FTIL said the earlier agreement stands terminated because of non-fulfilment of certain conditions and also due to the Economic Offences Wing (EOW)’s directive on February 28, 2015 restraining sale of FTIL assets. FTIL has signed the new agreement after the Bombay High Court in its order dated June 12, 2015 stayed the EOW’s letter on restraining sale of FTIL assets.

FTIL will have to desposit before the court Rs 84 crore from the sale of its stake in IEX within four weeks from the completion of the sale, the filing added. The new pact has been signed “despite numerous challenges including among others to cancel the license of IEX as stated in CERC order, EOW letter-dated February 28, 2015 and in the interest of all stakeholders”, FTIL added. IEX is the country’s leading power exchange with more than 95 percent market share.