Wednesday, July 19, 2006
Hyderabad Business News July 20th,2006
Wipro continues trend, net up 45%
Hyderabad, July 19: Wipro Ltd posted a 45 per cent increase in its net profit in the first quarter of 2006-07 to Rs 620 crores, while its total revenue jumped by 39 per cent to Rs 3,143 crores, but its guidance, which is modest, came as a damper for investors, dragging down the company’s stock into the red.
According to a Wipro release, the company’s global IT business grew by 42 per cent to Rs 2,450 crores. “The results for the quarter were quite satisfying; we enhanced our strategic investments to sustain long-term growth even as we continued solid execution leading to improvements in operating performance.
Looking ahead, for the quarter ending September 2006, we expect revenue from our global IT services business to be approximately $577 million,” Wipro chairman Azim H. Premji said. Wipro CFO Suresh Senapaty said that during the quarter ended June 2006, the company’s global IT services revenue at $539.3 million was ahead of our guidance of $533 million.
“Revenue of global IT Services segment included $3.2 million from Enabler, our acquisition announced and consummated during the quarter. Continuing strong momentum, our financial solutions and combined technology business delivered 60 per cent and 40 per cent year on year growths respectively. Among service-lines, testing services grew 86 per cent year-on-year while our technology infrastructure services grew 67 per cent year on year.”
The release said Wipro’s global IT business added 62 new clients during the period, but the global IT services business reported a slip in operating margins on a sequential basis to 24.6 per cent from 25.1 per cent in the previous quarter. Mr Senapaty attributed the fall to the acquisitions and marketing expenses.
“We had 56,435 employees as of June 30, 2006, which includes 40,496 employees in our IT Services business and 15,939 employees in our BPO business. Compared to quarter ended March 31, 2006, this represents a net addition of 2,693 employees,” Mr Senapaty said. Wipro’s BPO services business saw a two per cent improvement in its margins. Analysts expressed disappointment over Wipro’s results, with JP Morgan noting that two of Wipro’s peers, TCS and Infosys Technologies, had indicated that they expected their second quarter to be better.
“Also, we had expected Wipro to make up for slightly-muted 1Q FY07 through stronger revenue growth in 2Q FY07, which does not seem to be the case,” CRISIL MarketWire quoted a JP Morgan analyst as saying.
Indian cargo firm, Boeing in $1bn deal
Hyderabad, July 19: In one of the biggest orders by an Indian aviation firm, the Secunderabad-based Flyington Freighters Private Limited, an air cargo company, on Wednesday agreed to buy four Boeing 777F cargo aircraft. The four aircraft are estimated to cost $945 million at list prices. “We want to be the biggest (cargo airline) in Asia. We will be sticking primarily to Boeings,” Flyington Freighters chairman T. Venkattram Reddy told reporters at the Farnborough International air show in the United Kingdom.
The 777 is a twin-engined, long-range model which in its cargo version sells for about $240 million at list prices. According to agency reports from London, Flyington Frei-ghters expects to start flying with three leased aircraft by April next year.
Flyington Freighters’ managing director Deepak Parasuraman said at the airshow that deliveries of the 777-200 freighters would begin in the end of 2009. “However, we plan to launch our global cargo operations with leased aircraft from this year end. We are close to finalising the lease deals also,” Mr Parasuraman said.
Mr Parasuraman said Flyington would lease six aircraft, which would be a mix of McDonnell-Douglas-11S and Airbus A300-600S to launch operations. “We plan to carry out cargo operations to China, West Asia, the US and Europe,” he said.
The Flyington deal is the biggest deal so far by an Indian company at the Farnborough airshow. Air cargo in India is in a nascent stage, but with the economy estimated to gr-ow at over seven per cent per year, this segment is expected to grow rapidly.
Civil aviation minister Praful Patel had told airline executives at the AGM of the International Air Transport Association, an industry lobby, in Paris last month that the country’s air cargo sector was set to expand.
“Cargo is one sector we have completely overlooked in India,” Mr Patel had said, citing a meagre fleet of just five cargo aircraft. “You could see about 150 cargo planes at least coming into India in the coming years.” Both Boeing and Airbus have taken aim at the Indian market and have new cargo models either under consideration or in development.
GMR IPO plans to mop up Rs 1,000cr
Hyderabad, July 19: GMR Infrastructure Limited will hit the capital market on July 31 with an IPO through which it hopes to collect Rs 1,000 crores. Announcing this on Monday, Mr G.M. Rao, chairman of GMR Infrastructure, which is modernising the Hyderabad and Delhi airports, said that the price band has been fixed at Rs 210 to Rs 250.
Asked whether the group was not worried about the weak and volatile market since many IPOs have been postponed, Mr G.B.S. Raju, GMR director, said they were not worried as they had confidence in the fundamentals of the company and the business model.
