FinXpress StartUp in focus:
Redbus.in
3
Markets this Week 5
News of the Week 6
CAN YOU SOLVE IT? 8
Company in Focus:
Sapient Corporation
2
FEBRUARY 05, 2012
Sources of Data:
> HDFCsecurities
> Economic Times
> The Hindu
> Rediff Money
> MoneyControl.com
> Financial Express
> Indiapetro
Inside this issue:
Institute Of Management Technology
Ghaziabad
“Change is not your enemy. It’s your opportunity”
We want to travel faster. Work faster. Communicate and
connect faster. We're a society fixated on speed, because
we're a society fixated on technology. It's our collective
accelerator. As technology moves, we move. But the same
technology that fulfills our need for speed also poses our biggest challenge. Because technology doesn't just
increase the speed at which we move, it increases the speed at which change moves.
For two decades Sapient has helped its clients anticipate, navigate and leverage change. Their deeply engrained tech-
nology heritage, running through all of their businesses like a foundational thread, has allowed us to utilize technol-
ogy to its fullest business application and creative expression, giving their clients something that, in today's business
climate, they simply can't succeed without: the ability to quickly and confidently adapt to ever-changing conditions.
Throughout their history, Sapient has demonstrated to companies across a wide spectrum of industries and geogra-
phies, that success doesn't rely solely on how you manage your business, but also, on how you manage changes that
affect your business. And, at no other time has that been more applicable, more profoundly relevant, than now.
Sapient is an interactive and professional services company founded in 1990 and based in Boston, Massachusetts,
United States. It has offices in North America, Europe, India, Asia and Australia. As of 2011 it employs more than
9015 people around the world.
In 1998, Sapient acquired visual design firm Studio Archetype. In 1999, the company acquired the small San Francisco
-based e-commerce builder Ad agency.
In 2005, Sapient established a Government Services division as an independent subsidiary in Arlington, Virginia, to
serve federal government clients. In 2006, it acquired PGI, a Miami-based interactive agency.
In August 2008, Sapient's TRM practice expanded with the acquisition of the London-based Derivatives Consulting
Group. In June, 2009, the company acquired Nitro Group, a traditional global advertising agency, which "turned the
tables on the recent trend of traditional advertising agencies snapping up digital shop(s)," according to the Wall
Street Journal.
Sapient Global Markets
From New York to Singapore, Sapient Global Markets is a premium provider of services to leaders in today's financial
and commodity markets.
Sapient Government Services
With a track record of delivering mission-critical solutions, Sapient Government Services is a leading provider of
consulting, technology, and marketing services to a wide array of governmental agencies.
Sapient Nitro
Sapient Nitro is a leading integrated marketing, commerce and technology services firm, that creates and engineers
highly relevant brand experiences, to accelerate business growth and fuel brand advocacy.
Page 2 FinXpress
Company in Focus : Sapient Corporation
redBus, also known as redBus.in, is an online travel agency offering bus tickets in India.
It has offices in Ahmedabad, Bangalore, Chennai, Coimbatore, Delhi, Hyderabad, Mum-
bai, Pune, Vijayawada and Vishakhapatnam. It was founded by Phanindra Sama, Cha-
ran Padmaraju & Sudhakar Pasupunuri in August 2006. It is headquartered in Banga-
lore. It deals with the domestic travel industry.
Their story All the founders used to work in Bangalore at the time (sometime in 2005) -
all with top IT MNCs - IBM, Texas Instruments and Honeywell. They were friends from BITS Pilani, one of India's finest engi-
neering colleges. During Diwali that year, one of them wanted to spend the festival in his home town. Since he didn't know
his schedule till the end, taking a bus was the only choice. He ran around town hunting for a ticket, but they were all sold
out minutes before he reached the travel agents. That's when he thought of the possibility of providing consumers the con-
venience of booking a bus ticket over the internet. The objective was two-fold - to ensure that they don't have to leave the
confines of their comfort to book a ticket, and to help them get a ticket when they need it the most. The idea was compel-
ling. The internet was being voted as a medium people couldn't do without. PC and net penetration was increasing not only
in urban areas, but also in rural India with innovative concepts like Shakti and e-Choupal. Also, people were getting used to
booking tickets for travel using IRCTC and private airline websites. So, why not buses?
