Indian Allison Industry Update

01 Jun 2017

IndustryGovt PolicyMampM shares end over 4 higher m-cap rises by Rs 3376 cr

Its rain amp gain for MampM tractors to drive earnings

Foreign brokerages raise MampM target price post Q4 results

MampM shares end over 4 higher mcap rises by Rs 3376 cr

SampP BSE Auto Nifty Auto index hit new high

Automobile dealers stare at Rs 1000 cr hit on transit stocks under GST

All clear for private role in defence

Govt to disinvest 100 equity in Scooters India bidding process begins

China can help India electrify all vehicles by 2032

MampM rallies 6 post Q4 on robust outlook for FY18 top index gainer

OEMsComponentsApollo Tyres raises Rs 450 cr via NCDs

DICV crosses 10000 truck export mark

Pricol to acquire PMP Auto Components

Will launch new UV platform this year Pawan Goenka MD Mahindra amp Mahindra

Steel Strips Wheels bags Europe order worth euro60000

Tata Motors to invest Rs 4000 cr aims to be 3rd largest CV maker globally

Volumes donamprsquot excite or leave us desperate aim to grow sales faster than market Pawan Goenka MampM

Ashok Leyland to retain buzz on infra revival product mix

JBM Auto Q4 net profit up 39 at Rs 13 crore board nod to Rs 2 per share dividend

MampM looks interesting Abhimanyu Sofat VP-Research IIFL

Ashok Leyland gains after block deal

Isuzu MU-X Review A proper utilitarian SUV but worth the price

New Maruti Suzuki Dzire Why you wonamprsquot need to make a compromise anymore for the compact sedan you always wanted

BusesBRTs amp Trucks 9th timeamprsquos the charm DTC tries to expand fleet again

MoUDNHAIJNNURMNHAI released Rs980 crore funds under arbitration scheme Ind-Ra

Lukewarm response to arbitration claims by infra developers

STUOrganisationsDriversRoad SafetyConstruction amp Off-Highway equipments

Infra major IVRCL pares loss to Rs 131 crore in FY17

Gayatri Projects net rises to Rs 32 cr in Q4

Johnson Lifts launches heavy duty escalator unit

InvITs will see good pick up soon Virendra Mhaiskar CMD IRB Infrastructure

Construction sector performed particularly poorly during Q4FY17 Panagariya

Air transport amp AirportsWe are confident to cross Rs 10000-crore revenue mark in this fiscal MV Gowtama of Bharat Electronics

Military

BEL plans Rs 700-cr capex for FY18

Four players interested in supplying 57 fighter jets to Navy

Tata Reliance Defence will now be able to participate in major military manufacturing projects

Hindalco plans to set up high-end aluminium plant for defence sector

Higher defence spending revs Q4 show of BEML BEL

Private defence manufacturing Defence Ministry unveils strategic partnership policy

INS Kalvari to join Navy by July

INS Kalvari to join Navy by July

Oil amp GasIndias record diesel demand to continue in 2017 growth to slow

Oil falls as rising Libyan US output undermines cuts

Petrol price hiked by Rs 123litre diesel by 89 paise

Castrol India Net up 4 at Rs 179 cr in January-March quarter

Government panels to monitor ONGC and Oil India fields

IOC partners in talks to buy stake in Russias Vankor field

IndustryGovt Policy

MampM shares end over 4 higher m-cap rises by Rs 3376 cr PTISee this story in The Hindu Business Line (Web Edition)

New Delhi Shares of Mahindra amp Mahindra (MampM) ended with over 4 per cent gains adding Rs 3376 crore to market valuationafter the company reported nearly 20 per cent growth in profit for January-March quarter

The stock ended at Rs 141635 up 399 per cent on the BSE During the day it soared 638 per cent to Rs 1449

On the NSE the stock gained 410 per cent to close at Rs 141695

The companyamprsquos market valuation rose Rs 337642 crore to Rs 8796842 crore

In terms of volume 226 lakh shares of the company were traded on the BSE and over 39 lakh shares changed hands on the NSEduring the day

The stock was the top gainer among Sensex and Nifty components

Homegrown auto major MampM had yesterday reported a 1993 per cent increase in its standalone profit-after-tax (PAT) at Rs 72516crore for the fourth quarter ended March 2017

The company had posted a PAT of Rs 60463 crore during the same period a year ago

Its total income from operations during the fourth quarter rose to Rs 1231964 crore up 404 per cent from Rs 1184047 crore ayear earlierhttpwwwthehindubusinesslinecommarketsstock-marketsmm-shares-vroom-over-6-on-q4-earningsarticle9716714eceMampM shares end over 4 higher mcap rises by Rs 3376 crThe Hindu (Web Edition)httpwwwthehinducombusinessmm-shares-end-over-4-higher-mcap-rises-by-rs-3376-crarticle18668356eceMahindra Q4 profit rises 199 to Rs72516 croremint (Web Edition)httpwwwlivemintcomCompaniesCdBGxyYO4Us00TInj8kX4KMM-Q4-profit-rises-263-to-Rs874-crorehtmlMampM rallies 6 post Q4 on robust outlook for FY18 top index gainerBusiness Standard (Web amp Print Edition)httpwwwbusiness-standardcomarticlemarketsm-m-rallies-6-post-q4-on-robust-outlook-for-fy18-top-index-gainer-117053100240_1htmlMahindra amp Mahindra shares jump over 6 per cent post Q4 earningsDeccan Chronicle (Web Edition)httpwwwdeccanchroniclecombusinesscompanies310517mahindra-mahindra-shares-jump-over-6-per-cent-post-q4-earningshtml

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Its rain amp gain for MampM tractors to drive earnings Ashutosh ShyamThe Economic Times (Delhi Print Edition)

Indias largest tractor maker Mahindra and Mahindra has hit a sweet spot for the current and next fiscal thanks to the buoyancy in

tractor volume growth on the expectation of normal monsoon for the second consecutive year and analysts have upgraded theirearnings estimates by 8-14

Additionally volumes in the auto segment -where it generates income from selling vehicles such as Scorpio Bolero and XUV500-are not expected to go down any further The stock is trading at 13 times projected earnings based on core vehicles earnings a23 discount to the industry average

A reasonable valuation with improving volume growth and product mix could attract many institutional investors looking for safehaven when the market is at record-high levels

MampMs management has forecast tractor volume growth of 10-12 for the current fiscal In the last few years it has been able tobeat industry growth owing to new product launches and expanding its marketing reach

In the previous fiscal MampMs tractor volume growth outperformed the industry by 5 Subsequently the companys market share intractor segment gained 200 basis points to a record high of 432 due to the launch of Yuvo (3045 HP) and Novo (more than 50HP)

The tractor volume growth outperformance is likely to repeat in FY18The Street has pencilled in volume growth of 15-20 for theyear on the back of expectation of strong rural demand sentiment buoyancy in rural average levels higher food grain production inthe previous year and 10 rise in kharif sowing in FY18

MampM plans to launch another new platform for tractor and a range of Swaraj branded tractors that will help boost tractor volumesfurther

The higher volume growth is margin accretive as the tractor segment fetches nearly double the operating profit (EBIT) compared toauto segment

On the auto side the Street has priced in low volume growth However the downward trend may reverse with refreshes forKUV100 Scorpio and XUV 500 lined up in FY18 Also volume boost due to lower prices of larger cars are expected to come down5-7 after GST implementation

In the listed space MampM is likely to be a key beneficiary of reduction in the tax as GST rates are lower than current rates Besidesit will launch its premium MPV in the second half of FY18 which is expected to compete with Toyota Innova The GST on passengervehicles for FY18 is expected to be 75 versus 13 in the previous year

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Foreign brokerages raise MampM target price post Q4 results The Economic Times (Web Edition)

Global brokerage houses upgraded the target price of Mahindra and MahindraBSE 399 (MampM) after the company on Tuesdayreported a 2630 per cent year-on-year jump in consolidated net profit for March quarter at Rs 874 crore There are expectationsthat robust monsoon and implementation of GST will further give a boost to Mahindra and Mahindra in coming months

CLSA upgraded MampM stocks to amplsquoOutperformamprsquo and raised the target price to Rs 1550 from Rs 1280 per shares

Japanese brokerage firm Nomura also lifted the target price of the auto major to Rs 1586 indicating an upside of over 10 per cent

During the quarter the company sold 46583 tractors in the domestic market indicating a growth of 1330 per cent on a YoY basisThe company exported 10831 units during the quarter ampldquoOutlook for strong tractor demand improved meaningfullyamprdquoCLSA said

Nomura in a research note said ampldquoRural demand indicators have improved with rural wages increased over 7 per cent onyear-on-year basis in Jan-Mar-17 10 per cent increase in kharif crop acreage and positive monsoon outlook We thus raise ourtractor volume growth forecasts to 20 per cent in FY18F led by a ramp-up of the new Jivo platform Under GST prices of mid-sizecars or UVs are likely to come down by around 5-7 per cent which should drive demand further for MampM UVsamprdquo

The southwest monsoon on Tuesday hit Kerala and the Northeast two days ahead of the scheduled arrival of the crucial seasonalrainfallhttpeconomictimesindiatimescommarketsstocksnewsforeign-brokerages-raise-mm-target-price-post-q4-resultsarticleshow58922471cms

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MampM shares end over 4 higher mcap rises by Rs 3376 cr PTISee this story in The Hindu

New Delhi Shares of Mahindra amp Mahindra (MampM) on Wednesday ended with over 4 per cent gains adding Rs3376 crore tomarket valuation after the company reported nearly 20 per cent growth in profit for JanuaryampmdashMarch

The stock ended at Rs 141635 up 399 per cent on BSE

During the day it soared 638 per cent to Rs1449

At NSE shares of the company gained 410 per cent to close at Rs 141695

The companyamprsquos market valuation rose by Rs 337642 crore to Rs8796842 crore

In terms of volume 226 lakh shares of the company were traded on BSE and over 39 lakh shares changed hands at NSE duringthe day

The stock was the top gainer among Sensex and Nifty components

Homegrown auto major MampM on Tuesday reported a 1993 per cent increase in its standalone profitampmdashafterampmdashtax (PAT)at Rs 72516 crore for the fourth quarter ended March 2017

The company had posted a PAT of Rs 60463 crore during the same period a year ago

Its total income from operations during the fourth quarter rose to Rs 1231964 crore up 404 per cent from Rs 1184047 crore ayear earlierhttpwwwthehinducombusinessmm-shares-end-over-4-higher-mcap-rises-by-rs-3376-crarticle18668356ece

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SampP BSE Auto Nifty Auto index hit new high Business Standard

Mumbai Shares of automobiles companies were in focus with the SampP BSE Auto (24293) and Nifty Auto index (10919) hitting theirrespective record highs on the bourses on Wednesday in intra-day trade after strong rally in automobiles and auto relatedcompanies

Mahindra amp Mahindra (MampM) Ashok Leyland Exide Industries Cummins India Bharat Forge and Maruti Suzuki India from theauto index were up in the range of 1 to 6 as compared to Sensex and Nifty 50 index which trading flat at 1117 am

The SampP BSE Auto and Nifty Auto index were up 1 each up for the seven straight trading sessions Since May 23 auto indiceshave outperformed the market by surging almost 6 against 2 rise in the benchmark indices Ashok Leyland MampM Bharat ForgeMaruti Suzuki India and Tata Motors have gained between 7 and 11 during the period

MampM rallied 6 to Rs 1449 on BSE in intra-day today after the company said the outlook for 2017-18 (FY18) is much more robustwith a favourable domestic and global backdrop

Expectation of good monsoons higher rural incomes and a government thrust in agricultural and rural sectors is likely to pushtractor demand up in Q1FY18 by driving positive sentiment in the larger rural economy MampM added CLICK HERE TO READ THERELEASE

