Share Market and It Effects to Indian Co

8/8/2019 Share Market and It Effects to Indian Co

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Sales Dec 2007 Vs Dec 2008Sales Dec 2007 Vs Dec 2008

Maruti SuzukiMaruti Suzuki : : -- 10.9%10.9%

General MotorsGeneral Motors :: -- 35.6%35.6%

Toyota Kirloskar MotorToyota Kirloskar Motor :: -- 54.1%54.1%

AutomobileAutomobile



REAL ESTATEREAL ESTATE



F our WheelersF our WheelersHuge losses due to high inventory of raw materialHuge losses due to high inventory of raw material

Lag Effect (drop in prices of Steel)Lag Effect (drop in prices of Steel)F alling SalesF alling SalesHigh F ixed Cost High F ixed Cost High cost of Raw MaterialHigh cost of Raw MaterialPromotions cost Promotions cost

Truck Makers were Worst hit Truck Makers were Worst hit Maruti Suzuki earnings down by 54%Maruti Suzuki earnings down by 54%

Ashok Leyland earnings down by 84% Ashok Leyland earnings down by 84%

Tata Motors registered a loss of Rs 263 crore ( 1Tata Motors registered a loss of Rs 263 crore ( 1 st st time on 7 yrs)time on 7 yrs)

Two WheelersTwo WheelersPerformed better than expected .Performed better than expected .

No losses because raw material inventory is smallNo losses because raw material inventory is smallHero Honda Operating Profit up by 14.3 %Hero Honda Operating Profit up by 14.3 %



Media and AdvertisingMedia and Advertising

All leading brands cut on the All leading brands cut on the

Advertisement Expenditure Advertisement Expenditure ( Ad spending Down 15% )( Ad spending Down 15% )

Marketing Expenditure downMarketing Expenditure down

Overall , the Revenues down by 25%Overall , the Revenues down by 25%

Publications are reducing pages to cut costsPublications are reducing pages to cut costs

Newsprint prices down by 30%Newsprint prices down by 30%



MetalsMetals

F or Steel , Q3 worst in 8 yrsF or Steel , Q3 worst in 8 yrs

S AIL and TATA (Suppliers of 40% steel in the country) faced more than 50% Net S AIL and TATA (Suppliers of 40% steel in the country) faced more than 50% Net

Losses in Q 3Losses in Q 3

NonNon ferrous metal prices down byferrous metal prices down by5555--80% (levels below Marginal Cost)80% (levels below Marginal Cost)



EXPORTSEXPORTS

Exports ContributeExports Contribute

to 22% of the GDPto 22% of the GDP

for Indiafor India





H andicraftsH andicrafts

Total Employment Total Employment 7 million7 million

Growth in Q 3, 08Growth in Q 3, 08--0909 --60%60%

Estimated Job LossEstimated Job Loss 5,00,0005,00,000

Largest Employer in India afterLargest Employer in India after

Agriculture and Textile Agriculture and Textile



TextilesTextiles

Total Employment Total Employment 120 million120 million

Growth in Q 3 08Growth in Q 3 08--0909 --10%10%




Engineering SectorEngineering Sector

Total Employment

Total Employment

4 M

illion4

M

illionGrowth in Q 3 08Growth in Q 3 08--0909 0%0%




LeatherLeather

Export OrientedExport Oriented

NovNov Dec PE AK CHRISTMAS season .Dec PE AK CHRISTMAS season .

Exports Down 15 % in NovemberExports Down 15 % in November

Exports Down 20 % in DecemberExports Down 20 % in December

Severe Liquidity CrunchSevere Liquidity Crunch

Demand in Q 3 down by 50%Demand in Q 3 down by 50%More than 5,00,000 UnemployedMore than 5,00,000 Unemployed

Estimated that another 5,00,000 might be loosing their job in the runningEstimated that another 5,00,000 might be loosing their job in the running

quarter .quarter .

