ECONOMY, P2 SUNIL JAIN ROAD TO BREXIT Niti Aayog’s Kumar bats for independent debt management office PM Theresa May to lay out road map in speeches FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOLUME VIII NO. 316, 18 PAGES, `4.00 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 IN THE NEWS GST returns panel to meet industry this week THE PANEL ON GST returns will meet industry this week to seek their views on simplification of return filing process, reports PTI. It is likely to submit its report to the group of ministers which will place its recommendations before the GST Council by month-end. 15.23% year-on-year, which alsodroveuptheebitdamargin. The company said the performance was largely driven by improved domestic volumes and better realisations across geographies due to rising commodityprices. For the country’s largest two-wheeler manufacturer, Hero MotoCorp, the volume growth was sound as most of the festivals fell during the quarter. The company’s total netrevenuesincreasedby17% y-o-ywhiledippingby12.6%q- COSTLY PROPOSITION Special Features We want to sell meaningful software solutions Honeywell is playing a defining role in the growth of India’s 100 Smart Cities as it aspires to become a software-industrial company, says its India president Vikas Chadha ■ EFE, P8 Looking for ways to reduce the impact of LTCG tax? As long-term capital gains tax on equity will become a reality from April this year, here’s what you should do between now and March 31 to manage your equity portfolio ■ Personal Finance, P9 QuickPick OVL, partners buy 10% stake in Abu Dhabi oil field for $600 m ONGC VIDESH and its partners have acquired a 10% stake in a large offshore oilfield in Abu Dhabi for $600 million, the first time any Indian company has set foot in the oil-rich UAE, reports PTI. The contract for the oilfield in Lower Zakum Concession is a part of the government's efforts to ensure the country's energy security. PAGE 5 Rush to avail MP’s MSP scheme FE BUREAU New Delhi, February 11 OUTCOME THE CENTRE IS yet to work out the modalities of its MSPbased deficiency payments scheme, but if Madhya Pradesh’s just-concluded Bhaavantar Bhugtaan Yojana (BBY) is anything to go by, the scheme will be a costly one. Market arrivals of crops tryingtoavailtheschemehaveshot up by four times in the case of urad — as compared to the previous year where there was no such scheme — and 50% each in the case of maize and soyabean. Compared to 2016-17 when 3.6 lakh tonne of maize came to the market for sale, it was 5.5 lakh tonne in 2017-18, numbers forurad rose from 1.5 lakh tonnes to 6.3 lakh tonne and from 12.6 lakh tonne to 18.8 lakh tonne forsoyabean. The Madhya Pradesh government has spent close to around `2,000 crore for the scheme this year. Since only a small number of farmers are still registered for it,the numbers will increase next year. Around a third of urad production was registered for the scheme in Madhya Pradesh, Market arrivals of crops trying to avail scheme have shot up 5.5L tonne of maize for sale in 2017-18, from 3.6 lakh tonnes in 2016-17 18.8L tonne of soyabean in 2017-18, from 12.6 lakh tonnes in 2016-17 6.3L tonne of urad in 2017-18, from 1.5 lakh tonnes in 2016-17 less than a fifth in the case of soybean,a tenth formaize,and a twentieth for groundnut. While MP has traditionally had lower prices than other states for most crops,after the implementationofthescheme in September 2017, the price difference has risen. Continued on Page 2 ADVERTISING REVENUES The second coming: Broadcasters go regional WITH POTENTIAL FOR advertising revenues in regional markets still looking good, broadcasters are either adding to their bouquets or trying to break in here. At `5,300-6,000 crore, regional advertising spends on television in 2017, grew at about 10% over those in 2016. That compares with around `5,800-6,400 crore of revenues that flowed into the Hindi GEC space in 2017. Most broadcasters, such as Zee Entertainment Enterprises (ZEEL), already have a strong regional presence but an additional channel or two can’t hurt, especially at a time when Hindi GECs are suffering due to many free-to-air channels. Ashish Sehgal, COO, Zee Unimedia, points out that when a national level player like a Star or a Zee, Viacom18 with Colors enters a market, it is able to create more ad inventory.“Since broadcasters VOLUME GAME Ad revenue(` cr) Southern market* 3800-4200 Marathi 550-680 Bengali 450-520 *including 4 languages 2016 2017 Snapshot of AdEx (` cr) 2016 2017 4200-4600 TV industry 600-650 Hindi GEC market 500-550 Regional GEC market 20,100 5,300-5,800 4,800-5,400 22,500 5,800-6,400 5,300–6,000 Source: Industry estimates ANUSHREE BHATTACHARYYA New Delhi, February 11 provide superior content, relative to that offered by local channels, advertisers are happy to spend,” Sehgal said. The four Southern markets — Tamil,Telugu, Kannada and Malayalam —have always been lucrative as have the Marathi and Bengali markets. Now Sony Pictures is gearing up to launch a Marathi GEC while Zee Entertainment, a veteran in many markets, is readying to roll out a Malayalam GEC. Meanwhile, Viacom18 will launch a Tamil GEC. Jehil Thakkar, partner, Deloitte, observes that with the success of Free Dish, broadcasters are changing their business model. Continued on Page 2 13,596 10,916 ` Punjab Rajashtan 21 39 as Chattisgarh, Haryana, Andhra Pradesh, Karnataka and Maharashtra