The year 2014 has ended on a high for players in the medium and heavy commercial vehicle space, with December sales clocking a robust pick-up.
The year 2014 has ended on a high for players in the medium and heavy commercial vehicle space, with December sales clocking a robust pick-up. CNBC-TV18'S Alexander Mathew and Arvind Sukumar report that the industry is now looking forward to this uptick continuing through 2015.
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With the Narendra Modi government gearing up for its second Union Budget, Finance Minister Arun Jaitley on Tuesday held pre-Budget consultation with industry and trade groups.
In an interview to CNBC-TV18 CII president, Ajay Shriram said they discussed with the FM of ways to increase the revenue generation. He said the industry body is confident that government will look at disinvestment more aggressively.
According to him the market is still buoyant and mood about India is largely positive across the world.
Talking about the goods and services tax (GST) rate, he said it should be in the range of about 20%, lower than the state and Centre averages.
Below is the transcript of Ajay Shriram's interview with CNBC-TV18's Shereen Bhan.
Q: You met with the finance minister today. It seems that industry organisations like yours have presented a wish list which is or less similar to the one submitted earlier to the finance ministry. Does this mean that issues of interest and priority have yet to be fully addressed by this government?
A: No, I don't think so. If you compare what we did last year or rather eight months back than what we are doing today there are a couple of new additions. It is definite that in the last seven months the government has made changes across many areas and we fully support the approach of the government where they say the Budget is only a one day accounting exercise but changes and benefits to the economy or changes for economic growth can be done every day of the year. So, we support that totally.
But in this year also there are some new ideas. For instance we recommended that all the NPAs which are there for infrastructure spending which are given by banks please put them into a separate corporate entity and that can then be taken care of separately like you have asset reconstruction companies and the bank's liquidity position, bank's ratios will be better. They can then look into the investments in the future.
So there are other areas also. We have also recommended for instance saying that for infrastructure growths can one look at the government taking up the projects for implementation and then giving it to a private company for revenue sharing so the government recovers the money through the management and the maintenance of these later on. So there are new ideas which keep coming in.
Q: The recent midyear review talked about challenges in meeting the fiscal deficit target for FY16. Does this mean that in the coming financial year, the government will have its hands tie when it comes to its own spending programme or supporting the industry through any kind of fiscal measures? All of you are talking about the fiscal stimulus at this point in time but can the government afford it?
A: It is a bit of a challenge there is no doubt on that but our recommendations today when we met the finance minister and his team was also areas and how to increase revenue. So that is one area by which they can increase revenues. For instance the target of disinvestment inflows into the government accounts have not been based on what the Budget was. If that had happened they would have got additionally Rs 40,000-45,000 crore. We are suggesting for the next year please have a Budget of Rs 60,000 crore.
Q: It doesn't seem likely that the government will be able meet the target set for this financial year. Given that situation, I know CII has pegged an even more aggressive disinvestment target for the coming year, do you believe that is this a case of the government mismanaging the disinvestment schedule once again, we saw the previous government do it, do you believe that this government is guilty of mismanaging the disinvestment schedule as well?
A: There is always a little time it takes to come to the stage of implementation. I hope and I feel it is a situation of planning for the disinvestment, the markets are still buoyant, the mood about India is positive across the world. So, I am confident that they will look at the disinvestment in the new financial year in a more aggressive manner.
Q: The budget session will also see action related to Goods and Services Tax (GST). The initial feedback on the rates is that it will be significantly on the higher side. What according to CII is an ideal rate for GST that will take care of interest of corporate India, states as well as the centre?
A: GST is something which we are absolutely behind and we appreciate the efforts put in by the FM and his entire team on that. Our judgement says that to have a wider base for GST, two things. One, we should virtually bring it on all products and services because that then ensure it is wider and secondly the rate should be lower than the calculations which show the state and central averages. That comes to about 26 percent plus.
