Companies & Sectors
Builder association requests independent regulator for cement industry

According to BAI, all free markets needed a regulator not only to regulate the sector but to expedite grievances of others

 
Madurai: The Builders' Association of India (BAI) has suggested setting up an independent regulator for the cement industry on the lines of Insurance Regulatory and Development Authority (IRDA), following recent developments, reports PTI.
 
The Regulator should have quasi-judicial authority, BAI trustee DL Desai said. He told reporters in Madurai that the Competition Commission of India's penalty of Rs6,300 crore on 11 cement companies last month for violating provisions of the Competition Act, 2002 was a landmark judgement under the act.
 
He suggested CCI follow the trend set by its sister bodies like tribunals of Income tax, sales tax and Excise Departments and direct cement companies to deposit 50% of the fine before accepting their petition.
 
The BAI would oppose tooth and nail any petition from cement companies seeking a stay on recovery of the penalty. The development in this case, Desai said, would be path breaking in fighting cartelisation in vital commodity sectors.
 
According to him the fine of Rs6,400 crore was meagre compared to profits earned by the industry with an installed capacity of 320 million tonnes, with the present demand standing at 250 MT. CCI's penalty on them was only 0.5 times their profits in 2009-10 and 2010-11, he said.
 
He pointed out that even the Parliamentary Standing Committee headed by Shantha Kumar had concluded that price escalation in the cement sector was profit-driven and had recommended setting up a regulator.
 
All free markets needed a regulator not only to regulate the sector but to expedite grievances of others, he said.
 

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BHEL Q1 up 13% to Rs921 crore

During the June quarter, BHEL's net sales also rose by 17% to Rs8,326 crore from Rs7,132 crore last year

 
New Delhi: State-run power equipment maker BHEL has reported about 13% jump in net profit at Rs921 crore for the first quarter ended June 2012, reports PTI.
 
It had posted net profit of Rs815.5 crore in the April- June quarter of 2011-12, BHEL said in a statement on Thursday.
 
The company said, during the June quarter, its net sales rose about 17% to Rs8,326 crore, from Rs7,132 crore in the same period of the previous fiscal.
 
The company has an outstanding order book position of Rs1.3 lakh crore at the end of June 2012.
 
It includes the Rs950 crore contract for supplying equipment for 1,020 MW hydel project in Bhutan, bagged by BHEL last month.
 
The order envisages manufacture, supply, erection and commissioning of the electro-mechanical equipment for the 1,020 MW Punatsangchhu-II Hydroelectric project.
 
BHEL is also executing the 1,200 MW Punatsangchhu-I project in Bhutan. It is being set-up under a bilateral agreement between India and Bhutan.
 
Located around 80 Km from Thimphu on the banks of the Punathsangchu River in Western Bhutan, the project is an environment friendly run-of-the-river scheme.
 
The company has, so far, executed three hydro projects - 336 MW Chukha, 60 MW Kurichu and 1,020 MW Tala in Bhutan. These projects account for nearly 95% of the total power generating capacity in Bhutan.
 
BHEL has established footprint in six continents, spanning over 75 countries.
 

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ITC Q1 net profit up 20.2% to Rs1,602 crore on robust sales

Despite a challenging economic climate, the conglomerate saw its sales growing at an impressive 15% while its net profit grew at 20.2%. This was helped by its tobacco and packaging segments


ITC, a conglomerate and fast moving consumer goods major, posted a strong performance during the June 2012 quarter, with 15%, year-on-year, increase net revenue growth to end the quarter with sales of Rs6,713 crore. Its sales were driven primarily by branded packaged foods, education and stationery and its tobacco businesses. Non-cigarette fast moving consumer goods segment registered robust revenue growth of 23%, while its hotels business continues to be impacted by weak global and domestic economic environment. Its net profit grew at a higher rate, 20.2%, to end the quarter at Rs1,602 crore when compared to the corresponding quarter last year. 
 
Its operating profit grew by 21%, which is more than the preceding three quarter year-on-year growth rate (which stood at 19%). Its operating profit has been very steady and stable despite global economic uncertainties and difficulties. Despite increase in commodity prices, its foods business grew. The company said in its press release that the sales of value‐added and premium products grew at a faster pace based on an enriched portfolio mix. It was especially helped by its paperboards business which recorded a growth of 9% while segment results grew faster at 17%. Improvement in profitability was further aided by smart commodity sourcing and several strategic cost management initiatives, which was largely helped by its agri-business that gave ampld support, in terms of sourcing and back-end supplies. Given such robust performance, it is little wonder that ITC is commanding high premium (its market capitalisation is quoting at over 20 times its operating profits) while its return on equity is 34%. 
 
The hotel segment was affected as it was impacted by the weak global and domestic economic environment and significant additions to room supply in key Indian cities. Consequently, segment revenue has remained at the same level as the corresponding quarter of the previous year. In line with its investment led growth strategy, given the compelling longer-term potential of this sector, the company, through a newly formed subsidiary, acquired a prime plot of land in Colombo, Sri Lanka on a 99‐year lease from the Government of Sri Lanka, for developing a five star luxury property.  The new super luxury property, ITC Grand Chola at Chennai, is complete and is awaiting statutory clearances prior to its commercial launch. The construction activity of the new luxury properties at Kolkata and at Classic Golf Resort near Gurgaon are progressing satisfactorily.  
 
The cigarette industry in India continues to be impacted by a discriminatory taxation and regulatory policy framework, with steep increases in excise duty and VAT. Despite this challenging environment, ITC managed to sustain leadership position in the country. Several initiatives were launched during the quarter across the portfolio in terms of pack modernization and introduction of variants and limited edition packs under the ‘Classic’, ‘Flake’, ‘Gold Flake Premium Filter’ brands further bolstering market standing, said the press release. 
 
According to its press release, its branded foods segment grew strong, with an increasing number of consumers shifting to value‐added and premium offerings of Aashirvaad atta under the ‘Multi‐grain’ and ‘Select’ brands, the Staples category continued to improve its realisations and margins. During the quarter, ‘Kaju Badam Cookies’ was launched in select markets and initial consumer response has been encouraging. The Bingo! range of potato chips and finger snacks grew at a rapid pace. Recent launches in this category include 'Tangles' in an innovative format and ‘Mad Angles Masti Chaat’ were well received by target consumers and are being extended to more markets.
 
The scrip closed down 2.02% at Rs249.45 on the Bombay Stock Exchange. 

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