Besides, he said, “This is the first stock that will be listed on the stock exchange which is a pure, core infrastructure stock. The others were property companies which converted themselves into infrastructure companies. We need good IPOs to get back the confidence in the market.”
The net offer to the public will constitute 11.37 per cent of the fully diluted post-issue paid-up capital of the company. The issue is being made through the 100 per cent book-building process with an allocation of at least 60 per cent of the issue size to qualified institutional buyers or QIBs. Of this, 5 per cent will be proportionately allocated to mutual funds and not less than 10 per cent would be available for allocation to non-institutional investors.
The company has placed 2.89 per cent of the post-issue equity with ICICI Venture for Rs 250 crores, 1.11 per cent with Citigroup Venture Capital for Rs 99.17 crores, 0.75 per cent of its equity with the George Soros promoted Quantum Fund for Rs 67.25 crores and 0.30 per cent with the Punjab National Bank for Rs 27 crores.
Infrastructure Development Finance Corporation, which had invested in the company, will hold 3.55 per cent of the post issue capital. ICICI Venture had bought its shares at Rs 261 per share.The company will use part of the issue proceeds for investment in various infrastructure special purpose vehicles which are currently in the development stage.
YSR calls to expedite broadband project in AP
Hyderabad, July 19: Chief Minister Y.S.Rajasekhar Reddy on Wednesday reviewed the status of the ambitious joint venture project by Online Media, Transmission Corporation of Andhra Pradesh and Power Grid Corporation, to provide broadband in the state using the electricity poles belonging to the State-owned power utility.
“Dr Reddy met with directors of all the three joint venture partners. He asked the concerned government agencies to expedite the signing of the agreement and further instructed the concerned party to review the business plan, since a lot of technology advancements have happened in the telecom sector in last few years,” Mr P.V. Narasimha Rao, director of Online Media Solutions, said in a statement.
According to Mr Rao, “Since Online Media is paying Rs 112 crores as right of way (RoW) to APTransco for using its poles, the chief minister has categorically denied providing the poles (RoW) free of cost to anybody.” Mr Rao said that all the three consortium partners were holding the required licenses to implement the project.
Online Media holds a 51 per cent stake in the joint venture, while APTransco holds a 26 per cent stake and Power Grid 23 per cent. Online Media holds the stake as consortium comprising the Secunderabad-based Goldstone group and Videocon Appliance Limited.
Mr Rao had told this newspaper in April that APTransco, which has already laid 1,548 km of fibre optic cable on its grid, was participating in the joint venture to utilise the broadband network to get a more accurate reading of power meters. The RoW will enable Online Media to use APTransco’s 24,000 cable kms of transmission lines and 6.68 lakh cable km of distribution lines in the State.
Hyderabad seen as frontrunner for Routes
Hyderabad, July 19: Hyderabad has emerged as a key runner to host the Routes event, which brings together airlines and airports from around the world, in 2009, senior officials of the Route Development Group, which organises the annual event, said here on Wednesday.
Speaking to reporters after discussions with GMR Hyderabad International Airport Ltd., the company that is building the new international airport and has bid for hosting Routes 2009, Eric Layden, V-P, emerging markets, said that Hyderabad was among the “key runners” for the hosting the event. Other competing countries are China, South Korea and Mexico.
“China has been in the news because it will be hosting the 2008 Olympics, and we are visiting all the cities which have bid to host Routes 2009. We have sought some additional det-ails from the bidders, and the name of the city which will host Routes 2009 will be announced during the Routes 2006 event, which is scheduled in Dubai from 17-19 September.”
Munjal eSystems plans new unit in the South
Hyderabad, July 19: Munjal eSystems, a Hero group arm which provides ERP solutions to the auto ancillary sector, will be setting up a second development centre in southern India, Ms Shefali Munjal, deputy chief executive of the company, said here on Wednesday.
Speaking to this newspaper, Ms Munjal, granddaughter of founder and chairman of Hero group Brijmohan Lall Munjal, said that a second development centre had become necessary because of the growth in the auto ancillary sector in southern India.
“There is a lot of growth in the auto ancillary sector in Tamil Nadu and Karnataka and we are debating whether to set up our development centre in either of the states. Our current development centre in Gurgaon has over 80 workers,” Ms Munjal, an engineer who played a key role in setting up the IT infrastructure of the Hero group, said.
She said MeS, which is stated to be the only company from the Asia-Pacific region to be validated by Microsoft Corporation for its automobile vertical solution, had over 40 ERP and CRM implementations in India, including 36 in the auto ancillary sector.
“We have been doing some work in the Chennai auto sector as well and believe that there is potential in Chennai and Coimbatore and in Karnataka, especially among small and medium businesses.”
