The country's largest car maker, Maruti Suzuki India Ltd, reported a 33.36 per cent jump in sales at 78,074 units in July.
It had sold 58,543 vehicles in the same month last year. Sales in the domestic market grew by 27.63 per cent to 67,528 units in July from 52,911 units in the same month last year. Exports rose by 87.25 per cent to 10,546 units compared to 5,632 units in the year-ago period, Maruti Suzuki India (MSI) said in a statement.
During the month the company crossed the 50,000 units export mark for its A-Star which was introduced internationally in January this year, it added.
Sales of the company's oldest and once bread-and-butter model M800 declined by 43.55 per cent at 2,796 units compared to 4,953 units last year, while A2 segment (comprising Alto, Wagon R, Zen Estillo, Swift, A-Star and Ritz) witnessed a growth of 38.28 per cent at 48,115 units compared to 34,795 units in the same month last year.
Saturday, August 1, 2009
Hero Honda sales up 30.39% in July
The country's largest two-wheeler maker Hero Honda Motors Ltd reported a jump of 30.39 per cent in its sales at 3,66,808 units in July compared to the sales in the same month last year.
Hero Honda had reported a jump of 83.28 per cent in its net profit at Rs 500.11 crore for the quarter ended June 30 on account of robust sales amidst softening of input costs.
The company sold 2,81,317 units in July last year.
The net profit for the first quarter for the last fiscal was at Rs 272.87 crore.
The total income of the company had grown by 33.72 per cent to Rs 3,864.92 crore during the April-June period of this fiscal from Rs 2,890.25 crore of the same quarter a year ago.
The company had crossed 10-lakh units mark in a single quarter for the first time by selling 11,18,987 units from 8,94,244 units in the year-ago period, up 25.13 per cent.
Hero Honda had reported a jump of 83.28 per cent in its net profit at Rs 500.11 crore for the quarter ended June 30 on account of robust sales amidst softening of input costs.
The company sold 2,81,317 units in July last year.
The net profit for the first quarter for the last fiscal was at Rs 272.87 crore.
The total income of the company had grown by 33.72 per cent to Rs 3,864.92 crore during the April-June period of this fiscal from Rs 2,890.25 crore of the same quarter a year ago.
The company had crossed 10-lakh units mark in a single quarter for the first time by selling 11,18,987 units from 8,94,244 units in the year-ago period, up 25.13 per cent.
Indian Auto Industry Update August 01, 2009
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| INDUSTRY Tata Motors launches vertical parking systems INTERVIEWS/FEATURES Toyota launches variant of Camry, the New Camry in India Toyota moves ahead on compact car COMMERCIAL VEHICLES Hero Honda Q1 net zooms 83 pc; crosses 10 lakh mark COMPONENTS
| ALLIED INDUSTRIES TVS Srichakra's Pantnagar plant goes on stream Amara Raja Batteries net up at Rs 42.55 cr FINANCE & INSURANCE OIL, LUBRICANTS & ALTERNATIVE FUELS INTERNATIONAL NEWS Audi profit falls 25 pc during first half Ford slows down Volvo bidding process: Report Toyota loss to narrow, helped by hybrid boost: media Buffett posts $1 bn profit on China car maker BYD ECONOMY & FINANCE Sensex hits year-high on strong Q1 results
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| INDUSTRY Go To Top Sindhu Bhattacharya Daily News & Analysis (Web Edition)
New Delhi: Mahindra & Mahindra appears to be banking on new product launches, better rains and continuous cost rationalisation to improve its performance.
The company has reported a robust growth in topline as well as profitability in the June quarter but there could be dampeners going forward to snip away at this kind of growth rate. For example, M&M has written off (or written back) about Rs 300 crore on account of losses in its joint venture company Mahindra Renault (MRPL) during the June quarter. Even though the company asserts there is no plan whatsoever to wind up this JV, it continues to be a drain. MRPL posted a loss of Rs 490.21 crore on a turnover of Rs 741.17 crore during 2008-09.
