An edited version of this story first appeared in DNA Money edition on Thursday, May 30, 2013.
Housing Development & Infrastructure Ltd (HDIL) plunged 10.3% in the intra-day trade on the news that Mumbai International Airport Ltd (MIAL) has served a notice of termination for its slum rehabilitation project citing unsubstantiated charges. The company shares recovered part of the losses to close 6.8% lower at Rs 47.95 in Mumbai trading on Wednesday. The realtor is set for a legal battle with MIAL and may also file for damages.
Hariprakash Pandey, vice president - finance, HDIL, said the company has not accepted the notice. "The termination notice is completely unwarranted and company will take all the necessary legal steps and is also looking at filing (as said by company chairman Sarang Wadhawan) as damage claim on MIAL," said Pandey. He added that their legal counsel has advised the notice of termination is not tenable in the court of law and that the realtor has initiated legal remedies available to it.
While HDIL claims it has fulfilled all the obligations pertaining to the slum rehabilitation project MIAL feels otherwise. According to sources, MIAL entered into Slum Rehabilitation Agreement with HDIL in October, 2007 and as per the said agreement, HDIL had to complete the slum rehabilitation within four years i.e. by 2011.
"However, HDIL continuously failed to perform and MIAL issued a Cure Notice in June 2011. Because of non-performance of HDIL, the MIAL board took a decision to terminate the agreement and accordingly, in the month of February, 2013, MIAL terminated the said agreement,” MIAL sources said.
However, HDIL management said they have already handed over over 1,000 apartments for the Sahar elevated road and that more than 16,000 apartments are ready clearly substantiating the company has have fulfilled obligations.
"We have applied to the Maharashtra government for taking possession of over 7,000 apartments, which has been pending for over a year now. There have been issues regarding the eligibility criteria of the slum dwellers and the Maharashtra government has taken cognisance of it. There is a policy issue with respect to eligibility norms of the slum dwellers which needs to be resolved. Our apartments are ready since over two years now but issue will only get resolved after the government comes up with clarity on the criteria and expedite the hand over process," said Pandey.
HDIL said it will continue work on the approximately 27,000 units and keep on receving the transfer of development rights (TDR) from Government of Maharashtra against these units.
However, following a conservative accounting policy, the company has written-off the unabsorbed costs on its books (profit and loss account as an exceptional item) around Rs 441.98 crore accumulated over a period of 3-4 years. The unabsorbed costs pertains to 65 acres of land HDIL is supposed to get after the completion or substantial completion of the slum rehabilitation project.
The market is also abuzz with rumours that banks have termed their lending to HDIL as non-performing asset (NPA). The company management said they cannot comment on this matter unless there is proper information given by the banks themselves. "There was some issue with bank payments in fourth quarter but none of our bank accounts are frozen as of now," said Pandey.
Prior to termination, MIAL also invoked HDIL's performance securities in the form of bank guarantee worth Rs 25 crore, MIAL sources said. Now that the termination notice has been served the HDIL management feels there is no question of any other performance security to be invoked. "There was a promissory note worth Rs 275 crore but that cannot be invoked as the agreement itself has been terminated," said Pandey.
Friday, 31 May 2013
Bajaj Electricals to double advertising spend to Rs 75 crore in FY'14
An edited version of this story first appeared in DNA Money edition on Tuesday, May 28, 2013.
Coinciding with its platinum jubilee celebrations, Bajaj Electricals will more than double its overall advertising spend for the current fiscal i.e FY14. The company has earmarked Rs 75 crore towards advertising as compared to Rs 38 crore it spent in FY12. The company is also looking to increase its sales turnover by 25% to over Rs 4,200 from Rs 3,416 it registered in fiscal 2012-13.
Anant Bajaj, joint managing director, Bajaj Electricals Ltd, said the company has a very elaborate spent planned considering it is their 75th year in business. "We clearly have on our mind to spend a significant money on advertising this year. In fact, you should soon start seeing significant visibility being created in the market place for our brand and products alike," said Bajaj.
Over the years, the management has been aggressively working on its distribution, product range and the consumer's requirement (in terms of a product) and it feels that advertising will only help it become better. "We have achieved very good traction in the market despite not spending too much in the past mainly because we have been smart in our spending. While continuing with that strategy, we will work smartly towards being more visible vis-a-vis competition," added Bajaj.
