Q3 attrition down by 2%; see further decline: Wipro

Wipro surprised markets with the resignations of the joint-CEOs of its information technology business, after reporting profit growth rates which lagged rivals Infosys Technologies and Tata Consultancy Services.

India's third-largest software services exporter said company veteran TK Kurien was taking over as the new chief executive of the unit.

The company's net profit for the third quarter of fiscal year 2011 grew 3.4% on quarter-on-quarter basis. The number stood at Rs 1,319 crore as against Rs 1,276 crore reported last quarter. Its consolidated revenues too went up to Rs 7,829 crore from Rs 7,731 crore and dollar denominated global IT revenues rose 5.6% to USD 1.34 billion (QoQ).

Commenting on the company's performance, the newly appointed CEO of the IT business TK Kurien along with the company’s executive director and chief financial officer Suresh Senapaty, and HR head Pratik Kumar, said they expected growth to return in 2011.

"With the environment for the IT sector looking positive, we are confident of growth despite tepid volumes in the previous quarter," the management said, adding that the attrition rate for the quarter was down by 2%, and it saw further decline there.

On the move to have one CEO for the IT unit, the management said the structure of a single CEO was more appropriate for coming years.

Nifty consolidates; ADAG stocks top gainers

The 50-share NSE Nifty has consistently been volatile in trade today due to two-way move. On one side, heavyweights like Reliance Industries, SBI and ICICI Bank, ahead of their numbers, were helping the markets. BHEL after its strong numbers, NTPC, M&M and Bajaj Auto along with Anil Dhirubhai Ambani Group companies' shares too followed the same trend.

However, selling continued in ONGC, Wipro, Infosys, Bharti Airtel, HDFC and HDFC Bank along with metal, cement, healthcare, realty and FMCG companies' shares.

At this point in time, Arjun Divecha of GMO said they are heavily underweight both India and China in their emerging markets strategy. This is primarily due to high valuations in both countries relative to other emerging markets, he says. "In addition, central banks in both countries appear to be behind the curve and they will have to act strongly to bring inflation down."

The Sensex was trading at 18,999, down 47 points and the Nifty fell 15 points to 5,696.

Among frontliners, Wipro was trading at Rs 456.35, down 4.53% (after quarterly numbers), ONGC was at Rs 1,108.35, down 2.27% (Oil spill reported from ONGC`s fields off Mumbai coast); Sterlite Industries was at Rs 177.40, down 1.74%; DLF was at Rs 252, down 1.7%; ITC was at Rs 168.95, down 1.63% (after quarterly numbers); HCL Tech was at Rs 499.50, down 2.22% and ACC was at Rs 995.05, down 2.14%.

However, Reliance Infrastructure, Reliance Communications, SBI, Reliance Industries, BHEL, Reliance Power and Sesa Goa gained 1.3-2.9%.

In midcap space, Motilal Oswal rallied 12%. Cholamandalam, HMT, BOC India and Peninsula Land gained 4.5-5% while Financial Tech, Persistent, KGN Industries, Kirloskar Brothers and Polaris slipped 3.8-6%.

In smallcap space, Valecha Engg, Lloyds Metals, Hanung Toys, Hyderabad Inds and Splash Media rallied 8-17% whereas Rossell Tea, SML Isuzu, Spectacle Info, Prabhav Indust and Centrum Finance lost 4.6-5%.

TVS Motor Q3 net profit up 137% at Rs 55.7 cr

TVS Motor has announced its third quarter results. The company’s Q3 net profit was up 137% at Rs 55.7 crore versus Rs 23.5 crore, year-on-year, YoY.

Its net sales were up 50.19% at Rs 1,613 crore versus Rs 1,072.6 crore, YoY.

n a press conference, TVS Motor said:
-2 -Wheeler sales volume up 39%
-3-Wheeler sales crossed 10,000 units for the 1st time
-Topline growth continues to be good
-Should be able to protect margins
-Commodity prices to soften in next fiscal
-Expect CAGR of 14-15% over next 2-3 years
-Will launch two new variants of Apache & Scooty
-Very positive response for 3-wheelers
-3-Wheeler export sales to outpace domestic sales in 1 year
-Supply chain effectiveness improving

The company's trailing 12-month (TTM) EPS was at Rs 2.93 per share. (Sep, 2010). The stock's price-to-earnings (P/E) ratio was 21.71. The latest book value of the company is Rs 18.22 per share.

At current value, the price-to-book value of the company was 3.49. The dividend yield of the company was 1.89%.

Food inflation eases, but RBI action seen

Food inflation eased for the second straight week in January, tracking lower fruit and vegetable prices, but accelerating headline inflation in December is likely to put pressure on the Reserve Bank to raise rates at policy review on January 25.