The JV sold 13,423 units of Logan last fiscal, a decline of 48% over the previous year "due to increased competitive activity in its market segment. Industry sales in the C segment, where Logan competes, increased 12% in FY09", said chairman Keshub Mahindra in the latest annual report.
Then, M&M has wisely pruned its planned capacity expansion expenditure from over Rs 6,000 crore to Rs 4,500 crore for the next three years. A bulk of this investment was to be made in the Chakan plant, from where M&M's first product in the medium and heavy commercial vehicle (M&HCV) range is slated to roll out. The Chakan plant is scheduled to commence partial operations from the third quarter.
In an analyst call on Friday, M&M officials said at least one new product in the M&HCV segment would be launched during the third quarter this fiscal through the joint venture with US company Navistar, besides a light transport vehicle under its own badge. http://www.dnaindia.com/money/report_m-and-m-banks-on-new-products_1278838
TATA MOTORS LAUNCHES VERTICAL PARKING SYSTEMS The Hindu Business Line (Web & Print Edition)
Pune: Tata Motors has entered into the business of automated vertical parking with the launch of two systems that will be manufactured by its wholly-owned subsidiary, TAL Manufacturing Systems.
The company will manufacture the parking towers that have been customised for Indian conditions, under a license agreement with South Korea-based MP Systems Co Ltd, Mr Atam Arya, Managing Director of TAL, said.
The parking towers, branded TAL-Vertipark, are currently being offered in two modules a 20-level that can accommodate 40 vehicles and a 10-level one to accommodate 20 vehicles. They stand at 46 metre and 26 metre in height respectively. The fully automated, password protected, fork-type systems are scalable, suitable for both residential and industrial applications and can be configured for both cars as well SUVs. The cost ranges between Rs 4.5-5 lakh a slot.
Located in the Chinchwad premises of Tata Motors, TAL (formerly Tata Automation Ltd) is a Rs 200-crore company that till the year 2000 catered only to captive consumption. It has four business units (BU), including the Aerospace BU whose greenfield facility at Nagpur is almost ready to go on stream, and earns 65 per cent of its revenue from business other than Tata units. http://www.thehindubusinessline.com/2009/08/01/stories/2009080152121900.htm
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| CARS, SUVs, MUVs Go To Top Garima Singh Neogy The Telegraph (Web Edition)
New Delhi: Maruti Suzuki India, the countrys largest car maker, has raised its capital expenditure (capex) for the current fiscal to Rs 2,100 crore from Rs 1,800 crore to boost research and development. This marks an increase of Rs 425 crore over last years capex of Rs 1,675 crore.
Besides research, other focus areas will be product launches and plant upgrades. The company has already pumped in Rs 310 crore in the last quarter. Developing R&D is one of our top priorities. This is necessary to meet our aggressive plan for new models and next-generation engines, said S. Nakanishi, managing director of Maruti Suzuki India.
Maruti engineers have helped in the designing of the Swift, the upgrades of the Zen, WagonR, Omni, Swift DZire, A-star and Ritz to make them suitable for Indian conditions. They also had a major role in designing the A-Star. The company wants to enhance the R&D capability so that by 2012 its engineers are able to design and develop an India car.
Maruti has introduced its new KB-series engines with the launch of the Ritz and the A-star. The A-star was launched last year, while the Ritz was rolled out in May this year. The company plans to incorporate the engines in its existing as well as new models. It has set a sales target of 1 million units by 2010-11.
