Archive for December, 2009

Resurgent India posts growth in many business sectors

December 28, 2009

Leading information technology companies in India are meanwhile increasing their presence in North America, in step with the improving business climate in the region. Top-tier information technology companies which are increasing their delivery capabilities in North America, includeHCL Technologies which concluded acquisition and expansion of its Parsippany, New Jersey data centre. The North America region currently accounts for 60 per cent of India’s Information Tech export basket. Information technology company, Cognizant, has similarly announced the expansion of its US delivery centres in Toronto and Phoenix (Arizona).

India’s top-ranking status in the field of basic research came in for mention at the India Eco Summit held recently, where the panelists discussed whether, and how, India could become an innovation hub in the near future, given India’s strengths in science and technology and research and development. The country made a significant stride in science and technology with Indian researchers succeeding in sequencing the entire genome of a human being. The genome sequencing was undertaken by the Institute of Genomics and Integrative Biology, part of the Council of Scientific and Industrial Research (CSIR). In another development that would have a bearing on innovative science and technology prospects for Indian companies—on the sidelines of the climate change conference at Copenhagen, India’s proposal for a global network of innovation centres for climate-friendly technologies received wide consensus.

Leading manufacturers of automobiles in India, posted record monthly sales for the month of November 2009, even as car makers and two-wheeler companies improved on their sales posted in earlier months. Two of the leading manufacturers of automobiles in India, Maruti Suzuki and Hyundai Motor India reported record monthly sales of 87,807 units and 55,265 units respectively for the month of November 2009. Major manufacturers of Automobile are seeing their India operations contribute significantly to the company’s global operations. For example, Hyundai’s India subsidiary contributes between 15 per cent and 20 per cent to the company’s global turnover.

India’s infrastructure segment has received a boost with representatives from the Power Grid Corporation, the India Infrastructure Finance Co Ltd (IIFCL), the World Bank and the Government of India, signing loan agreements for projects of a total value of US$ 4.2 billion in the month of October 2009. In another fillip to the country’s infrastructure that is certain to speed up infrastructure projects through the route of public-private partnership, the Asian Development Bank (ADB) has decided to provide close to US$ 700 million in loans as part of the second India infrastructure project financing facility.

According to a study by PricewaterhouseCoopers (PwC) and Urban Land Institute, India heads the top real estate investment markets for the year 2010. The report, which is based on the views of over 270 international Real Estate professionals, revealed that India, particularly the Indian cities of Mumbai and Delhi were viewed as good destinations with residential properties seen as more attractive sectors. ICICI Bank, a leading private bank, has stated that it was focussing on the home loans segment on the back of a recovery in the real estate segment. HDFC, a top lender of home loans, has said that it expects loan disbursals in the housing sector to remain strong in the current fiscal (FY 2010). HDFC Vice-Chairman and Managing Director, Keki Mistry, said, “Loan disbursals (in the housing sector) remain very strong. We expect credit growth in excess of 20 per cent.”HDFC Bank, has for its own part, made news in the banking system. HDFC Bank has been named the strongest bank in the Asia-Pacific region, in a survey conducted by Asian Banker, which provides information for the financial services industry. Other Indian banks that featured in the ranking include Punjab National Bank (PNB) and Union Bank of India.

The healthcare sector in India is projected to grow to US$ 77 billion mark by 2012, up 23 per cent from the current size, according to a recently released study. The growth in the healthcare sector in India would come on the back of growth in healthcare facilities in the public and private sector as well as growth in medical diagnostic and path labs, as well as growth in the medical insurance sector. The Indian life insurance industry is on a high growth trajectory, posting a double-digit growth figure of 35.7 per cent year-on-year in October 2009, on the back of high inflows in premiums of the first year.

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Fast Moving Consumer Goods

December 14, 2009

Driven by the fast moving consumer goods (FMCG) and apparel segments, the Indian retail market which is currently estimated to be around US$ 350 billion is expected to witness growth by nine per cent annually touching US$ 521 billion by 2012. Bharti Retail President and Chief Operating Officer (COO), Vinod Sawhny, speaking during an industry event, said, “FMCG and apparel sectors contribute the maximum to the growth of the retail market in India.” He added, “FMCG in particular has a huge potential to grow… and this will ensure a growth rate of nine per cent year-on-year for the retail sector, which is likely to touch US$ 521 billion by 2012.”

Meanwhile, retail companies in India are seeing their margins from FMCG companies go up from 14-15 per cent to 17-19 per cent as they compete for shelf space with retailers’ private labels. Some FMCG companies say that as retailers acquire scale, they also deliver supply chain efficiency and organized scale. The Indian food market, which at US$ 182 billion accounts for about two thirds of the total Indian retail market, has seen the entry of Yum! Restaurants which announced it will invest up to US$ 150 million (about Rs 700 crore) in India where it will compete with companies in India such as Nirulas and Haldiram in the country’s organized food and beverage retail sector.

In a recent development that is seen as the global emergence of the Indian FMCG sector, the consumer care and lighting division of Wipro announced its acquisition of the Yardley business in Asia, Middle East, Australasia and certain African markets for US$ 45.5 million from the United Kingdom-based Lornamead Group. Meanwhile the IT division of Wipro, Wipro Technologies, joined some large IT companies in India, including Tata Consulting Services (TCS) and Infosys, in beating estimates for the second quarter of the year 2009. IT companies in India are also seeing the return of big deals with HCL Technologies, Wipro, and Infosys bagging significant deals so far in 2009.

The company’s information technology arm, Wipro Technologies, meanwhile saw its second quarter profits rise 19 per cent to Rs1,162 crore, beating analysts’ estimates. This increase in profits for the company come on the back of significant overseas deal wins and improved demand for services in the United States. Indian information technology companies, Infosys and TCS also posted strong second quarter results and forecast higher growth. In the sphere of (informational technology enabled services) ITeS, Infosys BPO has acquired the US company McCamish for an upfront consideration of US$38 million.

India’s top-ranking status in the field of basic research came in for mention at the India Eco Summit held recently, where the panelists discussed whether, and how, India could become an innovation hub in the near future, given India’s strengths in science and technology and research and development. The governments of Australia and India have launched a US$ 100 million collaboration project on science and technology including green technology to combat the challenges in water, energy, health and environment as a result of climate change.