Our feeling is GST should be in the range of 20 percent because that will then be accepted better, adherence will be better and with a wider base within a short period of time the inflows into the government coffers will go up.
Housing sales are estimated to rise this year to 1.92 lakh units in the country's top seven cities on expectations of interest rate cut and stable prices, according to property consultant JLL India.
Housing sales fell to 1.75 lakh units in the primary markets of seven major cities in 2014 as compared to nearly 2 lakh units in the previous year.
These seven cities are Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad and Pune.
Supply, however, is estimated to decline marginally to 2.18 lakh units this year from 2.2 lakh units in 2014.
Developers would be sitting on unsold inventories of 27 months at the end of this year as compared to 28 months in 2014-end.
"2015 will see home buyers benefiting from reduced borrowing rates, increased developer-focus on affordable homes, largely stable prices, and better job and income prospects," JLL Chairman and Country Head Anuj Puri said.
Puri added that this year would definitely be good for the real estate sector as borrowing rates are sure to go down from the current levels and economic activity is gradually picking up.
"With property prices staying stable and good deals being offered by developers in order to clear their inventory, fence-sitting buyers be further encouraged to press the 'buy' button," JLL said in a report.
Stating that developers are now largely focusing on affordable homes, the consultant said this would help in bridging the existing wide gap between demand and supply of affordable homes.
According to JLL, developers would become more earnest about right-sizing and right-pricing their offerings.
"Smaller, yet better-designed and more efficient homes will define the residential real estate market in 2015, and selective corrections in some of the over-priced cities will help bring about faster sales for stagnated supply of larger configurations," JLL said.
The consultant felt that townships would become more prevalent, while the supply of luxury homes would moderate to align with the slow demand.
Confident about further growth in its mutual fund and securities market businesses, financial sector conglomerate Reliance Capital expects a boost in its life insurance business as well in 2015.
Besides, the group should record a faster growth in its general insurance venture this year, Reliance Capital CEO Sam Ghosh said.
He said the 2014 has been very good for Reliance Capital in areas like mutual funds and brokerage businesses, although growth was somewhat stagnant in the life insurance segment.
"I expect the growth trends to continue in the mutual fund and broking businesses, while life insurance should see an uptick. Besides, general insurance should also see faster growth in 2015," Ghosh told PTI in an interview.
Speaking about the business outlook for 2015, Ghosh said there is "a lot of positivity around and the same should result in good growth in commercial finance, SME finance and other businesses as well".
Ghosh also said Reliance Capital would continue with its ongoing policy of exiting from the day-to-day operations of non-core businesses and there could be more divestments of such assets in 2015.
However, it may not be complete exits from such ventures and the group would rather focus on exiting the management of such ventures while retaining some as financial investments, he added.
On the overall economy, Ghosh said the government is doing all the right things and therefore the economy should prosper and the same would reflect in the markets as well.
"The services sector is already seeing an uptick and the manufacturing is also expected to grow going forward," he said.
Reliance Capital, financial services arm of industrialist Anil Ambani-led business conglomerate Reliance Group, is also likely to soon divest more equity in its life insurance venture to its foreign partner Nippon Life (which currently holds 26 per cent stake).
Besides, Reliance Capital also plans to rope in foreign partners for its health insurance and general insurance ventures. Taking an ordinance route, the government has permitted up to 49 per cent foreign investment in insurance.
Reliance Capital has interests in asset management and mutual funds, life and general insurance, commercial finance, equities and commodities broking, among others.
It had reported 20 per cent rise in its second quarter net profit at Rs 217 crore, helped by robust growth in mutual fund, commercial finance and general insurance businesses.
Total income rose by 12 per cent to Rs 2,084 crore for the quarter ended September 30.
Also Read: Sumitomo Mitsui buys 2.77% in Reliance Cap for $58.4 m
As it awaits final RBI guidelines to apply for a universal banking license, Reliance Capital has also roped in Sumitomo Mitsui Trust Bank of Japan as a long-term strategic partner.
