Citizens' Issues
Monkey Business
Would you punish a person for having a happy monkey as a pet?
 
Igatpuri nestles on the top of Thal Ghat, on the way from Mumbai to Nashik. Picturesque place, it has a ‘forest’. Many gardens are larger. Yet, it is something; the view of the valley below is breathtaking! At the entrance of the forest is a poster showing a man-eater. No one has seen a live one in decades, or so the keeper says, but there is a caged monkey, friendly to a fault. So why is it in prison?
 
For evidence. The simian is proof that is needed in court to convict its owner. Not for maltreatment, but for possession. 
 
Now, you be the judge. Would you punish a person for having a happy monkey as a pet?
 
One can monkey around as much as one wants. But you can’t keep a monkey on your back. That is asking for trouble, giving meaning to the expression, ‘Get the monkey off your back’.
 
One can keep a dog, a cat, even a horse. A cow, a bullock, a buffalo, a goat or rear sheep.  But some animals are taboo. A monkey is one of them. This is where the Wildlife Protection Act kicks in.
 
There is a list of dos and don’ts. About those that can be around as pets and those that must roam free. Endangered species and dangerous ones are best not kept near, on pain of conviction. THE INDIAN WILDLIFE (PROTECTION) ACT ensures that.
 
Monkeys are not the only ones. The list is wide enough to incorporate just about any and every animal. And birds. And reptiles. And amphibians. And plants and trees and other flora. Also certain types of fish. The positive list is a hundred times shorter. No one would want to keep a rhinoceros in the bedroom or an elephant in the kitchen, much less a snake in the cupboard or an alligator in the swimming pool. But monkeys, parakeets, love birds, butterflies are… oh, soooo cute. Unfortunately, they, too, are a no-no. 
 
The earth is losing something like 3,000 species of flora and fauna every year. Nature’s balance is being upset. Each individual plant and animal has its own use and needs. A break in the chain is an irretrievable loss; it can lead to chaos and any one extinction can lead to a hundred others. This necessitates the need for legislation.
 
India is not the only country to be rigid about wildlife preservation. Gaming licences have been around for centuries. Besides earning revenue, controls allow the seasonal stock to multiply, providing food for all without wastage. At other times, animals were killed, not for sustenance, but for fashion statements. The prime examples were mink coats and rhino horn dagger-handles, snake skin purses and bear tooth talismans. Ivory was for a variety of display pieces as well as intricate carvings and statutes. All unnecessary, except as avoidable status symbols. And monkeys were performing companions.
 
Laws were made to stop the misuse. The laws, though, are sensible, to a great extent. One can kill in self-defence. Having said that, the onus of proof lies on the killer. Medicinal plants can be cultivated under supervision. Till recently, simians and rats were used for medical experiments. Snakes can be quarantined for extraction of venom which is then used for a variety of medical procedures. Certain tribal rights are also protected. What about zoos? While it is often perceived as cruel to confine animals, and especially birds, to restricted areas, open zoos do find favour. Notified parks are places where the animal is king. In India, we have Corbett, Bharatpur, Madumalai, Periyar; places where animals roam free, without fear. 
 
The flip side of the coin. What happens when, instead of too few, there are too many? Elephants in Africa, protected, increased in such large numbers that they invaded farmlands in search of food. Tinkering with natural balances had led to unseen problems. In England, too, royal parks were off limits for stag hunting. Until they became too many. They were then ‘culled’, not killed. Bureaucracy and semantics had come to the rescue!
 

 

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Nifty, Sensex headed lower – Wednesday closing report
While the market indices may put in a short bounce, the trend is lower
 
We had mentioned in Tuesday’s closing report that Nifty may find a short-term support at 8,420 and that the indices were still weak. The major indices in the Indian stock markets have had a sharp fall of 1%-3% and the downtrend is threatening to continue. A second devaluation of the Chinese yuan today, a plunge in global commodity prices coupled with a depreciating rupee and stalled reforms process dampened sentiments in the Indian equity markets put a further dampner on stocks.
 
