ONGC pipeline off Mumbai coast develops leak

New Delhi: An oil spill was reported today off the Mumbai coast following a rupture in a pipeline carrying crude oil from state-owned Oil and Natural Gas Corporation's (ONGC) offshore oilfields, reports PTI.

The leakage in a pipeline carrying Mumbai High crude oil to Uran was reported around 0845 hrs and production was immediately stopped, a senior company official said.

"Production from the Mumbai High and Bassein oilfields was restarted around 0950 hrs and crude oil is being transported to shore using a separate line," he said.

ONGC boats and Coast Guard vessels have been pressed into service to access the damage. "Right now it is difficult to say what the damage has been," he said.

Production from the field was stopped for a short while following the incident but was resumed shortly after oil flow from subsea wells was diverted through another line.

Mumbai High and Bassein fields together produce 247,000 barrels of oil per day and the brief stoppage would mean that they would produce about 25,000 barrels less oil today.

The official said divers are being pressed into service to go down to sea-bed to access the damage to the pipeline.

"Remedial measures will follow once we know the extent of the oil spill," he added.


Accenture appoints Avinash Vashistha as country managing director for India

Avinash Vashistha has also been appointed co-chairman of India

Accenture said it has appointed Avinash Vashistha as the country managing director for India. Mr Vashistha has also been appointed co-chairman of India, along with Harsh Manglik.

Mr Vashistha, 49, joins Accenture from Tholons, a global strategic advisory firm for outsourcing, research, investment and education, where he served as founder, chairman and CEO. Earlier in his career he founded neoIT, an offshore advisory firm, and prior to that, he led Nortel's pioneering outsourcing efforts in India.

Accenture chief executive officer Pierre Nanterme said Mr Vashistha has the skills and experience to take Accenture to the next level in India. "Avinash brings to this role more than two decades of operational and execution leadership in global outsourcing along with knowledge, relationships and experience with Indian companies and the Indian marketplace. He will help us drive growth in our domestic business and support our global clients through our global delivery network centers in India."

Mr Vashistha holds an engineering degree from IIT Kanpur, a master's degree in Computer Science from the University of Alberta and an MBA from Arizona. He is a known thought leader in the industry and co-authored the book, "The Offshore Nation."

Mr Manglik, who intends to retire later this year, has served as chairman and country managing director of Accenture India since September 2006.


Q3FY11 analysis: Bajaj Auto records good profits, GAIL sales grow, HCL Tech margins lower

Bajaj Auto has recorded good results, but it has a tough road ahead; GAIL is expected to register increased gas transmission volumes going ahead; HCL Tech says it will focus on margins improvement

Bajaj Auto

Net sales came in at the lower end of the spectrum, while net profit was at the higher end. Realisations were up slightly higher than expected at 9% year-on-year (y-o-y). Margins did not dip as much as was being anticipated. Lower staff costs helped in this respect. Higher other income and a lower tax rate (from higher R&D expenditure) also helped in achieving good profits.

 The company has undertaken a price increase of Rs500-1,000 per vehicle on its Platina, Discover and Pulsar models from 1st January, both in the domestic and export markets. This should cushion the impact of rising raw material costs somewhat.

 Bajaj still aims to focus on its Pulsar and Discover models and does not seem too keen on new model launches. But it will launch a new Discover in April and a new Pulsar towards the end of the year.

Bajaj Auto Q3 FY11 highlights

Rs crore

Dec 2009

Sep 2010

Dec 2010

Net sales




Consumption of raw materials








Net profit




EBITDA margin (%)




 Over a three-month period the stock has not done so well. It has fallen from above Rs1,600 to current levels of about Rs1,300. While the stock took off around the time of the announcement of the third quarter results, it has since been coming off.

GAIL (India)

Sales came in at the higher end of expectations, while profits were in between. The negatives were higher other expenditure, lower other income (due to lower cash balances) and lower petrochemical volume.

 The positives were higher gas transmission volumes, which were above most brokers’ estimates despite lower KG-D6 volumes, 6.4% higher transmission tariffs and higher petchem and LPG realisations.

 Brokers continue to expect GAIL’s gas transmission volumes to be about 130 mcm/d next year, driven by higher LNG imports through Petronet LNG and Shell, recovery in gas production from the KG-D6 block, and commencement of gas production from ONGC’s marginal fields. However, these expectations seem to be at risk for now, especially the RIL ramp-up.

 Polymer sales were low in the quarter. GAIL sold 81,000 tonne of polymers in the third quarter compared to 107,000 tonne in the previous quarter and 120,000 tonne in the corresponding quarter a year ago. This has been mainly due to significantly lower demand and the shutdown of a plant for 20 days. It is expected that higher crude prices could drive up polymer EBIT in the near term.

 A sharp rise in LPG prices helped EBIT for the LPG and liquid hydrocarbons segment to rise 20% y-o-y.

 GAIL’s subsidy burden was at Rs420 crore, up from Rs350 crore in Q2FY11, but lower than Rs460 crore in Q3FY10.

GAIL (India) Q3 FY11 highlights

Rs crore

Dec 2009

Sep 2010

Dec 2010









Net profit




Gas sales (mcm/d)




 The GAIL stock price has come off sharply after the quarterly results. It has underperformed the Sensex in the past three months. The stock is still trading at historic highs, as far as the price-to-book is concerned and at 10-year highs in terms of price-to-earnings.

 HCL Technologies

 Both dollar and rupee revenue and profit came in at the higher end of expectations. Revenue growth was led by IT (+7.3% q-o-q) and infrastructure (+9.4% q-o-q).

 In the verticals, retail (+15% q-o-q), energy and utilities (+14% q-o-q) and healthcare (+7.5% q-o-q) reported strong growth. Among the geographies, Americas (+5.8% q-o-q) and Europe (+7.1% q-o-q) grew below the company’s average, while other geographies grew 14.5% q-o-q.

 The forex loss was down to Rs13 crore. The management believes that there in probably one last quarter of forex losses on account of the large hedges it had taken three years ago. The market had expected this would be the last quarter.

 The EBITDA margin continued to fall and it was down 460 basis points y-o-y. The management seems to have taken a decision to focus on margins now. In its Q2FY11 earnings call, it had said that it would focus on margins improvement for two quarters and hence give up a little on growth. This is in contrast to the stance a few quarters before, when it said that it had consciously chosen to invest and sacrifice margins to drive growth. Clearly, growth and margins are an either-or choice for HCL Tech.

 The biggest problem for the company is that strong revenue growth has not translated into operating profit growth, which is why most analysts are finding it hard to digest the recent re-rating in the stock. For now, it seems to be running up on the management’s commentary that margins will go up in the next two quarters. However, this is expected to be at the cost of revenue growth.

In the BPO business, HCL Tech has guided that it will continue to make losses of about $6 million a quarter for the next four quarters.

HCL Technologies Q2 FY11 highlights

Rs crore

Dec 2009

Sep 2010

Dec 2010

Revenues (US$ mn)








Net profit




EBITDA margins




 The HCL Tech stock has done very well over the past three months, outperforming the Sensex by quite a margin. The stock continues to do well even after the results.

 (This article is based on secondary research. The report is for information only. None of the stock information, data and company information presented herein constitutes a recommendation or solicitation of any offer to buy or sell any securities. Investors must do their own research and due diligence before acting on any security. Some of the opinions expressed in this article are the author's own and may not necessarily represent those of Moneylife.)


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