This is the hospital of the future

It has a wireless vital signs monitor, a fall detector and robots, of course.

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Q3FY11 analysis: SBI slippage still high, good growth for ITC packaged food, BHEL maintains order book target

Sales and profit were at the higher end of expectations for ITC; an accounting change shows increased revenues for BHEL; provisioning will affect SBI bottom line


Both sales and net profit came in at the higher end of estimates for the cigarettes-to-hotels major. Cigarettes volume growth at 2% was a positive surprise. Sales growth was at 18%.

The soaps business is doing well, but shampoos not so well, and the biscuit category is improving in terms of profitability. The company has entered the instant noodles segment.

Growth this quarter (in non-cigarettes) for branded packaged food was +24% (Sunfeast +28%, Bingo +48%), stationary +50%. Agri business sales grew by 18% driven by higher soya, coffee and leaf tobacco sales and hotel sales grew by 15%. Sales in the paperboard segment were low at 8%.

All eyes are now on the Union Budget, but the general expectation is that after the heavy excise duty hikes in the last two budgets, it is unlikely that there will be a repeat this year.

ITC Q3 FY11 highlights

Rs crore

Dec 2009

Sep 2010

Dec 2010

Net sales




Net profit

1, 144.2



 Over a year, ITC’s shares (up 38%) have outperformed the Sensex (up 9%) by a huge margin. Even over a three-month period, ITC’s shares (up 2%) have outperformed the Sensex (down 4%). Over a month, ITC’s shares are up 3% compared to a 4% fall on the Sensex.


Due to the accounting change, BHEL’s Q3FY11 revenues increased by 25% y-o-y to Rs8,850 crore and PAT grew by 31% to Rs1,400 crore, in line with market estimates. The change in the method of percentage completion led to revenues being higher by Rs440 crore and net profit by around Rs60 crore.

BHEL booked Rs12,200 crore worth of new orders in the quarter and the management maintained its Rs60,000 crore order inflow target for FY11 (the nine-month FY11 figure is Rs36,400 crore). For FY12, it expects order inflows to be substantially higher than FY11. These orders give it revenue visibility almost until FY15.

Over a one-year period, the shares have not done much and have underperformed the Sensex. Over a three-month period, the shares are down 13% compared to 4% fall on the Sensex. Over a month, the shares are down 6% compared to the 4% fall on the Sensex.

State Bank of India (SBI)

Net interest income came in above expectations and net profit was at the higher end of expectations. Profits were largely driven by an expansion in net interest margins.

The slippage ratio was still high at 2.6% (around Rs 3,800 crore). Loan growth was 22% (against 19% in the September quarter), some way below industry standards. In the current NPL provisions, SBI did not make the additional standard assets provision for its dual-rate home loan portfolio of Rs30,000 crore (10% impact on Q3 PBT). It has also requested RBI to exempt it from additional standard asset provision on dual-rate mortgage loans and extend the time-limit to meet the NPL coverage ratio of 70% by six months to March 2012.

Although the management guidance is that catching up with provisioning coverage and retirement benefit provisions will impact the bottom line in the near term, it is optimistic on the outlook for margins (likely to sustain in Q4) and a decline in asset quality slippages.

Compared to a consistent increase over the last seven quarters, both gross NPLs and net NPLs were almost flat. The bank’s outstanding restructured book was at Rs32,800 crore (about 4.5% of loans). Fresh restructuring was at Rs2,000 crore—including a special dispensation for airlines. Slippage from the restructured book increased to almost 16% compared with 14.5% in the previous quarter.

SBI’s Q3 FY11 highlights

Rs crore

Dec 2009

Sep 2010

Dec 2010

Net interest income




Employee expenses




Contribution for employees








Net profit




NIMs %




Gross NPLs




Gross NPLs %




SBI’s share price has underperformed the Sensex in the last three months and has fallen by as much as the Sensex over a month. However, the stock was up on 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.)


Justice Venkatachaliah: We are losing democracy to mobocracy

The former chief justice of the Supreme Court warns that the country is headed for chaos and underlines the need for course correction in public life

Long before the demand for a judges’ accountability bill came up, MN Venkatachaliah, the 25th chief justice of the Supreme Court, had suggested that the method of appointment of Supreme Court judges should be more inclusive and transparent. Eight years on, the recommendations of the National Commission to Review the Working of the Constitution (NCRWC) have not been implemented. But Justice Venkatachaliah continues to campaign for reforms in the judiciary. The respected judge was in Mumbai on Saturday for the National Conference on Judicial Reforms. In an interview to Moneylife, he talked about weaknesses in the judicial process, judicial activism, corruption, and ‘the muddle called Delhi politics’. Excerpts.

