India’s services PMI at 3-month high in July

The HSBC India Composite Index-which covers both the manufacturing and service sectors-posting 57.9, up from 56.8 in June 2011. While employment levels in the manufacturing sector increased for the first time since October 2010, this was largely offset by job cuts in the service sector-the first time in 28 months

India's services sector, as measured by the HSBC Markit Business Activity Index, stood at a three-month of 58.2 in July, up from 56.1 in the previous month, driven by new business. However, input costs and output prices also rose in the month under review.

Meanwhile, the HSBC India Composite Index-which covers both the manufacturing and service sectors-posting 57.9, up from 56.8 in June 2011. While employment levels in the manufacturing sector increased for the first time since October 2010, this was largely offset by job cuts in the service sector-the first time in 28 months.

Service providers were optimistic in July that activity would rise over the next one year. Confidence regarding future business prospects was supported by expectations of improving market conditions, plans for expansions of operations and service offerings and increased promotional activity.

Commenting on the Services PMI survey, Leif Eskesen, chief economist for India and ASEAN at HSBC said: "The service sector is humming to its own tune, with business activity and new business improving over the previous month, despite policy rate hikes and high inflation. With backlogs of work increasing, inflation pressures are set to remain significant and persistent. This also means that the RBI is not quite yet done with tightening."

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DLF Q1 net falls 13%; raises Rs165 crore from sale of assets

The company said total expenditure increased by about Rs300 crore to Rs1,505 crore during the June quarter primarily on land, development rights and constructed properties

New Delhi: DLF, the country's largest real estate company, on Tuesday reported a 12.81% decline in its consolidated net profit for the first quarter ended 30th June at Rs358.36 crore on higher expenditure and finance charges, reports PTI.

The company had posted a net profit of Rs411.03 crore in the corresponding period last year, the company said in a filing to the Bombay Stock Exchange (BSE).

Consolidated sales during the first quarter, however, rose by 20.57% to Rs2,445.82 crore from Rs2,028.53 crore in the year-ago period, it added.

DLF's total expenditure increased by about Rs300 crore to Rs1,505 crore during the June quarter primarily on land, development rights and constructed properties. Finance charges rose to Rs496.41 crore from Rs388.44 crore earlier.

On sale of non-core assets, DLF said that it realised Rs165 crore during the April-June quarter of this fiscal. In May, the company had said that it has increased the divestment target for non-core assets (including land parcels) to Rs10,000 crore from Rs4,500 crore earlier.

Till last fiscal, the company had already raised Rs3,070 crore from sale of non-core assets such as hotel plots and plans to raise another Rs7,000 crore in the next 2-3 years to reduce its debt that stood at Rs21,424 crore by March-end.

In a statement, DLF Group chief financial officer Ashok Tyagi said: "While debt levels have remained similar to the previous quarter, our momentum on the non-core asset/business divestments have gathered pace and these coupled with operational cash flows will help us in moderating our current debt levels."

DLF achieved a sales booking of 2.2 million sq ft in the first quarter of this fiscal as against 1.9 million sq ft in the same quarter of last year.

Mr Tyagi said DLF would continue to focus on launching plots, which enables it to mitigate the current inflationary environment and accelerate our cash flows.

He pointed out that the successive hikes in interest rates by the Reserve Bank of India (RBI) should have a moderating impact on demand.

DLF also said that Income Tax authorities have slapped notice for nearly Rs550 crore during the April-June quarter and the company has challenged the order with 'appropriate authorities'.

"...the company received an assessment order for assessment year 2008-09 from the Income Tax authorities, creating an additional demand of Rs546.85 crore, out of which Rs487.23 crore pertains to demand on account of dis-allowance of SEZ profit under section 80IAB of Income Tax Act," it added.

Shares of the company were trading 3.62% down at Rs219.60 on the BSE in late morning trade today.

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GDP growth to be around 8.5% this fiscal: Chief economic advisor

Chief economic advisor in the finance ministry Kaushik Basu is hopeful that GDP is likely to see a big rebound in the last quarter of 2011-12, thus neutralising any slowdown that may happen in the first few months. He, however, admitted that a 9% growth would not be possible

New Delhi: A day after the Prime Minister's Economic Advisory Council (PMEAC) lowered the economic growth projection for this fiscal to 8.2%, the chief economic advisor in the finance ministry Kaushik Basu yesterday said gross domestic product (GDP) could still reach last year's number of 8.5%, reports PTI.

"From 7.8% to 8.5% roughly we are seeing people putting up forecast. My own sympathies are still at the upper range of this," Mr Basu told reporters here.

In its Economic Outlook for 2011-12 released on Monday, the PMEAC had lowered the economic growth projection for the current fiscal to 8.2% from 9% earlier, citing the uncertain global outlook, high domestic inflation and subdued industrial performance.

The country's economy had expanded by 8.5% in 2010-11.

Mr Basu said GDP is likely to see a big rebound in the last quarter of 2011-12, thus neutralising any slowdown that may happen in the first few months. He, however, admitted that a 9% growth would not be possible.

"On the whole my expectation won't be 9% as we had forecasted earlier. But I continue to be on the upper end of the forecast that I am seeing all around. I am more optimistic than many forecasters and I personally do expect that the last quarter would see the biggest rebound," he said.

The finance ministry will also conduct an interim review of the economic growth in September.

"This year we are going to do one interim one. Hopefully, by mid-September or even early September we will try to bring out something," Mr Basu said.

He added that the mid-year review scheduled for November will take place in time despite the interim review next month.

"The first quarter data will be out on 30th August. Soon after that we will do what is best in our capacity and put out some forecast.

"We normally would have done it only in November during the mid-year review. This year there is so much of anguish and thinking going on that we thought we are doing to do our own exercise," Mr Basu said.

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