Slowdown may Hit Tata Steel’s EU, UK Ops

Real growth will most likely come from Asia, Africa & Latin America, says Ratan Tata Tata Steel has said the prolonged economic slowdown that led to a decline in steel consumption in the European Union and the UK is likely to affect the company's operations in those geographies over the next year or two.  "While Tata Steel's operations in India are expected to remain strong, its operations in Europe will continue to be under enormous stress for the next year or two until the Western European economy recovers. The unprecedented rise in iron ore and coking coal prices, coupled with the acute decline in market demand, will continue to negatively impact the company's European operations," Rattan Tata, chairman of Tata Steel, said in his statement in the company's annual report. "Restructuring and capacity rationalising initiatives are under way to reduce costs and under-utilisation. The real growth will most likely be in Asia, Africa and Latin America," he added. In contrast, steel demand is still buoyant in Asia and Africa where growth rates and investment levels are higher than in the West and where new sources of iron ore and coking coal are being developed, the chairman said.  "The demand for steel in India remains robust and in fact continues to outstrip supply. However, major greenfield projects which would substantially increase domestic steel capacity are facing enormous delays due to hurdles in land acquisition and approvals for necessary mining rights to feed these new plants," he added. By 2014, it would have a global steel capacity of 33.5 mn tonne and will add a further 3 mn tonne on full implementation of the Odisha project. Tata Steel's 2.9-mn tonne expansion in Jamshedpur, set to be commissioned in 2012-13, will take the capacity to 9.7 mn tonne per annum.

Economy gasps as growth sputters to 9-yr low of 5.3% 6.5% GDP Rate In 2011-12 Way Below Govt’s Estimates

New Delhi: India's economic growth has come down to a nine-year low of 5.3% in the January-March quarter of this year, showing up in bolder relief than ever before the signs of the severe stress in the economy, and prompting calls for urgent action to reverse the trend. 

    Data released by the Central Statistics Office (CSO) on Thursday showed growth in 2011-12 stood at 6.5%, much lower than the 8.4% posted in the previous year. It was below the government's previous estimate of 

6.9% and way off the mark of estimates handed out periodically by top government policymakers. 

    The Indian economy, once the star among emerging market economies, has steadily slowed since the January-March quarter of 2010-11, and on Thursday after digesting the January-March growth figure of 5.3%, some economists cut their growth estimates for 2012-13. 

    The manufacturing sector growth fell 0.3% in the March quarter compared to an expansion of 7.3% in the corresponding period the previous year. Agriculture posted a growth of 1.7%, sharply lower than the 7.5% growth in the March quarter of 2010-11 For the full year, the manufacturing sector grew 2.5% in 2011-12 compared with 7.6% in 2010-11. 

SLUGGISH ELEPHANT March quarter GDP growth at 5.3%, against 9.2% in Q4 of 2010-11 

Manufacturing scrapes the bottom with 0.3% decline, agriculture grows just 1.7%, services slow down to 7.9% from 10.6% 

Overall 2011-12 growth at 6.5%, lower than estimates of 6.9% Economists are scaling down growth projection 

for 2012-13 

Industry in gloom. Says govt should pull out all stops to stem the slide 

Growth in core sectors slows to 2.2% in April 

    Growth in the eight core industries slowed in April, pointing to a rut. Coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity grew 2.2% in April, lower than the 4.2% posted in the same month last year. P 19 

Govt in denial? FM hints that the worst is over 

    The finance ministry seemed to be in denial on Thursday, with officials saying India was still growing faster than many Eurozone countries. Pranab Mukherjee too suggested the worst was over, saying the factors for sluggishness had "bottomed out". P 19 Experts urge govt to step up reforms

New Delhi:The slide in the economic growth has led to calls for quick action on the part of the government. The sluggishness in the services sector, which accounts for nearly 60% of GDP, emerged as a worry for policymakers already burdened by the slowing economy and stubborn inflation. Data showed the services sector growth slowed to 7.9% in the March quarter compared with a10.6% expansion in the sameyear-ago period. The domestic demand-driven economy has been hit hard by high inflation, interest rates, rising global commodity prices, lack of economic reforms and delay in implementation of projects. This, in turn, has hit business confidence, forcing domestic players to explore investment options overseas. 

    Policymakers have consistently blamed the global economic environment and the lack of cooperation from the opposition in approving key economic legislations as reasons for the slowdown. The March quarter data came on a day when the opposition had called for a shutdown to protest the sharp increase in petrol prices. Analysts say the disappointing growth numbers could spoil the mood further and heighten the anxiety. 

    Finance Minister Pranab Mukherjee termed the March quarter data as disappointing but said the figures should be seen in the light of overall global developments. He attributed the slowdown to tight monetary policy and the weak global sentiment affected growth in domestic private investment. 

