From Rediff.com
Mid-Market Commentary
Tuesday, January 8, 2002
Market recovers on renewed buying support in tech stocks - 13:14 Hrs IST
Fresh buying support in select tech stocks lifted the market from its lower levels in early afternoon trades, after a steady start.
Tech stocks bounced back on renewed buying spree, after a brief correction. Buying was also seen in select Old Economy stocks, especially in the cement and automobile sectors. Defensive sector stocks continued to display a mixed trend. A similar trend was also observed on the side counters.
Out of the 938 issues traded on BSE, declines outnumbered advances, with 510 losers and 327 gainers, reflecting the cautious undertone, largely on account of the tension at the Indo-Pak border.
The Sensex, meanwhile, gained further ground. At 12:55 IST, it was up by 25.73 points at 3,427.53.
The NSE S&P CNX Nifty Index also rose by 6.30 points to 1,106.45.
Gujarat Ambuja Cements (up 3.94% to Rs 216.50) remained firm after touching a 52-week high of Rs 219 in early afternoon trades following sustained buying support on hopes that the company may improve its financial performance in the current quarter as reconstruction work in Gujarat gains momentum. Earlier this month, the cement major reported a healthy 36.76% growth in cement dispatches for December 2001 on a year-on-year basis to 6,25,000 tonne. From its recent low of Rs 182 touched on 26 December 2001, the company’s stock has bounced back by nearly 19% on renewed buying support.
Satyam Computer (up 3.12% to Rs 310.45) held on to its gains on sustained buying. From its recent low of Rs 203 on 27 December 2001, the stock of the Hyderabad-based software major has recovered by nearly 53%. Satyam topped volumes on BSE, with 98.33 lakh shares being traded.
The new Sensex entrant, HCL Technologies (up 2.54% to Rs 316.90), remained firm. The stock of the Shiv Nadar group flagship has risen by nearly 37% from its recent low of Rs 231.50 touched on 20 December 2001. A total of 10.51 lakh HCL Technologies shares were traded on BSE.
Infosys Technologies (up 1.03% to Rs 4,736.10) bounced back into the positive zone, recovering from the day’s low of Rs 4,633 on renewed buying support.
Tata Steel (up 2.03% to Rs 100.50) also bounced back into the positive territory, recovering from the day’s low of Rs 96 on fresh buying at lower levels. Over 4 lakh Tisco shares were traded on BSE.
Old Economy pivotals like BSES (up 1.78% to Rs 200), Reliance Petroleum (up 1.60% to Rs 28.55), Bajaj Auto (up 1.49% to Rs 391), Bhel (up 1.51% to Rs 137.85), ACC (up 1.01% to Rs 165.60), ICICI (up 0.68% to Rs 44.45) and Reliance Industries (up 0.34% to Rs 320.65) moved in a narrow range.
Defensive buying continued in pharma pivotals like Glaxosmithkline (up 1.74% to Rs 300.95), Cipla (up 1.50% to Rs 1,169) and Dr Reddy’s Laboratories (up 1.25% to Rs 973.90).
On the other hand, Hero Honda Motors (down 3.07% to Rs 286.10) and Zee Telefilms (down 1.68% to Rs 126.10) remained subdued on profit booking, after recent gains.
Selling continued in other pivotals like L&T (down 1.42% to Rs 195), Colgate (down 1.36% to Rs 166.50), Ranbaxy (down 0.89% to Rs 712), Castrol (down 1.14% to Rs 191), Nestle (down 0.88% to Rs 500.90), SBI (down 0.75% to Rs 193) and MTNL (down 0.36% to Rs 124.30).
Non-Sensex frontline tech stocks like Wipro (down 2.18% to Rs 1,796), NIIT (down 1.46% to Rs 256.90), SSI (down 1.11% to Rs 223.20) and Digital GlobalSoft (down 0.15% to Rs 529.40) recovered from their lower levels, but were still in the negative zone.
On the other hand, while Hughes Software (up 4% to Rs 326.50) held on to its gains, Polaris Software (up 0.07% to Rs 209) bounced back into the positive zone, recovering from the day’s low of Rs 200.70 on renewed buying support.
