OPINION, P8 BACK PAGE, P18 EDITORIAL Air India sale gets a leg up, structuring it right is critical INTERNATIONAL, P16 S BHATTACHARYA CNG RETAILING STRENGTHENING ECONOMY Expenditure curbs the only way to keep fisc in control, that will affect FY18 growth Pradhan: PNGRB to offer 100 CGD licences for bidding this month Draghi-led ECB sees chance of policy shift early this year KOLKATA, FRIDAY, JANUARY 12, 2018 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME XXVII NO. 63, 18 PAGES, `5.00 (NORTH EAST STATES & ANDAMAN `10.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 34,503.49 ▲ 70.42 NIFTY: 10,651.20 ▲ 19.00 NIKKEI 225: 23,710.43 ▼ 77.77 HANG SENG: 31,120.39 ▲ 46.67 `/$: 63.67 ▼ 0.07 `/€: 76.09 ▲ 0.22 BRENT: $69.35 ▲ $0.15 GOLD: `29,606.00 ▲ `43.00 THIRD QUARTER NUMBERS TCS profit growth meets estimates Net profit Ebit margins (%) Real estate longs for stability, certainty and strength Budget 2018 should raise the tax benefit on loan repayment of second house to `3 lakh, hike ceiling on capital gains investment and expand the basket of eligible investments ■ Personal Finance, P15 QuickPicks NCLT orders liquidation of Gujarat NRE Coke with riders THE KOLKATA bench of the National Company Law Tribunal ordered liquidation proceedings against Gujarat NRE Coke as a ‘going concern’, as no resolution plan was approved by the creditors of the company during the stipulated time, reports Mithun Dasgupta in Kolkata. It ordered the commencement of liquidation proceedings with some conditions. PAGE 6 Earnings optimism propels markets to new lifetime highs BENCHMARKS SPURTED to fresh lifetime highs on Thursday over optimism surrounding corporate earnings, reports PTI. The Sensex jumped 70.42 points to end at 34,503.49, while the broader Nifty finished at 10,651.20, up 19 points. The Sensex broke its previous closing high of 34,443.19 and the Nifty surpassed its previous closing record of 10,637 hit on January 9. PAGE 11 GST: Panel moots merger of forms, cutting RCM ambit AWEEK ahead of a crucial GST Council meeting, senior tax officials met on Thursday to finalise the relevant proposals, reports fe Bureau in New Delhi. A merger of triplicate comprehensive tax return forms (GSTR-1, 2 and 3) into one consolidated form and restricting the prospective application of reverse charge mechanism are learnt to be among the key proposals. PAGE 2 2,807.20 2,820 2,788.40 6,446 6,531 7,781 7,660 1.6 25.1 1.3 2,790 10 bps digital business) and improved profitability, was in line with analysts’estimates. AnalystshadestimatedTCS would report a net profit of `6,532 crore on revenues of `31,054 crore, Bloomberg 2,780 Open Close data showed. For the December quarter, consideredseasonallyweakfor the ITindustry,revenues of the country’s biggest software services exporter came in at `30,904 crore, an increase of 1.2% over the September quarter,and a tad below street estimates. However, the company said it registered its strongest sequential volumes growth in the December quarterinthreeyearsof1.6%,while revenues in dollar terms were up 1% to $4.79 billion. The company maintained its operating margins, with a 10-basis-point increase sequentially to 25.2%, even aftercurrencyadjustments.The companyreportedanoperating profit or Ebit (earnings before interest and tax) of `7,781 crore,up 1.6% sequentially. Continued on Page 2 HOME LOANS RBI flags falling asset quality NPAs across slabs of housing loans PSBs (%) NPAs HFCs Total FY16 FY17 FY16 FY17 FY16 FY17 Up to `2 lakhs 12.0 11.9 6.1 8.6 9.8 4.9 5.0 2.4 3.4 4.0 4.4 Up to `10 lakhs 2.7 2.7 1.5 1.2 2.3 2.1 Up to `25 lakhs 1.7 1.7 0.8 0.7 1.4 1.3 >`25 lakhs 0.9 1.2 0.3 0.5 0.6 0.9 TOTAL 1.4 1.5 0.4 0.6 0.9 1.1 With two-digit sales growth, two-wheelers pick up pace BLOOMBERG Mumbai, January 11 MUKESH AMBANI’S TELECOM venture is on course to record its first-ever quarterly profit this financialyear,aided by the government’s decision to slash interconnection fees, people with knowledge of the matter said. Reliance Jio Infocomm, a unit of the nation’s most valuable company Reliance Industries, may report a net income this month itself when it lays out its December-quarter performance,the people said,asking not to be identified discussing private information. The crucial financial milestone would come less that 18 months after Jio, as the company is known, stormed into India’s mobile-phone market withfreeservicesthattriggered a tariff war and forced consolidation in the sector.Achieving profitabilitywouldbeoneofthe parameters thatwill decide the company’s path to an initial public offering after Ambani pumpedatleast$31billioninto the venture. Parent Reliance Industries has surged 