However, the most compelling reason was that no body in India had done this!
What customers can seek?
It has moved beyond providing value over the internet by reaching out to customers using all media that provide them
convenience - be it the phone, home delivery, physical outlets or even SMS.
They regularly tie-up with partners that are strong in their domains and distribute their bus tickets through them, thus pro-
viding convenience to customers and adding value to the business of their partners as well.
Today one can book a redBus ticket at over 75,000+ outlets!
It has the largest network of bus operators in their list (350+ and growing) and very satisfied customers. Some of them
have been writing testimonials and which they have showcased on their site. Currently, on offer are over 4500+ (and grow-
ing) routes across the Indian map.
Culture - Learn, Implement, Grow
They regularly solicit feedback from our customers. This helps them understand what they are doing wrong. They then en-
sure that the same mistakes are not repeated. People are encouraged to speak their minds and they don't fear sharing
their mistakes, so that everyone can benefit from the learning, no matter how small.
Every other day new partnerships are forged - all with the aim of adding more value and convenience. They have grown
organically by opening office in key metros and inorganically through partnerships. They encourage customers to let them
know of any routes or bus operators which they don't have in their list. They then go right ahead and make sure that by the
next time customer logs on, list is updated.
Safety of transactions
They ensure a safe transaction over the net as they employ the best-in-class security. They use Secure Socket Layers (SSL)
data encryption. This ensures that the information exchanged with them is never transmitted unencrypted, thus protecting
the information from being viewed by unauthorized individuals. This encryption is done using 128-bit RC4 encryption. In
addition the credit card information is processed over secure gateways which are certified by Visa.
Page 3 FinXpress
StartUp in Focus :
Redbus.in
redBus is also being mentored by the TiE-EAP (Entrepreneurship Acceleration Program). TiE - EAP is a program by The Indus
Entrepreneurs (TiE) Bangalore chapter.
redBus' CEO, Phanindra Sama was recently selected by Endeavor as a high impact entrepreneur. Also, Businessworld voted
Phanindra Sama as one of the top 5 most promising entrepreneurs in India.
Phanindra Sama, CEO
Page 4 FinXpress
StartUp in Focus continued.. . Redbus.in
Page 5 FinXpress
Markets this week The week gone by saw the Nifty rallying further to end with gains for the fifth consecutive week. The Nifty gained 2.33%
W-o-W. Market breadth was positive in four out of the five trading sessions of the week. The biggest gainers from the CNX
500 were STC India, KSK, Aban, Tata Global and Prestige. The biggest losers were Varun Shipping, Sterling Bio, FDC and
Tata Coffee.
The top gainers this week were NTPC and Hindustan Unilever with gains of 2.71% and 2.69%. however, the top losers
were Hindalco Industries and Jindal Steels and lost 3.08% and 2.66% respectively.
KEY HIGHLIGHTS OF THE WEEK
• All the sectoral indices except Consumer Durables and Capital Goods ended in the green, which lost 2.8% and 1% respectively. The top gainers were Realty, Auto, IT and Bankex, which ended higher by 4.8%, 3.7%, 3.3% and 3.2% respectively.
• India's per capita income grew by 15.6% to ` 53,331 per annum in 2010-11, crossing the half-a-lakh rupees mark for the first time.
• India's manufacturing sector in January hummed along at its fastest clip in eight months, fuelled by new order growth. The HSBC India Manufacturing Purchasing Managers' Index (PMI), a key measure of factory production, registered 57.5 in January, up from 54.2 in December -- accelerating for the second straight month.