In another development, the company is also planning at taking its exclusive Bajaj World stores international. "A store has already been opened in Nepal, and talks are currently on for opening in Ghana, Nigeria, Sri Lanka and South Africa," said Bajaj adding that all these stores will added through exclusive franchise agreements.
As on May 1, 2013, the company had 42 Bajaj World stores operational in India and the management is looking at opening another 13-odd outlets in the next 45 days. A total of 75 stores are likely to get operational by the end of this fiscal.
The company is also in the advanced stages of setting up a new research and development (R&D) centre in Mumbai. It has a capex planned of Rs 45 crore, though not all of it has been invested in the centre as yet.
And with e-commerce starting to gain traction in the country, Bajaj Electricals has launched its e-retailing market place as well. The e-commerce portable has been up and running for the last five to six months. Bajaj said that the company is quite pleased with this initiative which has been giving them Rs 6 lakh to Rs 10 lakh worth business every month.
"We are currently selling most of the products available in the market but will gradually launch products that will be sold only through the e-commerce portal thereby creating a differentiation in the market place," he said.
The company also reported fourth quarter results for the fiscal 2013 wherein its net profit plunged 99% year-on-year to Rs 0.62 crore mainly due to restructuring of its engineering and projects (E&P) business. E&P sales declined 22% to Rs 285 crore in Jan-March and losses stood at Rs 51 crore as compared to a profit of Rs 21 crore in the fourth quarter a year ago.
Its net sales for the three-month period gained just 5% from a year ago to Rs 1,114 crore. Sales from consumer durables rose 22% to Rs 544 crore while lighting sales were up 15% to Rs 285 crore.
Coinciding with its platinum jubilee celebrations, Bajaj Electricals will more than double its overall advertising spend for the current fiscal i.e FY14. The company has earmarked Rs 75 crore towards advertising as compared to Rs 38 crore it spent in FY12. The company is also looking to increase its sales turnover by 25% to over Rs 4,200 from Rs 3,416 it registered in fiscal 2012-13.
Anant Bajaj, joint managing director, Bajaj Electricals Ltd, said the company has a very elaborate spent planned considering it is their 75th year in business. "We clearly have on our mind to spend a significant money on advertising this year. In fact, you should soon start seeing significant visibility being created in the market place for our brand and products alike," said Bajaj.
Over the years, the management has been aggressively working on its distribution, product range and the consumer's requirement (in terms of a product) and it feels that advertising will only help it become better. "We have achieved very good traction in the market despite not spending too much in the past mainly because we have been smart in our spending. While continuing with that strategy, we will work smartly towards being more visible vis-a-vis competition," added Bajaj.
In another development, the company is also planning at taking its exclusive Bajaj World stores international. "A store has already been opened in Nepal, and talks are currently on for opening in Ghana, Nigeria, Sri Lanka and South Africa," said Bajaj adding that all these stores will added through exclusive franchise agreements.
As on May 1, 2013, the company had 42 Bajaj World stores operational in India and the management is looking at opening another 13-odd outlets in the next 45 days. A total of 75 stores are likely to get operational by the end of this fiscal.
The company is also in the advanced stages of setting up a new research and development (R&D) centre in Mumbai. It has a capex planned of Rs 45 crore, though not all of it has been invested in the centre as yet.
And with e-commerce starting to gain traction in the country, Bajaj Electricals has launched its e-retailing market place as well. The e-commerce portable has been up and running for the last five to six months. Bajaj said that the company is quite pleased with this initiative which has been giving them Rs 6 lakh to Rs 10 lakh worth business every month.
"We are currently selling most of the products available in the market but will gradually launch products that will be sold only through the e-commerce portal thereby creating a differentiation in the market place," he said.
The company also reported fourth quarter results for the fiscal 2013 wherein its net profit plunged 99% year-on-year to Rs 0.62 crore mainly due to restructuring of its engineering and projects (E&P) business. E&P sales declined 22% to Rs 285 crore in Jan-March and losses stood at Rs 51 crore as compared to a profit of Rs 21 crore in the fourth quarter a year ago.
Its net sales for the three-month period gained just 5% from a year ago to Rs 1,114 crore. Sales from consumer durables rose 22% to Rs 544 crore while lighting sales were up 15% to Rs 285 crore.
Sunday, 26 May 2013
Wockhardt says speeding up process to be up to speed
This story first appeared in DNA Money edition on Saturday, May 25, 2013.
