Tata Motors Group global wholesales, including Jaguar Land Rover, were 110,785 in March 2011, a growth of 1% over March 2010
The Tata Motors Group global wholesales, including Jaguar Land Rover, were 110,785 in March 2011, a growth of 1% over March 2010. Cumulative sales for the fiscal (April 2010-March 2011) are 1,081,245 higher by 24% compared to the corresponding period in 2009-10.
Global sales of all commercial vehicles-Tata, Tata Daewoo and the Tata Hispano Carrocera range-were 56,814 in March 2011, a growth of 19%. Cumulative sales for the fiscal are 512,269, a growth of 24%. Global sales of all passenger vehicles were at 53,971 in March 2011. Cumulative sales for the fiscal are 568,976, a growth of 24%.
Global sales of Tata passenger vehicles and the distribution offtake in India of Fiat cars were flat at 29,870, for the month. Cumulative sales for the fiscal are 327,403, a growth of 23%.
Global sales of Jaguar Land Rover in March 2011 were 24,101 vehicles, higher by 2%. Jaguar sales for the month were 3,772, lower by 19%, while Land Rover sales were 20,329, higher by 8%. Cumulative sales of Jaguar Land Rover for the fiscal are 241,573 nos., higher by 25%. Cumulative sales of Jaguar are 52,993, higher by 12%, while cumulative sales of Land Rover are 188,580, higher by 29%.
On Friday, Tata Motors ended 1.19% down at Rs1,234.95 on the Bombay Stock Exchange, while the benchmark Sensex declined 1.57% to 19,386.82.
With the high cost of operations and a change in the business model, retail-focused stock broking companies and their smart backers are staring at a difficult future
A business newspaper front-paged a report this week that Angel Stockbroking is in talks with Citigroup to buy Sharekhan, the retail brokerage which was acquired by Citigroup in 2007. Sharekhan was planning a public issue, which would have been impossible to pull off. Angel's move may save Sharekhan, but what happens to the dozens of other broking firms that have built large overheads and nationwide chains in the hope of tapping the desire of retail investors to trade in stocks, and buy insurance, fixed deposits and other financial products?
Those that have been funded by private equity investors will have to take a decision soon -- like Citigroup is doing. There have been efforts by some brokers to survive by reducing costs and widening geographical reach; but there will have to be many more big deals like the Angel-Sharekhan to be able to make a difference to the large and fragmented broking industry. There is something fundamentally wrong with the sector and unless this is set right, private equity funds which invested in broking companies for their retail spread, face a severe challenge. They will have to get ready to slash, burn and exit.
Remember, a few months back, New Silk Route of Victor Menezes and Rajat Gupta got rid of Destimony, the broking business it foolishly acquired from Dawnay Day and gave a bunch of highly-paid bankers to run, even though they had no truck with Indian retail equity investors. As Destimoney and others have discovered, the Indian model of large nationwide broking is beset with several problems.
High overheads: The cost of running a large nationwide brokerage business is exorbitant -- and fixed. Broking companies have to bear the cost of a large back office staff, compliance, technology and high capital cost of property (or rent). These expenses have skyrocketed in India over the last few years, especially the cost of staffing. And nearly all these costs are fixed in nature -- brokers have to incur them simply to stay where they are. Any attempt to reach retail investors involves promotional costs as well. This too is killing in India. Try to run an outdoor campaign or ads in one of the business newspapers or business news channels. It would set the firm back by a few crores and may not help the bottomline.
Research - The Expensive junk: In 1999, DSP Merrill Lynch published a research report that promoted Pentafour Software as a 'buy' when the price was at around Rs800. The stock is junk today. It was junk at that time too; the researcher who was being paid a princely sum to write the report was either ignorant, or was compromised. This is not an exception. The Moneylife Foundation library has a collection of research reports from the last three bull markets (1994, 2000 and 2007) that make for hilarious reading. That is not so hilarious to the customers who trusted them and have suffered a large hole in their wallets. The core of what passes for stock research is usually a clerical effort with the numbers. The tone of the report is guided by companies and investment banks. But for some strange reason, stock brokers pay through their nose to hire people to do this. The high cost of maintaining a research team that would churn out 'buy' recommendations irrespective of the market climate, based on financial projections that rarely come true, severely skews the cost structure of any decent sized broker.