    But economists pointed to two key risks which included uncertainty about the monsoons and the European debt crisis and said the need of the hour was to step up reforms and ease supply bottlenecks.

COME AGAIN? 

There are several reasons that growth is almost universally predicted to be sustained at a high rate of 8-9% per annum and more, over the next few decades... —PRANAB MUKHERJEE ON AUG 6, 2011

Ratan Tata India’s Most Powerful CEO, Mistry Debuts at No. 15

Vijay Mallya, Sunil Mittal and Anil Ambani among big losers in ET-Corporate Dossier listing

Tata Sons Chairman Ratan Tata heads the ET-Corporate Dossier ranking of India Inc's Most Powerful CEOs for the fourth year running. Set to retire by the end of the year, Tata will leave a vacancy at the top, just as former Infosys chairman NR Narayana Murthy dropped off the list of Most Powerful CEOs only when he ceased to be a chief executive. This year's ranking includes Cyrus Mistry for the first time, at No. 15, by virtue of his appointment as vice-chairman and chairmandesignate of Tata Sons. The annual ranking includes a few other major changes as well, owing mainly to the tumultuous environment that has left several business houses severely mauled. While Mukesh Ambani has managed to retain his position at second place, brother Anil has fallen six positions to 11. Sunil Mittal has had an even more drastic fall, to 16th position from No. 3 last year, mirroring the state of the telecom sector. Kumar Mangalam Birla has, however, not let his problems over the 2G issue eclipse his success in the other sectors, such as retail. The 500 senior executives interviewed by IMRB for the survey have placed him third in the power rankings, up from seven last year. Vijay Mallya has been ejected from the top 10, along with fellow MP Naveen Jindal. Mallya and Jindal have been ranked at 43rd and 17th positions, respectively. Azim Premji has remained rock steady at No. 4 while the fifth position is occupied by banker Chanda Kochhar, who is not only India Inc's Most Powerful Woman but also the list's top professional CEO. After retiring from ICICI Bank, KV Kamath appears in a new avatar in the top 10 this year — as executive chairman of Infosys. The other non-promoter CEO in the top 10 is L&T's AM Naik, who has climbed a massive 23 positions this year, from 30 to seven. The list also features a ranking of global Indian business leaders, with London-based LN Mittal at the top, and Indra Nooyi of Pepsi-Co and Nikesh Arora of Google at No. 2 and 3, respectively. Nobel laureate Amartya Sen heads the separate ranking of global thought leaders. 

For the complete listing of India Inc's Most Powerful CEOs, see today's issue of Corporate Dossier

Ratan Takes Cyrus on His First Public Safari

Unrecognised, praised and mobbed, Tata Group vice chairman was cynosure of all eyes  Cyrus Mistry caught a glimpse of his life ahead as the chairman of Tata Sons as he appeared at the Delhi Auto Expo on Thursday, and was in turns unrecognised, praised and mobbed, as he made the rounds with long-time chairman Ratan Tata.  In his first public appearance since being named vice chairman of the $83-billion Tata Group, Mistry came across as distinctly uncomfortable in the public glare, but friendly, polite and jovial in person.  He did not speak at the launch events of Tata Motors or Jaguar Land Rover, and politely declined questions off stage, as ET trailed him during his visits to competitors' halls.  Mistry, son of Tata Sons' singlelargest shareholder Pallonji Mistry, will take over from Tata as the chairman of the tea-to-telecom conglomerate in December 2012.  Mistry stood between Ratan Tata and Tata Sons director R K Krishna Kumar as a troupe of dancers unveiled the latest iteration of the Safari—Storme. When photographers and media urged them to take the stage, Tata walked up readily, while Mistry reluctantly followed. Off stage, he was more assured and comfortable, and was chatting and sharing a laugh with senior executives such as Kumar and Tata Motors vice-chairman Ravi Kant. At the JLR presser, Mistry and Tata were talking to each other in whispers. Mistry maintained a respectful distance from Tata most times, and mostly hung out with the next rung of executives.  But the life outside the protective layers of the Tata and JLR stalls was rougher for the reticent engineer. As he accompanied Tata and a small group of executives to other exhibitors' stalls, he had to come to terms with his new high profile.  "That is Cyrus," many youngsters told each other, pointing him out to friends, as he smiled.  When Tata visited the Hyundai stall, a senior Korean executive rushed to show him around the vehicles. He didn't seem to recognize Mistry. At the Hero pavillion, Tata introduced Mistry to Pawan and Brijmohan Munjal. At the Bajaj stall, where Tata spent time inspecting the new RE-60, even bending to look under the vehicle at one point, Mistry chatted with Formula One driver Narain Karthikeyan, who is sponsored by Tata Motors.  Many people came up and introduced themselves to Mistry. A Tata Motors dealer, an engineering student who wants to work with the Tatas, and a tall man, who spoke in Hindi and insisted on introducing his friend to the Tata Sons deputy chairman. "Yeh hai Mistryji, pehelwanji, hind kesari," he said, pointing out to his friend, who didn't seem to know who Mistry was, but folded his hands in greeting nonetheless. "Arrey Mistry hai Mistry," the first man shouted, annoyed by his friend's poor grasp of world affairs.  At one point, Mistry asked autograph seekers to excuse him, as he watched the vehicles on display at the Ssangyong Motor stall.  One particularly pushy fan insisted on an autograph, saying he was from a small village and it was a big deal for him to have met Mistry. The executive relented, writing on a small paper: "Surendar, have fun. Cyrus."  Mistry soon came to regret the decision, as Surendar instantly began to regard the young executive as a close friend. He trailed Mistry closely, and at one point, leaned forward and brushed something off the back of his shoulders. "Sir you have dandruff," he said. Mistry looked uncomfortable. ON A NEW JOURNEY Cyrus Mistry (L) and Tata Group chairman Ratan Tata pose with the new Tata Safari Storme SUV at the 11th Auto Expo in New Delhi on Thursday

