OPINION, P6 COMPANIES, P5 A GULATI & R JUNEJA Agri-reform roadmap missing from parties’ manifestos INTERNATIONAL, P4 SUNIL JAIN EYEING MORE GROWTH AS RATINGS DIP Neither caste, nor GDP, nor jobs, nor Hinduism alone can explain voting patterns TCS ‘hungry’ for acquisitions, says COO Subramaniam Brexit can’t define us, says May’s de facto deputy Lidington NEW DELHI, MONDAY, APRIL 15, 2019 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLV NO. 37, 14 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) 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 CORPORATE INDIA Five tough years and counting IN THE NEWS Insolvency cases: Creditors recover nearly half of claims NEARLY HALF of their total admitted claims worth over `1.42 lakh crore have been recovered by financial and operational creditors from as many as 88 debt-ridden firms under the insolvency law, according to official data, reports PTI. The claims were admitted in 88 cases under the IBC till February 28, IBBI data showed. FE SPECIALS FNP: From flowers to QSR Will Ferns N Petals’ diversification into cafés and premium water pay off? ■ eFE, P8 Power of connectivity From healthcare to heavy engineering, companies are realising the business value brought in by Internet of Things ■ PERSONAL FINANCE, P9 Tracking insurance claims Policy holders will now be able to track the status of their insurance claims at every stage of processing ■ INFRASTRUCTURE, P11 Smart solutions integral to Mela Cutting-edge technologies provided by L&T played a key role in the success of Kumbh 2019 ■ SCIENCE & TECH, P12 The Hobbit’s cousin More new human species are discovered, South-East Asia reveals details of ancient relatives QuickPicks ‘Developing country’tag: US seeks review at WTO; targets India,China THE US has sought a review of the ‘developing country’ status at WTO, saying several members including China and India that have moved up fast on economic and social ladders since formation of the multilateral body in 1995 are still enjoying special and preferential treatments, reports Banikinkar Pattanayak in New Delhi. India and China have rebutted these claims. PAGE 2 FCI takes fresh loan of `60k cr from NSSF; Centre staring at debt trap PRODDED BY the Centre, the Food Corporation of India has taken a fresh `60,000-crore loan from National Small Savings Fund just before the fiscal came to an end, reports Prasanta Sahu in New Delhi. What necessitated it was the Centre’s inability to foot the budgeted food subsidy bill, given a big revenue shortfall. PAGE 2 *(Dec) Universe: All companies: 2,117 (excl banks, financials) rebounding, operating profits are expected to decelerate a touch,crimping margins. The problemis demand has flagged following the general slowdown in the economy,the disruption from demonetisation and GST which threw smaller companies off-kilter. Negligible investments by the private sector in the last four years have meant very limited job creation and in some instances job losses. 21.8 10.8 344 infra projects show cost overruns of `3.16L cr PRESS TRUST OF INDIA New Delhi, April 14 FY19* FY17 75.4 FY18 8.8 149.7 FY19* FY18 -400 -282.7 FY16 -388.8 -200 FY15 FY19* -1.7 0.6 FY18 FY17 0 FY17 1.8 -3.6 6.3 FY16 -15 FY15 -0.8 FY19* FY18 7.5 3.5 25.4 2.7 0 (%) 200 (%) 16.8 16.2 FY16 FY19* -15 FY15 15 15 RM/sales -13 30 (%) Source: Capitaline Insufficientliquidity,worsened by the NBFC crisis, is beginning to hit consumption demand and is starving even mid-sized firms of affordable working capital. And large government borrowings — including those done off the balance sheet — have crowded out the private sector. Real interest rates are at nears even-year highs. Continued on Page 2 TURBULENT TIMES Jet pilots postpone ‘no flying’ decision PRESS TRUST OF INDIA Mumbai, April 14 ■ BRANDWAGON, P10 FY17 FY16 FY19* -15 FY15 19.9 10.7 9.7 4.8 8.1 15 0 FY18 0 FY17 5 Costs 30 PAT 9.2 Ebitda 15 (%) 10 Other income 30 (%) 0 FY18 1.8 -2.2 6.1 FY17 -10 FY16 0 FY15 10 2.2 CORPORATE PROFITS IN the last year of the NDA regime may grow at 0%. That sounds bad but not so muchwhenyou consider that net profits fell both in 2014-15 and in 201718. What’s more, operating profits grew at sub 5% in two of the four years to 2017-18 and sub 10% in the other two. Both manufacturing and exportshavefaredpoorlythese past few years and that’s why despite the push to GDP from the re-based data, the economy has been slowing from 8.2% in 2016-17 to 7.2% in 2017-18 and further to an expected 7% in 2018-19. It could get worse before it gets better. An assessment by Crisil says that