On the global front too the demand is expected to be favourable with most forecasts pegging global output and trade higher in2017 and 2018 as compared to the recent past the company said

Maruti Suzuki India hit a new high of Rs 7238 up 13 on BSE in intra-day trade Since April 27 the stock rallied almost 13 afterreported a good set of numbers for the quarter ended March 2017 On comparison the Sensex was up 4 during the period

Analysts at HDFC Securities remain positive on the Maruti Suzuki growth story on the back of strong volume growth led byconsistent volume uptick of Ciaz Brezza and Baleno and success of Ignis increasing ASP led by an expanding portfolio in thepremium segment fresh capacity addition from the Gujarat facility uptick in rural demand supporting macro tailwinds like 7th PayCommission payout falling interest rates urbanisation and growing middle classhttpwwwbusiness-standardcomarticlemarketss-p-bse-auto-nifty-auto-index-hit-new-high-117053100502_1html

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Automobile dealers stare at Rs 1000 cr hit on transit stocks under GST Ajay ModiBusiness Standard (Web amp Print Edition)

New Delhi Automobile dealers could take a hit of Rs 1000 crore because of the transitory provisions of the goods and services tax(GST)

Dealers are entitled to a 40 per cent credit on the Central GST they will pay from July 1 on excise-paid vehicles dispatched bymanufacturers till June 30

Raising this issue with the department of revenue this week the Society of Indian Automobile Manufacturers (Siam) said dealersusually carried inventories of four to eight weeks depending on the type of vehicle and the distance from a manufacturing plant Theassociation said this inventory was worth Rs 48000 crore including cars two- and three-wheelers light and heavy commercialvehicles and spare parts

From July 1 dealers will have to bill cars at a GST of 28 per cent and a cess of up to 15 per cent on different categories The GST

subsumes excise duty VAT and other cess In the current system VAT is paid at the dealeramprsquos end while excise duty of 14per cent is paid by the manufacturer when a vehicle leaves the plant

Under the GST system the dealer will have to pay a GST of 28 per cent and a 1 per cent cess on a small petrol car If this carenters the dealer network before July 1 excise duty will have been paid If the car is sold in July the dealer will pay GST and cessand should ideally receive a credit on the CGST component (14 per cent) The rules however say only 40 per cent of the CGSTcomponent can be reimbursed as credit for vehicles

Siam has said the transitory provisions under the GST should cover 90 per cent of the CGST for small vehicles and 80 per cent forbig vehicles Alternately it has requested the government to consider allowing full tax credit of the excise duty paid bymanufacturers on vehicles not sold till June 30

A Siam functionary said the industry was hopeful this situation would be addressed ampldquoDealers could come under a hugefinancial burden and companies may have to bail them outamprdquo he saidhttpwwwbusiness-standardcomarticleeconomy-policyautomobile-dealers-stare-at-rs-1-000-crore-hit-on-transit-stocks-under-gst-117053101486_1html

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All clear for private role in defence Manu PubbyThe Economic Times

New Delhi The defence ministry has rolled out its strategic partnership plan meeting concerns of the private sector by allowingIndian companies to participate in major military manufacturing projects across segments keeping room open for participation bypublic sector units and identifying four areas where work will start soon

The Navy which has the two biggest projects out of the $ 20 billion kitty submarines and helicopters has said that it is hopeful thatthe policy can be implemented within six months to kick start manufacturing of critical equipment in India

The final partnership model will come as a major relief to companies like Tata LampT and Reliance Defence that have interests indifferent segments ranging from aviation to land systems and naval shipbuilding Though conditions could be added lateraccording to the plan announced Indian companies will be allowed to participate in all four segments separately Unlike the plandrawn up earlier one company can technically be a strategic partner in two or more sectors For conglomerates like the Tata Groupwhich has Tata Advanced Systems Limited (TASL) and Tata Power SED invested in different area of defence manufacturing thepolicy will give a higher opportunity for success Similarly LampT which has made significant investments into both armoured vehiclesand submarine building will be able to be competitive in multiple contests

The services are relieved as the firming up of the policy will start major projects ampldquoAs per the model we now have to go andget Acceptance of Necessity (clearances) on what we want to build We are hopeful that we will be able to move this process within6 monthsampldquo Navy chief Admiral Sunil Lanba said at a FICCI seminar in the capital

ampldquoCompanies which have diverse interests have it going in their favour At the same time it is very interesting to take intoaccount that the precise parameters for qualification could be individually decided and the DPSUs and OFBs could also be pulledinto participating in some form or manner We should now eagerly await the release of the first set of EOIs RFPs and hit the groundrunningampldquo said Ankur Gupta VP EY India

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Govt to disinvest 100 equity in Scooters India bidding process begins Ronak ShahThe Economic Times (Web Edition)

New Delhi The Government of India plans to disinvest 100 per cent equity holding in Scooter India Limited Department of HeavyIndustries said in a notification on Tuesday

The Government intends to disinvest equity holding Lucknow-based company to a strategic buyer who will be identified through twostage auction process The auction process will be conducted by Department of Heavy Industry on behalf of Government of India

Scooters India Limited is a listed Central Public Sector Enterprise under the administrative control of Department of Heavy IndustryMinistry of Heavy Industries and Public Enterprises and was incorporated in 1972 Govt owns 9374 shares of the company andthe balance shares are with Special National Investment Fund (394) and the Public(232)

The deal will include valuation of all assets including Land amp Buildings Furniture amp Fixtures Civil Infrastructure like roads drainscompound wall etc and Plant amp Machinery including electrical stock inventory of spares in stores etc on an ampldquoas is where isbasisamprdquo

The valuation is to be done keeping in view the objective of disinvestment for fair value reads the notification

Govt has listed out many criteria for the buyer to acquire Scooters India limited which includes and is not restricted to the following

mentioned below

1 The interested party should have completed at least 3 valuations in the last 5 years of assets of similar nature of value of Rs100crore or more in each case

2 The interested party should have minimum average annual turnover of Rs5 crores during at least two out of last three financialyears

Financial Bid will be opened only after the presentations of only those parties who qualify in the technical evaluation added thestatementhttpautoeconomictimesindiatimescomnewsindustrygovt-to-disinvest-100-equity-in-scooters-india-commences-bidding-process58924422

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China can help India electrify all vehicles by 2032 IANSSee this story in The Economic Times (Web Edition)

Beijing Saying China can help New Delhi electrify all vehicles by 2032 a Chinese journalist on Wednesday said it will be in theIndian peoples interests if Chinese firms set up plants in India

Any efforts to raise trade protectionism barriers would be counter-productive said Hu Weijia of the state-run Global Times

In a commentary titled India should not block Chinese firms from catering to demand for electric cars Hu said New Delhisambition to promote the use of electric vehicles would probably lead to another wave of investment

India is now a major investment destination for Chinese smartphone vendors

Now it seems the scenario is likely to be repeated in the electric car sector he said

In recent years some Chinese electric car makers have used competitive prices and successful branding strategies to expandrapidly within China now one of the worlds fastest-growing markets for electric vehicles

Chinese electric cars have a comparative price advantage which will be conducive for making inroads in the Indian market

The future competition between Chinese electric car makers and their Western counterparts may follow a similar road map in India

If New Delhi wants to push the use of electric vehicles in a bid to improve the countrys energy structure and curb pollutionChinese electric car makers should be allowed to play a bigger role

Without Chinas help Indias ambition to electrify all vehicles by 2032 will be hard to achieve

India Hu said should allow Chinese companies to bring in competition and challenges for Indian electric car makers

It would be in the interests of Indian people for Chinese firms to set up plants in the country and employ local workershttpautoeconomictimesindiatimescomnewsindustrychina-can-help-india-electrify-all-vehicles-by-203258932906

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MampM rallies 6 post Q4 on robust outlook for FY18 top index gainer Business Standard (Web amp Print Edition)

Shares of Mahindra amp Mahindra rallied over 6 after the utility vehicle and farm equipment major reported a 263 growth in netprofit at Rs 874 crore for the March quarter helped by an exceptional gain of Rs 93 crore and higher other income of Rs 294 crore

The stock gained as much as 63 to Rs 1449 on the BSE So far 79000 shares exchanged hands on the counter against itstwo-week average of 85000 shares

Consolidated revenue from operations (including other income) increased over 5 to Rs 12889 crore The company took aone-time hit of Rs 171 crore owing to restrictions on sale of BS-III vehicles by the Supreme Court (from April 1 2017)

Mahindra sold 130778 vehicles in the domestic market during Q4 a flat performance compared to the previous year ampldquoWeare not happy to maintain 30 per cent market share in the utility vehicle segment We have lost market share given the increase incompetitionamprdquo Pawan Goenka managing director said Sale of tractors grew 133 per cent to 46583 units in the domesticmarket Tractor exports stood at 10 831 units

The consolidated annual profit in FY17 stood at Rs 4050 crore against Rs 3554 crore in FY16 Consolidated revenue for the yearrose 106 to Rs 88983 crore

The company has a robust outlook for FY18 assuming a favourable global and domestic backdrophttpwwwbusiness-standardcomarticlemarketsm-m-rallies-6-post-q4-on-robust-outlook-for-fy18-top-index-gainer-117053100240_1html

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OEMsComponents

Apollo Tyres raises Rs 450 cr via NCDs PTISee this story in The Hindu Business Line

New Delhi Apollo Tyres has raised Rs 450 crore through private placement of non-convertible debentures (NCDs)

The companyamprsquos board which met today allotted 4500 NCDs of face value Rs 10 lakh on a private placement basis ApolloTyres said in a regulatory filing

Apollo Tyres has lined up Rs 2500-crore capex for the current fiscal as it eyes a double-digit volume growth

The company which recently commissioned its new manufacturing plant in Hungary expects construction activity to commence atits new plant in Andhra Pradesh in the second half of the current year

Apollo Tyres shares ended marginally down at Rs 22840 per scrip on the BSEhttpwwwthehindubusinesslinecommarketsapollo-tyres-raises-rs-450-cr-via-ncdsarticle9716882ece

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DICV crosses 10000 truck export mark The Economic Times (Web Edition)

New Delhi Less than four years after the kick-off the 10000 export vehicle at Chennai Daimler India Commercial Vehicles (DICV)has achieved a milestone of exporting 10000 trucks The milestone vehicle a Mercedes-Benz 40-ton heavy- duty tractor for acustomer in Indonesia is part of a batch of about 250 trucks on the way to various markets in South-East Asia according to acompany statement

Marc Llistosella President and CEO of MFTBC and Head of Daimler Trucks Asia said on achieving the milestone ampldquo10000trucks exported are only a start We are leveraging additional potentials in growth markets with reliable efficient high-quality trucksbuilt at our Indian manufacturing plant There will be continuous significant growth in this business for our FUSO andMercedes-Benz brandsamprdquo

DICVamprsquos export range is manufactured on the same production lines as its domestic BharatBenz portfolio according to globalDaimler standards and features medium-duty (9-16 tonnes) and heavy-duty (16-49 tonnes) trucks

Developed and rigorously tested to meet the diverse requirements of the target markets in Asia the Middle East Africa and LatinAmerica they are opening additional growth opportunities for Daimler Trucks

Erich Nesselhauf Managing Director and CEO DICV said ampldquoOur exports business has been developing extremely well Sincethe launch in 2013 we have doubled our figures each year and we aim for further significant growth as we will expand to servemore than 40 markets on three continents by the end of the yearamprdquo

With regard to the amplsquoMake in Indiaamprsquo initiative Nesselhauf added ampldquoMake in India works really well formanufacturers like us who can offer modern products and are able to meet international norms and customer expectationsamprdquo

