Thursday, May 24, 2012

A Split Averted in BJP

At last BJP president Nitin Gadkari  has rolled back his decision of reinstalling  Modi's bete noire Sanjay Joshi.   This decision of Gadkari had costed  a heavy price in UP election earlier in February.  Sanjay Joshi’s resignation from the party’s national executive  has confirmed that  BJP  needs  Narendra Modi, the inverse may not be true.
Sanjay Joshi - a scape goat
This small sacrifice is a move to counter a bigger probable move of vertical split in BJP.  The pillars in  four states have been showing their dissident mood continuously from November onwards. That was the time when Gadkari took decision to make Sanjay Joshi incharge of UP elections. Sanjay Joshi has a good reputation of organising capability amongst a certain sect within the  party.  But Khanduri in  Uttaranchal, Vijayaraje Scindhia in Rajasthan and  B.S. Yeddyurappa in Karnataka for different reasons had expressed their resentment against central leadership openly.

On surface the reasons given were different but  their followers had started pushing  these four to get together and  form a separate alliance. These four leaders command over more than two third of electoral base of the party.

Yeddyurappa’s statement before the meet was significant. He told reporters in Bangaluru , "The national executive should deliberate on the issues rocking Karnataka, Gujarat and Rajasthan and promote Modi as Prime Ministerial candidate,". He also  added, "Modi is popular because he has done great work in Gujarat and made the state number one in the country".
He  had  posed a serious crisis a few days ago by threatening the resignation of 70 MLAs from the party.  Unlike other leaders  in BJP Gadkari is proactive administrator, he could sense the danger ahead in the next tenure of his president ship, if no quick decision is taken.  Both Modi and Yeddy  had sent the strong signals.

Gadkari’s request  to rescue was accepted by Nagpur and Sanjay Joshi was asked to tender the resignation.  Displeased Sanjay Joshi accepted the  demand, but did not forget to mention that he was resigning from the National Executive Committee under pressure from top leaders like Narendra Modi.

Will this decision give a peace to Gadkari for next two years  or would catapult new problems? Only time will tell atleast for time being he can get extended bytes of media.

Other Posts :

Gujarat high court uphelds appointment of Lokayukta

Laws of gravity on revolution.

Wikileaks boomranged Congress in Gujarat

Wednesday, May 23, 2012


The dismal performance of the  Giants of Indian Industry has to do more with mismanagement of the government policies than the international crisis. Take any stalwart results of last financial year and guidance for the next tell the same story.

RIL has not been able to recover in last  two years partly because of over estimated reserves of their Gas recovery and partly because of the vindictive approach of MoPNG led by Jaipal Reddy. Refining margin is the only factor that can be attributed to market forces.
Adani Enterprises Ltd.  was looked upon as an alternate  promising and safe company to invest after RIL . However, the results have failed to fulfil that promise. AEL has posted a second straight fall in quarterly net profit due to  as its power business, which is suffering due to high fuel costs amid local shortages. Net profit of AEL for the fourth quarter through March slumped 67% to 3.09 billion, but revenue rose 17% to 106.37 billion. For the year ended March 31, Adani Enterprises's net profit fell to 18.39 billion from   24.76 billion.

Unless political will to reform power sector policy is shown by the central government power sector and Adani both are going to disappoint the investors for some more quarter. On fundamentals the business model of Adani Power is best amongst the best in Power Industry. APL has developed a total integrated business module, when ever the sector recovers this should be the front runner.

But as of the now, the story is no better than other peer companies.  The whole sector where more than   2,50,000 Cr of financial companies is invested, is transforming into NPA. Unless the politicians rise above the short sighted agenda this whole money would go into drain and the country will miss the opportunity to strengthen its infrastructure – a stepping stone for industrialization.

India is facing a coal shortage, estimated to be about 100 million tons for the current fiscal year, hurting growth of the power sector, which is mainly dependent on the dry fuel. Sluggish growth in output at state-run Coal India Ltd., which meets more than 80% of the country's coal requirement, has forced utilities to cut power generation despite an increase in costlier imported coal. Imported coal is at least 50% costlier than local coal.

The group's Adani Power Ltd.  earlier this month posted a second straight quarterly loss for the January-March period, at  2.90 billion. It has 4,620 megawatt of electricity generating capacity and aims to be a 10,000 MW company by the end of March 2013.

In its port business, the company expects annual cargo handling capacity to touch 200 million tons by 2020 from 77.75 million tons.  This will have the highest share in this segment.

Another promising investment Adani has done is in Australia. It has plans to start production from Australian mines in the year 2015.  The project handling capacity of Adani is such that this may happen even before the end of 2014.

The market cap of AEL has dropped to  ₹ 280 billion. The company touched its 52-week high Rs 765.95 and 52-week low Rs 228.50 on 26 Jul, 2011 and 16 May, 2012, respectively. Currently, it is trading -70.14% below its 52-week high and 0.09% above its 52-week low.

Other Posts :

Monday, May 14, 2012

New Mercedes-Benz M-Class SUV launched in India

Mercedes has launched its of luxury sports utility vehicles’ (SUV) ML 350 CDI model  in India on 15th May,2012.  With this  SUV segment has got more competition, now on the niche side.  Early this year it was put for exhibition at Delhi Auto Expo.

The new  third generation  model of this German car maker is longer, wider and slightly lower compared to earlier versions. To make off road drive on the bumpy surface more comfortable ride height is given electronic control  and a click of button to raise  the suspensions .

The ML 350 BlueTEC uses an improved 3.0-litre V6 diesel engine that will produce 258.33PS @ 3600rpm and an impressive torque of 620Nm between 1600-2400rpm. For pick up and peak speed,  Manufacturer performance tests claim a 0-100km/h in just 7.4 seconds and a top speed of 224km/hour.