while soft commodity prices enabled Ebitda margins for a clutch of 347 companies to staystable at 1517% in 2018-19, this could reverse. With prices now Revenue 20 (%) FY16 SHOBHANA SUBRAMANIAN New Delhi, April 14 REPORT CARD FY15 With commodity prices rebounding, operating profits are expected to decelerate a touch ● BEYOND THE BUDGET JET AIRWAYS PILOTS’ body, the National Aviator’s Guild (NAG), on Sunday deferred its “no flying” call to a later date, even as the management is scheduled to meet the lenders on Monday. Earlier in the day,the guild, which has around 1,100 pilots as its members, decided to stop flying from April 15 in protest against non-payment of salaries. “It has come to our notice that there is a critical meeting planned tomorrow (Monday) morningwith the airline management and SBI. “In light ofthe meeting,the members have requested, through their team leaders, thatthe call of‘nopay,nowork’ be deferred to give the airline a chance of survival. Accordingly, as requested, the committee would like to inform all that the decision stands deferred for the time being,” the guild committee said in a late evening communication to its members. All pilots are still requested, however, to be present at Siroya Centre at 9.30 am on April 15 in their uniforms,it said. Siroya Centre is the Jet Airways headquarters in the Andheri suburb of Mumbai. Continued on Page 2 Jet extends suspension of West-bound flights till Apr 16 PRESS TRUST OF INDIA Mumbai, April 14 STRUGGLING FOR SURVIVAL owing to severe cash crunch, Jet Airways has suspended its operations in Saarc and Asean regions indefinitely, besides extending suspension of its services to Toronto and Paris from Chennai and back. The airline has also cancelled its long-haul, Westbound operations to and from Amsterdam,London and Paris tillApril 16,Jet said on Sunday. Operatingwith6-7aircraft, Jet Airways had on Friday extendedsuspensionof itsservices to these destinations until Monday. “Jet Airways has currently suspended operations to Saarc and Asean destinations, as well as to Toronto and Paris from Chennai and back,” the cash-straped airline said in a statement. AS MANY AS 344 infrastructure projects, each worth `150 crore or more, have shown cost overruns to the tune of over `3.16 lakh crore owing to delays and other reasons,a report said. “Total original cost of implementation of the 1,424 projects was `18,17,469.76 crore and their anticipated completion cost is likely to be `21,33,649.81 crore, which reflects the overall cost overruns of `3,16,180.05 crore (17.40% of original cost),” the ministry of statistics and programme implementation’s latest report for December 2018 said. The ministry monitors infrastructure projects worth `150 crore and above.Of these 1,424 projects, 344 reported cost overruns and 384 time escalation. According to the report,the expenditure incurred on these projects till December 2018 was`8,06,997.78crore,which is 37.82% of the anticipated cost of the projects. However, it said the number of delayed projects decreases to 326 if delayis calculated on the basis of latest schedule of completion. For 686 projects, neither theyearofcommissioning,nor the tentative gestation period has been reported. Out of 384 delayed projects,113 projects have overall delay in the range of 1 to 12 months, 61 are delayed by 13 to24months,101reflectdelay of 25 to 60 months and 109 projects show 61 months and above delay. The average time overrun inthese384 delayed projects is 44.78 months. The brief reasons for time overruns, as reported by various project implementing agencies, are delays in land acquisition, forest clearance and supply of equipment. Reaching out Congress general secretary Priyanka Gandhi waves to supporters during a roadshow in Silchar, Assam, on Sunday PRIYANKA IN SILCHAR ‘Attempt being made to destroy the Constitution’ PRESS TRUST OF INDIA Silchar (Assam), April 14 COMING DOWN HEAVILY on the BJP, Congress leader Priyanka Gandhi Vadra on SundaysaidtheConstitutionis not being respected and an attempt is being made to destroy it by the current dispensation. Holding a roadshow in Silchar in support of Congress candidate and sitting MP Sushmita Dev, she also said that Prime Minister Narendra Modi has toured the world over, but hardly spent time in his own constituency — Varanasi in Uttar Pradesh. “It is ‘Mahapurush’ (BR) Ambedkarji’s birth anniversary. He laid the foundation of this country through the Constitution. It is the duty of every leader to respect that Constitution. “Today, you are seeing that the Constitution