• Claims for U.S. jobless benefits fell last week and productivity cooled in the fourth quarter, signaling hiring may accelerate as companies reach the limits of how much efficiency they can wring from existing workforces. Applications for unemployment insurance payments dropped by 12,000 to 367,000 in the week ended Jan. 28. Worker output per hour increased at a 0.7 percent annual rate from October through December, down from a 1.9 percent gain in the prior three months.
• In straight five-week of gains, the Sensex has zoomed by 2,150.04 points, or 13.91 per cent, the highest 5-week gains after September, 2010. The investors got rich by over ` 1.38 lakh crore in the week and over ` 8.59 lakh crore in the cur-rent calender year till February 3.
• The Dow Jones Industrial Average jumped 156.82 points (1.23 per cent) to finish at 12,860.23, its highest closing level since May 2008. The Nasdaq Composite added 45.98 (1.61 per cent) to 2,905.66, its best close since December 2000 and the dot.com collapse. The broad-based S&P 500 rose 19.36 (1.46 per cent) to 1,344.90.
• The Indian rupee continued to rule firm for the fifth straight week as it appreciated by 62 paise to close at over three-month high of 48.69/70 against the US currency on the back of frenzied foreign funds inflow in firming local equity markets.
• Prices of gold tumbled by ` 600 while silver fell sharply by ` 1,590 a kg on the bullion market here today due to heavy selling by stockists which took cues from weak global markets.
Outlook of the week
With the markets moving up further for the fourth consecutive session, the underlying trend continues to remain up. Im-mediate upside targets for the Nifty in the coming week are at 5360-5380. The current short term uptrend would reverse with a Nifty close under 5076.
SENSEX NIFTY
Page 6 FinXpress
News of the Week
Per capita income
crosses `̀̀̀ 50,000 for
first time in 2010-11
Reflecting growing prosperity,
India's per capita income grew by
15.6 per cent to ` 53,331 per
annum in 2010-11, crossing the
half-a-lakh rupees mark for the
first time, according to govern-
ment data. The per capita in-
come at current prices is esti-
mated at ` 53,331 in 2010-11, as
against ` 46,117 for the previous
year, depicting a growth of 15.6
per cent. The growth in per cap-
ita income comes on the back of
8.4 per cent expansion of the
Indian economy during the last
fiscal. However, the increase in
per capita income at constant
(2004-05) prices, after discount-
ing for inflation, was about 6.4
per cent in 2010-11. It was `
35,993 in 2010-11, as against `
33,843 in the previous year. Ac-
cording to the figures, the size of
the economy at current prices
rose to ` 71,57,412 crore last
fiscal, up 17.5 per cent from `
60,91,485 crore in 2009-
10.Based on 2004-05 prices, the
Indian economy expanded by 8.4
per cent during the fiscal ended
March, 2011. The GDP at con-
stant (2004-05) prices in 2010-11
has been estimated at ` 48,
85,954 crore, as against ` 45,
07,637 crore in 2009-10.
Flip side of economic
growth: Cos prefer
more capital over la-
bour, create less jobs
Companies are preferring to em-
ploy more capital instead of la-
bour while producing goods,
lending credence to the belief
that India's growth in the post-
liberalisation era has failed to
create more jobs. The country's
worker-to-fixed-capital ratio in
the registered manufacturing
sector has declined from 10.9 in
1990-91 to 3.2 in 2009-10.
Growth in employment, too, has
slowed from 2.61% in 1993-94 to
1.02% in 2009-10, according to
five-yearly NSSO survey. When
viewed in conjunction with slow-
ing employment, it is certainly a
problem. And the main reason is
that the labour-intensive indus-
tries are not growing fast
enough. An increasing bias to-
wards capital-intensive produc-
tion, or a higher degree of
mechanization, has also skewed
India's export basket. The share
of capital-intensive products in
India's export basket more than
doubled from about 25% in 1993
to nearly 54% in 2010 while the
share of unskilled labour-
intensive products halved from
30% to 15%. If the worker-to-
fixed-capital ratio is biased to-
wards capital, it reflects greater
preference for capital goods in
the production process. It is a
matter of concern because it is
this (labour-intensive manufac-
turing) sector that holds the po-
tential to absorb the large pools
of surplus labour from India's
agriculture sector. A fall in labour
intensity in manufacturing -- the
extent of labour inputs used in
per unit of output produced --
also raises concerns about India's
ability to absorb its rapidly ex-
panding workforce and reap the
benefits of a favourable demog-
raphy.