77% sinceJiostartedoperationsand dislodged rivals to become the nation’s No.4wireless carrier. A Reliance Industries spokesman didn’t respond to an emailed queryon Jio’s timeline for reporting profits. “We are ahead of ourschedule in terms of the returns that we are generating,” billionaire Ambani had said at a December 1 eventwithout giving any timelines. Jio reported a surprise operating profit in the September quarter,the first time the unit’s resultsweresegregated.Ithada net loss of `271 crore on revenueof`6,150crore.Costshave since declined substantially after a reduction in the fee an operator pays its counterparts forallowing calls to go through. Analysts say AprilDecember sales augur a rate of growth of 12%, a level that was last seen in FY12 Motorcycles sales FY13 (Apr-Dec, % growth) 0.77 2.48 FY14 5.54 FY15 FY16 -2.46 6.3 FY17 9.77 FY18 Source: SIAM DEEPAK KUMAR Mumbai, January 11 MOTORCYCLE SALES, WHICH had been in the slow lane for the past five fiscals, have picked up speed thisyear. According to data released by the Society of Indian Automobile Manufacturers (SIAM) on Thursday, sales during AprilDecember of the current fiscal grew 10%. Though SIAM had refrained from giving any exact projection for motorcycle sales in the current fiscal by merelystating that it expected moderate growth,analysts are optimistic now that the fiscal may see sales back in double digits,nearing 12%,which the industry clocked way back in FY12. In FY17, motorcycle sales grew by just 4%. In fact, during December motorcycle sales rose a whopping 40.31% to 7,88,156 units. This maybe because of the lowbase during the month in the previous year as sales were badly hit due to demonetisation. However, analysts saidthatthegrowthinDecember this year would have been even higherhad it not been the last month of the calendar which prevents companies from despatching higher volumes to the dealers. Market leader Hero MotoCorp posted domestic sales of 3,98,816 units during the month,up 42.71% against the same month last year. Rival Bajaj Auto’s bike sales rose 5.87%to1,12,930units,while HondaMotorcycleandScooter India (HMSI) saw its sales rise by 133% to 1,24,425 units. Binaifer Jehani, director, Crisil Research, said that motorcyclesaleshavegrownat a faster pace this year on account of improved rural demand due to a good monsoon. “Also, the Seventh Pay Commission payouts have started to show an impact on sales numbers,”she said. “Good kharif output and farm loan waivers in key motorcycle contributing states like UttarPradesh,Madhya Pradesh have led to a growth in the overall industry. Normal rabi sowing is further expected to improve sentiments and boost contribution from the rural side. Continued on Page 2 Related reports on Page 6 SIAM lifts sales projections for FY18 FE BUREAU Mumbai, January 11 WITHPASSENGERVEHICLE (PV) sales crossing the 3-millionmarkincalendar2017on robust demand for utility vehicles,which is a five-year high, SIAM on Thursday revised its projections for fiscal 2018 across segments.PV sales,which were earlier projected to grow 7-9% during thefiscal,arenowexpectedto growatthehigherendof9%, the industry body said. Similarly,for commercial vehicles (CVs),growthhasbeenrevised upwardsto13%fromanearlier estimate of 4-6%,while for two-wheelers it has been pegged at 12% against a previous forecast of 9-11%. In terms of growth rate, PV sales in CY2017 was the fastest since 2012 when it rose 9.77%. Vehicle sales across categories, including CVs and two-wheelers, grew 8.39% to 2,37,39,780 units in 2017 compared with 2,19,01,703 units in 2016. InDecember,PVsalesrose 5.22% to 2,39,712 units. Domestic car sales, however, declined a tad to 1,58,326 units against 1,58,617 units in December2016. 10.4 Up to `5 lakhs Jio poised to report first profit this fiscal Source: National Housing Bank FE BUREAU Mumbai, January 11 THE RESERVE BANK of India (RBI) flagged worsening asset quality in the housing-loan space, stating that the nonperforming asset (NPA) ratio in this categoryof loans rose to 1.1% in 2016-17 from 0.9% in 2015-16. Muchofthedeteriorationin asset quality came from the up to `2-lakh loan slab,where the NPA ratio rose 60 basis points (bps) to 10.4% between FY16 and FY17.The rise in stresswas moresevereinthecaseofhous- ing finance companies (HFCs), which saw the NPA ratio in the up to `2-lakh loan segment jump 250 bps to 8.6% at the end of FY17. State-owned banksfaredbetter,withtheNPA ratiodropping10bpsto11.9% at the end of FY17. In an article titled “Affordable housing in India”,released as part of its monthly bulletin for January 2017, the RBI observed that in response to policyefforts,affordable housing is currently