TCS Q1 Net Jumps 27%, Signals Higher US Outsourcing Demand

But co's profits down 7.9% q-o-q due to a jump in salary costs

India's biggest software exporter Tata Consultancy Services has joined global rival Accenture in signalling higher demand for outsourcing from customers in the US seeking to cut costs, and posted a 26.7% rise in its first quarter profit from last year. 

Rising salary costs, however, dragged down TCS' net profit for the June quarter by 7.9% to . 2,415 crore from the fourth quarter ended March this year. 
India's $60-billion outsourcing sector is looking for positive cues amid growing economic uncertainties in top markets such as the US and Europe — TCS' 31.4% growth in first quarter revenues to . 10,797 crore provided some relief. As top customers, General Electric and Citigroup, which seek to cut costs and become more profitable, are increasing the outsourcing of non-core, back-office and software development projects to vendors like TCS. 
India's number two software firm Infosys, which announced its April-June quarter earnings earlier this week, also saw its first quarter profit fall by 5.3%, compared with the fourth quarter of last year on increased salary costs. While Infosys raised concerns on demand ahead for outsourcing because of economic uncertainties in the US and Europe, TCS denied any such trend. "While we are watchful, as of now we continue to see sustained demand for our services," TCS CMD N Chandrasekaran said on Thursday. TCS scrip closed down by 2.2% to . 1,123.70 on BSE on Thursday. 
Investors and experts tracking the sector were anxious about the prospects ahead after Infosys provided a muted forecast and raised concerns about macroeconomic worries affecting demand for outsourcing business. 
"While TCS, too, saw its profits get affected because of wage hikes, the management commentary hinted at strong demand, which is quite the opposite of what Infosys projected," said an analyst at Mumbai-based office of a multinational brokerage firm. Last month, consulting firm Accenture reported better-than-expected third quarter profit growth of 28% and raised its outlook for the year citing strong demand for services. "TCS results were above our estimates. The 7.4% volume growth was the highlight. More importantly, the growth was broadbased, which lends a degree of stability, we believe. The management is confident about client spending, while being cautious on the macro scene," said Dipen Shah of Kotak Securities. 
Chandrasekaran did not deny the economic uncertainty, butsaid it has not affected demand for outsourcing yet. "This uncertainty will continue. In some countries, unemployment is an issue. In the Middle East, there is unrest. There was a natural calamity in Japan. These things put pressure on the environment," he said. 
"But businesses have their own plans, a set of actions to go after efficiency. In that environment, we continue to see momentum," he added.

TATA- AIR POWERED CAR IN INDIA

Air Powered Car Tata Motors is ready to introduce Air Car - Will it be the next  big thing?Tata Motors is taking giant strides and making history for  itself. First the Land Rover/Jaguar deal, then the world's cheapest car, and  now it is also set to introduce the car that runs on compressed air. With spiraling fuel prices it is about time we heard some breakthrough! India's largest automaker, Tata Motors, is set to start  producing the world's first commercial air-powered vehicle. The Air Car, developed by ex-Formula One engineer Guy N'gre  for Luxembourg-based MDI, uses compressed air, as opposed to the gas-and-oxygen  explosions of internal-combustion models, to push its engine's pistons. Some 6000  zero-emissions Air Cars are scheduled to hit Indian streets by August 2011. The Air Car, called the "MiniCAT" could cost around Rs.. 3,47,523/- ($8,177.00) in India and would  have a range of around 300 km between refuels. The cost of a refillwould be about Rs. 85($2..00) The MiniCAT which is a simple, light urban car, with a tubular chassis that is glued, not welded, and a body of fiberglass powered by compressed air. Microcontrollers are used in every device in the car, so one tiny radio transmitter sends instructions to the lights,indicators,etc. There are no keys -  just an access card which can be read by  the car from your pocket. According  to the designers, it costs less than 50  rupees per 100 Km (about a tenth that of a  petrol car). Its mileage is about  double that of the most advanced electric  car (200 to 300 km or 10 hours of  driving), a factor which makes a perfect  choice in cities where 80% of motorists drive at  less than 60 Km. The car has a top  speed of 105 Kmph. Refilling the car will, once the market develops, take place  at adapted petrol stations to administer compressed air. In two or three minutes,  and at a cost of approximately 100 rupees, the car will be ready to go another  200-300 kilometers. As a viable alternative, the car carries a small compressor  which can be connected to the mains (220V or 380V) and  refill the tank in 3-4 hours. Due to the absence of combustion and,  consequently, of residues, changing the oil (1 litre of vegetable oil) is  necessary only every 50,000 Km). The temperature of the clean air expelled by the exhaust pipe is  between 0-15 degrees below zero, which makes it suitable for use by the internal   air conditioning system with no need for gases or loss of power.

