The company has been forced to take the decision in view of capacity constraints
India's largest automaker Maruti Suzuki will limit exports to the same level as last year due to capacity constraints, reports PTI
"We are not competing in exports (with other carmakers)... We are short of capacity. This year exports will not go beyond last year", Maruti Suzuki chairman R C Bhargava said.
Maruti Suzuki exported 1.47 lakh units in 2008-09, its highest ever export figures, with the compact car A-Star alone clocking over 1.27 lakh units.
"A-Star" was exported to Europe, including UK, France, Germany, Italy and the Netherlands. Major non-European export markets for the car include Algeria, Chile, Indonesia and neighbouring countries.
South Africa, Hong Kong, Australia and Norway were new markets where the company's cars were exported during the year
To address increasing demand for its products, Maruti Suzuki has commenced work to increase capacity at its Manesar plant.
"We have started work at Manesar. But that will take time (to reach full capacity), which would be by 2012" he told PTI.
In March 2010, the company had announced a Rs1,700 crore investment for expanding production by 2.5 lakh units at its Manesar plant.
Production capacity after the expansion will reach 12.50 lakh units by 2012.
Mr Bhargava replied in the affirmative when asked whether the company was facing delay in deliveries. "Almost all our models are in the waiting list...I would say the average waiting list is three months for the diesel variant of Swift DeZire."
"We will keep increasing production in whichever way we can primarily to meet customer demand...our reasonable target (to meet the demand) is 2012", he said.
Maruti Suzuki sold 10.18 lakh vehicles in 2008-09 fiscal, the first time in Indian automotive history that a car company has sold over a million units in a financial year. This included sales of 8.70 lakh units in the domestic market, the highest ever by the company in a fiscal.
Asked whether introduction of new models by foreign companies would be a challenge, Mr Bhargava said every carmaker has to introduce new models to address customer needs. "He (carmaker) should make sure the customer gets something new".
On the growth of the automobile industry, he opined it might grow by 15%. "Even SIAM (Society of Indian Automobile Manufacturers) also said the industry would grow by 12%-14% and that is reasonable...but we have to look at base effect also", he said.
Mr Bhargava felt one of the biggest challenges facing the industry is lack of infrastructure. "I think (lack of) infrastructure is one big problem… especially when you look at global developments (in auto-industry)".
He urged more car makers to look at investing in "Research and Development" and also address labour issues.
Asked whether the company would phase out Maruti 800, the first small car introduced in 1982, he said, "Sometimes, every model has to be stopped… Maruti 800 will also end at one stage… I don’t know when it will happen… Right now, it is running..." he said.
Maruti Suzuki reported a 17.28% jump in sales to 88,091 units in June against 75,109 units in the same month last year.
GDP grew by 7.4% in the last fiscal with its fourth quarter managing clipping at 8.6%. The government expects 8.5% growth this fiscal
The economy is likely to grow above 9% in the first quarter, reports PTI quoting Planning Commission principal energy advisor Pronab Sen.
"The first quarter gross domestic product growth (GDP) will be slightly above 9%," said the former chief statistician on the sidelines of a PHD Chamber function in New Delhi.
Last Friday, chief economic Advisor Kaushik Basu also had said the first quarter might show up around 9% expansion while the full fiscal would grow over 8.5%.
GDP grew by 7.4% in the last fiscal with its fourth quarter managing clipping at 8.6%. The government expects 8.5% growth this fiscal.
The economy has been on the recovery path since dipping to 6.7% in FY09 mainly on stimulus measures undertaken by government, which saw the and industry ticking back after the global downturn that began in September 2008.
Industrial production has remained in double-digits for the eighth month in a row in May driven mainly by a robust performance of the manufacturing sector. However, Mr Sen said industrial growth is not likely to remain in double digits for the full financial year. It has slipped to 11.5% in May from 16.52% in April.
"The index of industrial production is very unlikely to cross 10% this fiscal. It will be probably around 9%," Mr Sen said.
On headline inflation, he said it is likely to inch up from the 10.55% in June, but will not cross 11% mark in July.
"July provisional inflation is likely to be below 11%. Inflation may peak in July unless rains play havoc," he said, adding the fuel price hike has already been factored in.
On whether there should be a uniform sales tax on petrol and diesel to avoid inter-state price disparity, he said the Centre has no role as sales tax on these items are out of the value-added tax (VAT) regime and it depends solely on the states.