Led by the A-star, exports rose 135 per cent in the first quarter. In February this year, the A-star was launched in Europe as Suzuki Alto. Since then, the company has exported over 50,000 units to countries such as Germany, the UK, Italy, France and the Netherlands. http://www.telegraphindia.com/1090801/jsp/business/story_11308055.jsp
TOYOTA LAUNCHES VARIANT OF CAMRY, THE NEW CAMRY IN INDIA PTI See this story in: The Economic Times (Web & Print Edition), The Hindu Business Line (Web & Print Edition), Daily News & Analysis (Web Edition), Hindustan Times (Web Edition), The Indian Express (Web Edition), The Hindu (Web & Print Edition), Deccan Herald (Web Edition), Rediff India (Web Edition), mint (Web & Print Edition), The Financial Express (Web & Print Edition), Business Standard (Delhi Print Edition)
Bangalore: Toyota, the world's largest car maker, has launched the 'New Camry'- a new variant of the luxury sedan Camry in India and is targeting 500 units of this model to hit the Indian roads this year. http://www.thehindubusinessline.com/blnus/02311523.htm http://www.dnaindia.com/money/report_toyota-launches-new-camry-luxury-sedan-in-india_1278733 http://www.indianexpress.com/news/toyota-launches-variant-of-camry-in-india/496551/ http://www.hindu.com/2009/08/01/stories/2009080155881400.htm http://www.deccanherald.com/content/17007/toyota-rolls-camry.html http://business.rediff.com/report/2009/jul/31/toyotas-new-camry-at-rs-21-point-26-lakh.htm http://www.livemint.com/2009/08/01000712/Auto--Toyota-expects-sales-to.html http://www.financialexpress.com/news/toyota-to-hire-2-000-launches-new-camry/496610/
TOYOTA MOVES AHEAD ON COMPACT CAR Pranav Nambiar Daily News & Analysis (Web Edition) See this story in: The Hindu Business Line (Delhi Print Edition)
Bangalore: Toyota Kirloskar Motors Ltd (TKM) is putting the nuts and bolts in place for its foray into the compact car segment in the country. It will recruit 2,000 personnel for its Bidadi plant, which is currently in the second round of expansion, to manufacture the compact car codenamed 800 L.
"We will hire around 2,000 employees over the next one-and-a-half years by when the compact car will be ready for launch. Our new marketing team is already in place and the subsequent hiring will be for the production site," Sandeep Singh, deputy managing director, TKM, said. The firm currently has a manufacturing capacity of 65,000 cars annually and employs around 3,000 people.
It is putting in Rs 3,200 crore towards the new assembly line that will help it roll out an additional 70,000 compact cars annually. It is also doubling its dealership network from the current 80 odd to 150 by December 2010. The new showrooms will sport a new concept, look and feel, and over 60% of them will come up in semi-urban and rural areas. "We are consciously expanding into semi-urban and rural areas where we see good interest for our compact cars. It's mostly our Innova that is sold in these regions," Singh said.
TKM currently imports completely built units of its SUVs Landcruiser and Prado, as well as the newly launched premium sedan Camry. It also imports completely knocked down versions of multi-purpose vehicle Innova and sedan Corolla Altis.
On the heels of the Camry launch, the company will also launch a sports utility vehicle called Fortuner on August 24. This will sport around the Rs 20 lakh price tag competing with the likes of Chevrolet Captiva and Ford Endeavour. TKM expects Fortuner to "take away 50% marketshare" in this category. The company expects to sell 2,000 units of Fortuner from the launch date to December end.
Company officials said Toyota has not planned to launch any new model over the period between the unveiling of Fortuner in August and its compact car by next year-end. However, there would be limited editions and variants of existing models hitting the roads.