Beyond completely built trucks DICV has already exported more than 1000 bus chassis produced at its bus plant and is rampingup volumes of its Mercedes-Benz school bus which has been launched in the Middle East

The company has also been supplying FUSO truck CKD kits to Kenya for local assembly by a FUSO partner in Kenya since March2016 and to Daimler Truckamprsquos production plant in East LondonSouth Africa where local assembly just began in May 2017httpautoeconomictimesindiatimescomnewscommercial-vehiclemhcvdicv-crosses-10000-truck-export-mark58927604Daimleramprsquos truck exports from India cross 10000 unitsThe Hindu Business Line (Web amp Print Edition)httpwwwthehindubusinesslinecomcompaniesdaimler-truckarticle9717043eceDICV to ship trucks to 10 more nationsThe Hindu (Web amp Print Edition)httpwwwthehinducomtodays-papertp-businessdicv-to-ship-trucks-to-10-more-nationsarticle18685144eceDaimler India crosses export milestone of 10000 trucks in 4 yearsBusiness Standard (Web Edition)httpwwwbusiness-standardcomarticlecompaniesdaimler-india-crosses-export-milestone-of-10-000-trucks-in-4-years-117053100950_1html

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Pricol to acquire PMP Auto Components

PTISee this story in The Economic Times

New Delhi Auto components maker Pricol is acquiring Ashok Piramal Group company PMP Auto Components for an undisclosedamount as it looks to expand in Europe and North American markets

The board of Pricol has approved the acquisition of PMP Auto Components Pricol said in a regulatory filing

Pricol and PMP Auto Components India have entered into an exclusive and binding agreement for Pricol to acquire the entireownership interest in wiping systems business of PMP said Pricol

Both the parties are working towards executing definitive documentation and closure of this deal shortly the filing said further

The acquisition will give Pricol access to manufacturing locations in Europe and North America where it does not have anyfootprint

This will enable Pricol to also manufacture its current product portfolio in these new geographies With this acquisition Pricol willincrease its presence with the passenger vehicles manufacturers thereby opening up future cross-selling opportunities thecompany said

PMP which has a turnover of Rs 250 crore has manufacturing facilities in the Czech Republic Mexico and India It suppliescomponents to auto majors such as Volkswagen Daimler Fiat John Deere Skoda Audi Renault and Tata Motors

Pricol is acquiring the business as part of a long-term product diversification strategy and believes that wiping systems is a growingproduct segment with India the Czech Republic and Mexico serving as best cost manufacturing bases the company said

Shares of Pricol were trading at Rs 77 on BSE down 345 per cent from the previous closehttpautoeconomictimesindiatimescomnewsauto-componentspricol-to-acquire-pmp-auto-components58924824Pricol to acquire PMP Auto ComponentsThe Hindu Business Linehttpwwwthehindubusinesslinecomcompaniespricol-to-acquire-pmp-auto-componentsarticle9716740ece

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Will launch new UV platform this year Pawan Goenka MD Mahindra amp Mahindra The Economic Times (Web Edition)

Mahindra has lost some market share in the utility vehicle segment Pawan Goenka MD Mahindra amp Mahindra told ET Now in aninterview He also added that the company will launch a new platform to increase its market share

Edited Excerpts

Has Mahindraamprsquos market share in utility vehicles decreased

The market share that we had several years ago was very high when we were in situation of UV (utility vehicles) not being highlycompetitive and today every major player in India has 1 or 2 UV products (in their kitty) We have obviously six or seven andtherefore it is natural to expect that the market share will not remain at that level Having said that we are not comfortable with ourcurrent market share We would like it to go up few percentage points and the only way to do that is to have the right product theright price for the customer

We have right now six-seven products Some of these products are doing well Some did not do very well We are working on howto make those products perform better in the market place and we are very confident that this year we will see that that changehappen In addition we are launching one brand new platform during this year which hopefully will give us significantly new numberand not take away from the current product We will launch two or three (products) during the year This year we certainly shouldsee an increase in market share in the UV segment for Mahindra

We had the diesel ban then we had BS-IV but still the industry grew Now how are you looking at this fiscal expecting that there isgoing to be a smooth ride Are we looking at double digit growth this fiscal in terms of the industry

Last year in spite of many headwinds we had three or four major things that had negative impact on the industry Actuallypassenger vehicles had the best growth in six years last year at 92 However last year was a very high growth year for UVs 29for UVs We think the UVs will sort of come down to a growth of 10-11-12httpautoeconomictimesindiatimescomnewspassenger-vehicleuvwill-launch-new-uv-platform-this-year-pawan-goenka-md-mahindra-mahindra58924708

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Steel Strips Wheels bags Europe order worth acircsbquonot60000 The Hindu Business Line

Steel Strips Wheels on Wednesday informed the exchanges that it has bagged an export order for supply of steel wheels forEurope In a release to the exchanges the company said the total order valued at about euro60000 covers supplies of over 5000wheels in two months The wheels are to be despatched from the companyamprsquos Chennai plant next month Steel Strips Wheels

expects a repeat order to emanate from the current order during the current financial year Shares of Steel Strips Wheels edged up093 per cent at Rs84870 on the NSEhttpwwwthehindubusinesslinecommarketsstock-marketssteel-strips-wheels-bags-europe-order-worth-60000article9716999ece

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Tata Motors to invest Rs 4000 cr aims to be 3rd largest CV maker globallyDeepanshu TaumarThe Economic Times (Web Edition) New Delhi Countrys largest automaker by revenue Tata Motors sets an ambitious target to become third largest commercialvehicle manufacturer globally and have equal rank in passenger vehicle space in the domestic market by 2019 the companyrevealed its plan in the latest investor presentation

Currently Tata Motors is 5th largest commercial vehicle manufacturer in the world while it is ranked 5th largest PV maker in termsof domestic sales

The Indias largest commercial vehicle manufacturer has pegged a total investment of Rs 4000 crore which will include aninvestment of Rs 1500 crore in the commercial vehicle business while another Rs 2500 crore will be used for development ofpassenger vehicle business the company said in its investors presentation

Commercial VehiclesIn the commercial vehicle segment the investment of Rs 1500 crore will be spread over new launches network expansion andimproving frontline sale effortsDuring this financial year at Tata Motors we will invest in new product development capabilitiesdeveloping work for BS VI products new products new variants and upgrades of existing ones to cover our requirements for theIndian market and our Export business said Ravi Pisharody Executive Director Commercial Vehicles Tata Motors

The company plans to launch new products across Medium amp Heavy Vehicles (MHCV) Light Commercial Vehicles (LCV) and SmallCommercial Vehicles (SCV) In the MHCV segment the automaker will launch six new products which include LPS4923 LPK2518HD Signa on MAV 37 LPTK 2518 LPTK 3118 and Signa tippers While in the LCV segment the company will come up with fournew products mainly 1518 Ultra+ Ultra Narrow LPT709 CNG and 407 BS4 range Ultra 135 tonne

Apart from this Tata Motors will also launch four new products in the small commercial vehicle space for the last mile connectivityThe new small commercial vehicle will include Ace XL Mega XL Zip XL and Xenon Yodha range

In Q1 FY 17-18 we are launching the XL Extended Load Body range across Ace Zip Ace and Ace Mega then we have the ICVTruck LPT 1518 We have also started expanding the Signa Cabin across all Tractor Trailers in Q1 and Signa Cab will be coveringTippers and Multi-Axle trucks later in the year The BS IV range of ICVs and LCVs built around our new generation 3 litre and 5 litrecommon rail engines are also getting production ready in this Quarter Pisharody added

With the new launches the company focuses on accelerated frontline sales effort to improve market share and improve capacityutilisation This would largely depend upon the exports as the company is looking for at least 20 contribution in topline fromexports Last financial year the company exported 60000 units mainly in the markets like Saudi Arab Bhutan Vietnam amp Bolivia

Further the company is hugely focussing in bringing in hybrid and electric vehicles this year especially in passenger carriersegment Our Hybrid buses will be commercialised in this Quarter Our 9 mtr and 12 mtr full Electrical buses are also undergoingtrials and demonstration in different parts of the country with State Transport Undertakings and at Government events in HimachalPradesh Delhi and Nagpur Prisody added

Tata Motors will invest in modernisation of its sales amp service network with an aggressive customer centric approach the companyinformed Currently Tata Motors has 1400 sales outlets and over 1800 service touch points which the company plans to increase to1572 sales outlets and over 1969 service touch point by the end of this fiscal year

Tata Motors commercial vehicle sales in India grew marginally by 045 percent to 305620 units in the last fiscal year when theoverall commercial vehcile segment grew by 416 percent in the FY16-17 as reported by the industry body SIAM

Given a slow start to the year post the complete switch over to BSIV as well as GST implementation from July 1st it is difficult tomake a prediction for FY 18 We expect the Industry volumes to pick up in Q2 and H2 on the back of a second successive strongmonsoon the benefits of a uniform GST rate and an increase in overall economic activity in the country On the exports front wewill continue to target double-digit growth that we have been able to maintain over the last few years Ravi Pisharody ExecutiveDirector Commercial Vehicles Tata Motors said

Passenger VehicleIn the passenger vehicle segment a sum of Rs 2500 crore will be injected to bring new products to the market Last year thecompany has introduced three new products Tiago hatchback Sub-4 metre sedan Tigor and Hexa SUV

All the three products have done reasonably well In total all the three cars contribute about 41 of the total monthly sales With thehelp of the new products Tata Motors posted a double-digit growth of 1157 at 143364 units in FY17

The company further plans to enter the massively growing compact SUV segment with Nexon which is expected to be launchedbefore the festive season

We plan to deliver more number of products for greater market coverage with lesser platforms Going forward we will work with anext generation advanced modular platform for all our future vehicles enabling a faster time to market approach We will reduce our

current 6 platforms to 2 platforms The idea is to roll out more nameplates per platform and reduce complexities The strategy is todeliver 7-8 product variants from two platforms for greater coverage and sizable economies of scale Our investments have beenchannelized towards the new wave of transformation in our business said spokesperson of Tata Motors Passenger VehicleDivision

In an earlier interaction with ETAuto Mayank Pareek President Tata Motors - Passenger vehicle division said Tata Motors coversonly 59 percent of the market We are not present in many segments If we have to fulfil our aspiration of becoming number 3carmaker we will have to increase market share I have boldly said number 3 but behind that there is a huge strategy We need toincrease coverage To cover other segments the company is ready with its product plan FY2022

Tata Motors in its ambition to become third largest passenger vehicle maker in India seeks an important role of Advanced ModularPlatform AMP platform will enable them to roll out new car models and achieve economies of scale

Moving forward the company is betting big on Tamo a sub-brand of Tata Motors as it will act as an incubating centre of innovationtowards new technologies business models and partnerships in order to define future mobility solutions

According to the company it will operate as an agile ring-fenced vertical on a low volume low investment model with a faster timeto market approach

With innovation labs set up globally TAMOamprsquos focus will be to scout for new technologies and explore opportunities to workwith start-ups in new spaces For the rapidly changing automotive environment TAMO will transform the experience of interfacingand interact with its customers and the wider community It will work towards creating a digital eco-system which will further beleveraged by Tata Motors to support its mainstream business in the future added the spokesperson of Tata Motors PassengerVehicle segmenthttpautoeconomictimesindiatimescomnewsindustrytata-motors-to-invest-rs-4000-cr-aims-to-be-3rd-largest-cv-maker-globally58921431

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Volumes donacirceurotradet excite or leave us desperate aim to grow sales faster than market Pawan Goenka MampM Ketan ThakkarThe Economic Times (Web amp Print Edition)