India's food inflation quickened to a one-year high late last month as unseasonal rains spoilt summer harvest of perishable vegetables like onions, potatoes and tomatoes in several key producing states.

ndia's food price index rose 15.52% and the fuel price index climbed 11.53% in the year to January 8, government data on Thursday showed.

In the prior week, annual food and fuel inflation stood at 16.91% and 11.53%. The primary articles price index was up 17.03% in the latest week, compared with an annual rise of 17.58% a week earlier.

Analysts expect food prices to moderate by February, but they would still remain high.

"The build-up of food inflation will take two months to dissipate. So, it will moderate in January and February and we expect food inflation at 10% to 12% by March," said Abheek Barua, chief economist at HDFC Bank.

"I expect the RBI (Reserve Bank of India) to continue to be hawkish and continue with its rate hikes as non-food primary product inflation is sticky and can have pass through effect into wages and general prices," Barua said.

The wholesale price index, the most widely watched gauge of prices in India, rose 8.43% in December from a year earlier, compared with 7.48% in November, reflecting that food inflation has fed into the broader economy.

While monetary measures are largely ineffective in tackling supply-led problems like food inflation, the RBI is widely expected to raise policy rates by 25 basis points in its January 25 policy review to rein in inflationary expectations and dampen overall demand.

India's 5-year swap rate was down 2 basis points to 8% on a knee-jerk reaction after weekly food inflation eased, but rose back to previous levels as rate hike concerns and a hawkish policy stance weighed.

This week, the RBI governor Duvvuri Subbarao said that the central bank is 'desperate' to control inflation, in a sign which is being widely read as indicative of further monetary tightening.

Finance Minister Pranab Mukherjee met state finance ministers on Wednesday and said local factors are widening the gap between wholesale and retail prices.

Mukherjee said the federal government has taken measures to facilitate imports and restrict exports where needed, but urged state governments to review local levies and state level marketing regulations which add to food prices.

Bharti Airtel foresees super success on MNP platform

Mobile number portability (MNP)—a move that is expected to further intensify competition in the already crowded mobile services market. With the implementation of MNP, subscribers would get a wider choice and would be able to switch between service providers easily, thus compelling service providers to offer competitive pricing plans and offer higher service quality to attract and retain subscribers.

Calling today a historic day for the industry, number one telecom company (by market cap) Bharti Airtel's CEO Sanjay Kapoor said that the data indicated that bigger operators would get bigger after number portability. "And, we are a product of competition; customers believe in our strategy."

Nifty ends with moderate gains; financials, IT rise

Equity benchmarks closed with moderate gains after showing a smart recovery in the last couple of hours of trade on Thursday. Technology, financial and select power companies' shares led the recovery and pulled the Nifty up above the 5700 mark as well as the Sensex above the 19000 level. Indices had slipped close to 1% in the first half of trade today due to weak global cues.

Cabinet reshuffle and mobile number portability rollout did not have much impact on markets. Overall, indices were extremely volatile in trade. Naresh Kothari president of Edelweiss Capital expects this trend to continue in the first half of this calendar year.

Deven Choksey of KR Choksey Securities feels that the Nifty is likely to be in a range between 5700-5900 as earnings are largely inline with estimates. "Traders need to be cautious," he said.

However, the sell-off in oil & gas and select metal companies' shares along with ITC, Bharti, Bajaj Auto, Maruti and BHEL capped gains in late trade.

The 30-share BSE Sensex closed at 19,046.54, up 68.22 points or 0.36% and the 50-share NSE Nifty rose 20.55 points or 0.36% to settle at 5,711.60. Broader indices were quiet in trade today.

Rangarajan sees inflation at 6-6.5% by March

There is room for monetary action on the inflation front according to Prime Minister's Economic Advisory Council Chairman C Rangarajan. He expects WPI inflation to be between 6-6.5% by the end of March. "Inflation above 4% is uncomfortable and if it remains sticky, RBI steps may be needed. We may see action from the Reserve Bank by mid-January if inflation is firm," he says adding that the quantum of any rate hike depends on inflation.

Further he states that the government should guard against food inflation spreading to other sectors. He also alarms the spill over of untamed primary article inflation as well. "Price stability has to become the dominant issue for monetary policy in India," Rangarajan adds.

Food inflation accelerated to above 14% in mid-December on the back of high onion and vegetable prices and annual headline inflation, currently at 7.48% in November, could accelerate further in December.

Talking about fiscal deficit, which has been a matter of grave concern, Rangarajan says he sees the government meeting its fiscal 2011 aim. "There is no need for extra borrowings this fiscal. We also expect the liquidity situation to improve this quarter," he points out.

Commenting on the talks about government deregulating diesel prices, he says it may do so when inflation eases.