saw improvement in capex in the first nine months of FY18. However, the achievement of many states at Decemberend were much below 50% of therespectivefull-yeartargets. Even though Maharashtra reported a capex of `12,952 crore in April-December this year compared to `10,991 crore a year ago, the achievement is only 34% of the FY18 target of `38,142. Similarly, Karanataka has achieved only 48% of the full-year target of `32,033 crore.It is to be noted that UP, Punjab, Maharashtra, Rajasthan and Karnataka have Tamil Nadu 31 Bihar 33 « UP 34 8,581 WHILETHE CENTREwill miss its fiscal deficit target even after cutting capital expenditure in FY18,the states are also compressing capex to finance rising revenue spending and adhere to their deficit targets. Thecombinedcapitalexpenditure of 23 states stood at `2.04 lakh crore in April-December this fiscal, down 2% from `2.08 lakh crore a year ago. While the overall capex decline is modest, the reduction capex is sharp in the case of some states, notably Uttar Pradesh (UP) and Punjab. UP’s capex fell 61% to `18,309 crore in April-December FY18 from `47,447 crore ayearago. UP has set a capex target of `53,251 crore for FY18. Similarly, Punjab’s capex declined by 62% to `1,278 crore from `3,391 crore a year ago. Bihar, Rajasthan, Tamil Nadu and Madhya Pradesh, too,saw a decline. However, some states such ` « Sample of 1051 companies (excluding banks, financials & OMCs ) Source: Capitaline PRASANTA SAHU New Delhi, February 11 10,787 184.36 231.12 Q4 Q1 Q2 Q3 FY17 FY18 Apr-Dec FY17 Apr-Dec FY18 As % of annual target in Apr-Dec FY18 1,278 Q4 Q1 Q2 Q3 FY17 FY18 (` cr) 3,391 Q4 Q1 Q2 Q3 FY17 FY18 145.29 -3.63 199.42 19.36 (bps, chg y-o-y) Key states seeing decline in capex 18,309 Continued on Page 2 45.83 Continued on Page 2 1.38 28.24 -76.82 13.75 9.87 10.09 7.93 o-q asvolumeswere up 16%yo-y, and dipped by 15.4% q-oq.Realisationswereupby0.8% y-o-y and 3.3% q-o-q. Raw material costs to sales came in at 67.4% against 66.1% y-o-y as the impact of rising RM priceswas feltwell in this quarter. Margins came in at 15.8% which were slightly lower than expected as competitive intensity along with higher marketing spends were observed during the quarter. (bps, chg y-o-y) (% chg y-o-y) RM to sales To finance rising revenue expenditure, farm loan waivers; look to adhere to deficit targets « THE OCTOBER-DECEMBER QUARTERearningsseasoncontinues to maintain its steam with most companies posting a decentsetofnumberswithconsumer demand showing signs of picking up. Management commentary has so far been encouraging from most of the companieswhichhavedeclared results though rising input cost continues to remain a worry. Though signs of modest recoverycannotberuledout,itwould still be early to conclude that a full revival has taken place. TataSteel,whichannounced its earnings during the latter part of last week, saw its net profit rise nearly five-fold though short of estimates.The profits were impacted to some extent due to some provisions made for mining operations as mandated by the Supreme Court. Net sales were much abovetheestimates,growingby Net profit 271.16 Q4 Q1 Q2 Q3 FY17 FY18 PRIME MINISTER NARENDRA Modi on Sunday cautioned against the misuse of cyberspace to ensure it does not become a source of radicalisation, asserting that technology shouldbeharnessedasatoolfor development,not destruction. The comments by Modi at the World Government Summit in his plenary address comesatatimewhentheworld is engaged in efforts to address the misuse and abuse of cyberspace byterrorists and hackers. During the course of his address, Modi highlighted the importance of assimilating technologywithgovernanceto ensure equitable growth and prosperity for all. He emphasised the role technology was playinginIndia’sdevelopment. Moditoldtheaudiencethat India is aspiring to assume leadershippositioninartificial intelligence,Nano,cybsersecurity and cloud computing. He received loud cheers when he referred to what he called the 5Es and the 6Rs.“We need to follow the six Rs which stand for reduce,reuse,recycle, recover, redesign and remanufacture,thiswillleadustopoint wherewecanrejoice,”theprime ministersaid,amid applause. OPM -149.79 FE BUREAU New Delhi, February 11 (% chg y-o-y) PRESS TRUST OF INDIA Dubai, February 11 After Centre, states too curb capital spending « Most companies so far have reported earnings in line with estimates; outlook stable Net sales PM: Use tech for development, not destruction CAPEX CUTS 47,447 Results season shows uptick in demand ● CYBERSPACE MISUSE « OCTOBER-DECEMBER 9,040 PUNE, MONDAY, FEBRUARY 12, 2018 9,961 MSP for all crops signals discarding of marketing reforms GOVERNMENT DEBT Given huge price variations across states, pan-India agri market better than MSPs RENU KOHLI INTERNATIONAL, P4 « OPINION, P6 announced farm loanwaivers, implementation of which could furtherslowdown capex by these states. It is estimated that, loan waivers at the all-India level could be around `2 lakh crore. UP,which does not have a fiscal space, is understood to have slashed capital expenditure to accommodate the farm loan waiver, instead of borrowing from market. Similar trend could emerge in other states. Total borrowings by 23 states declined9%year-on-yearwhile theircombinedfiscaldeficitfell by24%inthefirstninemonths of the current financialyear. Continued on Page 2
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