Although it struggled to grow volumes in the last financial year due to competition from foreign carmakers Mahindra amp Mahindra isconfident that the current year will be different The company is aiming to grow sales in double digits in FY18 and faster than themarket on the back of new products in the utility vehicle segment said Pawan Goenka managing director of the company in aninterview with Ketan Thakkar Goenka expects normal monsoon to drive tractor sales and new product launches to boost the utilityvehicle segment As a rolling investment MampM is planning to invest Rs 12000 crore over the next three years and has allocated asizeable sum of Rs 600 crore to Rs 800 crore for its nascent electric vehicle business

Edited Excerpts from the interview

How will you review your performance in FY17 Tractor segment grew well but concerns on utility vehicles market share andperformance continue to linger

Mahindra does not play an irrational game We know volumes are important we know market shares are important but so isfinancial performance Therefore we will draw a line as to how much money we will spend to gain market share and we take aprudent approach to ensure that we have a reasonably good financial performance irrespective of what is happening in themarketplace Therefore neither do we get excited when the volumes are going up nor do we get too desperate when the volumesare going down We take a calibrated approach Even with the BS-III loss we have maintained our margins which have remainedaround the same levels in the last 4-5 years despite growing competition and complexities

How do you see FY18

There are a lot of things which are working well for us and there are some challenges too What is working well for us TractorsVery well set we have a good product range a good network and we have a good potential for market growth this year at 10-12Therefore we are going into the season with the highest level of confidence on the tractor side because the monsoon has alreadyhit the Kerala coast The question that keeps coming up is on the utility vehicle space We had a market share of 30 which is lessthan what we would have liked The segment grew very rapidly last year by 29 which we had not anticipated and we were aboutflat in terms of volumes Clearly this year we would like to see a good growth Two things are going to help us this year thechanges we have made to products and new launches Bolero Power Plus launched last year is doing extremely well TUV 300with 100 hp engine is doing very well compared with the previous version With KUV 100 we had a slow start but gradually we areseeing the volume pick up We will launch U321during the year which is a high volume product for us and we have refreshes fortwo or three of our existing products Altogether I will be surprised if we do not get higher than industry growth in the UV spacewhich is estimated to grow at 10-12 this year

Could the slide in utility vehicles market share have been contained

One always wishes in the hindsight that something could have been done sooner rather than later but I think we had done all theright things These are calls one takes 4-5 years before the actual outcome We have a product in every range if our KUV was a hitfrom the word go it would have had much better market share today The only thing that has not worked for us is KUV volumes butthat we are pretty confident will increase and with that we should be ok

Despite losses on electric vehicles are you infusing fresh funds

We remain optimistic The value proposition of EV is high It is zero emission vehicle it reduces import of crude oil into India both of

these are very important desires of the Government of India The reason we have decided to increase our investment in EVs is therecent events in last six months The government has taken very serious note of the needs for EVs in India A Niti Aayog reportrecently released speaks about making India a complete EV market by 2030 which is just 12 years away It is important that wetherefore increase our capacity If Olas and Ubers decide 5 of their fleet to be EVs that itself will be a big number In the space ofcommercial application fleet application and government buying there is a significant opportunity for EV buying and that is thereason why we are investing in EVshttpeconomictimesindiatimescomopinioninterviewsvolumes-dont-excite-or-leave-us-desperate-aim-to-grow-sales-faster-than-market-pawan-goenka-mahindra-and-mahindraarticleshow58935217cms

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Ashok Leyland to retain buzz on infra revival product mix Ashutosh ShyamThe Economic Times (Delhi Print Edition)

The frenetic pace of road building across India a likely revival in mining and infrastructure building and a diverse product portfoliowill likely keep investor interest high in Ashok Leyland the countrys second-largest commercial vehicle (CV) maker

Paced by the demand for tippers its sales growth rate will likely outpace that of the industry The pace of roadbuilding is likely tosustain the demand for tippers the sales of which increased nationally 30 in the last fiscal The firms tipper sales which accountfor a fifth of the truck volumes expanded at 50 in the period

Furthermore a revival in infrastructure and mining activity to underpin the targeted pace of economic growth should add tailwinds tothe trucking industry Ashok Leyland is expected to benefit from a secular growth in demand as it drives beyond its regionalbailiwick to ex pand its sales network across IndiaFrom less than 500 points of sale six years ago the company has built 2700sales outlets by FY17

Ashok Leyland also has access to less expensive technology -the intelligent exhaust gas recirculation -for launching CVs thatconform to BS-IV standards This technology will help the company get higher market share likely providing pricing power to thecompany that has gained 600 basis points in market share over the past two years

The company is also reducing its dependence on the cyclical truck business by increasing the share of revenue from segmentssuch as defence export LCV and spare partsIn the defence segment the company has 19 tenders to supply to the army It isfocused on manufacturing combat vehicles armoured trucks and mine-protection vehicles Ashok Leylands defense businessrevenue is `500 crore currently and the company plans to increase it to `5000 crore in the next few years Similarly the companyhas been gradually increasing its exports to Ivory Coast Kenya and Bangladesh It plans to enhance its exports to 33 of sales inthe next few years from 10 now

Revenue visibility should bring down the earnings volatility for the company It will help analysts to accord superior price-earnings(PE) multiples On a one-year forward basis the stock is trading at 15 times to earnings

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JBM Auto Q4 net profit up 39 at Rs 13 crore board nod to Rs 2 per share dividend PTISee this story in Hindustan Times

Auto component maker JBM Auto on Wednesday posted 3929 rise in net profit at Rs 1347 crore for the fourth quarter endedMarch 31 2017

The company had reported a net profit of Rs 967 crore in the corresponding quarter of 2015-16

Net sales of the company rose to Rs 46747 crore for the fourth quarter as against Rs 42211 crore in the same period of previousfiscal JBM Auto said in a statement

For the year ended March 31 the company posted a net profit of Rs 6588 crore as compared to Rs 5238 crore in the 2015-16fiscal

Net sales for the year stood at Rs 179023 crore as compared to Rs 151776 crore in the previous financial year

The companyamprsquos board which met on Wednesday has approved a dividend of Rs 2 per share for the financial year endedMarch 31 2017

Shares of the company were trading 194ampthinspdown at Rs 27580 on BSEhttpwwwhindustantimescomautosjbm-auto-q4-net-profit-up-39-at-rs-13-crore-board-nod-to-rs-2-per-share-dividendstory-xlWxjzBCJZl4zt6xC0XfYIhtmlJBM Auto Q4 profit rises 39 at Rs13 croreminthttpwwwlivemintcomCompanies0gkt1UVNGayjbqWiCxAW9JJBM-Auto-Q4-profit-rises-39-at-Rs13-crorehtmlJBM Auto Q4 net profit up 39 at Rs 13 crThe Financial Expresshttpwwwfinancialexpresscomeconomyjbm-auto-q4-net-profit-up-39-at-rs-13-cr694639

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MampM looks interesting Abhimanyu Sofat VP-Research IIFL The Economic Times (Web Edition)

With timely monsoon and a slew of new launches lined-up MampM looks quite interesting according to Abhimanyu SofatVP-Research IIFL

Here is an Edited Excerpt of the interview of Abhimanyu Sofat with ET Now

Escorts tractor margins and volumes were pretty impressive that seems to be the case with MampM as well With the monsoon onseton time it seems like MampM is definitely going to flourish in the next quarter too What is your take

MampM is currently trading at close to 25 to 30 discount over the other automobile peers In the UV segment we expect - with theslew of new launches that the company is planning - improvement in market share in the UV segment and plus the better valuationfrom the subsidiaries So from risk reward perspective at current valuation MampM looks quite interesting considering normalmonsoon as well

Is it time to get out of Maruti and may be let us say buy Mahindra amp Mahindra It is suddenly cheap and there is this entire promiseof rural recovery

MampM looks quite interesting at this particular juncture Valuation wise it is around 25 discount to the other auto companies FromSOTP basis also with market improving there is enhance valuation of the subsidiaries and with the benign monsoon MampM doeslook interesting at this juncture

Is there anything in the pharma which you would like to buy at all or it is a big no when it comes to pharma

So yes the short-term pain for this sector is clearly there and I do not see any reduction in that pain However what we have startedtelling our clients HNI clients over last couple of days have been to start some SIPs in some select pharmaceutical stocks sostocks like Aurobindo and all which are trading at around 10x FY19 those are the kind of stocks that we are recommending them tostart putting some part of your allocation

So clearly you cannot go and say at this particular juncture that you can go all out and take your entire position at this juncture Buta staggered manner is something which would look quite reasonable because ultimately it is a sector which structurally has a veryhigh ROC

There is a certain demand which always is going to be there you cannot stay without medicines So I think so you cannot write offthe sector but as the same time taking the entire position at this juncture is not something which is desirablehttpeconomictimesindiatimescomopinioninterviewsmm-looks-interesting-abhimanyu-sofat-vp-research-iiflarticleshow58923440cms

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Ashok Leyland gains after block deal Business Standard

Mumbai Ashok Leyland moved higher by 2 to Rs 9555 recovering 26 from early morning lows of Rs 9310 after a huge blockdeal executed on the counter on BSE

At 0921 am around 1098 million equity shares representing 046 of total equity of Ashok Leyland have changed hand on theBSE in a single block deal the exchange data shows

The name of the buyers and sellers were not ascertained immediately

In past one-week the stock outperformed the market by surging 16 after the company reported adjusted net profit of Rs 440 crorein March quarter against Rs 513 crore in a year ago quarter In comparison the SampP BSE Sensex was up 29 during the period

In a challenging environment (ban of BS3 vehicle) Ebitda (earnings before interest tax depreciation and amortization) marginexpanded by 97bps QoQ to 11 owing to cost control measures

ampldquoAlthough Q1FY18 volume will be subdued management is confident of double-digit volume growth in FY18 led by revival inmining and construction activities The company is confident of maintaining double-digit marginamprdquo HDFC Securities said in aresults review

The brokerage firm maintain positive stance and expect 10 volume CAGR over FY1719E led by expanding distribution networkstrong product portfolio and recovery in economic activity

ampldquoThe management initiatives to cut costs reduce debt improve working capital cycle divest non-core assets and fill productgaps have yielded results in terms of meaningful market share gain and consistently strong financial performance The companyhas clocked double digit margins in the last 10 quarters making it the most profitable CV playeramprdquo analysts at ICICI Securitiessaid in result update

At 1001 am the stock was trading 14 higher at Rs 9485 on BSE as compared to 006 rise in the SampP BSE Sensex Acombined 1725 million shares changed hands on the counter on BSE and NSE so farhttpwwwbusiness-standardcomarticlemarketsashok-leyland-gains-after-block-deal-117053100208_1html

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Isuzu MU-X Review A proper utilitarian SUV but worth the price Sukhpreet SinghThe Financial Express

Isuzu has been in the country for over three decades with its set of commercial vehicles through a tie-up with SML (Swaraj MazdaLimited) and since then the way forward for the two companies has been a gradual progress In the passenger vehicle segmenthowever the company entered the space a bit late with the Isuzu D-Max V-Cross a pickup truck That said this particular producthas proven its ground in a rather unchartered territory in the Indian automotive market But to introduce a premium SUV theJapanese carmaker had to play its cards right With the MU-X at a competitive price tag the company has done so with the ToyotaFortuner and the Ford Endeavour in its sight But is the MU-X worth the price it commands We see what are the hits misses andif it is worth spending your money on one

Before we get to the design language there is one more thing to clarify The MU-Xs starting price tag of Rs 2399 lakhex-showroom Delhi is around Rs 5 lakh cheaper than its SUV competitors It also happens to be in the MPV space which has beendominated by the Innova Crysta and a testimony of the same was witnessed when I went to pick the car up A customer wascontemplating between the MU-X and the Innova Crysta (not the top-end variant) and started to get inclined towards the SUV for itsbutch design language

