FY14F looks poised to be a year of strong profit growth, says Nomura Equity Research in its Quick Note on Dabur India
Dabur India reported solid results for the fourth quarter of FY13, with volume growth of 12%, which was a key positive. Margins improved by 120 basis points (bps), which was ahead of Nomura’s and consensus expectations. The management was confident of delivering robust volume growth and an improvement in margins in FY14F. Q4FY13F results gives confidence that some of the disruptions as a result of the revamp of the distribution system are now firmly behind and FY14F looks poised to be a year of strong profit growth. These observations were made by Nomura Equity Research in its Quick Note on the company’s performance.
Key highlights from Dabur’s Q4FY13 results
In segmental performance, Dabur’s consumer care business revenues rose 13.1% to Rs12.9 billion with margins improving by 10 bps y-o-y. Foods business revenues improved 19.4% with margins down 300bps. The Real brand delivered market share gains.
As per the management’s conference call, post-results:
• Volume growth guidance for FY14F should continue to be 8%-12% as in most years. But for FY14F, management expects to come in at the top end of that guidance, which is a positive.
All those responsible for constructing illegal buildings often get away scot-free and the end user has to pay the price. If at all the government is keen on demolishing illegal buildings, why not start with unsafe buildings first instead of bringing down sound structures, asks Ramesh Prabhu
Hapless settlers evicted with nowhere else to go, living in illegal buildings, thanks to builders who flouted the laws, may become the norm across the Mumbai Metropolitan Region. The residents of the 35 illegal floors at the Campa Cola Compound, situated in upscale Worli in central Mumbai, are a case in point. The Supreme Court on Thursday gave a temporary reprieve to these families and gave them five months to vacate their flats.
However, this would well be the fate of residents of over 40% buildings in Mumbai, who do not have the mandatory occupation certificate (OC) from the BrihanMumbai Municipal Corporation (BMC). “It is reckoned that at least 6,000 buildings across Mumbai are paying double money for municipal water, which means they are not authorised. Many unauthorized structures are routinely regularised on payment of penalties... but there are many more that are not yet regularised for various reasons. Will the axe fall on them also? In addition, why only Mumbai? What about Thane, Mumbra and Ulhasnagar where thousands of unauthorised (and often unsafe) structures are standing—a disaster waiting to happen?” asks Ramesh Prabhu, chairman of the Maharashtra Societies Welfare Association (MSWA).
He said, “In all these places, builders have sold the flats, made off with the life savings of crores of families—worth several thousand crore rupees. Dozens of members of Parliament (MPs), members of legislative assembly (MLAs) and corporators from all political parties as well as civic officials are accomplices of these builders.”
Between 1981 and 1989 seven high rise buildings were constructed at the Campa Cola Compound. While the builders have permission to build only five floors, they constructed several floors above. For example, one of the buildings Midtown has 20 floors while Orchid has 17 floors. Needless to say all floors above the permitted five floors are illegal. Unfortunately, it is the buyers of such flats, who have to pay the price for illegality committed by the builder and developer.
“As it happened with the three builders of the seven buildings of Campa Cola Compound, developers perpetrate the crime and usually go scot-free. Thousands of architects and contractors who mastermind such unauthorized buildings will also never be caught. The municipal officials, state government bureaucrats and police officials who turned a blind eye to the goings on are unlikely to be punished,” said Mr Prabhu.
He said, when the comes to for buildings to be demolished, it will be you and me—the common man—who will be running helplessly from pillar to post like the residents of Campa Cola Compound are doing today.
Mr Prabhu admitted there are no easy solutions for the illegal buildings menace and to get rid of all such structures, a major surgery is required across the Mumbai Metropolitan Region.
“However,” he said, “may I humbly urge the state government and legislature to frame a humane policy to deal with unsafe buildings first, before demolishing sound structures like the Campa Cola buildings? May I humbly urge Maharashtra government to avoid shirking its responsibility, and letting municipalities take their own decisions?”
“If a comprehensive and humane ‘demolition policy’ is not framed, a humanitarian crisis looms large before at least 40% of us in the years to come. Until such a policy is framed, I cannot help feeling that we all are Campa Cola building residents, waiting for our houses to be demolished for one reason or another,” the chairman of MSWA added.
EAS Sarma, former secretary to GoI has questioned the non-action from the government on the growing menace of multi-level marketing (MLM) and money-circulation schemes, which are duping lakhs of gullible savers
When Moneylife wrote about a ponzi scheme founded by a convicted Russian fraudster, Sergey Mavrodi, which was luring thousands of Indians to follow its ideology of ‘trust’ and help one another, we were in for a surprise. Our article has unleashed a barrage of intemperate responses that seem straight from the followers of the Mavrodi. In typical cult-like fashion, they claim to be creating a parallel universe with their own currency known as ‘Mavro’ named after the founder who conceived the system. The Bitcoin drama is obviously being re-enacted with another coin and currency.