Shipping Corporation of India (up 7.88% to Rs 31.50) ruled firm on reports that the government plans to rake in Rs 800 crore by divesting a 51% stake in the state-run shipping major. Over 85,000 shares were traded on BSE.
The rally in the stock was on reports that the government has decided to sell 51% stake in the shipping major and that the Union Cabinet has already approved the disinvestment. At present, the government holds 80% stake in the company. The remaining stock is in the hands of financial institutions and mutual funds (18%). Floating stock of the company is a miniscule 1%. The current foreign direct investment limit in the company is around 74%. The government intends to give 3% stake to the employees of the company.
Selective buying was seen on other side counters like Nalco, Whirlpool of India, Soundcraft Industries, Engineers India, Carrier Aircon, Bank of India, Birla 3M, Videocon International, Jindal Steel, Pidilite Industries, ABB, Esab India, Hindustan Zinc, Essel Propack, Ingersoll Rand, Supreme Industries, Syngenta India and Sesa Goa.
On the other hand, Hinduja TMT (down 3.67% to Rs 87.85) remained subdued on selling pressure, after recent gains. Earlier, the stock of the New Economy major had risen by over 57% from its recent low of Rs 58 touched on 24 December 2001 to Rs 91.20 on 7 January 2002 on renewed buying support.
Escorts (down 3.61% to Rs 52) was subdued after the rating agency, ICRA, cut the company’s short-term rating, blaming the company's lower operating profit and exposure to the telecom sector.
Selling was also seen on other side counters like Corporation Bank, Mirc Electronics, Saw Pipes, Apollo Tyres, Ciba Speciality Chemicals, Reliance Capital, Exide Industries, Crisil, Indian Rayon, Apollo Hospitals, Kesoram Industries, Bharat Electronics, Amara Raja Batteries and Ashok Leyland.
The Wintech story gets murkier
by Syed Firdaus Ashraf in Bombay
Jun 1, 2001
Consider this:
March 2000: 'I want to be the Bill Gates of India's computer education industry.' -- Murtuza Mathani, Wintech CEO. May 2001: Mathani's whereabouts unknown. Hundreds of vendors, professors and students are hunting for the Wintech CEO. All of them accuse of Mathani of having duped them. Cops are on the lookout for him
Wintech Computers, one of the fastest growing computer training institutes in India, has finally shut down its operations and it has been two weeks since the firm's chief executive officer Murtuza Mathani has been absconding.
Mathani -- with 170 operational centres all over the country, nearly 1,700 employees, and at least 40 students per institute - has not been heard of in more than a fortnight.
Millions of rupees siphoned off?
He was last seen in Baroda two weeks ago where he was arrested after a complaint by irate students. He was, however, granted bail and thereafter he has just 'disappeared'.
It is estimated that revenues of over Rs 200,000 were being generated every month by each of Wintech's institutes. The amount, running into millions of rupees, is said to have been siphoned off by Mathani.
So what went wrong? Was Mathani over ambitious? Was Wintech's growth unplanned and unsustainable? Did the raids on the institute for Oracle software piracy see it sink? Or is there more to it than meets the eye?
'Nobody's knows what went wrong'
"Nobody knows, what went wrong. We, too, are wondering how could this happen to us so soon," says Subhash Pachouri, a former employee who was a close aide of Mathani.
"The problem, I feel, is that Mathani kept all the financial dealings to himself and no one knew anything about the accounts or the fiscal position of the company, nor how the money was used," he adds.
Wintech, established in 1987, was owned by Mathani brothers: Arif, Abbas and Murtuza. The company was growing smoothly and impressively until its first brush with the law.
Pirated software, police raids
A raid on the company in September 2000 by the Bombay police and officials of Enforcers of Intellectual Property Rights -- a private investigating firm - queered the pitch for the institute.
"Wintech Computers had no licence to teach Oracle software. But they went ahead and did that regardless of the consequences. And then, one fine day, the EIPR with Bombay police raided our offices across Bombay," says Sanjay Bhatlekar another former employee.
"We asked Mathani for details and told him to shed some light on the matter. He brushed off the episode saying that, under the Indian Constitution, these raids are illegal and did not apply to educational institutes," he adds.