Drugmaker Wockhardt has stepped up efforts to mitigate the impact of an ‘import alert’ by the US Food and Drug Administration (FDA) for its units at Waluj in Aurangabad. The company will hire a US consultant and submit a corrective action plan within a fortnight.
”The consultant will be helping us in bringing this facility in compliance in a month or two maximum,” said Habil Khorakiwala, chairman, Wockhardt, during an analyst call on Friday.
Wockhardt has two facilities at Waluj, — one manufacturing injectables for the US and another that is not for US exports but has a product filed in that area.
”The FDA has observed non-compliance in terms of standard operating procedure and several other areas. This we are in the process of correcting. We will have clear replies to FDA within 15 days of the corrective measures and timelines we propose in terms of correction,” said Khorakiwala.
As a result of the import alert, Khorakiwala expects Wockhardt’s revenues to be impacted by Rs 550 crore, while margins are likely to be down 2%.
Anshuman Gupta & Prashant Nair, analysts with Citigroup, on Friday said they see revenues hit on two counts viz. discontinuation of approved products like Geodon, Comtan, Stalevo, Zithromax etc and delay in new approvals from the unit.
”While we don’t know how many abbreviated new drug applications (Andas) were filed from Waluj, we believe the list includes a few key products such as Reclast, Zometa, Adenoscan, Tricor, Arthrotec over this and next fiscal. We cut our topline estimates for the 2 years by $140m/$180m and await more clarity on potential mitigating measures (site transfers for instance) Wockhardt can explore,” Gupta and Nair said in a note.
Khorakiwala said Wochardt has over 47 Andas pending of which 50% has been filed from the facility that has received an import alert.
Drugmaker Wockhardt has stepped up efforts to mitigate the impact of an ‘import alert’ by the US Food and Drug Administration (FDA) for its units at Waluj in Aurangabad. The company will hire a US consultant and submit a corrective action plan within a fortnight.
”The consultant will be helping us in bringing this facility in compliance in a month or two maximum,” said Habil Khorakiwala, chairman, Wockhardt, during an analyst call on Friday.
Wockhardt has two facilities at Waluj, — one manufacturing injectables for the US and another that is not for US exports but has a product filed in that area.
”The FDA has observed non-compliance in terms of standard operating procedure and several other areas. This we are in the process of correcting. We will have clear replies to FDA within 15 days of the corrective measures and timelines we propose in terms of correction,” said Khorakiwala.
As a result of the import alert, Khorakiwala expects Wockhardt’s revenues to be impacted by Rs 550 crore, while margins are likely to be down 2%.
Anshuman Gupta & Prashant Nair, analysts with Citigroup, on Friday said they see revenues hit on two counts viz. discontinuation of approved products like Geodon, Comtan, Stalevo, Zithromax etc and delay in new approvals from the unit.
”While we don’t know how many abbreviated new drug applications (Andas) were filed from Waluj, we believe the list includes a few key products such as Reclast, Zometa, Adenoscan, Tricor, Arthrotec over this and next fiscal. We cut our topline estimates for the 2 years by $140m/$180m and await more clarity on potential mitigating measures (site transfers for instance) Wockhardt can explore,” Gupta and Nair said in a note.
Khorakiwala said Wochardt has over 47 Andas pending of which 50% has been filed from the facility that has received an import alert.
Chaitanya Joshi takes JWT Portfolio Night All-Star crown
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| Chaitanya Joshi |
Chaitanya Joshi, currently with Draft FCB Ulka, came out on top when he was adjudged the ‘All Star’ winner on Friday at JWT’s Portfolio Night 11 held in Mumbai. A gold medalist from Mudra Institute of Communications, Ahmedabad (MICA), Joshi was picked from a total of 90 contestants for the coveted title. He is now headed for New York where he will compete at the Portfolio Night All-Stars Creative Challenge in August.
Colvyn Harris, CEO, JWT South Asia, terms a Portfolio Night ‘All-Star’ as the one who is rated as the most talented young creative and notches up the highest score of the evening. “This is the first time ever in the 11-year history of Portfolio Night that this has been instituted,” said Harris.
“It was wonderful to see 90 bright, young minds unleashing their creativity with the legends of Indian advertising. We hosted the event with a view to giving back to the industry and recognising and guiding aspiring young creatives to carve a career for themselves,” he said, adding the entire JWT team worked overtime to create and put together this event.