 The list of safety equipment, interior gadgetry, entertainment options and upgrades to the overall fit and finish gives a  sense of luxury  for which he is willing to pay.

Other Posts :

Quality is must, Its an entry ticket to luxury.

How do brands make use of innovation?

Extravagance of Ambanis-Luxury Yatch

Sunday, May 13, 2012

This Might Just Happen Anytime Anywhere in our Great India

When India is celebrating 60th anniversary of  Parliament and debate on TV Channel is going on the state of country, I recieved an email from one of my friend who is worried about the security concern like all other Indian Citizens.  This is the price we are paying for uncommitted democracy.

Welcome to the Bomb explosion helpline of Home Department, Government of India.

Press 1 for latest bomb explosions

Press 2 to hear Home Minister’s pre-recorded reaction.

Press 3 to hear Prime Minister’s pre-recorded claims to condemn it and assurance to take strong action against culprits.

Press 4 to know whether anybody claimed responsibility for the explosion.

Press 5 to hear pre-recorded claim of Digvijay Singh blaming RSS for explosions.

Press 6 to know whether any innocent terrorist has been arrested by mistake.

Press 7 to know about death toll (press1 for govt version, press 2 for News Channel version, Press 3 for correct version).

Press 8 if you want to know Rahul Gandhi's comparison on blasts in India vis-a-vis blasts in Pakistan.

Press 9 if your relative has died in the explosion and you want to hear Gandhiji’s bhajan.

Press 0 if you wish to participate in opinion poll

(Question : Who is responsible for these blasts, options are
a) Not SIMI        b) Not IM         c) Definetly RSS.
SMS your answer to 1234.

Charges are Rs 6 for Gen category, Rs 3 for SC/ST, Rs 2 for Kashmiri Immigrants, Free for Religious Minorities, Rs 5.99 for freedom fighters and War Heroes.

Thank you for calling. God Bless all those who are still alive!

Other Posts :

Will Anna Hazare do Anshan at this Jantar Mantar?

Saturday, May 5, 2012

Kumar Mangalam buys synergy for AB Nuvo

Kumar Mangalam Birla
The year 2012  will be remembered by two main mile stones in the history of Indian Corporate. One, exit of Ratan Tata who took the challenge of competition with opening up of Indian Economy and placed the Tata group to new heights. Two, the visibility of the efforts of consolidation of “Aditya Birla Group” by Kumar Mangalam Birla.

During the last decade Aditya Birla Group did not make many headlines in  pink news papers. At that time Kumar Mangalam was working silently to consolidate  and watching the news making entrepreneurs.  Now, he is willing to buy the good work done by these entrepreneurs like Kishor Biyani. His flagship company Aditya Birla Nuvo is placed second after Tata Motors in Nielsen’s corporate image monitor survey of 2012.
On the last day of April Kishor Biyani informed the media that his most respected flagship firm, Pantaloon Retail India Ltd (PRIL), which operates the 'Pantaloon' chain of fashion apparel and accessories stores is being taken over by Aditya Birla Nuvo Ltd by infusing ₹ 1,600 crore. (App $ 308 millions). As a part of the deal between the two companies, the Pantaloon format will be demerged from PRIL, a listed entity on the BSE and National Stock Exchange.

This move give Kumar Mangalam two fold advantage: one, access to Pantaloon loyal customers  and second, removal of major threat to his existing brands which he acquired 13 years ago and have nurtured  well.  He had purchased  Madura Garments’ men’s apparel brands, Louis Philippe, Van Heusen and Allen Solly. These brands have survived the rough weather and have created a niche for themselves. But further boost  is required to grow revenues. His portfolio lacked exciting brand for women and kids. Pantaloon deal can fill that gap.
This is a journey of integration from age old business of yarn and fabric which the group had  and sold under Grasim and Graviera suiting brands to men’s niche segment and now further expansion to new vast segment. The Madura brands are valued higher than Pantaloon – a middle class label so far. Madura brands have created the niche brand image, but the cash flow has not been very exciting.
The purchase power of middle class can be encashed through new acquisition. This point well get validated  when on May 15 AB Nuvo will announce its numbers. In last 13 years the apparel business of AB Nuvo  has grown four times to ₹ 2,200 Crore (app $430 million), but is still too less looking to the size of market and the name associated with the brands.

The Indian apparel retail industry is expected to grow at a CAGR of 7% during 2011-14. During 2011 the growth rate was over 8% and total market size was valued at ₹           1,62,000 Crore (App $33.1 billion).  And is likely to cross ₹ 2,00,000 crore (App $33.1 billion) by 2015. To get a larger share of this market  existing brands were insufficient. Louis Philippe is positioned as corporate wear, Van Heusen as a premium brand and  V., a party wear.
Pantaloons comes with its wide range of affordable clothing for of mass and mid-mass brand segment.  Allen Solly, women’s wear brands of AB Nuvo will  get support from the ethnic wear range of  Pantaloons. Women’s wear and kids wear give margins as high as 30-40%. No brand can afford to miss out that.

Though it  sounds simple on paper, but implementing the new merged structure would be difficult to handle.  Many brands from different segments premium and mass brands under one roof pose problems of pricing, positioning and branding.  This would be mandatory that the different teams handle two segments separately.
Madura Garments’ experience will help Kumar Mangalam to make a strategy of injecting Birla values gradually after consolidation so that the resistance to change is minimum and synergy advantage is not lost.

Other Posts :

RIL Profit dipped so is its Control.

Future group to go Professional

SEWA members grow Coloured Cotton