Says Rajiv Pulani another employee of Wintech who had quit a reputed company to join Wintech's 'business to e-commerce division', "Mathani told us that he wanted Wintech to be the Yahoo! of India. And, I thought that he meant serious business. However, when I joined the company, I had nothing to do. Then came these raid for piracy. I was upset and apprehensive and approached for explanation and assurance. But Mathani just said that there was nothing with the company."
The modus operandi
Mathani then managed to convince many of his close aides that a company named Webtech was to invest more than $1 million in Wintech.
He said that Wintech Computers intended to dilute equity by 10 per cent and tap the capital markets with an initial public offering by July 2000.
Mathani's modus operandi was masterful in its simplicity: create a major hype in the media through an advertising blitz to attract students and franchisees.
The institute never invested in real estate, nor did it pour money into having its own offices or computers. The money was only used to create a brand with a high recall: Wintech. A massive advertising campaign, with full-page ads splashed across leading newspapers, managed to generate the required excitement and interest in the institute.
The advertisements attracted students as well as franchisees. Interestingly, a franchisee had to pay Wintech Computers a huge amount of money to 'be a part of Wintech'.
In return, the franchisee would get a certain percentage of the fees collected from the students. Wintech would provide the franchisee with technical expertise, software programmes and the courseware.
No law to regulate computer education institutes
"The advertisements were so attractive and alluring that some fresh management graduates in Assam took bank and deposited the amount with Wintech Computers to become franchisees," says Vijay Jathana, convenor of Consumer Guidance Society of India
"Needless to say, these gullible fellows lost their money. The government, meanwhile, has still done nothing to stop the growing menace of such computer classes. There are no government guidelines regulating the setting up of computer institutes. Anybody with some real estate space and zero knowledge of computers can set one up," adds Jathana.
"I joined Wintech only after seeing the advertisements," says Varsha Jaikishan. "But soon after I joined, I realized that there were no trained teachers at the institute. In fact, I used to teach sometimes. I then protested to the head of the institute and asked that I be put in a good batch. But they started delaying that. After I persuaded some more, they told me that my classes will begin anew from a certain Monday."
"When I reached the institute on the scheduled day, I was shocked to find that it had actually shut its operations. I protested and went to their headquarters in Goregaon. There, too, the watchman said that many students were hunting for the proprietor of Wintech as he was absconding," says Jaikishan.
Underworld connections alleged
Some students and employees allege that the Mathanis were close to underworld don Dawood Ibrahim. These alleged links with the underworld are now being probed by the police. Giving further credibility to this charge is the information that one of Wintech's training institutes is owned by a relative of a person who's an accused in the Bombay blasts case.
"People always asked me about Mathani's background. So one day I asked him to come clean. All he said was, 'Just tell them that I have always been a businessman, and try to avoid a detailed conversation with such people'," says Bhatlekar.
The employees do not wish to talk too much about the issue. Apart from the Mathanis, they are terrified the police, the vendors and the students. They fear that all the authorities and the victims would be after their lives if it is found out that working for Wintech.
"When a firm grows very slowly, lots of questions are raised. However, when someone grows too fast no such thing happens," says another IT professional who left a reputed company to join Wintech.
Tushar Rajwade, another Wintech student who paid Rs 33,375, has lost his all money and does not know what to do?
"Frankly speaking, I do not see any future for myself after undergoing this course. The Wintech franchisee told me that he will just give me a certificate on Wintech's letterhead, which will be of no use to me."
"Who will give me a job if I produce such a certificates? All my time, effort and money were a total waste," rues Rajwade.
Fleeing to Australia?
"Rumours are that the Mathani brothers -- Arif and Abbas - have fled to Australia, and Murtuza too would soon be joining there. Unless, of course, the cops are able to arrest him," adds another employee.
Amidst the high-voltage drama, Wintech employees -- who were rendered jobless with the firm shutting down its operations -- find themselves in dire straits.
"Nobody is willing to give me a job after I quit Wintech. I have been jobless for the last eight months. And after the recession in IT industry it has become even more difficult for me to land myself a decent job. I only wish that the cops nab Mathani, so that we have the satisfaction of feeling that justice was done," adds Sanjay Bhatlekar.