Hyderabad, July 19: Wipro Ltd posted a 45 per cent increase in its net profit in the first quarter of 2006-07 to Rs 620 crores, while its total revenue jumped by 39 per cent to Rs 3,143 crores, but its guidance, which is modest, came as a damper for investors, dragging down the company’s stock into the red.
According to a Wipro release, the company’s global IT business grew by 42 per cent to Rs 2,450 crores. “The results for the quarter were quite satisfying; we enhanced our strategic investments to sustain long-term growth even as we continued solid execution leading to improvements in operating performance.
Looking ahead, for the quarter ending September 2006, we expect revenue from our global IT services business to be approximately $577 million,” Wipro chairman Azim H. Premji said. Wipro CFO Suresh Senapaty said that during the quarter ended June 2006, the company’s global IT services revenue at $539.3 million was ahead of our guidance of $533 million.
“Revenue of global IT Services segment included $3.2 million from Enabler, our acquisition announced and consummated during the quarter. Continuing strong momentum, our financial solutions and combined technology business delivered 60 per cent and 40 per cent year on year growths respectively. Among service-lines, testing services grew 86 per cent year-on-year while our technology infrastructure services grew 67 per cent year on year.”
The release said Wipro’s global IT business added 62 new clients during the period, but the global IT services business reported a slip in operating margins on a sequential basis to 24.6 per cent from 25.1 per cent in the previous quarter. Mr Senapaty attributed the fall to the acquisitions and marketing expenses.
“We had 56,435 employees as of June 30, 2006, which includes 40,496 employees in our IT Services business and 15,939 employees in our BPO business. Compared to quarter ended March 31, 2006, this represents a net addition of 2,693 employees,” Mr Senapaty said. Wipro’s BPO services business saw a two per cent improvement in its margins. Analysts expressed disappointment over Wipro’s results, with JP Morgan noting that two of Wipro’s peers, TCS and Infosys Technologies, had indicated that they expected their second quarter to be better.
“Also, we had expected Wipro to make up for slightly-muted 1Q FY07 through stronger revenue growth in 2Q FY07, which does not seem to be the case,” CRISIL MarketWire quoted a JP Morgan analyst as saying.
Indian cargo firm, Boeing in $1bn deal
Hyderabad, July 19: In one of the biggest orders by an Indian aviation firm, the Secunderabad-based Flyington Freighters Private Limited, an air cargo company, on Wednesday agreed to buy four Boeing 777F cargo aircraft. The four aircraft are estimated to cost $945 million at list prices. “We want to be the biggest (cargo airline) in Asia. We will be sticking primarily to Boeings,” Flyington Freighters chairman T. Venkattram Reddy told reporters at the Farnborough International air show in the United Kingdom.
The 777 is a twin-engined, long-range model which in its cargo version sells for about $240 million at list prices. According to agency reports from London, Flyington Frei-ghters expects to start flying with three leased aircraft by April next year.
Flyington Freighters’ managing director Deepak Parasuraman said at the airshow that deliveries of the 777-200 freighters would begin in the end of 2009. “However, we plan to launch our global cargo operations with leased aircraft from this year end. We are close to finalising the lease deals also,” Mr Parasuraman said.
Mr Parasuraman said Flyington would lease six aircraft, which would be a mix of McDonnell-Douglas-11S and Airbus A300-600S to launch operations. “We plan to carry out cargo operations to China, West Asia, the US and Europe,” he said.
The Flyington deal is the biggest deal so far by an Indian company at the Farnborough airshow. Air cargo in India is in a nascent stage, but with the economy estimated to gr-ow at over seven per cent per year, this segment is expected to grow rapidly.
Civil aviation minister Praful Patel had told airline executives at the AGM of the International Air Transport Association, an industry lobby, in Paris last month that the country’s air cargo sector was set to expand.
“Cargo is one sector we have completely overlooked in India,” Mr Patel had said, citing a meagre fleet of just five cargo aircraft. “You could see about 150 cargo planes at least coming into India in the coming years.” Both Boeing and Airbus have taken aim at the Indian market and have new cargo models either under consideration or in development.
GMR IPO plans to mop up Rs 1,000cr
Hyderabad, July 19: GMR Infrastructure Limited will hit the capital market on July 31 with an IPO through which it hopes to collect Rs 1,000 crores. Announcing this on Monday, Mr G.M. Rao, chairman of GMR Infrastructure, which is modernising the Hyderabad and Delhi airports, said that the price band has been fixed at Rs 210 to Rs 250.
Asked whether the group was not worried about the weak and volatile market since many IPOs have been postponed, Mr G.B.S. Raju, GMR director, said they were not worried as they had confidence in the fundamentals of the company and the business model.