Rel Capital stock price
On January 02, 2015, Reliance Capital closed at Rs 498.95, up Rs 1.30, or 0.26 percent. The 52-week high of the share was Rs 668.40 and the 52-week low was Rs 304.55.
The company's trailing 12-month (TTM) EPS was at Rs 17.55 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 28.43. The latest book value of the company is Rs 472.71 per share. At current value, the price-to-book value of the company is 1.06.
Young Turks starting the year with two special episodes. First a discuss on the year gone by and in the next episode we spot the big ideas for 2015.
Young Turks starting the year with two special episodes. First a discuss on the year gone by and in the next episode we spot the big ideas for 2015.
Joining us today is Rahul Bhasin of Baring India. Bhasin has been investing in PE since 1997 and manages a capital pool of over USD 800 million. Also with us Dimple Sanghi the Director at Omidyar Network who brings 21 years of in depth knowledge of the financial services space including more than 11 years in PE in India and Rahul Khanna of Trifecta Capital who was until recently the Managing Director at Khanna & Partners a global venture capital fund with USD 3.5 billion under management. Rahul has 19 years of operating and investment experience in technology, media and telecom and also Parag Saxena of New Silk Route Partners, a veteran investor. He has a track record of building organisations in the consumer services, infra, telecom and IT space.
For complete show, watch accompanying videos.
Catch the fourth edition of India Engineering Sourcing Show which held at Bombay Exhibition Center, Goregaon in Mumbai between 16 December and 18 December, 2014.
Catch the fourth edition of India Engineering Sourcing Show which held at Bombay Exhibition Center, Goregaon in Mumbai between 16 December and 18 December, 2014.
For complete show, watch accompanying videos.
During 2014, the company recorded its highest ever domestic sales in a calendar year with 1,79,816 units, a growth of 67 per cent, from 1,07,661 units in 2013.
Honda Cars India today posted nearly three-fold increase in domestic sales at 14,428 units in December.
The company had sold 5,493 units in December 2013, Honda Cars India Ltd (HCIL) said in a statement. Last month, the company sold 1,120 units of small car Brio, 5,176 units of compact sedan Amaze, 2,098 units of Mobilio and 6,012 units of the mid-sized sedan City.
Besides, the company sold 22 units of sports utility vehicle CRV.
In addition, the company exported a total of 620 units during the month.
Also read: Bajaj Dec sales slip 3% to 2.86 lakh; co expects rise ahead
During 2014, the company recorded its highest ever domestic sales in a calendar year with 1,79,816 units, a growth of 67 per cent, from 1,07,661 units in 2013.
Commenting on the sales performance, HCIL Senior Vice-President (Marketing and Sales) Jnaneswar Sen said: "Two successful launches of Honda City and Honda Mobilio coupled with strong demand for all models throughout the year have contributed to 67 per cent growth in HCIL sales in 2014".
Honda's fast expanding dealer network in tier III markets has further contributed to this sales growth, he added.
The Jharkhand-based mine, which has 10 million tonnes per annum capacity, is crucial to Tata Steel's raw material supply for its 9.8 mtpa Jamshedpur facility.
The Jharkhand-based mine, which has 10 million tonnes per annum capacity, is crucial to Tata Steel's raw material supply for its 9.8 mtpa Jamshedpur facility.
"We have started the mine from January 1. It will reach to its full capacity in 2-3 days. The rated capacity of the mine is 10 mtpa," the official said.
The Noamundi mine has been closed since September on renewal of lease issues which forced Tata Steel to resort to imports of iron ore to the tune of 5 million tonnes. The issue cropped up following a notification of Mines Ministry last July amending Mineral Concession Rules, 1960, which provide for a period of two years to execute renewal lease for the first time.
It does not provide the leverage for second and subsequent renewals, based on the interpretation of a Supreme Court directive. This led to the closure of more than 40 mines in Odisha and Jharkhand belonging to SAIL , Tata Steel and others.