is not respected and an attempt is being made to destroy it,” said Priyanka, who is Congress’s general secretary in-charge of CAMPAIGN MODE ■ Priyanka appealed to peo- ■ She also criticised the ple to defeat the BJP-led govt, which she said does not listen to public voice govt for its ‘flawed policies’, cited withdrawal of ‘special status’ to Assam ■ Slamming the BJP ■ She urged people to manifesto, she said there was no space for different cultures and religions in it Uttar Pradesh East. SlammingthetheBJPmanifesto,shesaidthereisnospace for different cultures and religions in it, as well as any respect for the Constitution. “On the other hand, the Congress manifesto has the ‘Nyay’ scheme, under which a poor family will get `72,000 annually...In everyword,there isrespectfortheConstitution,” she said. Priyanka said she was told by people in Varanasi that Modi did not spend even five minutes with anyone there in the last five years. “He went to America and hugged there, went to China read the party manifestos carefully before deciding to vote for a candidate and hugged there,too.Hewent and hugged in Russia and Africa. He went to Japan and played the drum. In Pakistan, he had biryani.“But in his own constituency, he did not go once to a family’s house to enquireabouttheircondition,” she alleged. The Congress leader appealed to people to defeat theBJP-ledgovernment,which she said does not listen to public voice, does not try to understand their problems, does not believe it is peoples’ governance,and onlywants to enjoy power. Continued on Page 2 Bad news India Post pips BSNL & Air India, is top loss-maker INDIA POST, which runs the ubiquitous post offices in the country and popular savings schemes apart from performing its relatively new functions like distributing MGNERGS wages, is turning out to be an enormous fiscal burden, reports Prasanta Sahu in New Delhi. The perennial gap in the state-run entity’s revenues and expenditures has skyrocketed in recent years and touched a staggering `15,000 crore in FY19, according to data reviewed by FE (see chart). India Post’s annual deficit is now much higher than the losses incurred by ‘top loss-making’ PSUs like BSNL and Air India, which reported losses of `8,000 crore and `5,340 crore, respectively, in FY18. Like other loss-making public sector enterprises, India Post’s finances are weighed down by high pay-and-allowance costs, now at over 90% of its annual revenue. Continued on Page 2 16,000 12,000 India Post's losses ~15,000 (` crore) 8,000 4,000 0 1,210 FY06 FY19 `17,451 crore ■ Estimated pay & allowances cost of India Post in FY20, 90% of its projected revenue in the year 4.33 lakh ■ India Post employees as on March 31, 2017 IN TUNE Staying alive: Music streaming apps tango with telcos ASMITA DEY New Delhi, April 14 ONLINE MUSIC STREAMING app YouTube Music claims it attracted three million downloadswithinaweekofitslaunch in India.That’s good going.But the million-dollar question is whetherlistenerswillstaytuned because they are now increasinglyspoiltforchoice:apartfrom JioSaavn,GaanaandWynk,there are the global streamers YouTube Music, Apple Music, SpotifyandAmazonMusic. JioSaavn `99 `299 1 month 1 year Amazon Music `129 `999 Monthly Yearly Gaana `99 `199 `299 1 month 3 months 1 year Apple Music `49 YouTube Music `99 `99 (For android) Monthly `129 (For IOS) Monthly `149 Monthly (For students) Monthly (For individuals) Monthly (For family) Wynk Music `499 `999 `49 `99 Yearly Yearly Monthly Monthly (for Airtel subscribers) (for non-Airtel) (for Airtel subscribers) (for non-Airtel) Spotify `129 `389 `719 `1,189 1 month 3 months 6 months 1 year India maybe a big customer but not everyone wants to pay fortheirmusic,especiallywhen plenty of it is already available on radio channels or even YouTube,which comes downloadedwithanAndroid phone. Of the estimated 150 million users,just about 1-1.5 million pay for their music today, according to experts who point outsubscriptionrevenuescame in a shade below `100 crore in 2018.But acquiring customers can be an expensive affair — $1.5-$6.5 — and content does- n’t comecheap either. EY (M&E) director Raghav Anandsayswithoutaminimum number of users and a minimumArpu,itisdifficulttodefray the high CAC and content costs. The app economics,experts say, begintolookgoodoncethereare 20 million steady users paying around `150 per month; while the money is made from 5 millionusers,20millionareneeded, given the churn can be high at around60-70%. Continued on Page 2
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