(Some names have been changed to protect the identities of the former employees of Wintech)
Employees groan as IT firms slash salaries
by Priya Ganapati in Bombay
May 3, 2001
In the information technology industry, if you haven't been asked to take a hike yet, chances are that you aren't getting that much-desired pay hike either.
April, which normally brings joy to the IT programmers in terms of salary raise and incentives, has this year turned into a month of gloom.
Employees at many top notch IT companies are facing the prospects of a bleak year thanks to the insignificant amounts being holed out as increments, while many others are still waiting for some news about their raise.
The last few months have been tough for the IT industry. First, there was the dot-com bust. Then there was the depths to which the Nasdaq sank plunging technology stocks in India too into depression. Then, traditional IT companies started downsizing and issuing profit warnings.
While Indian IT companies largely escaped the slowdown that hit the IT industry in the US, the consequences of the decay are manifesting themselves here slowly.
Salary increments the first casualty
The first visible indications are in the form of the squeeze on the increments of IT workers as companies clamber to cut costs and maintain that much needed profitability to meet market expectations.
Most IT companies in India have the annual reviews for their employees around January-February and disburse the hikes and incentives about a month after the initial appraisals are done.
Till the pessimism set into the industry, software programmers used to get generous dollops of increments in a bid to retain the much-needed talent that would give one IT company an edge over the other in a market that has cut-throat competition.
And, in those times of plenty, God forbid if an IT company did dare scrimp on increments, programmers always had the option to move to a dot-com, another tech company or just take off to the US.
But now, despite noticing a massive drop in their pay hikes employees are quiet. All of which has only emboldened companies to tighten the squeeze on increments further.
Infosys sets the trend
Flagging off the trend this year was Infosys. Unofficial estimates pegged the increments handed out at Infosys this year at a paltry 6 per cent as opposed to a generous 25-27 per cent it was reported to have given last year.
Infosys officials declined to comment on the exact quantum of the hikes granted this year citing unavailability of a spokesperson.
However, the company issued a statement saying, "There is an average salary increase of 15 per cent even though there is softening of employee salary raises in the market. This is to show our commitment to one of the important segments of our shareholders which is our employees. A portion of this increase is likely to be linked to the company's performance in the next fiscal year."
But an ex-employee of Infosys refuted, "The increments being offered this year are definitely lower than what they had given last year. The average last year was a 27 per cent increase."
Infosys' reaction is significant for two reasons. For stripped off the jargon, the statement clearly says that there has been a general 'softening' of salary raises in the IT industry and that it indicates that if the company does not perform as well as expected this year due to a general slowdown in the market, salary increments would be the first one to take a hit.
Earlier, Infosys had reported uninspiring fourth-quarter results that sent the scrip crashing to a new 52-week low. For the fourth quarter ended March 31, 2001, the company reported a mere 94.5 per cent growth in net profit to Rs 1.8 billion and a 100 per cent growth in total revenue to Rs 5.72 billion.
The company has projected a mere 30 per cent revenue growth for the next fiscal. However, it has added nearly 920 employees last quarter and consistently denied reports that it would resort to any layoffs.
Others follow suit...
A similar tale extends across most of the other IT companies. In trying to walk the tightrope between making profits in a market that has slackened considerably and fears severe recession IT companies seem to have resorted to cutting corners on the easiest target in the game: salary increments.
Consider the Wipro case:
The company holds its annual employee review in October every year. Based on the appraisals and the general market conditions, it offers its employees hikes and incentives.
While Wipro employees have not been immediately affected by the slowdown in the last few months as they had got their due raise last October, sources in the company said that employees have been forewarned about this year's raise.
"At an annual meeting called about two weeks ago, we were told that there would probably be no more hikes in salary this year. We were even asked to be prepared for a cut in salary if the market continued to show signs of a slowdown we would have," an employee at Wipro revealed.
At Satyam Computer, the tale of woe continues. The employees there are yet to get a raise. While Satyam officials declined to make any comments on the raise being doled out, the mood among the employees is not too upbeat.