 
The negative global and local cues just ahead of the release of key economic data points unnerved investors, forcing the barometer 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) to plunge 354 points in the day's trade. 
 
The wider 50-scrip Nifty of the National Stock Exchange (NSE) also closed deep in the red. It ended 113 points or 1.33% down at 8,349.45 points.
 
The S&P BSE Sensex, which opened at 27,880.76 points, closed at 27,512.26 points, down 353.83 points or 1.27% from the previous day's close at 27,866.09 points.
 
The Sensex touched a high of 27,883.33 points and a low of 27,479.43 points in the intra-day trade.
 
Analysts observed that the domestic markets remained under pressure due to international cues even as commodity and banking stocks plunged. Profit bookings were widely witnessed in the mid and small cap counters.
 
Investors were also anxious over the Consumer Price Inflation (CPI) and Index of Industrial Production (IIP) data set to be released on Wednesday. 
 
According to Devendra Nevgi, chief executive of ZyFin Advisors, with more parties giving in-principle agreement to GST (goods and services tax), the chances of the bill getting passed in this session remained alive.
 
"There is still hope that the government will be able to pass the GST bill. However it is going to be close as only one day remains for the session to end," Nevgi told IANS.
 
The monsoon session of parliament ends on Thursday, with the fate of key legislations like the GST and the land bill hanging in the balance.
 
Sector-wise, banking, automobile, capital goods, metals and oil and gas stocks came under heavy selling pressure. However, IT, technology, entertainment and media (TECK), consumer durables and healthcare index ended in the green.
 
The S&P BSE banking index plunged by 644.35 points, followed by automobile index which tanked by 494.05 points, capital goods index sank by 370.99 points, metal index receded by 361.63 points and oil and gas index declined by 334.12 points.
 
The S&P BSE IT index zoomed by 292.25 points, TECK index jumped by 107.74 points, consumer durables index rose by 93.95 points and healthcare index gained by 86.25 points.
 
The top gainers and losers in the major indices in the market are given in the table below:
 
 
Among the Asian markets, Japan's Nikkei was down 1.58%, Hong Kong's Hang Seng declined by 2.38%, China's Shanghai Composite Index fell by 1.03%. 
 
 
In Europe, the London FTSE 100 index was down by 1.49%, Germany's DAX Index fell by 3.29%, and French CAC 40 fell by 3.37%.

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Revenues of 728 companies down 1% in the June quarter
Even though large-caps reported good numbers, overall results disappointed
 
As many as 728 companies of Moneylife’s database of 1,377 companies have declared their June 2015 quarter results. Consolidated revenues of the 728 companies fell 0.95% year-on-year (y-o-y) to Rs8.19 lakh crore for the quarter ended June 2015. Lower raw material costs, mainly due to the fall in crude oil prices led to improved operating profit margins. The 700-odd companies reported a consolidated operating profit of Rs1.47 lakh crore in Q1FY16 up 10.60% from Rs1.33 lakh crore reported in the same quarter last year. The operating profit margin improved to 17.95% from 16.08% over the same period. However, net profit for Q1FY16 declined by 1.18% to Rs79,365 crore from Rs80,313 crore. Valuations defined by market-cap to sales soared by 24% to 2.36 times as on 10 August 2015 from 1.90 times as on 11 August 2014. 
 
 

Mega-caps

Of the 119 mega-caps (market-cap above Rs10,000 crore) present in our list as many as 92 companies reported a growth in revenues. As many as 53 mega-cap reported a double digit growth. This included pharma companies like Torrent Pharmaceuticals, Glenmark Pharmaceuticals and banks such as Kotak Mahindra Bank and HDFC Bank. Many financial services firms too reported a significant growth in revenues. On top of the list were Bajaj Finserv, L&T Finance Holdings, Indiabulls Housing Finance and Bajaj Finance. 
 