Services PMI at six
month high in January
The services sector grew at its
fastest pace in six months in
January, signalling continued
improvement in demand and
market sentiment. The season-
ally adjusted HSBC Services Busi-
ness Activity Index rose to 58 in
January from 54.2 in December.
A reading of 50 separates growth
from contraction. "Activity in the
services sector rebounded in
January at the fastest pace since
July 2011 led by the financial
intermediation and hotels and
restaurant sub-sectors, and new
business also flowed in at a
faster pace," said Leif Eskesen,
chief economist for India and
ASEAN at HSBC. According to the
HSBC survey, based on responses
from around 350 private compa-
nies, the increase in demand due
to improving global conditions
led to a rise in the pace of new
orders coming into the service
sector. The new business index
surged to 58.2 in January from
55.7 in the previous month. Pri-
vate service providers were con-
fident that business activity
would increase over the next
year. "Growth is expected to be
supported by improving market
conditions and a rise in promo-
tional activity," the survey said.
The degree of positive sentiment
was also at its highest since July
2011, with the relevant index
posting its largest one-month
gain in seven months. Overall,
the HSBC composite PMI index,
which includes manufacturing
and services, rose fastest in nine
months to 59.6 from 54.7 in De-
cember.
Piramal Group picks up
an additional 5.5%
stake in Vodafone India
for `̀̀̀ 3007 crore
Piramal Healthcare Ltd said on
Saturday it would buy a 5.5 per
cent stake in Vodafone's India
unit, Essar, for ` 3007 crore
($616.14 million), taking its total
stake in the mobile company to
about 11 per cent. The sale
would mark the exit of Essar as
Vodafone's joint venture partner
in India after the London-listed
company last year sealed a long
awaited deal to buy out Essar in
July. Vodafone last year bought
22 per cent of Essar and Piramal
bought 5.5 per cent. The world's
biggest cellular carrier by reve-
nue, Vodafone is the largest
overseas corporate investor in
India. The transaction contem-
plates various exit options for
Piramal, including both participa-
tion in a potential IPO of the unit
and a sale of its stake back to
Vodafone, the Indian firm said in
a statement. Vodafone has said it
plans to take its India unit public
but has not set a timeframe. The
Vodafone stake buy is the cash-
flush drugmaker's second unre-
lated investment after it bought
private equity firms IndiaReit
Fund Advisors and IndiaReit In-
vestment Managers. The com-
pany, which last year bought
about 5.5 per cent in Vodafone
from Essar, was sitting on a cash
pile of 100 billion rupees, it said
last August. Piramal sold its In-
dian formulations business to US-
based Abbott Laboratories in
2010. It has been looking for in-
vestments outside the pharma-
ceutical sector and had recently
announced a foray into the finan-
cial services segment.
WTO: China unfairly
limits export of raw
materials
The World Trade Organization
ruled Monday that China unfairly
limited exports of nine raw mate-
rials to protect domestic manu-
facturers. A WTO appeals body
rejected China's appeal of an
earlier ruling in July that con-
cluded the Asian economic pow-
erhouse had violated interna-
tional trade rules. The appeals
body largely sided with the
United States, European and
Mexico, which had taken issue
with Chinese restrictions on its
exports of nine materials used
widely in the steel, aluminium
Page 7 FinXpress
News of the Week continued.. .