driving homeloan growth in the country. Continued on Page 2 Continued on Page 2 Borrowed glory ● NHAI LISTING FE BUREAU Process to start in early FY19 Shipping in mobility Mobile telephony in the country is largely dependent on imports, a Broadband India Forum report has found. The share of mobile and other telecom equipment in the country's total import basket is continually increasing and currently stands at 26.4%. Out of 7 domestic companies, only 2 reported some expenditure on R&D in 2016. KEEN ON mobilising funds to accelerate the pace of highway construction, the National Highways Authority of India (NHAI) will tap the market in earlyFY19viaafewsubsidiaries to be created, reports Surya Sarathi Ray in New Delhi. Being an authority, it cannot haveaninitialpublicofferingon itsown.“Wearenowthinkingof forming subsidiaries. The process might start early in the next fiscal,” NHAI chairman Deepak Kumartold FE. Royalty yield as % of global smartphone sale value 4 3.35% 3 2.88% 2.97% 2.64% 2 1 0 2013 2014 2015 Source: Company financials, GfK, TARI analysis 2016 Details on Page 2 FY17 RESULTS Some IPL franchises on a good wicket, others find a queered pitch ANUSHREE BHATTACHARYYA New Delhi, January 11 AT LEAST SOME Indian Premier League (IPL) teams seem to be spinning in the right direction.Outofatotalofeight teams,fourhave declared their FY17 earnings with the RegistrarofCompaniesandofthese, three have declared a profit during the fiscal. In FY16, of these four teams, two had posted a profit while the other two had turned in a loss. While the Shah Rukh Khan-owned Kolkata Knight Riders (KKR) has largely been profitable all along,the United Spirits-owned Royal Challengers Bangalore (RCB) for the first time in the last four years posted a profit during the fiscal. Kings XI Punjab, which posted a profit of `6.6 crore in FY17, has also been consistently posting profits for the last three fiscals.It had posted a loss of `4 crore in FY14. But the GMR-owned Delhi Daredevils continues to be in the red. It had posted a profit of `7 crore in FY14 but since then has posted losses every fiscal year. IPL team revenue (FY17, In ` crore) KOLKATA KNIGHT RIDERS DELHI DAREDEVILS ROYAL CHALLENGERS BANGALORE KINGSXI PUNJAB REVENUE REVENUE REVENUE REVENUE PROFIT LOSS PROFIT PROFIT 154.2 19.7 132.1 -9 162.1 3.1 106.9 6.6 Source: Tofler Auto tech is at full speed at CES 2018 and Las Vegas looked like a turbocharged Detroit when it came to vehicle technology. CES has evolved into an auto show, as much as it is a tech show ■ Motobahn, P15 Previous close 2,807.10 2,800 « 1.2 25.2 — RAJESH GOPINATHAN TCS CEO CES 2018 thinks beyond autonomous driving 2,830 2,810 Progressive organisations looking to take advantage of new opportunities in the Business 4.0 era are ramping up their digital investments. We signed our first $50 million+ deal in digital this quarter. Special Features Intra-day on BSE (`) 30,541 30,904 Ebit % growth « TATA CONSULTANCY SERVICES (TCS) on Thursday reported a net profit of `6,531 crore for the three months ended December 2017,marking a quarter-on quarter increase of 1.3%. The performance, supported by volume expansion (especially in the PRICE WATERHOUSE ON Thursday said there has been no intentional wrongdoing by its firms in the Satyam case and expressed confidence of getting a stay on the Sebi order, reports PTI. The audit major also said it has learnt the lessons from the Satyam case and invested heavily over the last nine years in building a robust and high quality audit practice. On Thursday, Union minister PP Chaudhary said that the corporate affairs ministry will examine Sebi's order against Price Waterhouse in the Satyam Computer Services case. Finding Price Waterhouse guilty in the multi-crore Satyam scam, Sebi on Wednesday barred its network entities from issuing audit certificates to any listed company in India for two years. Revenue Q3FY18 « FE BUREAU Mumbai, January 11 Q2FY18 « IN THE NEWS No intentional wrongdoing in Satyam fraud: Price Waterhouse (` cr) « Digital business sees strong growth; Europe on track to become second largest market after the US GUNNING THE GAS ● FALLING COSTS “KKR has always managed to cash in on the Shah Rukh Khan factor that has allowed the franchise to earn a higher sponsorship revenue ranging between `40-45 crore. As for RCB,in the initial years the franchise used a lot of its inhouse brands instead of getting third-party sponsors on board, but now that has changed as the franchise’s sponsorship revenue ranges between `35 crore and `40 crore,” said Indraneel Das Blah,co-founder,Kwan Entertainment. Continued on Page 2
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