Though company officials declined to come on record, the compact car is expected to be priced in the B+ category, which has cars such as Maruti Swift and Skoda Fabia. After a decade of its presence in India, the company managed to break even last year. TKM is forecasting flat growth in sales this year, but hopes that its small car portfolio will push up sales in 2010-11. It sold around 51,800 units in 2008 and is forecasting similar sales levels for 2009 as well. http://www.dnaindia.com/money/report_toyota-moves-ahead-on-compact-car_1278833 http://in.biz.yahoo.com/090731/203/batz83.html
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| COMMERCIAL VEHICLES Go To Top The Times of India See this story in: Business Standard, The Financial Express, The Hindu Business Line, Yahoo India, The Hindu, mint, The Economic Times
Chennai: TVS Motor Company on Friday said it earned a net profit of Rs 20.04 crore for the quarter ended June 2009 as against Rs 10.02 crore it earned in the same quarter last fiscal, recording a 100% increase. The company recorded a growth of 7% in the top line at Rs 988.70 crore as compared to Rs 924.45 crore. expenditure has been the key driver to profitability. Copyright 2008, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://www.business-standard.com/india/news/unitech-tvs-motoraurobindo-q1-result/365580/ http://www.financialexpress.com/news/tvs-beats-slowdown-profit-more-than-doubles/496630/ http://www.thehindubusinessline.com/blnus/26311505.htm http://in.biz.yahoo.com/090731/203/batz8c.html http://www.hindu.com/2009/08/01/stories/2009080155981500.htm
HERO HONDA Q1 NET ZOOMS 83 PC; CROSSES 10 LAKH MARK PTI See this story in: Hindustan Times, The Hindu
New Delhi: Country's largest two-wheeler maker Hero Honda on Friday reported a jump of 83.28 per cent in its net profit at Rs 500.11 crore for the quarter ended June 30 on account of robust sales amid softening input costs.
The net profit for the same period in the last fiscal stood at Rs 272.87 crore, the company said in a statement. Total income of the company rose by 33.72 per cent to Rs 3,864.92 crore during the April-June period of this fiscal from Rs 2,890.25 crore in the same quarter a year earlier.
The company has crossed the 10-lakh-units mark in a single quarter for the first time by selling 11,18,987 units from 8,94,244 units in the year-ago period, up 25.13 per cent. "Several other key factors such as cost rationalisation across the board, softening of commodity prices and tax benefits also contributed to the bottom line," it said. The substantial tax benefit accrued on account of the company's full utilisation of the tax benefits available for its Haridwar plant also resulted in bringing down the overall effective tax rate, the statement added.
"Our ongoing focus on continuous innovation in every sphere of our business and fiscal discipline has allowed us to leverage our double-digit sales growth into robust earnings for the quarter," Hero Honda Motors MD and CEO Pawan Munjal said. http://www.hindu.com/2009/08/01/stories/2009080155971500.htm
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| COMPONENTS Go To Top The Economic Times See this story in: Business Standard
New Delhi: Concentrating on the strong sales of cars in the domestic market, auto component maker Sona Koyo Steering Systems is looking to increase revenues from the new generation electronic steering systems for automobiles, which are priced higher than the conventional products. Copyright 2009, Bennett, Coleman & Co. Ltd. All Rights Reserved" http://www.business-standard.com/india/news/noida-toll- | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ALLIED INDUSTRY Go To Top The Hindu Business Line
Kolkata: The board of directors of Falcon Tyres has recommended splitting the face value of its shares from Rs 10 each to Rs 5 each. The shares of the company have been on fire for the last few weeks.
The company also proposes to issue two bonus shares for each share (of Rs 5) held by the shareholders after the stock-split. The recommendations will be placed for the shareholders approval at the AGM due in September.
Falcon Tyres, a manufacturer of tyres for two-and three-wheelers, clocked a 24-fold increase in net profit at Rs 12 crore in the April-June 2009 quarter from Rs 54 lakh (0.54 crore) during the corresponding period in 2008, despite a 10 per cent drop in gross sales. According to the Chairman, Mr P. K. Ruia, profitability moved up primarily due to lesser outsourcing of tyres; improvement in its own production and a lower per tonne cost of raw materials (natural rubber and rubber chemicals). The increase in replacement sales also contributed to profitability.