We forwarded details of this to EAS Sarma, former secretary to the Government of India (GoI), who has helped raise several issues with the Prime Minister’s Office as well ministry of corporate affairs (MCA) and the finance ministry.“As I write this letter, a vigilant Andhra Pradesh police has arrested Gopal Shekhawat of NMart. A Russian company, MMM India has already spread its tentacles into every nook and corner of India with a virtual currency, dubiously attractive incentives and agents to push through the scheme to cheat the gullible households. The ubiquitous ‘Q Group’, changing its name like a chameleon changing its colours, continues to swindle the people unhindered, as evident from media reports,” Mr Sarma said in a letter to Naved Masood, secretary, MCA.
He said, “Why is the government dragging its feet in tackling this menace? Are influential politicians involved in these MLMs? I suggest that your ministry (MCA) takes the initiative, though highly belated, to form a task force consisting of Serious Frauds Investigation Office (SFIO), Enforcement Directorate (ED), State Police and other investigating agencies to detect these multi-level marketing (MLM) well in advance and bring them to book before they cause any large damage. “
“The moment any company is found to be either registered or unregistered, offering unduly high incentives, it should trigger action on the part of the task force. As an immediate measure, the examples I have given, especially, MMM India and Q Group of companies, should be investigated speedily,” Mr Sarma said in this letter.
While Bitcoin was created to solve the mathematical solution to double-counting, it grew into a separate currency and system altogether and its value has skyrocketed as more and more people, investors and enthusiasts jump into the bandwagon and started transacting in the virtual currency. We had written, in detail, a primer on Bitcoin for those who are not familiar with it, in an accessible manner over here. The reason people took to Bitcoin, apart from its meteoric rise in value is because there is no regulator to control the currency unlike fiat currencies which get depreciated. However, recently, the Bitcoin has come under attack after hackers managed to penetrate into some of the Bitcoin e-Wallet sites, which caused them to shut down and stop offering Bitcoins for sale.
Similarly, the Mavro, the virtual currency transacted by so called ‘Mavrodians’ (i.e. those who have enrolled into MMM India), eerily resembles Bitcoin in the in many ways. Firstly, like Bitcoin, there is no regulator for it. MMM India website says, “In terms of legislation, MMM INDIA is an ephemeral combination of letters and numbers. MMM INDIA is an idea, a concept, and nothing more. There are no offices, no sales centres, no cash payments etc.” Secondly, like Bitcoin, participants simply transfer cash from one to another party through the internet using virtual currency. In order to acquire the currency, real currency must be paid first.
However, there is one catch, and an important one at that: exchange rate. While Bitcoin is market-determined and entirely prone to hackers, the Mavro is not market-determined at all. In fact, one man controls it.
The value or the rates of the Mavro currency are decided by none other than Sergey Mavrodi himself. He gets to decide how much the currency is worth and how much can be redeemed and has power to reset the entire system, and so on and so forth. He also gets to decide when to freeze redemptions. According to the MMM India website, it states: “Just like regular currency, MAVRO has two different ‘exchange rates’, one for ‘selling’ and one for ‘buying’. Each participant can ‘sell’ or ‘buy’ MAVRO, according to the ‘rates’. ‘Purchase’ and ‘sale’ of MAVRO are carried out by special automatic software on the official website”. The most important part is this, which is also stated on MMM India website: “These ‘rates’ would be established personally by Mr Sergey Mavrodi. Twice a week, on Tuesdays and Thursdays, and, supposedly, would be growing continually.”
Recently, Sergey Mavrodi had reset the value of the Mavro, thus shortchanging many so called ‘Mavrodians’, who will see that 95% of their virtual money in the system will be “frozen” leaving only 5% available for redemption. In other words, if you have, say 100 Mavros in your account, you will be only able to redeem five Mavros. Sergey Mavrodi explained the cause for the reset: “Despite the huge influx of new participants, wanting to give help, the number of people and most importantly the amount with which these people wanted to ‘GET HELP’ was much much more”.
He said, “Therefore, I declare the restart of MMM in India. Mavro of all participants will be recalculated as next: total amount of purchased confirmed Mavro minus total amount of withdrawal, plus 10%. This is to ensure from our side that all who have not yet received help - will get it for sure.” Needless to say, 95% will still be locked and frozen and it is not known when they can redeem the full value, if at all.
As of now only the 30% Mavro is being offered now (i.e. 30% returns as opposed to 40%). He even goes on to say, “By the way, 30% is also not a joke! This growth is approximately 10 times after nine months. Where and who is paying this type of percent?”
Surprisingly, the same Mavrodi froze operations of MMM-2011 in May 2012. In January 2011, he launched MMM-2011 frankly describing it as a pyramid adding, “It is a naked scheme, nothing more ... People interact with each other and give each other money. For no reason!” Within 17 months, Mavrodi announced that there would no more payouts in MMM-2011. This can well be the fate of MMM India as well.
This is exactly “too good to be true” that savers ought to avoid at all cost. Of course, when there is no regulator to govern the currency, anything can happen.