DesignThe Isuzu MU-X shares its underpinnings with the D-Max V-Cross which means a number of design elements have also been keptintact to keep the cost in check The front is exactly the same as the pickup truck with dual-headlamp units that have a projectorbeam a large dual slat grille that has oodles of chrome and small fog lamps Like its pick-up truck sibling the MU-X front is equallydominating and the large bumper accentuates it further The minute change between the two models here is that the SUV getsDaytime Running Lamps in order to add a premium appeal to the rugged front

The side is also carried forward from the pickup truck with flared wheel arches that add the butch character to this rather large SUVThe alloy wheel is now larger (17-inch unit compared to the 16-inch offered with the D-Max V-Cross) with a 25565 section tyre Thediamond cut alloy wheels add to an upmarket character A strong shoulder line runs through the entire length which adds a dynamicfeel however unlike the front the rear of the MU-X has a more docile design with a large tail lamp section adding to the premiumappeal Overall the design although similar to the pickup truck offered by Isuzu has the right balance between premium designlanguage and a butch character in the MU-X

InteriorsThe interiors of the Isuzu MU-X can be best termed as functional There is no leather upholstery added on the dashboard like theToyota Fortuner or the use of material isnt at par with the competitors however it has all the features one would expect from apremium SUV These include AC vents for each row with automatic climate control a touchscreen infotainment system with 10speakers steering mounted audio controls leather upholstery for the seats and door panel The material quality as well as theplastic quality isnt as premium as its competitors but it still has a reasonable feel to it Panel gaps are slightly more however thatwouldnt bring out a deal breaker

The interiors of the Isuzu MU-X can be best termed as functional There is no leather upholstery added on the dashboard like theToyota Fortuner or the use of material isnt at par with the competitors however it has all the features one would expect from apremium SUV These include AC vents for each row with automatic climate control a touchscreen infotainment system with 10speakers steering mounted audio controls leather upholstery for the seats and door panel The material quality as well as theplastic quality isnt as premium as its competitors but it still has a reasonable feel to it Panel gaps are slightly more however thatwouldnt bring out a deal breaker

In addition to the touchscreen infotainment unit what comes across as a practical addition is the presence of a roof mounted screenwhich is connected to the infotainment system offering a video playback ability for the rear passengers The rear screen can playmovies via the USB port or the DVD player and in concern of safety the output of the rear screen is not replicated on thetouchscreen unit up front So while the driver is focussed on the road second and third-row passengers can enjoy their dose ofentertainment on the move A company fitted addition such as this adds to a bit of exclusivity to the package The missing bit here isthe absence of a navigation system which is available in the international models That said for a potential buyer it would still notbe a deal breaker since the MU-X has a competitive price tag

Seating five tall occupants in the Isuzu MU-X is effortless and with the wide opening doors getting in or out is easy Seat bolsteringis also impressive so is the back support but what took the cake here is impressive under thigh support even in the second rowPassengers above six feet in height will be particularly sold off by the comfort level the seating offers The third row isnt verypractical and can maybe seat an average adult -- only --- for short trips That said this is a limitation in all premium SUVs that aresold in the Indian market today which is yet again not a deal breaker for a potential customer

Engine amp TransmissionThe Isuzu MU-X is available only with one engine and gearbox option The 30-litre diesel unit which generates 174 hp of power at3600 rpm and 380 Nm of torque from 1800 rpm to 2800 rpm is mated to a 5-speed automatic transmission Numbers aside thegearbox for a torque converter is an extremely refined unit which has negligible shift shocks while changing from one gear toanother If the right foot is planted hard on the floor the MU-X lunges forward eagerly like a stabbed rat NVH or Noise Vibrationand Harshness levels can be best termed as satisfactory as the diesel motor known to be an extremely reliable unit internationallyhas a slightly crude sound to it

That said the response from the powertrain is impressive irrespective of the road condition and right from keeping a light throttleinput to pushing the MU-X hard the engine does not break a sweat The model we had for the test also had an all-wheel-drivesystem with a shift-on-the-fly knob Switching from rear wheel drive mode to 4H or 4-High mode is just with the flick of a switch while

the 4-low or the low-range gearbox can only be engaged when the vehicle is brought to a complete stop and the transmission isengaged in neutral To sum up the performance of the powertrain it is a joy to drive on as well as off the road

Ride and HandlingA premium SUV is expected to offer class leading comfort with acceptable handling Most customers who buy a vehicle this want itto soak up most undulations without tossing its occupants around The Isuzu MU-X scores extremely well in this aspect as well withan extremely supple ride quality Most of the undulations would not be felt and even when the SUV is going over rough terrain theride isnt unsettling The independent coil springs up front and Penta-link setup at the rear offer good road comfort as well asimpressive articulation off-road

The most impressive bit is that despite being a ladder-on-frame chassis body roll is minimal for its segment In addition to this thesteering has an impressive feedback and the driver would feel connected to the road at all times Just point the vehicle in thedirection you want to go and it would take you through a corner with absolute grace If compared to its competitors the MU-X willhave the best handling characteristics

SafetyWhile the competitors offer at least six airbags the MU-X is available only with dual front airbags This may be a limitation to someintellectual buyers who would want complete safety for the occupants However the safety package in the Japanese SUV does notend at just airbags Like its rivals it is offered with ABS (Anti-lock Braking System) EBD (Electronic Brakeforce Distribution) ESC(Electronic Stability Control) traction control hill hold assist and a reverse parking camera What is misses out on is a downhillassist system which is very useful while off-roading through a steep decline This system manages the speed of the vehicle whiledownhill by engaging the brakes repeatedly So the MU-X if taken off-road should be driven by a seasoned driver Overall thesafety package offered in the premium SUV can be best termed as adequate which is not a bad thing at all

VerdictThe Isuzu MU-X is available in two trims 4X2 and 4X4 the latter being the fully loaded one Both the variants are available withautomatic transmissions with the lower variant priced at Rs 2399 lakh and the top-end one offered at Rs 2599 lakh both pricesex-showroom Delhi It does miss out on a premium appeal and some features but instead offers some unique to the segment likethe roof mounted DVD screen As an overall package the MU-X has all the right boxes checked in terms of being a utilitarian SUVwith the right amount of features What will be a challenge for Isuzu is to bring about a positive brand perception in a segmentwhere other manufacturers have been present for a considerable time Knowing the Japanese carmaker and its expertise for SUVsand pick-up trucks the MU-X is a clear winner but it has to shoulder a lot of responsibilityhttpwwwfinancialexpresscomautoreviewsisuzu-mu-x-review-a-proper-utilitarian-suv-but-worth-the-price694911

Top

New Maruti Suzuki Dzire Why you wonacirceurotradet need to make a compromise anymore for the compact sedan you always wanted Arpit MahendraThe Financial Express

Maruti Suzukis Dzire has been the buzzword in the Indian automotive scene for the past few days and it very well deserves to TheDzire in my opinion is the first car ever in the compact sedan segment in India to break the shackles of compromises and deliver awholesome experience to the end users Thats different even from its predecessor the older Dzire that was just another boringlooking car with loads of practicality Customers are smart enough to realise the benefits of the new one and in just about two weekssince its launch over 50000 bookings have already been made

Expectation from consumer to compromiseFor long the compact segment sedan has been riddled with abominations that were a result of the pressure created by themanagement on their designers to deliver a sedan without crossing the length of four metres Thats a Herculean task consideringmost good looking hatchbacks in India are on the edge of four metres and well over it in international markets But then againHercules did what no one else did implying the task is not impossible Enter the new Dzire our Hercules for this story

It became almost impossible to expect a compact sedan to look good and some even turned out to be outright ugly What MarutiSuzuki did with the new Dzire is the equivalent of Hercules exploits Ditching the done to death recipe of slapping a boot onto ahatchback Maruti Suzuki used a new platform which it calls HEARTECT The name sounds more like those used by Europeancarmakers to emphasise on the emotional connect between people and vehicles The platform itself is a reworked version of theone underpinning the Baleno but look at the Dzire and one cant find any glaring similarities

As a result of the ground-up approach the Dzire bears a proportionate design and looks like a sedan which most of its competitorsclaim to be but fail to look like Generous usage of chrome along with projector headlamps and LED DRLs and tail lamps help builda premium aura around the Dzire a surprising first for the segment

Considering the low-cost history of the company one might expect the cabin to feature a plethora of compromises but that isnt thecase Bearing almost no similarities with other Maruti Suzuki cars the Dzire gets a fresh interior design with a black and beigedashboard featuring wood finish The steering wheel is now flat-bottomed with wood finish in the lower part and the plastic qualitytoo is good although not the best in the segment The infotainment system is similar to the one seen in the Ignis but features adifferent positioning It also comes with Apple CarPlay and Android Auto which means connectivity is at par with some competitorsand better than most

The cabin too has been designed smartly Hence one gets more space so even with a six-feet tall person driving another person ofthe same height can sit at the rear without brushing his her knees against the front seat Boot space too is one of the largest in thesegment and the way its been designed makes it easy to use it efficiently

The new Dzire does however does have some old hardware and thats the choice of engines While some might complain of the

the 4-low or the low-range gearbox can only be engaged when the vehicle is brought to a complete stop and the transmission isengaged in neutral To sum up the performance of the powertrain it is a joy to drive on as well as off the road

Ride and HandlingA premium SUV is expected to offer class leading comfort with acceptable handling Most customers who buy a vehicle this want itto soak up most undulations without tossing its occupants around The Isuzu MU-X scores extremely well in this aspect as well withan extremely supple ride quality Most of the undulations would not be felt and even when the SUV is going over rough terrain theride isnt unsettling The independent coil springs up front and Penta-link setup at the rear offer good road comfort as well asimpressive articulation off-road

The most impressive bit is that despite being a ladder-on-frame chassis body roll is minimal for its segment In addition to this thesteering has an impressive feedback and the driver would feel connected to the road at all times Just point the vehicle in thedirection you want to go and it would take you through a corner with absolute grace If compared to its competitors the MU-X willhave the best handling characteristics

SafetyWhile the competitors offer at least six airbags the MU-X is available only with dual front airbags This may be a limitation to someintellectual buyers who would want complete safety for the occupants However the safety package in the Japanese SUV does notend at just airbags Like its rivals it is offered with ABS (Anti-lock Braking System) EBD (Electronic Brakeforce Distribution) ESC(Electronic Stability Control) traction control hill hold assist and a reverse parking camera What is misses out on is a downhillassist system which is very useful while off-roading through a steep decline This system manages the speed of the vehicle whiledownhill by engaging the brakes repeatedly So the MU-X if taken off-road should be driven by a seasoned driver Overall thesafety package offered in the premium SUV can be best termed as adequate which is not a bad thing at all

VerdictThe Isuzu MU-X is available in two trims 4X2 and 4X4 the latter being the fully loaded one Both the variants are available withautomatic transmissions with the lower variant priced at Rs 2399 lakh and the top-end one offered at Rs 2599 lakh both pricesex-showroom Delhi It does miss out on a premium appeal and some features but instead offers some unique to the segment likethe roof mounted DVD screen As an overall package the MU-X has all the right boxes checked in terms of being a utilitarian SUVwith the right amount of features What will be a challenge for Isuzu is to bring about a positive brand perception in a segmentwhere other manufacturers have been present for a considerable time Knowing the Japanese carmaker and its expertise for SUVsand pick-up trucks the MU-X is a clear winner but it has to shoulder a lot of responsibilityhttpwwwfinancialexpresscomautoreviewsisuzu-mu-x-review-a-proper-utilitarian-suv-but-worth-the-price694911