Unknown Cals Refineries is attracting millions of trades but no scrutiny
Cals Refineries, a penny stock (Rs 0.33), is a ferociously-traded company about which very little is known. However, the very fact that more than 40 million shares are traded in this stock daily (2-week average) even when its market cap is little more than Rs2.6 billion warrants a closer look at what’s going on here. The plot is quite thick — with rumours (and no evidence) that the promoters of Cals (Spice Energy) are the same as Spice Jet and the fact that it is building a 5mtpa refinery at Haldia (nowhere near completion from its own updates).
The BSE website reveals that the 52-week high of this stock is Rs0.89 on 11 September 2009 and its low was Rs0.27 on 24 May 2010. It has a good delivery ratio of 64%. On 17 May 2010, the company put out a notice on the BSE with ‘disclosures required under Clause 41(IV) (e) of the Listing Agreement for the Quarter ended March 31, 2010’. It revealed that it had raised about Rs8 billion in December 2007 through GDRs and has used its money for ‘the project’ — setting up a 5mtpa refinery at Haldia, which it expects to start in the last quarter of FY12.
After that relatively fresh piece of disclosure, it’s quite a shock to see the company’s dismal filing of quarterly and annual numbers. It has not filed quarterly numbers since June 2008 (sales Rs0.27 million and loss at Rs0.22 million, the same numbers for FY09, no disclosures since then). After the dismally dated financial filings, the relatively updated shareholding pattern (March 2010) reveals that the promoter group holds less than a percent. However, FIIs hold 6% (P-notes, Mauritius, Goldman Sachs, Merrill Lynch, Taib Securities). “Shares Underlying Outstanding DRs as % of Total No. of Shares is 55%.”
Internet message boards and forums around this company are very active (a true understatement) and range from outright attempts to lure more investors into this share to half-hearted attempts to console shareholders who have bought at higher prices possibly by trapped shareholders themselves. Most hopes are centred around the promoter company coming out with some fantastic announcement that is going to save all the trapped investors and make the speculators rich.
Now comes the most interesting part. The promoter company, which is called Spice Energy Group, has a logo that looks suspiciously like the Spice Jet logo, leading a lot of people to believe that it is the same group — the message boards of course actively contribute to this belief. I have found no evidence to indicate this is so. While the SpiceJet logo has dots, the Spice Energy logo has swishy lines — although the colours are startlingly similar. A deliberate attempt at association? Possibly.
SpiceJet was promoted by Ajay Singh and the Kansagra family. There is nothing linking these promoter to Cals except, again, ubiquitous comments on message boards, and some random documents floating around on the net saying that Bhupendra Kansagra was on the board of Cals (again, although possible, I have found no evidence).
There is a Hindu Business Line article dated 30 January 2010 in which DS Sunderajan, CFO of Spice Energy, claimed that the promoters of Spice — Sanjiv Malhotra, Ravi Chilukuri (CEO) and Gagan Rastogi and their families — actually controlled as much as 75% of the paid-up equity capital in Cals by subscribing to the GDRs. The article says that Cals was trying to get $250 million in foreign funding and an equal amount of domestic funds to achieve the financial closure of its proposed $1.1-billion refinery project at Haldia before March. In the article, Mr Sunderajan said that BNP was trying to tie up foreign funding for them while SBI Caps was looking at the domestic side. Some websites say that Sanjiv Malhotra is a former co-promoter of SpiceJet, but then again, no credible source.
There has been lots of regulatory action around this stock, although never directly on the company. The latest one, 1st July, was that Dr KM Abraham, whole-time member, the Securities and Exchange Board of India (SEBI) passed an order confirming the order against Chimming Trading Company Limited in the matter of alleged manipulative trading by certain connected entities in the scrips of Cals Refineries Limited and others. In June 2009, SEBI had barred 26 entities from dealing in the capital markets for acting as conduits for Ketan Parekh and executing synchronised deals in five scrips over a period of 26 months from January 2007 to February 2009 — one of the scrips in which the deals were done was Cals Refineries.
After all that cyber-snooping, I think it is safe to assume that there is something truly fishy about this company and all the trading that seems to be happening around its stock. I have not found a single piece of evidence suggesting that the fortunes of this company are going to turn around or found any evidence that it is anywhere near completing this refinery project. Investors, if you are smart, stay away.