Revenues: Brokerage revenues are worth nearly Rs15,000 crore in commissions each year, but the business is growing erratically. Geojit BNP Paribas reported an 8% decline in revenues for the March quarter. The others may do better, with slightly different business models, but essentially there is no growth in this business. This is due to the changed structure of the market. Volumes in the cash market-which is more lucrative for brokerages-are declining, while trading in option contracts is increasing. In the case of option contracts, the broking commission is charged only on the option premium, which is miniscule. On the National Stock Exchange, some 3.04 crore contracts of index and stocks options were traded in 2006-07. This exploded to 68.31 crore in 2010-11. But the cash market volumes have hardly budged in this period. The cash market was Rs7,812 crore in 2006-07 and jumped to Rs14,148 crore in the next year and that's where it has remained for the last three years.
So, the model of the nationwide chain of retail broking that private equity investors jumped into, was always flawed. Frankly, investors are not falling over each other to invest in equities, despite the long bull market. And a nationwide chain increases costs without increasing revenues commensurately. Firms like India Infoline may have understood that early, as it transitioned from an online broking firm to a full-service broking firm, and to a distributor of all financial products. Some time in 2007, it also added the institutional brokerage business at a very high cost. But this too has not worked well. Horrendous mis-selling of life insurance products has driven away customers and stirred regulatory action. Other brokers have moved from the institutional brokerage business into retail business (Edelweiss) or into selling non-equity products (Bonanza). But these moves have not been rewarding. The reason: customers have been treated shoddily by the stock market system comprising of broking firms and the market regulator. Retail investors have voted with their feet after 2006-07, after being bled by poor advice, frequent churning, massive losses in portfolio management and initial public offerings. They are not desperate to come back. Private equity firms who funded the broking business are staring at a retail business without retail participation. We will examine that paradox in the third part of this series.
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"Inflation has been a concern. It has not come under control as much as I had hoped. There is need to use fiscal and monetary policy to get rid of supply constraints wherever they exist," Planning Commission deputy chairman Montek Singh Ahluwalia said
New Delhi: Concerned over high headline inflation, the Planning Commission today raised doubts over clocking the targeted 9% economic growth in the current fiscal, reports PTI.
"We may not hit 9% (economic growth rate in 2011-12). Six per cent is the rate of inflation which we should be willing to accept this fiscal," Planning Commission deputy chairman Montek Singh Ahluwalia told reporters here.
The government and the Planning Commission had earlier projected a growth rate of 9% during 2011-12, up from 8.6% in the previous fiscal.
Referring to rise in headline inflation to 8.98% in March from 8.31% in February, Mr Ahluwalia said, "Inflation has been a concern. It has not come under control as much as I had hoped. There is need to use fiscal and monetary policy to get rid of supply constraints wherever they exist."
Referring to growth prospects in the current fiscal, he said, it may be difficult to achieve 6% farm sector growth expected to be recorded during 2010-11.
"There is no chance for agriculture to grow at 6% this fiscal, it may probably grow at 3%," he said.
He pointed out, "Even to stay at 8.6% gross domestic product (GDP) growth this fiscal, industry will have to do much better. Now industry has done about 7.8% in 2009-10 (so far till February end)."
According to the latest data, the index of industrial production (IIP) for April-February last fiscal stood at 7.8% and the factory output dipped to 3.6% in the month of February as compared to 3.9% in January.
Exuding confidence of maintaining growth momentum this fiscal, Mr Ahluwalia said, "Between 8.6% and 9% (GDP growth this fiscal) there is no big deal. I think the downside of 9% is more relevant," he said adding it will not be "way off" (the 9% mark).