"We have not heard any news about the pay hike. But we think that it will definitely be less than what was offered last year," a Satyam employee said.
Satyam officials are staying tight-lipped. "We have just finished our appraisals in April and have not yet decided on the quantum of the raise that has to be offered. We would not like to comment on it right now as any statement would have a direct bearing on employee morale," S V L Narayan, vice-president, corporate communications, said.
When probed further Narayan said, "The raise offered to employees has nothing to do with the recent slowdown that the IT industry has been experiencing. It is a factor of the general market conditions and the demand and supply equation. Naturally, if there is a shortage, the compensation will be adjusted to balance that."
So do market conditions - where the bellwethers of an industry concede that the impact of the US slowdown would hamper their growth - portend an ominous future for employees so far as a raise is concerned?
Narayan refuses to stick his neck out but he tacitly admits, "Yes. The general market conditions can affect incentives." Satyam hopes to announce its hike by the middle of the month.
"We have not even met yet to discuss the raise that should be offered. We have to consider the situation across departments and also apply all the equalisation factors," he said.
Meanwhile, employees at Oracle Corporation's India Development Center in Hyderabad are keeping their fingers crossed. Oracle has a bi-annual review, held in January and June, for its employees. While the appraisals this year went off as scheduled in January, the hike has not yet come through.
"All we have been told is that the hike is tentative. The proposal for it has been sent to our HQ (Oracle headquarters in the US). But the general feeling here seems to be that the hike this time is dicey and might not come through. This year there seems to be an uncertainty about the whole affair," a nervous Oracle employee said.
Cisco selects Infosys to establish center for next generation products
November 2, 2000
Infosys Techonogies Ltd a leading product co-development partner for Internet infrastructure companies, and Cisco Systems, Inc.the worldwide leader in networking for the Internet, today (November 2, 2000) announced a collaboration to develop state-of-art networking solutions including voice-related applications and optical technologies. Under the terms of the agreement, Infosys will establish a dedicated development center in Bangalore, India that will grow to 200 people in the first year of operations.
Infosys experience in working with the Enterprise Voice Business Unit (EVBU) and the Optical Transport Business Unit (OTBU) of Cisco providing IP-based tools and testing for Cisco's products has evolved into a partnership built a Cisco-Infosys Dedicated Development Center. This center will progress into a center of competency providing development, testing and sustenance activities for a whole range of Cisco products.
We were impressed with Infosys engineering talent and the training program that has helped create this talent pool. We also liked their management caliber. stated Prem Jain VP/GM Enterprises Line of Business. Infosys was already working on certain technologies and related applications that we were interested in. After a successful pilot run, we decided to strengthen our relationship with a strategic partnership and the establishment of a dedicated offshore center with them.
Infosys is excited about partnering with Cisco.We believe we can be a long-term, sustainable presence in Cisco's drive to deliver next generation communication solution to the market, stated Hari Murthy, Head of Worldwide Business Development for the Communications Practice for Infosys.
Navneet Publications Q4 net profit down by 15.05%, FY 2000 net profit up by 18.91%
November 2, 2000
Navneet Publications Ltd has posted a net profit of Rs 35.88 million for the quarter ended September 30, 2000 as compared to Rs 42.24 million in the corresponding period last fiscal. Total Income for the quarter ended September 30, 2000 is at Rs 324.08 million as compared to Rs 258.45 million in SQ 99. The company has posted a net profit of Rs 282.40 million for the financial year ended September 30, 2000 as compared to Rs 237.47 million in FY 99.Total Income has increased from Rs 1455.35 million in FY 99 to Rs 1768.23 million in the financial year ended September 30,2000.
The company has been allotted 49,86,500 equity shares of Rs 10/- each (Rs 3/- per share paid-up) of Navneet Equipment Limited, a wholly owned subsidiary of the company. The Company has invested Rs 1.50 crores till date The connectschool.com a Website for school partnership program of the wholly owned subsidiary, Navneet Equipment Ltd. has been made live and is progressing well.
In view of seasonal nature of business, financial results of this quarter of the year are not representative of the operations of the Company for the year as a whole.