Top

New Maruti Suzuki Dzire Why you wonacirceurotradet need to make a compromise anymore for the compact sedan you always wanted Arpit MahendraThe Financial Express

Maruti Suzukis Dzire has been the buzzword in the Indian automotive scene for the past few days and it very well deserves to TheDzire in my opinion is the first car ever in the compact sedan segment in India to break the shackles of compromises and deliver awholesome experience to the end users Thats different even from its predecessor the older Dzire that was just another boringlooking car with loads of practicality Customers are smart enough to realise the benefits of the new one and in just about two weekssince its launch over 50000 bookings have already been made

Expectation from consumer to compromiseFor long the compact segment sedan has been riddled with abominations that were a result of the pressure created by themanagement on their designers to deliver a sedan without crossing the length of four metres Thats a Herculean task consideringmost good looking hatchbacks in India are on the edge of four metres and well over it in international markets But then againHercules did what no one else did implying the task is not impossible Enter the new Dzire our Hercules for this story

It became almost impossible to expect a compact sedan to look good and some even turned out to be outright ugly What MarutiSuzuki did with the new Dzire is the equivalent of Hercules exploits Ditching the done to death recipe of slapping a boot onto ahatchback Maruti Suzuki used a new platform which it calls HEARTECT The name sounds more like those used by Europeancarmakers to emphasise on the emotional connect between people and vehicles The platform itself is a reworked version of theone underpinning the Baleno but look at the Dzire and one cant find any glaring similarities

As a result of the ground-up approach the Dzire bears a proportionate design and looks like a sedan which most of its competitorsclaim to be but fail to look like Generous usage of chrome along with projector headlamps and LED DRLs and tail lamps help builda premium aura around the Dzire a surprising first for the segment

Considering the low-cost history of the company one might expect the cabin to feature a plethora of compromises but that isnt thecase Bearing almost no similarities with other Maruti Suzuki cars the Dzire gets a fresh interior design with a black and beigedashboard featuring wood finish The steering wheel is now flat-bottomed with wood finish in the lower part and the plastic qualitytoo is good although not the best in the segment The infotainment system is similar to the one seen in the Ignis but features adifferent positioning It also comes with Apple CarPlay and Android Auto which means connectivity is at par with some competitorsand better than most

The cabin too has been designed smartly Hence one gets more space so even with a six-feet tall person driving another person ofthe same height can sit at the rear without brushing his her knees against the front seat Boot space too is one of the largest in thesegment and the way its been designed makes it easy to use it efficiently

The new Dzire does however does have some old hardware and thats the choice of engines While some might complain of the

same old engines being used in the Dzire I fail to understand what the fuss is all about The engines are at par with the competitionon every parameter and lead the way when it comes to the most important factor in India fuel-efficiency So why waste resourcesreinventing the wheel

The new thing about the powertrain is the choice of an AMT (Automated Manual Transmission) with both the petrol and dieselengines Even better is the fact that you can opt for it with the upper variants and not just the middle ones like a few competitors andsome earlier models of Maruti itself

This is a huge step in the right direction by the company since up till now automatic transmission has been offered as a trade-off tothe consumers One can either have all the bells and whistles except an AT or have an AT but do away with some features Whyyou may ask so The answer is that companies for long have thought they are smarter than the consumers and know better whatthey need and can spend or rather should have and spend Some carmakers at this stage might cite production constraints orresults from a market research report as the hurdles However as a consumer I dont care about a companys production issues ifmy freedom to choose features is getting affected And those who depend a lot on market research Well they most probably arestill crunching numbers from some important market research while the competition is busy selling cars With the new Dzire theconsumer now has the freedom of choosing maximum features and an AT at the same time and not one or the other

Most compact sedans reflect that you wanted needed to buy a sedan but couldnt afford one and hence bought a compact sedanThe new Dzire on the other hand is just a good-looking and feature-packed sedan that you purchased because you wanted a sedanwith these qualities

At this point you might be wondering if there are any negatives to the Dzire at all and the answer is yes It isnt the perfect car sothe plastic quality in the lower dashboard doesnt feel as good as the top black part The under-thigh support at the rear can feel abit inadequate for taller occupants and the lack of any cushioning at the rear door armrest can cause discomfort over a longerduration particularly for someone with a lean frame like me However none of these are going to transform ones cabin experiencefrom good to bad

The new Dzire does what no other in its segment does as it introduces elegance and desirability through its exterior and interiordesign Its in-cabin features are ahead of most of the competition and considering the price of all variants they are pricedcompetitively as well However the only negative I see here is some of the Baleno customers switching onto the Dzire instead

Understanding not assuming customer trends key to successIn a nutshell then the Dzire is a strong testimony of how quickly times are changing in the automotive world Companies can nolonger decide what consumers want but can only be a humble service provider and package everything smartly in order to offer apleasant user experience Customers can no longer be expected to make accept compromises because theyre on a budget thathangs between two segments and hence can only have some features from one and bits from the other

All said and done there is a bit of personal disappointment I have with the new Dzire The fact that this brilliant car comes from theMaruti Suzuki stable and not from one of its competitors speaks of how the competition is still not understanding quickly enoughwhat an average Indian car buyer wants and how her his demands are rapidly changing Maruti Suzuki already commands abouthalf of the passenger vehicle market in the country Seeing a car like Dzire rolling out from one of the competitors wouldve spicedup things and caused nightmares for Maruti Suzuki about losing market share Unfortunately none of that happened and the desireto maintain its market share seems stronger in Maruti Suzuki than its competitors to challenge ithttpwwwfinancialexpresscomautocar-newsnew-2017-maruti-suzuki-dzire-new-swift-dzire-new-maruti-dzire-review-maruti-dzire-on-road-price694312

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BusesBRTs amp Trucks

9th timeacirceurotrades the charm DTC tries to expand fleet again Jatin AnandThe Hindu

New Delhi The Transport Department and the Delhi Transport Corporation (DTC) are working on a proposal to procure 1200 morebuses for the public transporteramprsquos ailing fleet Sources said that this will be the Delhi governmentamprsquos ninth attempt toexpand the DTCamprsquos fleet in the last four years

The government plans to add between 1000 and 1200 more buses to the 5600-odd buses currently being operated by the DTCand the Delhi Integrated Multi Modal Transit System (DIMTS) on close to 800 routes in the Capital

As per a survey by the Transport Department in 2015 Delhi needs at least 10000 buses on a daily basis Sources however claimthat this figure has now gone up to around 16000

amplsquoProblematic clauseamprsquoampldquoBoth the Transport Department and the DTC have been directed to work on a proposal to add more buses to the publictransport system We are in discussions with vendors over our estimated requirement and their capacity to deliver on thatrequirementamprdquo a senior government official said

ampldquoThe intent is to add as many buses as possible as soon as possible A subsequent tender for the procurement of the busesonce the proposal is finalised will be the ninth tender of its kind when it is floatedamprdquo the official said explaining that theprevious eight tenders failed due to lack of response from eligible vendors

According to a source the clause related to post-procurement maintenance which has been the most problematic technicality in

relation to the overall cost of buses is what ongoing deliberations continue to revolve around following which a new proposal for thepurpose will be finalised

ampldquoThe post-procurement maintenance of buses is a significant issue which is why the Delhi government had initially intendedto build its own maintenance facility for the fleet but abandoned it due to its cost and related issuesamprdquo the source said

The decision to float a new proposal comes as the DTC prepares to phase out over 100 buses which have clocked 75 lakhkilometres by the end of 2018

Former Transport Minister Satyendar Jain had submitted in a written reply to a question by Leader of Opposition Vijender Gupta inthe Delhi Assembly during the winter session in January that no new buses have been added to the DTC in the last two years

Mr Jain was however quick to point out that the government intended to operate more buses under the cluster scheme Shortlyafterwards Delhi Finance Minister Manish Sisodia in the Capitalamprsquos budget for the current fiscal announced that 736 buseswould be inducted under the cluster scheme

According to a source no buses have been added to the low-floor fleet of the DTC since 2010 and only vehicles being operatedunder the cluster scheme have seen an increase in numbers

Mr Jain was recently replaced by his Aam Aadmi Party (AAP) colleague and Najafgarh MLA Kailash GahlothttpwwwthehinducomnewscitiesDelhi9th-times-the-charm-dtc-tries-to-expand-fleet-againarticle18685021ece

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MoUDNHAIJNNURM

NHAI released Rs980 crore funds under arbitration scheme Ind-Ra PTISee this story in The Economic Times

New Delhi Funds worth Rs980 crore have been released as against Rs2630 crore claims made to NHAI in the last six monthssince introduction of the arbitration scheme India Ratings and Research (Ind-Ra) today said

In the last six months since introduction of the arbitration scheme INR 98 billion funds have been released compared to INR 263billion claims made to National Highways Authority of India (NHAI) Ind-Ra said in a statement

The pace of release of arbitration claims for infrastructure developers has gained limited traction due to the inability of roaddevelopersproject companies to provide bank guarantees it said

Due to financial difficulties faced by many developers in the sector Ind-Ra believes that banks are wary of exposure in bankguarantees without adequate marginscollateral

The governments initiative to release 75 per cent of locked amount in arbitration awards has thus had a limited impact on theliquidity of developers except a few road developers

As per NHAI data HCC has been the biggest beneficiary receiving INR 380 billion (out of total claims of INR 108 billion) while thebalance claims are pending due to absence of BGs (Bank Guarantees) or opening of Escrow Accounts it said

Other notable beneficiaries who received full claims included IRB Infrastructure Developers Ltd and Shapoorji Palonji

Companies which submitted claims (in the absence of BGs) but have not received any funds are Oriental Structure Engineers PvtLtd and its group companiesILampFS Engineering and construction company ltd and Reliance Infrastructure Group it added

Ind-Ra notes that non-submission of bank guarantees despite reminders from NHAI and non-opening of Arbitral Award EscrowAccount (escrow account) are the key deterrent to the success of the scheme initiated by the government

The scheme was approved last year and the NHAI started accepting claims under the scheme on December 7 2016httpeconomictimesindiatimescomnewseconomyinfrastructurenhai-released-rs-980-crore-funds-under-arbitration-scheme-ind-raarticleshow58928028cms

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Lukewarm response to arbitration claims by infra developers Megha Manchanda Business Standard

New Delhi Settlement of arbitration claims by infrastructure developers is slow because of the inability of road developers toprovide bank guarantees and open escrow accounts according to India Ratings and Research (Ind-Ra)

The governmentamprsquos initiative to release 75 per cent of the locked amount in arbitration awards has had a limited impact on theliquidity of developers as banks are wary of taking exposure through bank guarantees without adequate margins or collateral

Ind-Ra said non-submission of bank guarantees despite reminders by the National Highways Authority of India (NHAI) andnon-opening of escrow accounts were the key deterrents to the success of the scheme which was approved by the CabinetCommittee on Economic Affairs

The scheme was approved on August 31 2016 and the NHAI started accepting claims on December 7 2016

The rating agency said since introduction of the scheme Rs9000 crore was released against Rs26000 crore of claims

Hindustan Construction Company was the biggest beneficiary receiving Rs3800 crore the rating agency said quoting NHAI dataThe balance claims are pending due to absence of bank guarantees or escrow accounts

Other companies that received their claims in full are IRB Infrastructure Developers (Rs2700 crore) Shapoorji Pallonji (Rs1410crore) and Atlanta Infra Assets (Rs1180 crore)

Companies that submitted claims but have not received funds include Oriental Structure Engineers and its group companies (claimsof Rs2830 crore) ILampFS Engineering and Construction Company (Rs1540 crore) and Reliance Infrastructure Group (Rs1330crore)