Consolidated revenues of the 119 mega-caps went down 2.65% to Rs5.55 lakh crore in Q1FY16 from Rs5.70 crore in Q1FY15.  Operating profit margins improved to 19.98% from 17.54% over the same period. This led to a y-o-y operating profit growth of 10.92% in the June 2015 quarter. Had you invested an equal amount in each stock one year back your investment would have grown by 22%. This price rise was supported by improved investor sentiment. The overall price-to-earnings (PE) of the  mega-caps rose by nearly 26% over the year to 23.4 times from 18.5 times a year ago.
 

Large-caps

The set of 206 large-caps (market-cap of Rs2,000-Rs10,000 crore) reported a growth of 4% in revenues. Revenues grew to Rs1.87 lakh crore in Q1FY16 from Rs1.80 lakh crore in Q1FY15. As many as 147 of the 206 large-caps, reported a growth in revenues. As many as 51 companies reported a revenue growth of over 20%. Sun Pharma Advanced Research, Gruh Finance, Welspun India, Hexaware Technologies and Gujarat Fluorochemicals are a few of the top companies on the list which reported a revenue growth in excess of 20%. Companies like Balkrishna Industries, EID-Parry, Clariant Chemicals and Gujarat State Fertilizers & Chemicals would have disappointed investors with a decline in revenue.
 
Consolidated operating profit of the 206 mid-caps rose 14% y-o-y to Rs28,950 crore in Q1FY16 from Rs25,432 crore a year ago. Unlike mega-caps, the consolidated net profit of the large-caps rose 14% to Rs11,111 crore from Rs9,752 crore over the same period. The stock price of the large-cap companies gained an average of 28% for the one-year period ended 10 August 2015. The PE valuations rose 13% to 20.4 times from 18 times over the same period.
 

Mid-caps

The 175 mid-caps (market-cap of Rs500-Rs2,000 crore) reported a y-o-y revenue growth of 4% in the June 2015 quarter. The consolidated revenues increased to Rs53,028 crore from Rs51,156 crore a year ago. Operating profit increased by 2% to Rs6,184 crore in Q1FY16 from Rs6,044 crore in Q1FY15. Net profit declined by 8% to Rs1,708 crore from Rs1,851 crore over the same period. Despite the lacklustre results, over the year these mid-caps would have returned around 25%. Investors seem very optimistic as PE valuations have risen by nearly 38% to 25.3 times as on 10 August 2015 from 18.4 times a year ago.
 
Just about 69 companies reported a revenue growth in excess of 10%. As many as 56 companies reported a decline in their top-line. Ramkrishna Forgings, Sonata Software MPS, Somany Ceramics and Navin Fluorine are a few companies which reported strong revenue growth.
 

Small-caps

Small-caps stocks (market-cap of Rs100-Rs500 crore) may have delivered the highest returns to investors over the past one year, however, the latest quarter results would have disappointed investors. The consolidated earnings of the 169 small-cap stocks on our list declined by 60% y-o-y to Rs456 crore in Q1FY16 from Rs1,140 crore in the same quarter a year ago. Revenues fell by 2% to Rs19,946 crore and operating profits too, declined by 9% to Rs1,563 crore. Profit margins fell as well. Operating profit margin fell to 7.84% as compared to 8.50% a year ago. Valuations too have increased significantly. MC/sales rose by 31% to 0.55 times from 0.42 times. The latest quarter annualised PE has risen to 23.3 times from 6.6 times a year ago.
 
Nitin Spinners, Omkar Speciality Chemicals, Ion Exchange, IFB Agro, Control Print and Alicon Castalloy are a few small-caps which reported strong first quarter results. As many as 80 out of the 169 small-caps have reported a decline in revenue. As many as 68 companies reported a decline in profit, while 17 companies reported a operating loss.
 

Micro-caps

The 59 micro-caps (market-cap less than Rs100 crore) on our list reported a decline of 18% in revenues over the one year period. The companies reported a consolidated operating loss of Rs474 crore and a net loss of Rs908 crore in the latest quarter. Around 23 companies reported a revenue growth while 30 companies reported a net profit. Divyashakti Granites, Natural Capsules, Shree Ajit Pulp & Paper and Dynemic Products are a few companies that reported decent first quarter results. 

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