As against the purchase of Rs 48-crore worth of tyres from other producers for re-sale during the first quarter of 2008-09, the purchase of traded goods dropped to approximately Rs 8 crore this year.
According to him, the company has also consolidated its product portfolio. Earlier we were producing roughly 170 types of tyres. Some of our products were sold either at a thin or negative margin. We have now dropped those items and restricted our offering to around 150 types of tyres, Mr Ruia said adding that the company had an order book position of 14 lakh tyres a month as against its current production of 7.5 lakh tyres.
To enhance its own production to 9 lakh tyres, it would move from a six-day to a seven-day-a-week production cycle from this month. A Rs 300-crore capacity augmentation project was under implementation to further scale up the capacity to 14 lakh tyres. The company has lined up credit of Rs 100 crore from Central Bank of India for the purpose, of which Rs 25 crore has so far been invested. The rest of the funds were yet to be tied up.
The price of the Falcon share shot up on Friday and closed at a record high of Rs 666 on the BSE, up five per cent from the previous close at Rs 634. The companys share price has jumped up by 150 per cent in the past one month. The company has also taken initiatives to list its shares on the NSE. http://www.thehindubusinessline.com/2009/08/01/stories/2009080151841200.htm
TVS SRICHAKRA'S PANTNAGAR PLANT GOES ON STREAM T E Narasimhan The Hindu Business Line See similar story in: The Financial Express
Chennai: Madurai-based TVS Srichakra Ltd, a member of the TVS group, has started manufacturing tubes from its new plant at Pantnagar in Uttarakhand, from July. It expects to commence tyre manufacturing from September 2009.
Company director P Vijayaraghavan told Business Standard as part of the Phase I plan, the facility would have a manufacturing capacity of 300,000 tubes and tyres by March 2010. The products would mainly cater to the aftersales market, he added. Meanwhile, the company reported a three-fold increase in net profit at Rs 6.84 crore during the quarter ended June 30, 2009, as compared with Rs 2.29 crore a year ago on the back of increase in the aftersales market and full capacity utilisation of the Madurai manufacturing facility. http://www.business-standard.com/india/news/tvs-srichakra/s-
AMARA RAJA BATTERIES NET UP AT RS 42.55 CR The Hindu Business Line
Mumbai: Amara Raja Batteries Ltd informed the BSE on Friday that its net profit for the first quarter ended June 30, 2009 has increased by 185 per cent to Rs 42.57 crore as compared with Rs 14.92 crore in the corresponding quarter of last fiscal. Net sa les stood at Rs 306.37 crore for the quarter ended June 30, 2009 against Rs 313.97 crore during last year period.
The companys Managing Director, Mr Jayadev Galla said: Revived profits outlook in the customer segments has enabled us to grow this quarter. The growth in profit during the quarter was aided by improved efficiencies, cost control, moderation of input c osts coupled with appreciation in the Indian rupee. http://www.thehindubusinessline.com/blnus/02311101.htm | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FINANCE & INSURANCE Go To Top Business Standard
Mumbai/ Ahmedabad: The Rs 500 cr Non Convertible Debenture (NCD) issue by Commercial vehicle finance major Shriram Transport Finance Company Limited (STFC) evoked an overwhelming response and was subscribed by almost ten times on the very first day of opening on Monday.
The QIB and HNI portions were fully subscribed. Retail segment is also evoking a good response, said market sources privy to the development.
The company mopped up over Rs 5,000 cr. STFC hit the debt market Monday with the NCD offer aggregating up to Rs 500 crores with an option to retain over-subscription of upto Rs. 500 crores for issuance of additional NCDs. The NCD issue offers yield on redemption of up to 11.50% (per annum).
This Issue has been rated CARE AA+ by CARE and AA (ind) by Fitch. The rating of CARE indicates stability and timely servicing of debt obligations and very low credit risk besides indicating high safety, sources said.