The NHAI had pending arbitration awards amounting to Rs220000 crore on March 31 2015 According to the NHAI 65 claimsamounting to Rs26300 crore have been submitted by road developers and funds in 19 cases amounting to Rs9800 crore hadbeen released or settled against margin-free bank guarantees as on May 26 2017httpwwwbusiness-standardcomarticleeconomy-policylukewarm-response-to-arbitration-claims-by-infra-developers-117053100991_1html

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STUOrganisations

DriversRoad Safety

Construction amp Off-Highway equipments

Infra major IVRCL pares loss to Rs 131 crore in FY17 The Hindu Business Line

Hyderabad IVRCL Ltd has brought down its loss to Rs13137 crore for the financial year ended March 31 2017 as against a lossof Rs106703 crore for the previous financial year on a consolidated basis

The Hyderabad-based cash-strapped debt-laden infrastructure company registered lower income of Rs205419 crore for the fiscalagainst Rs238523 crore for the previous financial year

For the fourth quarter ended March 31 2017 the company posted a loss before tax of Rs33134 crore as against a loss ofRs30264 crore for the corresponding quarter last year on a standalone basis

The income for the quarter was up at Rs68635 crore ( Rs65519 crore) During the year while the company posted a loss ofRs13137 crore it has accumulated loss of Rs217299 crore leading to substantial erosion of networth IVRCL expects to meetobligations with the help of a new strategic investor

amplsquoTough timesamprsquoE Sudhir Reddy Chairman and Managing Director of IVRCL told BusinessLine ampldquoWe are passing through tough times andthe focus is on completing ongoing projects Of the couple of road projects Indore-Jhabua and Chandrapur projects the former islikely to be completed within a couple of months and the latter has been completedamprdquo

ampldquoWhile the EPC business continues to be good the BOT projects have drained us out As per the RBI guidelines and normsalong with various stakeholders we will take an appropriate decision on the way forward for the companyamprdquo he said

Exploring optionsAsked if stake sale was a way out he said ampldquoYes it is one of the options and we are exploring various options But conditionsare toughamprdquo he said Auditors Chaturvedi amp Partners in the audit qualifications has said that the current liabilities exceedcurrent assets

The company has obligations towards borrowings aggregating to Rs5347 crore including Rs1768 crore falling due over the next12 months

IVRCL scrip closed at Rs484 up 169 per cent on the BSE on Wednesdayhttpwwwthehindubusinesslinecomtodays-papertp-newsinfra-major-ivrcl-pares-loss-to-rs-131-crore-in-fy17article9717150ece

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Gayatri Projects net rises to Rs 32 cr in Q4 The Hindu Business Line

Hyderabad Gayatri Projects has posted a profit of Rs3223 crore for the fourth quarter ended March 31 as against Rs2850 crorefor the corresponding quarter last year on a standalone basis

The Hyderabad-based construction and infrastructure company registered a total income of Rs81562 crore for the fourth quarteras against Rs66830 crore last year

For the financial year ended March 31 the company posted a profit of Rs7436 crore and an income of Rs212822 crore asagainst Rs5864 crore and Rs181881 crore respectively

The board recommended a dividend at 25 per cent (50 paise per equity share of Rs2 each)

The companyamprsquos shares were split from Rs10 per share to Rs2 per share with effect from February 10 2017 In March 2016the company had entered into an agreement to sell its wind power business

On a consolidated basis the company posted a loss of Rs9836 crore and an income of Rs230082 crore as against a loss ofRs4643 crore and an income of Rs174562 crore for the previous fiscal

The firm announced it has completed acquisition of 520833 shares of Gayatri Infra Ventures from AMP Capital Mauritius With thisacquisition Gayatri Infra Ventures has become a wholly owned subsidiary of the company

Gayatri Projects closed the day at Rs151 down 115 per cent at BSEhttpwwwthehindubusinesslinecomtodays-papertp-newsgayatri-projects-net-rises-to-rs-32-cr-in-q4article9717149ece

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Johnson Lifts launches heavy duty escalator unit The Hindu Business Line

Chennai Johnson Lifts has opened a heavy duty escalator manufacturing facility at Oragadam near Chennai with an investment ofRs100 crore

The 54-year-old homegrown player hopes to retain its leadership position in heavy duty applications such as metros railwaystations and foot overbridges with own manufacturing advantages

ampldquoPublic infrastructure segment will be the key driver of growth for heavy duty escalators Having an own facility will providethe advantages of quick delivery and better servicing capabilitiesamprdquo John K John Chairman amp Managing Director JohnsonLifts said here

The heavy duty escalator facility has been set up with technology know-how from the Chinese company SJEC which helpedJohnson to make light duty commercial escalators meant for malls and large shops in 2009 The company has added 60-70 newjobs with the new unit

The Rs1600-crore company a market leader in elevators and escalators has achieved 80 per cent localisation for its escalatorsand has developed its own supply chain industry said Joint Managing Director VM Thomas

Market shareWith metro rail projects driving strong demand for escalators Johnson Lifts has garnered about 36 per cent market share with thesupply of 1000 escalators across metro projects

ampldquoOver the next 3-4 years there will be requirement for 4000 escalators in the public infrastructure segment like railwaystations Also cities with population of about 20 lakh are expected to build metro projects in future So both railway stations andmetro projects will drive strong demand for escalatorsamprdquo said V Jagannathan Executive Directorhttpwwwthehindubusinesslinecomtodays-papertp-otherstp-statesjohnson-lifts-launches-heavy-duty-escalator-unitarticle9717213ece

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InvITs will see good pick up soon Virendra Mhaiskar CMD IRB Infrastructure The Economic Times

InvITs are fairly new product and will pick up traction in future believes Virendra Mhaiskar CMD IRB Infrastructure

Edited Excerpts

What has led to the growth this time around and what were the key highlights of Q4

We have seen a steady growth in both the verticals which is construction as well as tolling and that has resulted in 14 growth onyear-on-year basis on the top line and close to 12 growth on the profitability And we see a steady EBITDA because of thebusiness mix remaining more or less constant So it has been a healthy quarter in terms of stable growth and going forward As the

demonetisation impact seems to be waning we believe going forward also we should see steady growth on our toll assets

Could you quantify then the amount of revenues that came in from traffic at toll growth

Traffic has been growing in the range of around 6-7 Inflation almost all through the last year has been flattish so the projectswhere we had a 3 fixed element has come through but the tariff revision on account of WPI was more or less flattish In spite ofthat this growth has been registered so with inflation a bit of inching back we believe this year the revenue should remain morestronger than that

Your margins for the quarter gone by as well have been pretty strong Do you think the margins are sustainable at the current levelsand would you say that there is also scope that you may actually be able to better that

We operate in to verticals with is BOT and construction In the BOT business usually there is an 85 EBITDA margin whereas theconstruction margins are in the range of around 10 PAT levels So depending on the project mix you would see the overallmargins shaping up but as I said the product mix has remained more or less same the margins have remained steady and goingforward also considering the Rs 9000 crore odd of order book on hand we believe we will be able to maintain these margins

Slightly disheartened that your InvIT got a strong subscription but it never got a good listing response

It is a fairly new product and we have to remember that this is not an equity product It is a yield product and as such once peoplestart seeing the yields coming through it would instil more confidence into the investors This is a new product and it would takesome more time for people to understand how it operates As the results on the InvITs will come out it will see a very good pick up

So when exactly do you think the first payout will happen

See we have already stated in the past that as per the SEBI regulations the InvIT needs to give out a dividend at least twice in ayear but as the assets that we have in the InvIT are all toll yielding assets we would be able to give it on a quarterly basishttpeconomictimesindiatimescomopinioninterviewsinvits-will-see-good-pick-up-soon-virendra-mhaiskar-cmd-irb-infrastructurearticleshow58924150cms

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Construction sector performed particularly poorly during Q4FY17 Panagariya Ishan Bakshi amp Sanjeeb MukherjeeBusiness Standard

The revised estimates of gross domestic product (GDP) released by the Central Statistics Office (CSO) on Wednesday showedthat the economy slowed down to 61 per cent in the fourth quarter of 2016-17 from 79 per cent in the first quarter Ishan Bakshi ampSanjeeb Mukherjee spoke to Niti Aayog Vice-Chairman Arvind Panagariya to understand the implications of the latest estimatesand the state of the economy

Edited excerpts

The CSOamprsquos revised estimates show that GDP growth slowed down to 61 per cent in the fourth quarter Are we now seeingthe actual impact of demonetisation

First of all let me say that the growth rate for the full year 2016-17 has been 71 per cent This beats the pronouncements of allamplsquomessiahs of doomamprsquo who were predicting a minimum drop of 2 percentage points in this figure on account ofdemonetisation

Indeed the impact of demonetisation should have been felt the most in the third quarter and the figure for that quarter has held upAs for the fourth quarter a key factor explaining 61 per cent growth is the high base due to very high growth in Q4 of 2015-16 Theconstruction sector which has been suffering from legacy issues has performed particularly poorly during this quarter

The worry is that investment growth continues to be sluggish What are your views

Gross fixed capital formation at constant 2011-12 prices as a proportion of the GDP has been 295 per cent in 2016-17 This isapproximately one percentage point below that in 2015-16 but it is still a high figure I am not especially worried about it at thispoint We will see it turn up in the current year

What is your assessment of the state of the economy now What is your estimate of growth going forward

Iamprsquom upbeat about the prospects of the economy My bottom line prediction for FY18 is 75 per cent Demonetisation is behindus and we are tackling NPAs (non-performing assets) head on now In 2015-16 we touched 8 per cent So my prediction whichnearly all had seen with great skepticism at the time has come true Even the growth rate for year 2014-15 has been revised to 75per cent So I think we are poised to return to the 8 per cent plus growth trajectory The market is recognising the reforms that thegovernment is undertaking at fast pace and this is reflected in the upbeat mood Foreign investment has touched all-time high at$60 billion in 2016-17

There has been much controversy over the new GDP series Now with the latest revisions do you think the criticism will die down

I have maintained all through that the changes the CSO made were an improvement over our past practice The negative growth inthe Wholesale Price Index (WPI) had produced some anomalies most notably unusually slow growth in the GDP deflator whichmisled many observers into believing that something was wrong with the new methodology Now that the WPI is back in the normalterritory skepticism is dying downhttpwwwbusiness-standardcomarticleeconomy-policyconstruction-sector-performed-particularly-poorly-during-q4fy17-panagariya-117053101914_1html

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Air transport amp Airports

We are confident to cross Rs 10000-crore revenue mark in this fiscal MV Gowtama of Bharat Electronics The Economic Times

In a chat with ET Now MV Gowtama CMD Bharat Electronics said talked about companys growth strategy reasons behindcontraction in margins and recent defence deal with an Israeli company

Edited excerpts

What has been your growth contributer this yearOur drivers for good revenue growth this year are our ability to design indigenously quality manufacture and supply large number ofelectro-optic products to armour Also the weapon locating radar partnered with DRDO These contributed for an excellent growthfor the company this year

Is the Rs 10000-crore revenue mark now idealistic for this financial year do you look at crossing that figure really

I am very confident and we are working to cross the Rs 10000 crore mark in 2017-18

Your revenues are growing steadily but margins have contracted What is your outlook for this financial year

Margin are getting contracted for two reasons The first reason is the business is shifting from equipment supply to turnkey solutionproviding wherein large amount of money comes from infrastructure and invariably the delays in infrastructure eat away the marginsthere The second issue that troubles us in getting good margins is the growing competition in the defence sector The governmentis pushing for fair competition with private sector and certainly we will not be able to demand margins when we are in a competitivebusiness

