Maruti keeps market share in FY08, Tata loses ground

19 Apr, 2008, 0136 hrs IST, TNN

 

NEW DELHI: Even as the domestic passenger car market grew 12.17% to 15.47 lakh units, market share of Tata Motors and Ford India declined in the last fiscal. Tata Motors' market share dipped 1.72% to 2,27,919 vehicles while Ford India share declined 1.03% to 33,880 units in FY08.

With ageing cars and limited products in their stable, both the companies faced erosion in their market share. While Tata Motors did not witness a drop in sales, Ford India registered a 19% dip in sales. With no new model launch last fiscal, Japanese car makers Honda and Toyota also posted a marginal dip in sales.

Market leader Maruti Suzuki India managed to retain its share in the previous fiscal. World's largest car maker General Motors and utility vehicle major Mahindra and Mahindra (M&M) posted substantial increase in market share.

GM's major sales growth came from the introduction of new models. The debut of Chevrolet UV-A hatchback and small car Spark helped GM double its market share while M&M benefited from its foray into the passenger car market with the Logan sedan. For Maruti, entry into the premium mid-size car market with SX4 sedan helped gain numbers.

Korean major Hyundai Motor India also stabilised its market share with the introduction of new compact car i10, even as the sales of its older models — Santro, Getz and Accent — declined in the last fiscal.


HSBC automobile analyst Sanjay Satpathy said: "Car maker are driving growth from newer models. Customers are looking for excitement and are preferring new cars with more features and better technology. Tata Motors, Ford India and Toyota did not witness growth as they have not launched any new car in the past one year."

 

Source: ET

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IIT, IIM professors can expect salary hike up to 200%

18 Apr, 2008, 1154 hrs IST,Kumar Anand, TNN

 

AHMEDABAD: Top academicians of the country can hope for top salaries too. The faculty members of IITs and IIMs may see a salary rise as high as 200%, to bring them at par with global pay levels. Not just that, the pay scales will be relaxed and a contract system introduced for offering flexible pay packs to ensure that the best brains are not lost to the private companies.

Despite the Sixth Pay Commission recommendations not having a direct bearing on their salaries, the recommendations made by a separate committee formed by the Union ministry of HRD—to be possibly submitted within six months—will have enough clues to take from the Commission recommendations to help country's top institutes compensate their faculty members in the best terms possible. The exercise is to ensure that the faculty is encouraged, salarywise, to put in their best in shaping up the country's top talent.

"The recommendations will be based on what has been laid down in the Sixth Pay Commission, as has been the norm. And if this happens, then IIMs and IITs will be in a position to bring salary of faculty members at par with international standard. This will arm these institutions with the flexibility of deciding their own salary," said senior IIM-A faculty and member of the Sixth Pay Commission Prof Ravindra Dholakia.

 

The commission's recommendations for autonomous institutions, mainly those dealing with contractual appointments, negotiated salary and flexible pay bands have been made with the idea to ensure that none of the senior faculty members stagnate in their career, talented faculty are well compensated and quality of education does not suffer due to the lack of talented faculty pool.

 

The recommendations made by the Commission give these institutes freedom and flexibility to pay any amount of salary to its professors, associate professors and assistant professors, and even appoint international faculty members on contractual terms to enhance the quality of teaching, if they so like to.

A separate committee responsible for making recommendations on salary structure of faculty and administrative staff of IITs, IIMs and central universities is formed following the recommendations made by the University Grants Commission (UGC) committee on salary structure of staff and faculty members of universities and colleges across the country. While UGC will submit its recommendations any time now, the committee deciding on salary structure of faculty members of IITs and IIMs is yet to take shape. But this should not take more than six months to submit its report.

The institutes had earlier followed the recommendations of the Fifth Pay Commission in deciding the salary structure of their faculty and other staff, which is currently equivalent to the salary structure of joint secretary to central government. While IIM-A professors draw a basic salary of Rs 18,400-22,400, the amount is Rs 16,400-20,000 for associate professors. For assistant professors, it is Rs 12,000-18,000.

In its recommendations, the Sixth Pay Commission has introduced pay band instead of pay scale system. "Pay band system will give institutes flexibility enough to pay any amount of salary to its faculty and help retain talent. The concept of contractual appointments will allow autonomous bodies to recruit the best talent by negotiating their salaries," said Professor Dholakia.

"The basic problem is not about reviving salary but to allow flexibility when deciding pay packages, removing the problem of stagnation and finally, delaying the system to increase efficiency. We have focussed on these factors in the Sixth Pay Commission," he added.

 

Source: ET

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US housing crisis melts Indian realty valuations

18 Apr, 2008, 2115 hrs IST,Sanjeev Choudhary & Vivek Sinha, TNN

 

NEW DELHI: The subprime crisis may have struck in the US, but real estate companies around the world are feeling the heat. The meltdown in property firms' valuations in other economies, including India, China, Japan and the UK, has surpassed that of the US with Indian real estate companies witnessing one of the biggest falls. Some leading Indian real estate firms are trading at about 34% discount to their net asset values (NAVs), which implies that property firms are being valued at just two-thirds of the assets they hold.

