Citizens' Issues
Supreme Court refuses to cancel Unitech MD Sanjay Chandra's bail

CBI had approached the Supreme Court for cancellation of bail after Chandra was allegedly caught on tape trying to influence AK Singh, the then public prosecutor in the 2G spectrum scam

The Supreme Court on Monday refused to cancel bail granted to Sanjay Chandra, managing director of Unitech Ltd and an accused in 2G spectrum case, for allegedly trying to "sabotage the trial".


A bench headed by Justice HL Dattu turned down the plea of Central Bureau of Investigation (CBI), which had approached the apex court for cancellation of bail after Chandra was allegedly caught on tape trying to influence AK Singh, the then public prosecutor in the case.


The apex court said it is "not appropriate at this stage" to recall its order of 23 November 2011 by which Chandra was granted bail in the multi-crore 2G spectrum scam.


CBI had alleged that Chandra had misused the relief given to him by approaching Singh and trying to "materially interfere" with the prosecution in an "attempt to influence" the conduct and outcome of the trial.


It has alleged that conduct of Chandra was questionable during the period of bail as he was found holding discussion with the prosecutor about crucial witnesses.


His conversation with the prosecutor, who was removed from the case, reflected that the entire strategy of CBI in dealing with the case was compromised, the agency has said.


CBI said it had registered a Preliminary Enquiry report which named Chandra and prosecutor Singh.


The investigation also suggested that the conversation took place between the two when the statement of crucial witness A K Srivastava, Department of Telecom's former Deputy Director General (AS) was being recorded in the court, it had said.


The agency had also stated that the CFSL report has also confirmed that the recorded conversation was neither tampered with nor any editing was done and it was the voice of Chandra and Singh.


Infosys and TCS may report soft growth in March quarter

According to Nomura, while Infosys and TCS would show soft growth, other companies like HCL Technologies, Wipro and Tech Mahindra would show stronger growth during the March quarter

Tata Consultancy Services (TCS) and Infosys, the country’s too two IT companies, are likely to report soft growth while companies like HCL Technologies, Wipro and Tech Mahindra would show stronger growth during the March quarter, says Nomura.


According to Nomura’s report on Indian IT sector, Infosys expects to be at the lower end of its FY14F guidance of 11.5%-12% on US dollar revenue growth, which implies a 0.4% quarter-on-quarter fall in 4QFY14F. Infosys attributes the revenue weakness to: (a) retail and hitech segments; (b) skill mismatches leading to delay in ramp-ups and (c) project cancellations/rampdowns. These factors are likely to continue to impact growth in first half of FY15, Nomura said.


The report said, TCS had indicated that in line with seasonality, 4Q revenue growth will be weaker than 3Q, with the India business continuing to show a decline (though the decline is likely to be lower than the decline in 3Q of 9% quarter-on-quarter in rupee terms). Latin America and Europe are likely to show better than the company average growth and the US is likely to grow in line with the company average.


Talking about HCL Technologies, the report sees a 3% quarter-on-quarter growth. Deal signings have been strong for the company in the last four quarters with cumulative deal TCV (total contract value) of $4 billion.


Nomura said it expects 3% quarter-on-quarter growth at Tech Mahindra on account of: (a) deal signings of US$1 billion over the last three quarters; (b) strong growth at top Clients, other than British Telecom (BT) (c) Comviva typically has a stronger 2H, which should offset the decline from cessation of BT-related restructuring revenue in



Wipro has guided for 1.8%-3.6% quarter-on-quarter growth in 4Q and has indicated that it is tracking in line with the guidance. Its growth will be better in FY15F on: (a) the continuation of strong growth momentum in Europe; and (b) macro improvements in the US starting to reflect in better demand, the research note said.


Nomura’s comparison of valuation of India’s top IT companies is given in the table below:



Slow growth and high rates to stay for a while longer in India

General elections outcome in May is critical to improvement in growth mix, which includes, increasing capex and lowering fiscal deficit, says Morgan Stanley in a research note

The outcome of general elections in May 2014 will be critical to determining the pace of recovery in India, says Morgan Stanley. Considering the constraints facing domestic demand, the strength of the overall growth improvement will depend largely on improvement in exports in the near term and measures to boost productivity in the medium term, it says in a research note.


“A meaningful recovery in private capital expenditure (capex), government spending or private consumption will be difficult to achieve over the next six to twelve months in the Indian economy, while policy makers focus on improving macro stability indicators, such as inflation, the current account deficit, and banking sector balance sheets. Industrial companies will also need to de-lever their balance sheets (average debt equity ratio of industrial companies is at 2:1),” the note added.


Morgan Stanley observes that in terms of government policy post-elections steps must be taken towards: (a) fiscal consolidation for sustained improvement in macro stability; (b) moderating rural wage growth to be in line with the productivity trend; (c) improving the investment outlook by reducing regulatory hurdles, and (d) cleaning up public sector banks' balance sheets and infusing capital.


In the context of CPI inflation remaining above 8% in the near term, Morgan Stanley expects Reserve Bank of India (RBI) to keep policy rates on hold at the next monetary policy meeting. Seasonally favourable factors in 1H FY2015 would help to improve liquidity conditions and result in some easing in short- term market rates.


Morgan Stanley expects the full-year F2014 current account deficit to narrow to 1.7% of GDP (vs. 4.8% of GDP in F2013) and further to 1.6% of GDP in F2015.


For financial stability, there is a need for adjustment in underlying deposit growth for sustained improvement in credit deposit ratio. While deposits have been growing at a faster pace than credit recently, underlying deposit growth adjusted for Non- Resident Indian (NRI) deposits is still slower than credit growth, indicating that the underlying adjustment process of lifting deposit growth above credit growth is still not complete. Morgan Stanley believes that as CPI (consumer price index) inflation moderates and real rates build up gradually, they will help to improve deposit growth, which is required to correct the persistent gap between credit and deposit growth.


Morgan Stanley’s snapshot on macroeconomic forecasts is given in the table below:


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