ENAM Securities Private Limited, A K Capital Services Limited, ICICI Securities Limited and Kotak Mahindra Capital Company Limited have been appointed as the Lead Managers to the Issue, while Integrated Enterprises (India) Limited will be acting as the Registrar to the Issue.
STFC intends to use the funds raised through the issuance of NCDs for various financing activities including lending and investments, subject to the restrictions contained in the Foreign Exchange Management (Borrowing and Lending in Rupee) Regulations, 2000, and other applicable statutory and/or regulatory requirements, to repay its existing loans and its business operations including for its capital expenditure and working capital requirements. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OIL, LUBRICANTS & ALTERNATIVE FUELS Go To Top Reuters, Ikuko Kurahone Yahoo India
London: Oil fell below $66 on Friday, in line with broad falls on global markets after data showing the U.S. economy contracted and consumer spending had declined, with knock-on effects for fuel demand.
U.S. light crude fell 95 cents to $65.99 a barrel by 1325 GMT, pulling back from its gains ahead of the release of the economic data.
London Brent crude dropped by $1.43 to $68.68. U.S. gross domestic product fell 1.0 percent in the second quarter, with consumer spending falling 1.2 percent, the U.S. Commerce Department said.
Although the contraction was smaller than expected the January-March GDP was revised down to a 6.4 percent drop from the previously reported 5.5 percent fall.
With the contraction in the second quarter, U.S. GDP has fallen for four straight quarters for the first time since government records started in 1947. "The GDP reading did come better than expected, but the stabilisation is coming off a downward revised first quarter number," Harry Tchilinguirian, oil analyst with BNP Paribas, said.
"Spending is worse than expected so economic activity in the U.S. is still not supportive for oil demand." European shares turned negative after the data and U.S. stocks opened weaker. Oil prices were poised to mark their first monthly fall since January, which is likely to be about 4 percent.
In the United States, the world's largest energy consumer, crude inventories have risen and oil refinery utilisation rates have remained lower than normal as economics for refining have been poor and fuel demand has been weak.
U.S. crude oil imports in May fell to the lowest level for the month in 12 years. In Japan, the world's third largest oil consumer, fuel sales fell in June, dropping for the 13th consecutive month. http://in.biz.yahoo.com/090731/137/batz79.html
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| INTERNATIONAL NEWS Go To Top Lalit K Jha, PTI See this story in: Hindustan Times, Rediff India
Washington: Americans are ready to buy cars from India and China, a survey in the US has revealed.
Results of the survey called 'Opportunity for Chinese and Indian Brands in the USA' shows that 15 per cent of the new car buyers in the US say they would consider purchasing their next vehicle from China, and 11 per cent would consider buying a car from India.
More than 30,000 buyers from around the country were interviewed in this survey conducted by AutoPacific.
"As Hyundai and Kia have been on the American scene for decades now, it's surprising that consideration for Chinese and Indian brands would be about as strong as it is for the Korean brands," automotive research firm AutoPacific President and author of the study George Peterson said.
"It appears that buyers in America are willing to give Chinese and Indian vehicles a chance right out of the box. Understanding these consumers will be critically important to the success of any newcomer," he said.
"Not only are a significant number of people willing to consider Chinese and Indian brands, this group consists of highly desirable buyers who would be coveted by any manufacturer," Peterson said.
The study shows Chinese and Indian car considerers are likely to currently own Japanese and Korean brands, indicating that these brands may face a lot of competition from the new entries, rather than domestic brands- Chrysler, Ford or GM. http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName= http://business.rediff.com/report/2009/jul/31/americans-keen-to-buy-indian-chinese-cars.htm
AUDI PROFIT FALLS 25 PC DURING FIRST HALF Agencies See this story in: The Economic Times
Berlin: German luxury automaker Audi AG said Friday its profit for the first six months of the year fell 25 percent as sales slipped nearly 10 per cent but, unlike most of its peers, it remained profitable.