Tista Sen, national creative director (NCD) and senior vice-president, JWT India, who was part of an impressive array of 28 reviewers, talked about two types of portfolios that hogged the limelight. “One category included kids in college who were sharing their college projects and there were others who had put together different ideas to showcase their writing skills, mock up advertisements, art direction and illustrations skills. I met and reviewed some very interesting portfolios. Despite just starting out in life, the kids were very clear on what they wanted to be and do, which I think is fantastic,” Sen gushed.
Portfolio Night is an event that provides a platform to aspiring ad copywriters, art directors and designers to pitch their cases with renowned advertising creative directors. Ford Motor Company has partnered with Portfolio Night for the All Stars Creative Challenge and together with Ford’s agency Team Detroit, the Portfolio Night All-Stars will tackle a Ford creative brief.
Singh family rebuts Daiichi charges
This story first appeared in DNA Money edition on Friday, May 24, 2013.
The Singh family on Thursday said Daiichi Sankyo’s allegation of concealment and misrepresentation regarding drug research at Ranbaxy Laboratories is false and baseless.
On Wednesday, Daiichi Sankyo said it is weighing legal options to sue the former promoter-shareholders of the New Delhi-based generics drugmaker.
The Singh brothers — Shivinder & Malvinder — had sold Ranbaxy to Daiichi in 2008 for $4.6 billion. Daiichi bought a 51% stake — including 34.8% that the Singhs held — in June 2008.
The Singh family claimed that Daiichi Sankyo purchased their interests in Ranbaxy in 2008 after a long negotiation process, as is typical of deals of this magnitude, and after conducting full due-diligence.
“At every step of the way during the negotiation process, Daiichi Sankyo and its representatives were made aware of the on-going FDA and Department of Justice
investigations. They were also given full access to the documents at Ranbaxy pertaining to the FDA and DoJ investigations,” the Singh family said in a statement.
They added that Daiichi Sankyo went into the deal after satisfying itself with its due diligence and with the benefit of legal advice.
“The belated suggestion, made years after the fact, that information was concealed from and/or misrepresented to Daichii Sankyo is false and designed to divert attention away from Daiichi Sankyo’s own failures,” they said in the statement.
The Singh family on Thursday said Daiichi Sankyo’s allegation of concealment and misrepresentation regarding drug research at Ranbaxy Laboratories is false and baseless.
On Wednesday, Daiichi Sankyo said it is weighing legal options to sue the former promoter-shareholders of the New Delhi-based generics drugmaker.
The Singh brothers — Shivinder & Malvinder — had sold Ranbaxy to Daiichi in 2008 for $4.6 billion. Daiichi bought a 51% stake — including 34.8% that the Singhs held — in June 2008.
The Singh family claimed that Daiichi Sankyo purchased their interests in Ranbaxy in 2008 after a long negotiation process, as is typical of deals of this magnitude, and after conducting full due-diligence.
“At every step of the way during the negotiation process, Daiichi Sankyo and its representatives were made aware of the on-going FDA and Department of Justice
investigations. They were also given full access to the documents at Ranbaxy pertaining to the FDA and DoJ investigations,” the Singh family said in a statement.
They added that Daiichi Sankyo went into the deal after satisfying itself with its due diligence and with the benefit of legal advice.
“The belated suggestion, made years after the fact, that information was concealed from and/or misrepresented to Daichii Sankyo is false and designed to divert attention away from Daiichi Sankyo’s own failures,” they said in the statement.
FDA import alert a Rs 550 crore hit for Wockhardt
This story first appeared in DNA Money edition on Friday, May 24, 2013.
An ‘import alert’ by the US Food and Drug Administration (FDA) on one of its plants is likely to cause a sales loss of $100 million or over Rs 550 crore, Wockhardt said.
The FDA has expressed concern on the drugmaker’s export-oriented facility in Aurangabad.
The Wockhardt management, however, said it should be able to restore most of that ($100 million impact on revenues) within six to nine months by shifting production elsewhere. “That is a worst-case scenario,” said Habil Khorakiwala, chairman.
Shares of Wockhardt fell 20% on Thursday to their lowest level in more than seven months, post the import alert published by USFDA for the Aurangabad unit.
Interestingly, the company’s shares had corrected sharply by over 20% earlier in April when FDA had sought clarifications on the company’s injectables facility in Aurangabad as it was not satisfied with the processes/systems there.
Calling it a routine matter, the company spokesperson has then said that there was nothing more to disclose.