This makes India the second-most affected nation after Malaysia in the first quarter of 2008 among key property markets, according to a Citigroup report. Interestingly, in the US, the property market index is trading at just 12% discount to its NAV. Its performance is even better than the global index, which is ruling at an 18% discount. NAV is the present discounted value of all future cash flows of a property firm. It factors in the existing landbank, overall development opportunities and project execution of a property firm. It is a valuation tool for real estate firms.

 

Analysts say the discount to NAV shows that the Indian property market is on a downswing. According to ICICI Direct real estate analyst Rupesh Sankhe, "Historically, when the property market cycle is on an upswing, firms trade at a premium to their NAVs, and during a downturn, this tends to get reversed with shares trading at a discount. Since real estate stocks are high risk, the trend gets amplified."

Indian property stock prices have dropped as much as 50-67% and underperformed the Sensex by 23% in the first quarter of 2008. Such a sharp fall has widened the discount to their NAVs, which was just 1-2% in November '07. This is despite the fact that Citigroup has lowered the NAVs of Indian property firms by 9-27% in its analysis. Real estate consultancy firm Cushman & Wakefield joint managing director Sanjay Dutt says high interest rates have made property firms with high debt exposure prone to rapid erosion of corporate valuations.

He added that each segment of the domestic real estate sector is facing problems: "With the exit of speculators from the residential market, the transaction volume is down by almost 40%. Secondly, a large part of the IT & ITES space is occupied by US and Europe-based MNCs, but in the first quarter of this year, a majority of them didn't commit to any space and we don't expect it to change in the second quarter either. In the office space, rates have started softening due to new supplies. Majority of the mall developers are also hit as cost of servicing debt has gone up and private equity funds are being cautious in investing in the sector."

Valuations in the Indian real estate sector had peaked in January, when the benchmark stock market index, Sensex, also hit an all-time high, with realty stocks trading at over 20% premium to their NAVs. After the stock market crash, DLF, Unitech and Purvankara traded at a discount of 18%, 26%, and 49%, respectively, to their NAVs. Regionwise, Malaysia fared worse than India with property stocks here trading at a marginally higher discount compared to India. The correction in Chinese property stocks seems to be the deepest since November last year. Chinese property stocks are trading at a discount of 27% to their NAVs compared to a premium of 5% in November. The US, in fact, saw marginal reduction in discount since November '07.

Some risks appear to be priced in and the valuations seem attractive, but there could be more volatility ahead, says the Citigroup report, pointing out that the sector is highly vulnerable to capital flows as risk appetite tapers off.

 

Source: ET

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Prices will ease with good monsoon, says Baru

19 Apr, 2008, 1644 hrs IST, PTI

 

NEW DELHI: Inflation will ease with good monsoon and the need to take short-term measures to control prices will gradually go away, said an official in the Prime Minister's Office.

"My guess is that with good monsoon, we will see some easing of food price inflation. And, therefore, the temptation of quick-fix price control will go," said Prime Minister's media adviser Sanjaya Baru, while dubbing import duty cuts and ban on exports of certain commodities as short-term measures.

The government and the Reserve Bank has taken a host of fiscal and monetary measures to check inflation, which is hovering at 7.14 per cent now, down marginally from a 40-month high of 7.41 per cent on March 29.

Inflation has mainly been driven by high prices of food and some manufactured goods.

To reign in high prices, the government banned export of non-basmati rice and pulses and reduced duties of refined edible oil. The RBI too increased the mandatory deposits that banks maintain with the central bank to 8 per cent in a bid to curb money supply.

Pointing out that the country is increasingly becoming a food importing nation, Baru said, "It would be in the interest of India to favour continuation of farm subsidies by the US and the European countries so that import prices remain low."

India, however, is opposed to developed countries subsidising their farm sector.

Baru, who made these comments at the IISS-Citi India Global Forum here, clarified that he was speaking in his personal capacity and not as spokesperson of the government. "It is for the Commerce Ministry to take a view of the issue", he added.

 

Source: ET

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Gold tumbles by Rs 325 on global cues

19 Apr, 2008, 1536 hrs IST, PTI

 

NEW DELHI: Gold prices tumbled by Rs 325 to Rs 12,060 per 10 gram on the bullion market on Saturday on aggressive selling by stockists triggered by steep fall in its prices in global market.

Selling pressure gathered momentum after reports that the gold fell the most in two weeks in global markets as dollar rebounded from an all-time low against the euro, reducing the appeal of the precious metal as an alternative investment.

Silver also dropped in line with gold and reduced offtake by industrial units.

Marketmen said despite busy ongoing marriage season steep fall in its prices in the international market mainly attributed to hefty plunge.

The dollar rose against the euro and the yen on speculation that financial companies will survive the credit crisis. Gold in New York dropped by $ 27.20 to $915.20 an ounce and silver futures for May delivery declined 48.5 cents to 17.82 dollar an ounce.

Standard gold and ornaments tumbled by Rs 325 each to Rs 12,060 and Rs 11,910 per 10 grams respectively.

Sovereign followed suit and lost Rs 50 at Rs 9900 per piece of eight gram.

In a similar fashion, silver ready plunged by Rs 650 at Rs 23,550 per kg and weekly-based delivery by Rs 610 at Rs 23,290 per kg respectively. Its coins also lost Rs 100 at Rs 26,600 for buying and Rs 26,700 for selling of 100 coins.

 

source: ET

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