FORD SLOWS DOWN VOLVO BIDDING PROCESS: REPORT Reuters See this story in: The Economic Times, The Times of India
Ford will wait for General Motors to sell Opel and is looking at inviting the losing bidder to bid for Sweden-based Volvo, the person told the paper.
"Expect nothing to happen for another three to four weeks" with Ford waiting for GM to finalize an Opel buyer, the person was quoted by the paper as saying.
TOYOTA LOSS TO NARROW, HELPED BY HYBRID BOOST: MEDIA Reuters See this story in: Hindustan Times
Toyota has forecast an operating loss of 850 billion yen ($8.9 billion) for the year to March 2010. NHK said strong sales of its new Prius and other hybrid vehicles, boosted in part by government tax incentives in Japan to promote fuel-efficient cars, would help narrow its annual loss by several tens of billions of yen.
Analysts have already estimated that Toyota's loss forecast would prove to be far too pessimistic. The market consensus is for a loss of 474.6 billion yen, according to the average of 23 analysts polled by Thomson Reuters.
Toyota is scheduled to report earnings for the April-June quarter on Tuesday. Earlier this week rivals Honda Motor Co and Nissan Motor Co surprised investors by eking out profits in the latest quarter, while Honda raised its annual operating profit forecast to 70 billion yen from 10 billion yen. http://www.hindustantimes.com/StoryPage/StoryPage.aspx?
BUFFETT POSTS $1 BN PROFIT ON CHINA CAR MAKER BYD Bloomberg See this story in: Business Standard
Beijing: Warren Buffetts Berkshire Hathaway Inc earned a $1 billion paper profit from an investment it agreed to make in Chinese carmaker BYD Co less than a year ago. The automaker has jumped fivefold in Hong Kong trading since the deal was announced on September 27, helped by Buffetts investment and rising demand for fuel-efficient vehicles. Three days earlier Berkshire agreed to an investment in Goldman Sachs Group Inc that has since generated a paper profit of about $2 billion.
When Warren Buffett says the sun shines out of somebodys backside, its worth paying attention, said Guy Spier, principal at New York-based hedge fund Aquamarine Funds LLC, who owns Berkshire shares and has researched BYD. Buffett is betting on the jockey in this case, Spier said, referring to BYDs Chief Executive Officer Wang Chuanfu. Berkshires MidAmerican Energy Holdings Co unit agreed to buy 225 million new shares of BYD for HK$8 apiece. That stock now has a market value of HK$9.66 billion ($1.25 billion), based on todays closing price. Buffett will pay HK$1.8 billion. BYD said last night it completed the sale. Buffett didnt respond to a request for comment. The investment may help BYD, the seventh-biggest carmaker in China, boost its profile overseas and also reassure potential customers, Chief Executive Wang said last year. The automaker started selling the F3 DM, the worlds first mass-produced plug- in hybrid, in December.
Investors are buoyed by the potential growth in BYDs electric-car business, said Barry Leung, an analyst at Sun Hung Kai Securities Ltd. in Hong Kong. The alternative-energy sector is clearly one that will continue to enjoy the support of the Chinese government. Leung rates the carmaker buy.
BYD, also Chinas biggest maker of rechargeable batteries, climbed 3.1 per cent to HK$42.95 at the close of trading. The company supplies power units to mobile-phone makers including Motorola Inc, Nokia OYJ, Samsung Electronics Co and LG Electronics Inc.
Battery technology is one of the most important subjects affecting the technological future of man, Charlie Munger, Berkshires vice chairman, who first identified BYD as a potential investment target, said in a May 1 Bloomberg TV interview. BYD is one of the most interesting small companies in the world.
The Shenzhen-based company aims to more than double vehicle sales this year to 400,000 helped by exports and new models, Wang said in March. First-half sales more than doubled to 176,814, helped by demand for the F3, Chinas fourth bestselling car, according to the China Association of Automobile Manufacturers. Chinas overall passenger-car sales rose 26 per cent to 4.53 million.