Analysts familiar with the development had said that the company was issued FDA 483 letter for the Aurangabad unit which would be followed by a warning letter, if FDA is not satisfied with the response.
“However, it’s not something to be worried about as the said unit doesn’t contribute more than 3-4% of Wockhardt’s US revenues,” Bhavika Thakker, research analyst, IIFL had said.
Typically, in an FDA 483 letter scenario, once observations are given by the USFDA, the company is given one month time to rectify and submit their response.
Analysts had also said, in case the facility receives a warning letter, it would only affect new approvals in injectibles and not affect current revenue stream materially. The Aurangabad unit currently does not materially contribute to the company’s revenues as it does not include Toprol XL, Flonase or any high value product.
An ‘import alert’ by the US Food and Drug Administration (FDA) on one of its plants is likely to cause a sales loss of $100 million or over Rs 550 crore, Wockhardt said.
The FDA has expressed concern on the drugmaker’s export-oriented facility in Aurangabad.
The Wockhardt management, however, said it should be able to restore most of that ($100 million impact on revenues) within six to nine months by shifting production elsewhere. “That is a worst-case scenario,” said Habil Khorakiwala, chairman.
Shares of Wockhardt fell 20% on Thursday to their lowest level in more than seven months, post the import alert published by USFDA for the Aurangabad unit.
Interestingly, the company’s shares had corrected sharply by over 20% earlier in April when FDA had sought clarifications on the company’s injectables facility in Aurangabad as it was not satisfied with the processes/systems there.
Calling it a routine matter, the company spokesperson has then said that there was nothing more to disclose.
Analysts familiar with the development had said that the company was issued FDA 483 letter for the Aurangabad unit which would be followed by a warning letter, if FDA is not satisfied with the response.
“However, it’s not something to be worried about as the said unit doesn’t contribute more than 3-4% of Wockhardt’s US revenues,” Bhavika Thakker, research analyst, IIFL had said.
Typically, in an FDA 483 letter scenario, once observations are given by the USFDA, the company is given one month time to rectify and submit their response.
Analysts had also said, in case the facility receives a warning letter, it would only affect new approvals in injectibles and not affect current revenue stream materially. The Aurangabad unit currently does not materially contribute to the company’s revenues as it does not include Toprol XL, Flonase or any high value product.
Dentsu acquires Capital 18's stake in Webchutney
An edited version of this story first appeared in DNA Money edition on Friday, May 24, 2013.
The Dentsu India Group has acquired 80% stake in Webchutney from Capital18 (venture capital arm of Network18) for an undisclosed sum. With around 200 employees, Webchutney is one of India’s leading digital agencies working in the areas of web design, social media, mobile and experiential digital advertising.
Rohit Ohri, executive chairman, Dentsu India Group, said, that partnership with Webchutney is another step in building the network of the future. "We’re now going to be able to put world class digital solutions in the centre of our offering to our clients," said Ohri.
Webchutney is Dentsu's first acquisition in the digital space. The integrated communication solutions provider had earlier acquired stake in Taproot India as well.
Though financial terms related to this deal were kept under wraps, Network18 informed that this divestment was in line with its strategy of monetising its investments and claimed the investment has generated a return of over 300% to the company.
Network18 held 70.06% stake in the company, through its investment arms Capital18 Limited Mauritius which held 49.42% stake and Capital18 Fincap Pvt Ltd which held 20.64% stake.
In the works for a while now, earlier media reports had pegged the deal size to be between Rs 40 crore and Rs 60 crore. For the fiscal 2012, Webchutney had registered a profit of Rs 6.35 crore on total revenue of Rs 21.55 crore.
Founded by Sidharth Rao and Sudesh Samaria in 1999, Webchutney will continue to operate independently under the management control of its current leadership.
The Dentsu India Group has acquired 80% stake in Webchutney from Capital18 (venture capital arm of Network18) for an undisclosed sum. With around 200 employees, Webchutney is one of India’s leading digital agencies working in the areas of web design, social media, mobile and experiential digital advertising.
Rohit Ohri, executive chairman, Dentsu India Group, said, that partnership with Webchutney is another step in building the network of the future. "We’re now going to be able to put world class digital solutions in the centre of our offering to our clients," said Ohri.
Webchutney is Dentsu's first acquisition in the digital space. The integrated communication solutions provider had earlier acquired stake in Taproot India as well.
Though financial terms related to this deal were kept under wraps, Network18 informed that this divestment was in line with its strategy of monetising its investments and claimed the investment has generated a return of over 300% to the company.