and chemical industries. They
had complained that China drives
up prices on overseas shipments
of the materials by setting export
duties, quotas and licensing re-
quirements on them, giving the
country's manufacturers an un-
fair edge over competitors. But
China had argued that its export
limits were needed to protect
the environment. The ruling af-
fects China's exports of certain
forms of bauxite, coke, fluorspar,
magnesium, manganese, silicon
carbide, silicon metal, yellow
phosphorous and zinc. In it, the
WTO appeals body says China
must now ``bring its export duty
and export quota measures into
conformity with its WTO obliga-
tions.'' The issue has sparked
tension with some of China's
major trading partners. In a
statement, U.S. Trade Represen-
tative Ron Kirk called the ruling
``a tremendous victory for the
United States _ particularly its
manufacturers and workers.'' He
called it a decision that ``ensures
that core manufacturing indus-
tries in this country can get the
materials they need to produce
and compete on a level playing
field.''
2G license cancellation
to hit banks' profits by
10%: Fitch
Food Global ratings agency Fitch
said the Supreme Court's deci-
sion to cancel 122 telecom li-
censes will hit the profitability of
banks that had extended credit
to these companies by up to 10
per cent. "Assuming a conserva-
tive level of write-offs on these
loans, we believe that banks'
credit quality will not be materi-
ally weakened, but that annual
profits could fall by up to 10 per
cent," it said in a report. Accord-
ing to Fitch, Indian banks' expo-
sure to the telecom companies
that are losing 2G licenses is
around 0.6 per cent of their total
loans. "However, around half of
the exposure is in the form of
financial guarantees toward fu-
ture payments of license fees.
State Bank of India has con-
firmed that once the licenses are
cancelled, those guarantees
should no longer be in force," it
said. "In total... the volume of
loans that are affected by the
license cancellations may be less
than 0.2 % of the sector's total
loan book," Fitch added. In a
report, the agency added that
the banking sector should be
able to absorb loan-losses on
account of the cancellation of
licenses without it having a major
effect on their credit profile. Ac-
cording to the agency, while the
impact of the Supreme Court's
decision is limited, the cancella-
tion of the 2G licenses highlights
the Indian banks' exposure to
infrastructure, a sector which
continues to face high regulatory
and execution risks. "We have
previously highlighted that
banks' ability to handle these
exposures as a whole is finely
balanced and further increases in
exposure to the infrastructure
sector may hurt the standalone
credit profile of Indian banks," it
said. Fitch's report comes on a
day when government said that
public sector banks have an ex-
posure of about ` 10,000 crore
to telecom companies whose
licenses were cancelled.
Cartoons
Solve it Now!
We are on the web !
http://www.facebook.com/FinNiche
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Page 8
**Rush in your entries to : [email protected]
The right entries will get their name featured in the
next issue of FinXpress. So hit the quiz fast & get
yourself visible among 1000 odd in the campus.
Set A
Match the following: Identify the Chariman/Chief/Head/CEO :
1.German Chancellor a.Michael Andrew
2.IMF Christine b.Aditya Puri
3.World Bank c.Stuart Gulliver
4.UN Secretary-General d.Ban Ki-moon
5.KPMG e.Pratip Chaudhuri
6.HSBC f.Angela Merkel
7.HDFC Bank(MD) g.Robert B. Zoellick
8.SBI h.Lagarde
CAN YOU SOLVE IT ?
Feel free to write to us at : Drop in your suggestions to the editorial team :
[email protected] Magazine design/news : [email protected]
Articles/quiz : [email protected]
LAST ISSUE’S RIGHT ENTRIES WERE FROM :
Sambhav Jain
LAST WEEK’S ANSWERS
SET A
False; C Subramaniam was the FM then
False; the other was Yashwant Sinha
False; Merrill Lynch is called thundering herd
True; Lucas Pacioli
SET B
1. 125th birth anniversary of Dr.Rajendra Prasad
2. US firm Colombian Chemicals for $875 million
3. AMRO- formed after the merger of Amsterdam-
sche Bank and Rotterdamsche Bank.
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