BYD plans to sell shares on the mainland to help fund the development of its auto business. The company intends to offer as many as 100 million yuan-denominated shares in Shenzhen, it said in a July 16 statement.
In May, the automaker agreed to explore cooperation with Volkswagen AG in areas including hybrid cars and lithium-battery powered electric vehicles. The company will also work with Buffetts MidAmerican on the development of rapid-charge batteries for storing power from wind and solar generation, MidAmerican Chairman David Sokol said in September.
Goldman Sachs turned to Buffett after the global credit crunch forced Lehman Brothers Holdings Inc into bankruptcy. Berkshire agreed to buy $5 billion in preferred shares paying 10 per cent interest and took options to buy $5 billion of shares at $115 apiece. Goldman closed at $162.42 in New York Stock Exchange composite trading on Thursday.
The company is likely to hold onto the warrants until close to their 2013 expiration dates, Buffett said in a Fox Business Network interview on July 24. Buffett, ranked the worlds second-richest man behind Bill Gates by Forbes magazine, transformed Omaha, Nebraska-based Berkshire from a failing textile maker into an enterprise with businesses ranging from ice cream and underwear to corporate-jet operations. His net worth was estimated at $37 billion by Forbes in March. http://www.business-standard.com/india/news/buffett-posts-1-bn-profitchina-car-maker-byd/365550/ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ECONOMY & FINANCE Go To Top The Hindu Business Line
Mumbai: The rupee gained by 40 paise tracking the positive equity markets and on general dollar weakness. The rupee opened at 48.25 and closed at 47.94/95, against the previous close of 48.34. There was continuous dollar selling and little resistance for the rupee, said a forex dealer with a private bank. The 47 level was last seen almost a month ago. There are expectations that inflows from foreign investors will increase, thereby strengthening the rupee even furthe r, said the dealer. The FII inflow is also the reason for the rise in the countrys foreign currency reserves. In the overseas market the euro and pound also gained against the dollar. In the forward premia market, the six-month premia closed at 2.6 per cent (2.45 per cent) and the 12-month at 2.36 per cent (2.28 per cent). http://www.thehindubusinessline.com/2009/08/01/stories/2009080151610600.htm SENSEX HITS YEAR-HIGH ON STRONG Q1 RESULTS The Hindu Business Line
Mumbai: Buoyed by good first quarter corporate earnings, the benchmark stock index Sensex hit a 52-week high on Friday.
The rally in the last day of the result season was led by FMCG, banking, oil and gas and metals stocks. Sensex rose 1.8 per cent to 15,670, the level last seen in June 2008. The rise in metal prices in the international market and the fairly widespread monsoon in the North boosted the market sentiment, brokers said.
The Nifty closed 1.7 per cent higher at 4,636. FMCG major Nestles stock price went up more than 6 per cent after the company announced a 33.8 per cent jump in net profit on Friday.
Shares of SBI, which reported a 42 per cent rise in net profit on Thursday, rose 5.29 per cent. Hindalco jumped 6.6 per cent, on less than expected fall in profit, said an analyst. Foreign and domestic institutions were net buyers of equities worth Rs 582 crore and Rs 316 crore, respectively, according to the provisional data released by the exchanges. However, retail investors were net sellers.
Good margins Corporates have reported good margins, though sales growth was not that good. For example, margins of automobile companies were higher primarily due to a fall in commodity prices and the cost-cutting measurers taken by them, said Mr Sanjeev Patni, Head of Institutional Equities, Centrum Broking Pvt Ltd.
Commodity prices went up in global markets yesterday, so commodity stocks went up, Mr Patni said. Besides Hindalco, other gainers were Sterlite Industries (2.91 per cent) and Tata Steel (2.12 per cent). http://www.thehindubusinessline.com/2009/08/01/stories/2009080152160100.htm
Last Financial closing
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