30 September 2012
Meeting takeaways – IFFCO ::Kotak Sec,
Meeting takeaways – IFFCO
` Losing money in the complex fertilizer business in the current year
` Greenfield projects in complex fertilizers are not viable - will not invest in new
capacities
` Has not made 'assured' 12% post tax ROE in urea for a long time
` Volatility in Rupee has been the biggest challenge in the past two years
Buy Maruti Suzuki India; Target : | 1503 :: ICICI Securities, report
Setting new benchmark for wages….
Struggling with labour woes, Maruti Suzuki (MSIL) has hiked salaries of its
workers by an average of ~| 18000 per month (including the benefits and
variables) as part of the three-year wage settlement. The hike would
happen in a staggered manner with an increase of | 14800 for FY13E and
the rest in FY14E/FY15E by 10% each. The agreement would be apply
from April 2012 onwards. It is important to note that this hike is only
applicable to the permanent workers on the shop floor at the associate
level. Hence, the ambit of employees getting this hike is limited to
~2,700(Gurgaaon/Mansesar-2100/600) at present. The number will
increase to ~6,000 for FY14E, considering the increase in operations at
Manesar and regularisation of the work force. The hike is the highest ever
in the company’s history. However, the management has indicated that
the labour cost will stay at the levels of ~2.5% of the net sales for FY13E.
Godrej Consumer Products :: ICICI Securities, report
Healthy growth in core categories…
We met the management of Godrej Consumer Products Ltd (GCPL) to get
an insight into the company’s operations and future plans. GCPL is the
leader in hair colour and home insecticides (HI) in India and is the second
largest player in soaps in the country. The company is driving growth in
India as well as international markets through its ‘3x3’ strategy according
to which it aims to concentrate on three core categories (HI, household
care and personal wash) in three markets (Asia, Africa and Latin America).
Following the strategy, the company has posted a robust CAGR of 44.9%
and 47.4% in FY08-12 in revenues and earnings, respectively.
Europe’s austerity madness :: -Paul Krugman in NYT
So much for complacency. Just a few days ago, the conventional wisdom was that Europe finally had things under control. The European Central Bank, by promising to buy the bonds of troubled governments if necessary, had soothed markets. All that debtor nations had to do, the story went, was agree to more and deeper austerity — the condition for central bank loans — and all would be well.
Will companies benefit from FDI?::Business Line
Retail stocks have been partying on news of the Government permitting foreign direct investments in multi-brand retail. But what will the opening up of foreign investment bring to companies in the listed space?
While it may be early days yet, companies do stand to benefit in the long term in terms of back-end infrastructure and capital inflow. However, their challenge will be to work around the restrictions on location and build up economies of scale.
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