Network18 held 70.06% stake in the company, through its investment arms Capital18 Limited Mauritius which held 49.42% stake and Capital18 Fincap Pvt Ltd which held 20.64% stake.
In the works for a while now, earlier media reports had pegged the deal size to be between Rs 40 crore and Rs 60 crore. For the fiscal 2012, Webchutney had registered a profit of Rs 6.35 crore on total revenue of Rs 21.55 crore.
Founded by Sidharth Rao and Sudesh Samaria in 1999, Webchutney will continue to operate independently under the management control of its current leadership.
Optimism has now reached fast-moving consumer goods companies: Mark Patterson
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| Mark Patterson |
Mark Patterson plays key roles in GroupM, the world’s No.1 media investment management operation which serves as the parent company to WPP’s media agencies.As CEO for Asia Pacific and chairman of China operations, Patterson oversees GroupM’s business across a humongous region. He tells why India and China are now growth-drivers in the region. Excerpts from the interview:
Could you share your views on the advertising industry in the Asia-Pacific (APAC) region?
It’s really difficult to give an overall APAC situation. There is small single-digit growth in some markets, mega growth or high double-digit growth in a few other markets and everything else in between. That spectrum and diversity make it very difficult to identify what’s common between them because they are all so uncommon.
How do India and China compare with other regional markets?
India and China certainly fit in the scale of growth bucket. For our business and most other businesses, they are the engines or drivers of growth. It is like... the more we put in, the more we get from these markets. It’s a question of prioritising and there is no disrespect to other markets.
How does GroupM plan to grow in India?
We have been having a significant scale for some time. In India, we had to be braver, take more risks, be smarter about our growth strategy. When you have a certain scale, there is natural organic growth. We’ve reinvented ourselves several times over in the last few years. Being here for over a decade now, we have always had the ability to continue to challenge, develop and innovate, and to shape and lead the market. I think India is unique in that regard and we had to do a lot more differently here than in some other markets.
What were the focus areas of discussion during your India visit?
We spent time talking about MashUp (a joint venture with television production company Optimystix) which is a unique Indian proposition to deliver industrial-scale sustainable engagement online videos. Our mobile play with Madhouse, which is a Chinese company, is something that, in a way, brings China and India together, which is very unique.
Discussions largely focused on continuously diversifying and extending new services to other markets where they aren’t available.
Will you also be looking at some inorganic growth?
While we have been very acquisitive over the years, it doesn’t have to be that way always.
Our recent initiative MashUp is a great example of using partnerships as a strategy to deliver certain offerings in the market. In fact, we have another 4-5 such partnerships currently under discussion. We will work on delivering new services and continue to offer integrated broader solutions to clients.
You met top clients. What did they say?
Our discussion brought out one thing that’s common – cautious optimism. And that has now reached the fast-moving consumer goods (FMCG) companies. That’s sort of the key phrase across, something I would not really like to disagree with in most markets, to be honest.
I’ve spent a lot of time in China where the growth rate is still great, but it’s not what they were and there is still a degree of uncertainty. There is, sort of, this basic pessimism in Australia, while Japan seems to be gathering optimism.
Generally, people are getting to shorter-term outlook and clients are looking month to month, quarter to quarter, at best. Nobody is prepared to go beyond and make a prediction whether this is going to be a good year. The basic question is — how good will it be?
The risk with making a prediction is that you can always go wrong. But what I also found out is that the mood can change quite quickly; I could be in a particular market where four months hence things will have gone one way or the other for whatever reasons. It could be a 10-20% shift in sentiment rather than a 5%.
Any thoughts on agency-media relationships in the context of changing market dynamics in India?
The relationship we have with media partners is crucial on so many levels. The way we contract and work with media partners is changing as much as the way we contract and work with clients. If we have our people going on that side (media and clients), the circles all overlap and so can help down the line. One of the advantages of our network is the fact that we have scale, our people go out into other parts of business, but we always have that connection. In the end, it’s the relationship that works in this business.
Dish TV subscription revenues grow 15%
This story first appeared in DNA Money edition on Thursday, May 23, 2013.
Dish TV, India's top direct-to-home (DTH) company, has reported a 6.5% year-on-year rise in operating profit for the quarter ended March at Rs 120 crore and a 7.6% increase in standalone operating revenues at Rs 555.4 crore.
The company, a market leader with a 24% share, recorded 15.3% on-year growth in subscription revenues at Rs 500.1 crore.
