Economy
Consumer demand continues to be strong says Nomura

Consumer stocks like Hindustan Lever, Godrej Consumer, Nestle and others are trading at expensive valuations. The reason: It will be another quarter of robust earnings growth for consumer product companies

 
Nomura’s (Nomura Equity Research) meeting with Godrej Consumer Products indicated that despite concerns on slowing GDP (gross domestic product) growth and poor monsoons, there has been limited to negligible impact on underlying demand. This was already borne out in the Q1FY13 numbers across the sector. The demand has continued to remain robust into Q2 as well. Nomura predicts that this augurs well for companies across the sector and it is believed this will be another quarter of robust earnings growth.
 
Consumer stocks are trading at higher than long-term averages. This is a result of consistent delivery on a quarterly basis, with most companies reporting double-digit volume growth and some price/mix led gains, says Nomura.
 
In an environment where investors are averse to increasing the risk in the portfolio, consumer companies offer a safe haven, opines Nomura, and they have been rewarded with higher multiples. Nomura does not expect this to reverse in the short-term and valuations look likely to remain at the higher end of the long-term average.
 
Nomura analysts met Godrej Consumer Products to get an update on the outlook for FY13F, and performance of various business units. Q1FY13 results were solid, with most businesses showing robust performance. The company has not seen any demand slackening in Q2 and remains confident of delivering another solid year in FY13. Key takeaways from the meeting included soaps business continuing to perform, household insecticide business continuing to drive growth, and international business being on track to deliver. 
 

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Naroda riots: Ex-minister Maya Kodnani among 32 convicted

The Special Court, which heard arguments on the quantum of sentence, will decide on the punishment on 31st August. The massacre had taken place a day after the Godhra train burning incident of 27 February 2002

 
Ahmedabad: Ten years after over 90 people from the minority community were killed in Naroda Patiya riots, a special court on Wednesday convicted 32 people, including BJP MLA and former minister Maya Kodnani and Bajrang Dal leader Babu Bajrangi, on charges of murder and conspiracy, reports PTI.
 
Additional principal judge Jyotsna Yagnik in her verdict acquitted 29 other accused.
 
The court held Kodnani and Babu Bajrangi guilty under sections 120 (B) (criminal conspiracy) and 302 (murder) of IPC in the post-Godhra riots case.
 
"The maximum punishment for criminal conspiracy and murder can be death sentence," advocate Shamshad Pathan, representing the victims, said.
 
The court, which heard arguments on the quantum of sentence, will decide on the punishment on 31st August. The massacre had taken place a day after the Godhra train burning incident of 27 February 2002.
 
On 28 February 2002 when a bandh call was given by the Vishwa Hindu Parishad (VHP), a large crowd gathered in the Naroda Patiya area and attacked people belonging to minority community that resulted in the death of 97 people while 33 others were injured in the violence.
 
Kodnani, a three-time MLA from Naroda area, who was considered to be close to Chief Minister Narendra Modi, was arrested in March 2009 when she was the minister and had to resign from the post.
 
She became the MLA for the first time in 1998 and won elections twice from that constituency. She was made Minister of State for Women and Child Development in the Modi government in 2007.
 
BJP state leadership wasted no time taking her into the Cabinet, widely believed to be at the behest of LK Advani. She was the first Sindhi leader to become a Gujarat minister, since the state was founded in 1960.
 
Welcoming the verdict, Law Minister Salman Khurshid said in Delhi tht the judgement enhances faith of the people in the legal system.
 
Playing down the court's order, BJP spokesperson Tarun Vijay said, "We have full trust in the judicial system of the country".
 
The trial began in August 2009 and charges were framed against 62 accused, one of the accused, Vijay Shetty, died during the course of trial.
 
As many as 327 witnesses, comprising eye witnesses, victims, doctors, police personnel, government officials, forensic experts and journalists including Ashish Khetan, who conducted a TV sting operation on the accused, have been examined by the court.
 
Initially, 46 people were arrested by the Gujarat Police, whereas 24 more people were apprehended after the probe was handed over to the Supreme Court-appointed Special Investigation Team (SIT) in 2008. In all, 70 people were arrested in the case.
 
Six persons died before the charges could be framed and trial started, while two others identified as Mohan Nepali and Tejas Pathak jumped bail and are still absconding.
 
Kodnani was arrested by the SIT when she was a minister of state for women and child development in Modi government in March 2009. She was an MLA at the time of the incident.
 
The Naroda Patiya case was probed by eight investigating officers over the last decade with the latest being Himanshu Shukla on behalf of the Special Investigation Team (SIT).
 
The Naroda Patiya case was one of the nine cases of Gujarat riots being probed by the SIT, including the Godhra train burning case.
 

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More rainfall in September to help rice crop: Agriculture Secretary

Better rains in September will help in retaining soil moisture and support sowing of rabi crops and will benefit kharif crop as well

 
New Delhi: Rainfall during the next month is expected to be better as monsoon is unlikely to be influenced by El Nino weather pattern, helping rice and other kharif crop, Agriculture Secretary Ashish Bahuguna said on Wednesday, reports PTI.
 
El Nino refers to abnormal warming of surface ocean waters in the Pacific that disrupts weather pattern causing drought and floods in many regions of the world.
 
"I don't think the September rains will be impacted due to El Nino. Even if El Nino temperature do increase, I do not think, it will impact our monsoon. It may affect other parts of the world," Bahuguna said on the sidelines of a CII event.
 
So far, monsoon deficit is 13%. However, the seasonal rains have revived because the Indian Ocean Dipole (IOD), known as Indian Nino, is now favourable, he said.
 
Better rains in September will help in retaining soil moisture and support sowing of rabi crops, Bhauguna said, adding that kharif crop will also benefit.
 
He said there may be more rainy days ahead as monsoon could withdraw late from north-west India.
 
"Normally, monsoon starts withdrawing from north-west India around 1st September. This year, it seems withdrawal will be delayed. Onset of monsoon was delayed and withdrawal will also delay. We will have more rainy days," he said.
 
On Kharif crops situation, Bhahuguna said the crop health looks better and the gap in sowing area has been made up due to the recent spell of rains.
 
Area coverage under rice, oilseeds, cotton and sugarcane is good, though it is slightly lower under coarse cereals and pulses, he said.
 
"I think, recent spell of rains will help area under coarse cereals to pick up, especially ragi in Karnataka, bajra and jowar in Rajasthan," Bahuguna said.
 
Although the kharif crop prospects are improving, there will certainly be some impact on overall production and productivity, he noted.
 
Total area under kharif crops is down at 32.9 million hectare as on 24th August, against 34.2 million hectare in the same period last year.
 
Bahuguna said Karnataka, Maharasthra, Gujarat and Rajasthan have officially declared drought in some areas.
 
"The situation in all of these states is much better than what it was a month ago. Saurashtra region in Gujarat is still bad as it has not received rains at all. Saurashtra is probably the worst affected now," he said.
 
The Secretary mentioned that a central team is on the job of assessing the situation. A team, which visited Karnataka, has come back and will shortly submit a report. A separate team will visit other three states as well.
 
To mitigate the impact of drought in these states, the government has already announced some measures like diesel subsidy and will further consider some relief measures in the forthcoming meeting of the Empowered Group of Ministers (EGoM) on drought next week, he added.
 
"We still have few proposals that will be submitted to the EGoM as and when it meets next week. The proposals would be to get measures to support the protective irrigation for orchard crop among others," he added.
 

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