Besides, he said, “This is the first stock that will be listed on the stock exchange which is a pure, core infrastructure stock. The others were property companies which converted themselves into infrastructure companies. We need good IPOs to get back the confidence in the market.”
The net offer to the public will constitute 11.37 per cent of the fully diluted post-issue paid-up capital of the company. The issue is being made through the 100 per cent book-building process with an allocation of at least 60 per cent of the issue size to qualified institutional buyers or QIBs. Of this, 5 per cent will be proportionately allocated to mutual funds and not less than 10 per cent would be available for allocation to non-institutional investors.
The company has placed 2.89 per cent of the post-issue equity with ICICI Venture for Rs 250 crores, 1.11 per cent with Citigroup Venture Capital for Rs 99.17 crores, 0.75 per cent of its equity with the George Soros promoted Quantum Fund for Rs 67.25 crores and 0.30 per cent with the Punjab National Bank for Rs 27 crores.
Infrastructure Development Finance Corporation, which had invested in the company, will hold 3.55 per cent of the post issue capital. ICICI Venture had bought its shares at Rs 261 per share.The company will use part of the issue proceeds for investment in various infrastructure special purpose vehicles which are currently in the development stage.
YSR calls to expedite broadband project in AP
Hyderabad, July 19: Chief Minister Y.S.Rajasekhar Reddy on Wednesday reviewed the status of the ambitious joint venture project by Online Media, Transmission Corporation of Andhra Pradesh and Power Grid Corporation, to provide broadband in the state using the electricity poles belonging to the State-owned power utility.
“Dr Reddy met with directors of all the three joint venture partners. He asked the concerned government agencies to expedite the signing of the agreement and further instructed the concerned party to review the business plan, since a lot of technology advancements have happened in the telecom sector in last few years,” Mr P.V. Narasimha Rao, director of Online Media Solutions, said in a statement.
According to Mr Rao, “Since Online Media is paying Rs 112 crores as right of way (RoW) to APTransco for using its poles, the chief minister has categorically denied providing the poles (RoW) free of cost to anybody.” Mr Rao said that all the three consortium partners were holding the required licenses to implement the project.
Online Media holds a 51 per cent stake in the joint venture, while APTransco holds a 26 per cent stake and Power Grid 23 per cent. Online Media holds the stake as consortium comprising the Secunderabad-based Goldstone group and Videocon Appliance Limited.
Mr Rao had told this newspaper in April that APTransco, which has already laid 1,548 km of fibre optic cable on its grid, was participating in the joint venture to utilise the broadband network to get a more accurate reading of power meters. The RoW will enable Online Media to use APTransco’s 24,000 cable kms of transmission lines and 6.68 lakh cable km of distribution lines in the State.
Hyderabad seen as frontrunner for Routes
Hyderabad, July 19: Hyderabad has emerged as a key runner to host the Routes event, which brings together airlines and airports from around the world, in 2009, senior officials of the Route Development Group, which organises the annual event, said here on Wednesday.
Speaking to reporters after discussions with GMR Hyderabad International Airport Ltd., the company that is building the new international airport and has bid for hosting Routes 2009, Eric Layden, V-P, emerging markets, said that Hyderabad was among the “key runners” for the hosting the event. Other competing countries are China, South Korea and Mexico.
“China has been in the news because it will be hosting the 2008 Olympics, and we are visiting all the cities which have bid to host Routes 2009. We have sought some additional det-ails from the bidders, and the name of the city which will host Routes 2009 will be announced during the Routes 2006 event, which is scheduled in Dubai from 17-19 September.”
Munjal eSystems plans new unit in the South
Hyderabad, July 19: Munjal eSystems, a Hero group arm which provides ERP solutions to the auto ancillary sector, will be setting up a second development centre in southern India, Ms Shefali Munjal, deputy chief executive of the company, said here on Wednesday.
Speaking to this newspaper, Ms Munjal, granddaughter of founder and chairman of Hero group Brijmohan Lall Munjal, said that a second development centre had become necessary because of the growth in the auto ancillary sector in southern India.
“There is a lot of growth in the auto ancillary sector in Tamil Nadu and Karnataka and we are debating whether to set up our development centre in either of the states. Our current development centre in Gurgaon has over 80 workers,” Ms Munjal, an engineer who played a key role in setting up the IT infrastructure of the Hero group, said.
She said MeS, which is stated to be the only company from the Asia-Pacific region to be validated by Microsoft Corporation for its automobile vertical solution, had over 40 ERP and CRM implementations in India, including 36 in the auto ancillary sector.
“We have been doing some work in the Chennai auto sector as well and believe that there is potential in Chennai and Coimbatore and in Karnataka, especially among small and medium businesses.”