Moneylife (ML): You have served as the highest judge in the country and as chairman of the National Human Rights Commission. How do you rate India today?

Justice MN Venkatachaliah (MNV): If things continue the way they are today, we will have complete chaos in the next decade. This system cannot go on, it will collapse on its own, and the biggest millstone that we will have around our neck will be the administrative and judicial machinery.

ML: So reforms are necessary?

MNV: Of course. We are in a dangerous position. There are 30 million cases pending in the lower courts, half of which are in only five states. We have 35 lakh cases in the High Courts. Not only do we need better information technology for fast justice delivery, we also need very competent people to deliver effective justice. I am sorry to say, but there are many cases where the judges have proved to be incompetent.

ML: But isn’t the judiciary more active now?

MNV: Well, in some matters, yes. But in many areas, where it ought to be active, it isn’t.

ML: How about now, when the Supreme Court has rebuked the government for not publishing the names of tax-evaders and bothering about ‘diplomatic niceties’ when there has been a ‘plunder of the national exchequer’?

MNV: See, what people don’t understand is that there are treaties that bind governments. It is not so easy to publish such confidential information, because there are other complications. These are sensitive issues.

ML: But don’t you think that when there is such an amount of money involved the government should rather publish the names?

MNV: Like I said, these are complicated matters. The treaties that I referred to are not subject to ordinary law. You need to initiate complicated procedures for bringing them under the purview of common law.

ML: You have spoken against the government in quite a few cases. You had rebuked Kalyan Singh after the Babri Masjid episode, saying the Uttar Pradesh government had committed “the worst ever contempt of court’ by allowing access to the locked idols. Don’t you think such an assertive role is required now?

MNV: The issue of contempt is a completely different thing. And this is a misconception—I rebuked Mr Singh on some other issue, where the government started the work to level the ground for a cemetery, despite the court’s order to the contrary.

ML: As the head for National Commission to Review the Working of the Constitution (NCRWC) you had put forward the proposal of a more inclusive and broader collegium for appointment of judges of the Supreme Court. But like many other reports, the recommendations are yet to be implemented. Why has the government not done so?

MNV: Many years have passed since that, and times have changed. And there are many good people who want to bring about change, but they cannot, because of the muddle called Delhi politics.

ML: Do you think matters will look up in the future?

MNV: We are losing democracy to mobocracy. Germany could regain it because they were a high energy democracy. Unfortunately, in India, if the system collapses, we will not be able to rebuild it, no matter how much faith we have in our political institutions of processes.




P M Ravindran

5 years ago

Please read my blog at

You may just recognise some gods with feet of clay!

nagesh kini

6 years ago

Long live Justice Venkatachalliah!
I thought we are in the midst of mobocracy - what ever has happened to the review of the Constitution the Commission which the learned CJI heads? The PMO flatly denying knowledge of the pending criminal charges - the CVO says he is charged with criminal conspiracy which is a lighter cup of tea! - is the depth of immorality , three service chiefs involved in land scams and a general court marshalled, high court judge being impeached, $60,000 in a closely monitored Swiss bank account just disappears under the nose of the FM and yet he won't release the names - citing treaty obligations, industry chief can't get sleep but has no qualms of paying high profile female fixer Rs. 90 cr to jump the Q of 342 applicants to bag 18 0f the 23 telecom circles and three top media personalities involved in fixing union cabinet posts. If not mobocracy what?


6 years ago

The biggest problem facing India is incompetence and the failure to recognise that, thanks to poor governance, we do not have enough good, well trained people in all fields of life. We have further aggravated this by ill considered social engineering that has promoted the concept of reservations and permanently vested interest groups. Posterity will wonder how an entire nation could have committed itself to mediocrity as public policy, and the answer will regrettably be India's convoluted, Democracy where there was no honesty in public life and no justice!


6 years ago

I agree to a large extent that we are not a democratic country-we are a mobocracy or anarchy,and we will not be able to remain united once the whole system collapses-and the responsibility lies in dirty nexus of corporates plus politicians plus beurocrats who are bent on turning the situation to worse.

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