Operating profit margin for the quarter stood at 21.6%. Reporting first full year of positive free cash flow this fiscal, Dish TV's net loss for the January-March quarter was down to Rs 43.6 crore against a loss of Rs 49.02 crore a year ago. The company said losses continued to be influenced by depreciation and write-off policy.
On future potential, Subhash Chandra, chairman, Dish TV India, said, “In the media sector, digitisation, though not fully up to speed, holds big potential for the industry. DTH platforms, in particular, look forward to a level-playing field, contributing to meaningfully higher ARPUs and stickier subscriber base over time. Dish TV’s industry leading initiative, to hike acquisition and pack price is likely to be a catalyst to achieve that.”
The company added 0.2 million net subscribers in the March quarter, touching a total of 10.7 million net subscribers. Its subscriber acquisition cost at Rs 1,996 was down compared with Rs 2,201 in preceding December quarter. Higher winbacks reduced average churn for the quarter to a low of 0.8% per month compared with 1% in the previous quarter.
Consolidated total income was up 10.66% to Rs 2,166.80 crore in fiscal 2013 from Rs 1,957.93 crore in the previous fiscal. Consolidated net loss halved to Rs 66 crore from Rs 133.14 crore in the previous fiscal.
Jawahar Goel, managing director, Dish TV, said, “Fiscal 2013 saw most players in the Indian DTH industry evolve to the next level. Under Dish TV’s leadership, the industry pulled off a significant increase in the acquisition price over the last several months, thereby reducing the effective cash burn per subscriber. While the resultant decline in industry gross additions is marginal, it is expected to be well compensated by quality of subscribers. There was no respite though, from the multiple taxation which the DTH industry is reeling under. Uncertainty on the rollout of Goods & Services Tax (GST) continues to be an overhang on the earnings potential of the industry.”
The ARPU for the quarter at Rs 157 was down compared with Rs 160 in the immediately preceding quarter. “However, on a like-to-like basis, ARPU for the quarter would have been Rs 160, considering that revenue is recognised over a 90-day period in the fourth quarter compared with 92 days in the third quarter. On the expenses front, a 5.1% year-on-year increase in content cost for the fiscal remained well within the guided range of 10-12% hike,” said Goel.
Dish TV, India's top direct-to-home (DTH) company, has reported a 6.5% year-on-year rise in operating profit for the quarter ended March at Rs 120 crore and a 7.6% increase in standalone operating revenues at Rs 555.4 crore.
The company, a market leader with a 24% share, recorded 15.3% on-year growth in subscription revenues at Rs 500.1 crore.
Operating profit margin for the quarter stood at 21.6%. Reporting first full year of positive free cash flow this fiscal, Dish TV's net loss for the January-March quarter was down to Rs 43.6 crore against a loss of Rs 49.02 crore a year ago. The company said losses continued to be influenced by depreciation and write-off policy.
On future potential, Subhash Chandra, chairman, Dish TV India, said, “In the media sector, digitisation, though not fully up to speed, holds big potential for the industry. DTH platforms, in particular, look forward to a level-playing field, contributing to meaningfully higher ARPUs and stickier subscriber base over time. Dish TV’s industry leading initiative, to hike acquisition and pack price is likely to be a catalyst to achieve that.”
The company added 0.2 million net subscribers in the March quarter, touching a total of 10.7 million net subscribers. Its subscriber acquisition cost at Rs 1,996 was down compared with Rs 2,201 in preceding December quarter. Higher winbacks reduced average churn for the quarter to a low of 0.8% per month compared with 1% in the previous quarter.
Consolidated total income was up 10.66% to Rs 2,166.80 crore in fiscal 2013 from Rs 1,957.93 crore in the previous fiscal. Consolidated net loss halved to Rs 66 crore from Rs 133.14 crore in the previous fiscal.
Jawahar Goel, managing director, Dish TV, said, “Fiscal 2013 saw most players in the Indian DTH industry evolve to the next level. Under Dish TV’s leadership, the industry pulled off a significant increase in the acquisition price over the last several months, thereby reducing the effective cash burn per subscriber. While the resultant decline in industry gross additions is marginal, it is expected to be well compensated by quality of subscribers. There was no respite though, from the multiple taxation which the DTH industry is reeling under. Uncertainty on the rollout of Goods & Services Tax (GST) continues to be an overhang on the earnings potential of the industry.”