The closure of the mines forced Tata Steel to temporarily suspend operation of a blast furnace for over a month. It had earlier said this would impact the stability of operations, cost structure and profitability during the October-December quarter.
However, it is looking for better days during the January-March quarter as its four mines in Odisha have resumed last month.
Tata Steel has been operating its mines in Jharkhand and Odihsa for several decades and the operation of its Jamshedpur facility is dependent "equally" on these mines located in the two mineral-rich eastern states.
Also Read: Core sector growth jumps to 5-month high of 6.7% in Nov
Tata Steel stock price
On January 02, 2015, Tata Steel closed at Rs 410.80, up Rs 6.25, or 1.54 percent. The 52-week high of the share was Rs 578.60 and the 52-week low was Rs 332.20.
The company's trailing 12-month (TTM) EPS was at Rs 84.86 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 4.84. The latest book value of the company is Rs 629.60 per share. At current value, the price-to-book value of the company is 0.65.
The government hopes to garner additional Rs 6,000-7,000 crore through this third hike.
The government on Thursday raised excise duty on petrol and diesel by Rs 2 per litre each.
According to an official statement, the hike in basic excise duty on petrol and diesel (both branded and unbranded) will aid in funding the government's ambitious infrastructure development programme, particularly building of 15000-kms of roads, during current and next financial year.
The hike in rates will come into effect from the midnight (January 2, 2015), said the statement, adding that there will be no change in other excise duty rates applicable to these commodities.
This is the third excise duty hike since November, which will help government raise additional Rs 6,000-7,000 crore during remaining three months of the current fiscal.
"Allocation of these resources to the road sector will also spur economic activity and employment generation arising from the road construction sector," the statement said.
IOC stock price
On January 01, 2015, Indian Oil Corporation closed at Rs 336.55, up Rs 4.95, or 1.49 percent. The 52-week high of the share was Rs 410.90 and the 52-week low was Rs 194.50.
The company's trailing 12-month (TTM) EPS was at Rs 41.40 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 8.13. The latest book value of the company is Rs 271.80 per share. At current value, the price-to-book value of the company is 1.24.
Sathiyavathi, a 1982-batch IAS officer of the UT cadre, has been appointed as the Director General of Civil Aviation for three years till 2017. She is likely to take charge on Monday.
The first woman chief of aviation regulator DGCA M Sathiyavathy is likely to take charge from incumbent Prabhat Kumar early next week, officials said today.
Sathiyavathi, a 1982-batch IAS officer of the UT cadre, has been appointed as the Director General of Civil Aviation for three years till 2017. She is likely to take charge on Monday, the officials said.
Kumar, a 1985-batch IAS officer of the Uttar Pradesh cadre who was appointed in January last year as the DGCA head for three years, would revert to his home cadre.
The top-level change comes at a time when DGCA is faced with a review report of the US regulator Federal Aviation Administration (FAA), which had downgraded its safety ranking to Category-II on par with countries like Bangladesh, Barbados, Ghana and Nicaragua.
India was till January last year holding the topmost safety ranking Category-I.
Kumar had taken a series of steps and brought in several regulations to enhance aviation safety to resolve the deficiencies pointed out by the FAA.
The FAA, which held its third audit of DGCA only last month, is likely to come up with its assessment over India's safety mechanism by February. Following this, it would decide whether or not to revert India to the top Category-I.
Kumar had initiated several measures and come up with new regulations to enhance safety of air operations. The measures included carrying out surprise checks on airlines, non-scheduled operators and chopper firms to test whether the mandatory safety requirements were being fulfilled by them.
Sathiyavathy, who was appointed as Additional Secretary and Financial Advisor to the Civil Aviation Ministry in February and had served as Puducherry's chief secretary before that, is due for elevation as Secretary by July.
The DGCA chief's position has so far gone to IAS officers of the rank of Joint Secretary or Additional Secretary.
Also Read: Vistara to launch operations from January 9
