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The manufacturing sector growth fell further in January as a slower expansion in new orders and power outages slowed output growth
India’s manufacturing output recorded a decline last month. While the overall rate of growth remained firm, the growth slipped to a three-month low, the HSBC India Manufacturing Purchase Managers’ Index (PMI) showed.
The HSBC manufacturing PMI, an indicator of the country’s manufacturing output growth, eased to 53.2 in January 2013, from 54.7 in December 2012 as power shortages hampered production and inventories were used to satisfy demand requirements wherever possible.
The HSBC India Manufacturing PMI is based on data compiled from replies to sent to purchasing executives in over 500 manufacturing companies. A reading of over 50 shows expansion, while below 50 indicates contraction.
Continuing the trend that started in April 2009, output at manufacturers in India rose during January. While solid, the rise in production was the slowest recorded in three months, the HSBC Markit release said.
Total new business rose solidly, although growth eased from December. Meanwhile, new export orders increased for the fifth straight month, and also at a solid rate. Panel members stated that demand from foreign clients was higher. In line with stronger sales, manufacturers in India increased their input buying in January, the release said.
Pre-production inventories rose for the ninth month in a row, but on a lower scale. On the other hand, post-production inventories were depleted as power shortages hampered production and inventories were used to satisfy demand requirements wherever possible.
Staffing levels in the Indian manufacturing sector increased during January, amid reports of higher workloads, the HSBC PMI indicated. Meanwhile, input and output prices both increased in January, with rates of inflation again marked.
Commenting on the survey, Leif Eskesen, chief economist for India and ASEAN at HSBC said, “The growth momentum in the manufacturing sector eased in January as a slower expansion in new orders and power outages slowed output growth. Encouragingly, input and output price inflation continued to ease, albeit only gradually, supporting the case for the Reserve Bank of India’s cautious policy rate cut earlier this week.”
Bharti Airtel’s consolidated net income during the December quarter was impacted by higher depreciation and amortisation cost, net interest costs, forex fluctuation losses and tax provisions
Bharti Airtel, India’s leading telecom services operator, on Friday posted a lower than expected third quarter net profit of Rs284 crore. The profit which fell for the twelfth quarter in a row is down a whopping 72% compared Rs1,011 crore same period last year.
“The consolidated net income was impacted by higher depreciation and amortisation cost (Rs316 crore), net interest costs (Rs284 crore), forex fluctuation losses (Rs261 crore) and tax provisions (Rs109 crore),” the company said in a statement.
Bharti Airtel’s third quarter sales came in at Rs20,239 crore, a rise of 9.5%. The company’s loss for the third quarter from its Africa business stood at Rs520 crore.
According to the Bharti Airtel, the profit for the third quarter to end-December was hit by high depreciation, amortisation and interest cost.
“Market conditions have been challenging in recent quarters due to pricing pressures and rising input costs, which have put enormous pressure on the sector and consequently the margins,” Bharti Airtel chairman and managing director Sunil Bharti Mittal said.
However, the worst seems to be getting over with corrections taking place in customer acquisition practices and the tariffs, which are driving quality of acquisitions and improving efficiencies, he added.
The company’s overall customer base stood at 262.27 million across mobile telephony, telemedia and digital services across geographies.
Monthly average revenue per user (ARPU), a key metric for telecom carriers, from Bharti’s Indian operations declined to 185 during the reporting quarter from 187 in the same period last year.
The revenue from its African operations rose by 15% year-on-year to Rs6,170 crore during the third quarter, it said.
Bharti Airtel is the world's fourth-biggest cellular carrier by number of subscribers, operating in 20 countries in Asia and Africa. Singapore’s SingTel owns almost a third of the firm.
Earlier in the week the Sunil-Mittal led company announced changes in its top level management. In a major top-level management restructuring, Bharti Airtel will appoint Manoj Kohli as its managing director to revive its mobile business.
Sunil Mittal, who is currently its chairman and managing director, will become executive chairman of the company, after Kohli moves to his new role. Kohli currently heads the company’s international operations as its chief executive officer and is also a joint managing director of the company. He is currently based in Nairobi, the headquarters of Bharti Airtel’s African operations.
Gopal Vittal, the new CEO of Bharti Airtel’s India business, will be named joint managing director. He was named chief executive after the company’s India CEO Sanjay Kapoor stepped down two weeks back. The management revamp comes at a time when the company is looking at improving profitability while increasing both 3G and 4G subscriber base.
Bharti Airtel is also grappling with uncertain regulatory environment and bleeding business in Africa.
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