The ARPU for the quarter at Rs 157 was down compared with Rs 160 in the immediately preceding quarter. “However, on a like-to-like basis, ARPU for the quarter would have been Rs 160, considering that revenue is recognised over a 90-day period in the fourth quarter compared with 92 days in the third quarter. On the expenses front, a 5.1% year-on-year increase in content cost for the fiscal remained well within the guided range of 10-12% hike,” said Goel.
Daiichi weighs options to sue Ranbaxy Labs promoters
This story first appeared in DNA Money edition on Thursday, May 23, 2013.
Daiichi Sankyo, the Japanese parent of Ranbaxy Laboratories, is weighing legal options to sue the former promoter-shareholders of the New Delhi-based generics drugmaker.
The Singh brothers -- Shivinder & Malvinder -- had sold Ranbaxy to Daiichi in 2008 for $4.6 billion. Daiichi bought a 51% stake -- including 34.8% that the Singhs held -- in June 2008.
In a statement, the company said it believes “certain former shareholders” of Ranbaxy concealed and misrepresented critical information concerning the US Department of Justice and Food and Drug Administration (FDA) investigations.
“Daiichi Sankyo is currently pursuing its available legal remedies and cannot comment further on the subject at this time,” the company said.
“Daiichi Sankyo continues to support Ranbaxy in its efforts to address and correct the conduct of the past which led to the investigations by the US Department of Justice and the FDA. These efforts include significant changes to Ranbaxy’s management, culture, operations and compliance,” it said.
Arun Sawhney, CEO and managing director, said: “Ranbaxy is a different company today.
The steps we have taken over the recent years reflect the wide-ranging efforts of the current board and management to address certain conduct of the past and ensure that Ranbaxy moves forward with integrity and professionalism in everything we do. We are fully committed to upholding the high standards that patients, prescribers and all other stakeholders expect.”
The comments follow a detailed excoriation of Ranbaxy’s past practices by the Forbes magazine in its latest issue.
“All Ranbaxy products currently in the global market are safe and effective,” Sawhney said.
The company, he said, has made investments of over $300 million (Rs 1,650 crore) in its manufacturing facilities to install state-of-the-art technologies.
“We have also instituted a rigorous new code of conduct for all Ranbaxy employees, with clear accountability for compliance,” he said.
Sawhney said Ranbaxy has successfully launched several new generic equivalents across the world recently, and maintains a robust pipeline of important new products.
“We look forward to continuing to enrich lives globally with quality and affordable medicines.”
Daiichi Sankyo, the Japanese parent of Ranbaxy Laboratories, is weighing legal options to sue the former promoter-shareholders of the New Delhi-based generics drugmaker.
The Singh brothers -- Shivinder & Malvinder -- had sold Ranbaxy to Daiichi in 2008 for $4.6 billion. Daiichi bought a 51% stake -- including 34.8% that the Singhs held -- in June 2008.
In a statement, the company said it believes “certain former shareholders” of Ranbaxy concealed and misrepresented critical information concerning the US Department of Justice and Food and Drug Administration (FDA) investigations.
“Daiichi Sankyo is currently pursuing its available legal remedies and cannot comment further on the subject at this time,” the company said.
“Daiichi Sankyo continues to support Ranbaxy in its efforts to address and correct the conduct of the past which led to the investigations by the US Department of Justice and the FDA. These efforts include significant changes to Ranbaxy’s management, culture, operations and compliance,” it said.
Arun Sawhney, CEO and managing director, said: “Ranbaxy is a different company today.
The steps we have taken over the recent years reflect the wide-ranging efforts of the current board and management to address certain conduct of the past and ensure that Ranbaxy moves forward with integrity and professionalism in everything we do. We are fully committed to upholding the high standards that patients, prescribers and all other stakeholders expect.”
The comments follow a detailed excoriation of Ranbaxy’s past practices by the Forbes magazine in its latest issue.
“All Ranbaxy products currently in the global market are safe and effective,” Sawhney said.
The company, he said, has made investments of over $300 million (Rs 1,650 crore) in its manufacturing facilities to install state-of-the-art technologies.
“We have also instituted a rigorous new code of conduct for all Ranbaxy employees, with clear accountability for compliance,” he said.
Sawhney said Ranbaxy has successfully launched several new generic equivalents across the world recently, and maintains a robust pipeline of important new products.
“We look forward to continuing to enrich lives globally with quality and affordable medicines.”
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