(as per the Chennai based Council for Leather Exports)(as per the Chennai based Council for Leather Exports)



DiamondDiamond

Contributes to 13.5 % India s Export market Contributes to 13.5 % India s Export market

Total Employment (export)Total Employment (export) 1.3 million1.3 million

Total Employment (domestic)Total Employment (domestic) 3.0 million3.0 million

Growth in December 08Growth in December 08--0909 --26.3%26.3%

Estimated Job Loss (only Surat)Estimated Job Loss (only Surat) 3,00,0003,00,000



Exceptions in the Economy Exceptions in the Economy



FMCG SectorFMCG Sector

21 % Growth in Revenue21 % Growth in Revenue

Net Profit Up by 12.5%Net Profit Up by 12.5%

HLLHLL Volume Growth Volume Growth 2.3%2.3%

Advertisement reduced to 1.3% of sales (earlier 8.3% ) Advertisement reduced to 1.3% of sales (earlier 8.3% )

ColgateColgate

26.5% cuts in Advertisement Expenditure26.5% cuts in Advertisement Expenditure

Net Profit up by 28.6%Net Profit up by 28.6%



PharmaceuticalsPharmaceuticals

GrowthGrowth 28 %28 %

But Profit down by 11.5%But Profit down by 11.5%

Main Reason was F orex LossesMain Reason was F orex Losses

Domestic sales up only 15% in Q3Domestic sales up only 15% in Q3

Q1 and Q 2, each saw 20% growthQ1 and Q 2, each saw 20% growth



ITIT

No Negative surprisesNo Negative surprises

Growth rate has slowed down , but industry still growingGrowth rate has slowed down , but industry still growing

Volume growth remained in single digit figure ( 0 to 3% ) Volume growth remained in single digit figure ( 0 to 3% )

Infosys improved its E BIT Q3 margins by 31.9% Infosys improved its E BIT Q3 margins by 31.9%

TCS managed to improve Q 3 margins by 23.9% TCS managed to improve Q 3 margins by 23.9%

Salaries have been reducedSalaries have been reduced

New job creation has slowedNew job creation has slowed





But Margins went DownBut Margins went DownQ2 Vs Q3Q2 Vs Q3

IdeaIdea 26.3% to 25.5%26.3% to 25.5%

RComRCom 40.8% to 40.2%40.8% to 40.2%

BhartiBharti 42.6% to 41.0%42.6% to 41.0%

Also , Average usage per person has drastically reduced . Also , Average usage per person has drastically reduced .

But overall in F Y 2008But overall in F Y 2008- -09 the telecom companies saw an overall09 the telecom companies saw an overallincrement in the net profit .increment in the net profit .



W ho says what about W ho says what aboutGDP..?GDP..?

ESTIMAT EDESTIMAT ED ESTIMAT EDESTIMAT EDE ARLIERE ARLIER NOWNOW

PM s Economic Advisory CouncilPM s Economic Advisory Council 7.7%7.7% 7.1%7.1%

RBIRBI 88--8.5%8.5% 7%7%

Brokerage Limit Brokerage Limit -- 6.3 to 6.9 %6.3 to 6.9 %International Monetary F undInternational Monetary F und -- 5.1%5.1%



Measures Already TakenMeasures Already Taken

RBI cutsRBI cuts

R ATI OS that matterR ATI OS that matter E ARLIERE ARLIER NOWNOW

Repo RateRepo Rate 9% 9% 5%5%

Reverse Repo RateReverse Repo Rate 6% 6% 4%4%

CRR (casr Reserve Ratio) 9% CRR (casr Reserve Ratio) 9% 5%5%SLRSLR 25%25% 24%24%

Result Result 4,28,000 crore fresh liquidity injected4,28,000 crore fresh liquidity injected



ConclusionConclusion

HIGH RATES OF :

Investment

Income

Job Creation

RISING OF :Demand

Production

Prices

Interest

HIGH :

Inflation

Interest Rate

CUTS IN :

Investment

Production

Income

LOW:

Prices

Production

Interest Rate

Investment

Emploment

Trade

Income

W eareher

e

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Share Market and It Effects to Indian Co