Tatas, Loop & Aircel-Maxis Under Probe, CBI Tells JPC

Agency may file third chargesheet early next month on the basis of response from Mauritian authorities

The head of the Central Bureau of Investigation, or CBI, has told the Joint Parliamentary Committee (JPC) that it is investigating two transactions related to the Tata Group, the ownership of Loop Telecom, and the controversial Aircel-Maxis deal.

CBI Director AP Singh, who made a 45-page presentation to the JPC, said the agency had failed to unearth anything incriminating against Niira Radia, corporate lobbyist and head of a corporate communication firm, whose leaked conversations with assorted bigwigs have riveted the nation. The two transactions involving the Tatas are an advance of 1,700 crore given by Tata Group company Tata Realty and Infrastructure Ltd (TRIL) to Delhi-based realty major Unitech, and a real estate transaction in Chennai involving another group company, Voltas. The CBI said board members of Tata Sons, the group's holding company, were privy to the decision to advance money to Unitech. It also said Unitech utilised these funds to pay for the mobile permits it got in 2008, a member of the JPC told ET on condition of anonymity. The Tatas and Unitech have vehemently denied there was anything untoward in the entire transaction. Singh, who was accompanied by a number of officials, said the agency was also awaiting response from the attorney-general of Mauritius to queries seeking information about the source of funding and ownership of Loop Telecom, which is alleged to be linked to the Essar Group, and Delphi Investments. The latter is the entity to which Reliance Telecom—part of the Anil Ambani group—had sold its stake in Swan Telecom, alleged to be a major beneficiary of the so-called 2G scam. The response from the Mauritius authorities could form the basis of a chargesheet the CBI could file in early July. The deposition of the CBI director was described to ET by people familiar with it. They declined to be identified because the JPC's proceedings are confidential. In the case of Loop, the CBI is probing whether it was a front for the Ruias of Essar. It is widely believed that Loop and Essar would be named in the third chargesheet. Both Loop and Essar have strongly denied these allegations. The agency has so far filed two chargesheets. It has arrested former telecom minister A Raja, and the owners of Swan Telecom (now known as Etisalat DB) and Unitech Wireless. These businessmen have been accused of conspiring withRaja to grab airwaves and licences at below market prices in early 2008. The CBI, under the instruction of the Supreme Court, is also investigating the period between 2001 and 2007. JPC to Summon Telecom Bosses Kanimozhi, daughter of DMK leader M Karunanidhi, has also been jailed because of a . 200-crore payment by DB Realty, the promoter of Swan Telecom, to a television channel in which she is a shareholder. In consonance with the understanding reached among the members before the meeting, the CBI director was asked only a few questions, mostly on minor issues. It was decided that he would be allowed to make his presentation on Tuesday, leaving his cross-examination for some other day. The CBI had been called by the JPC to brief the parliamentary panel on the investigations. The agency has submitted to the JPC copies of both the chargesheets filed so far, as well as the 80,000 crore supplementary documents. CBI officials will be called again as witnesses by the JPC later for questioning. The Congress members of the JPC are believed to have stressed the need to probe the National Telecom Policy of 1999 (NTP 99) and sought to know whether it was backed by the recommendations of Trai. NTP 99 was formulated by the BJP-led NDA government. JPC chief PC Chacko also told newspersons after the meeting that the panel had shortlisted 85 names who would be summoned as witnesses. These include former telecom ministers, ministry officials, Attorney-General Ghulam Vahanvati, former attorney-general Soli Sorabjee, and former chairmen of Trai and BSNL. The bosses of telecom companies, including the likes of Ratan Tata and Anil Ambani, are also likely to be called. Asked by newspersons, Chacko said the list could include Raja, who is now in Tihar jail, after "following proper procedures".