Could you give us a little more details on your $630-million deal with the Israeli defence system for the Indian Navy

We have signed contract with MDL for supply of defence systems This system is a government-to-government joint developmentbetween DRDO and IAI Israel in which BEL is also one of the partnershttpeconomictimesindiatimescomopinioninterviewswe-are-confident-to-cross-rs-10000-crore-revenue-mark-in-this-fiscal-mv-gowtama-of-bharat-electronicsarticleshow58926045cms

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Military

BEL plans Rs 700-cr capex for FY18 The Hindu Business Line

Bengaluru Public sector defence major Bharat Electronics Ltd (BEL) plans a capex of Rs 700 crore for 2017-18

ampldquoThe sanctioned amount is more but planned spend is around Rs 700 crore on two new plants at Anantapur andMachilipatnam in Andhra Pradeshamprdquo said BELamprsquos Chairman amp Managing Director M Gowtama

At Nimmaluru village near Machilipatnam the company is building new advanced night vision products factory and plans are afootto expand night vision devices business At Anantapur a dedicated defence systems integration complex at Palasamudram isplanned In addition to these plants the company is also creating dedicated business groups to address home land security andsmart city business On the sales outlook for 2017-18 Gowtama said ampldquoOur aim is to cross Rs 10000 crore During 2016-17we clocked Rs 8825 crore Currently our turnover from indigenous technology is 87 per cent and sales from defence business is88 per centamprdquo

To clock more sales ampldquowe plan to continue indigenisation efforts in line with Make in India We plan to enhance capacity andcreate new test facilities for defence business and are pursuing new opportunities in solar energy homeland security smart citiessmart cards and telecomamprdquo he added

On electronic voting machines (EVMs) Gowtama said EVMs made by BEL are safe and the Election Commission (EC) has placedan order for 17 lakh machines with a budget of Rs 3100 crore ampldquoThe EC has placed order of 85 lakh each with us (BEL) andECIL We are committed to supply the order by September 2018 For us revenue with tax comes to Rs 1500 crore and without taxit will be Rs 1300 croreamprdquo

The companyamprsquos exports dipped 2352 per cent to $65 million in FY17 as compared with $85 million in FY16 Gowtama

attributed the fall to Reliance Defence failing to raise LoI ampldquoOtherwise we could have achieved the last fiscal salesamprsquolevelamprdquo he said The companyamprsquos order book as on April 1 is at $82 million This includes offset order book $15 millionampldquoThis year our thrust is on exports and offsets Focus is on build to print build to spec and buyer-nominatedequipmentamprdquo

The company has drawn a three-year (2017-2020) research and development (RampD) planhttpwwwthehindubusinesslinecomtodays-papertp-newsbel-plans-rs-700cr-capex-for-fy18article9717152ece

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Four players interested in supplying 57 fighter jets to Navy PTISee this story in The Economic Times

New Delhi Four players have shown an interest in providing the Navy with 57 multi-role combat fighter jets for its aircraft carrierIndian Navy chief Sunil Lanba said today

The chief of naval staff also said the Scorpene submarine Kalvari is going through its final phase of trials and should be delivered byJuly-August

Having rejected indigenously built Tejas as too heavy the Indian Navy in January issued a Request for Information to procure 57multi-role combat aircraft for its carrier

The Navy has got response from four players for the RFI We will examine the RFI and take it forward Lanba said on the sidelinesof a seminar organised by FICCI on Building Indias Future Navy Technology Imperatives

He however did not disclose the name of the companies which have shown interest in the proposal

At present the Navy operates 45 MIG-29K jets which face serviceability issues from time to time

Currently six planes are compatible for aircraft carrier They are Rafale (Dassault France) F-18 Super Hornet (Boeing US)MIG-29K (Russia) F-35B and F-35C (Lockheed Martin US) and Gripen (Saab Sweden)

While F-18 Rafale and MIG-29K are twin engine jets the remaining three have single engine

The delivery of deck based fighter jets is expected to take four-five years

The indigenously built aircraft-carrier Vikrant should complete trials in 2019 It was likely to be commissioned by 2020 Lanba said

When asked about the recently approved Strategic Partnership (SP) model under which select private firms will be engaged to buildmilitary platforms like submarines and battle helicopters Lanba said the next step would be to identify strategic partners

All three service chiefs will have to go and get the AONs (Acceptance of Necessity) on what we want to be built through strategicpartners so that partners in each segment can be identified

We are hopeful that we should be able to move this process in next six months he said

Four segments -- submarines fighter aircraft helicopters and armoured carriersmain battle tanks -- were identified under the newpolicy aimed at attracting billions of dollars of investment in defence manufacturing by private defence majors including leadingforeign firms

The Ministry of Defence had recently scrapped navys decision to appoint Flag Officer Delhi Area (FODA) and Flag officer GujaratNaval area (FOGNA) without its consent

Responding to this Lanba said We are in discussion with the Ministry of Defence and we will resolve ithttpeconomictimesindiatimescomnewsdefencefour-players-interested-in-supplying-57-fighter-jets-to-navyarticleshow58928487cms

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Tata Reliance Defence will now be able to participate in major military manufacturing projects Manu PubbyThe Economic Times

New Delhi The defence ministry has rolled out its strategic partnership plan meeting concerns of the private sector by allowingIndian companies to participate in major military manufacturing projects across segments keeping room open for participation bypublic sector units and identifying four areas where work will start soon

The Navy which has the two biggest projects out of the $ 20 billion kitty ampndash submarines and helicopters ampndash has said thatit is hopeful that the policy can be implemented within six months to kick start manufacturing of critical equipment in India

The final partnership model will come as a major relief to companies like Tata LampT and Reliance Defence that have interests indifferent segments ranging from aviation to land systems and naval shipbuilding Though conditions could be added later

according to the plan announced Indian companies will be allowed to participate in all four segments separately Unlike the plandrawn up earlier one company can technically be a strategic partner in two or more sectors

For conglomerates like the Tata Group which has Tata Advanced Systems Limited (TASL) and Tata Power SED invested indifferent area of defence manufacturing the policy will give a higher opportunity for success Similarly LampT which has madesignificant investments into both armoured vehicles and submarine building will be able to be competitive in multiple contests

The services are relieved as the firming up of the policy will start major projects ampldquoAs per the model we now have to go andget Acceptance of Necessity (clearances) on what we want to build We are hopeful that we will be able to move this process within6 monthsamprdquo Navy chief Admiral Sunil Lanba said at a FICCI seminar in the capital

ampldquoCompanies which have diverse interests have it going in their favour At the same time it is very interesting to take intoaccount that the precise parameters for qualification could be individually decided and the DPSUamprsquos and OFBamprsquos couldalso be pulled into participating in some form or manner We should now eagerly await the release of the first set of EOIamprsquos RFPamprsquos and hit the ground runningamprdquo said Ankur Gupta VP EY Indiahttpeconomictimesindiatimescomnewsdefencedefence-ministry-releases-framework-for-strategic-partnership-model-keeps-fdi-at-49-per-centarticleshow58932369cms

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Hindalco plans to set up high-end aluminium plant for defence sector Shailaja Sharmamint

Mumbai Hindalco Industries Ltd Indiaamprsquos biggest aluminium producer hopes to set up a high-end alloy plate manufacturingunit for the countryamprsquos defence sector managing director Satish Pai said in an interview on Tuesday

The project would need an overall investment of Rs2000 crore and Hindalco is in talks with the government to evaluate if it canstart it as a public-private partnership (PPP) Pai said

ampldquoWe are talking to the ministry of defence for setting up more high-end alloy plate manufacturing in India We are hoping fora pick-up in the defence sectoramprdquo Pai said

The companyamprsquos factory in Aurangabad already makes aluminium alloy billets and slabs for use in the aerospace sportinggoods and surface transport industries and Hindalco is ideally suited for such a project due to its downstream capacity of castingalloy Pai said

It could take about two years to put up such a unit he added

The company estimates that India will need about 5000 tonnes of high-end alloy plates over the next five years and in the absenceof strong domestic manufacturing these would have to be imported

ampldquoThe end product is one thing but it needs lots of very high-end aluminium to begin with We really want support from thegovernment to get that doneamprdquo Pai said

ampldquoIn defence sector orders are never smooth they come and go thatamprsquos why we need public private partnership forputting up this projectamprdquo he added

Hindalco which has a target of doubling its downstream aluminium capacity in five years is facing stiff competition from cheaperChinese imports

Aluminium is used in everything from packaging automobiles aircraft to defence construction and other industrial products

Defence is one of the growth areas that Hindalco has identified where a number of domestic firms are looking to startmanufacturing in India

It is also targeting sectors such as urban transport packaging building and construction and automobiles to grow domesticdemand

More than half of Indiaamprsquos aluminium demand is currently met through imports

Hindalco expects domestic aluminium demand to rise 7 in the current fiscal on the back of the governmentamprsquos push oninfrastructure development and the likelihood of higher power sector orders

On Tuesday the firm had reported a 256 rise in fourth quarter net profit helped by higher revenue in its aluminium and copperbusinesshttpwwwlivemintcomIndustryl8f4HDfAMfgz0oW7v1rQ1MHindalco-plans-to-set-up-highend-aluminium-unit-for-defencehtml

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Higher defence spending revs Q4 show of BEML BEL Hamsini KarthikBusiness Standard

When some of the larger state-run firms such as Coal India and Bharat Heavy Electricals lagged Street expectations relativelysmaller BEMLamprsquos numbers were ahead of the estimates

Its March quarter results (announced after market hours on Tuesday) broke three quarters of decline in revenues The Streetcheered and the stock gained 45 per cent on Wednesday

Revenue for the quarter (fourth or Q4 of 2016-17) rose by 18 per cent to Rs 1346 crore Net profit grew 26 per cent to Rs 186crore

While segmental results are awaited analysts believe much of the performance could be attributed to an improvement in thedefence sector Some believe its contribution to overall revenue would have increased from Rs 330 crore in FY16 to Rs800ampndash900 crore in FY17

ampldquoThis is a major positive and reiterates that BEML is on the right track to reducing its dependence on the coal sector andstrengthening its product baseamprdquo says an analyst from a domestic brokerage

BEML aspires to increase the share of defence revenues to 30 per cent in the long term It has partnered with Bharat Dynamics(BDL) to build the militarys Futuristic Infantry Combat Vehicle (FICV) where the order inflows projected are Rs60000 crore Thetie-up with BDL would also help it to supply missile aggregates and associated technologies

Such tie-ups also reduce BEMLamprsquos dependence on its traditional supply of Tatra trucks to the army Thereby evening out theuncertainties in execution or order inflows as seen in FY11-16 particularly for the defence segment

Even in the mining and construction segment BEMLamprsquos mainstay and contributing to about half its revenue the aim is toreduce the dependence on Coal India for sale of its tippers While the construction equipment business mainly catering to roadconstruction projects of the National Highways Authority of India is a relatively new vertical BEML targets 60-65 per cent growth inthis space in FY18

The only uncertain patch for now might be the railway and metro rail segment where execution has been slower than expected Onthe whole swift expansion in defence revenue will be the key theme ahead

Bharat Electronics or BEL is another beneficiary of improvement in defence spending by the government Revenue growth in FY17has been the best in four years and an order book of Rs 40000 crore provides revenue comfort for at least four years Order inflowfor FY18 is estimated at Rs 16000 crore

However the next 18 months might see dilution in operating margins BEL will undertake Rs 6000 crore of orders for the lowmargin voter-verifiable paper audit trail (VVPAT) machines for the Election Commission

Despite this analysts at Credit Suisse term BEL a reliable public sector undertaking with broad capability set in a focusedenvironment ampldquoIt has emerged as a large system integrator with projects such as the Akash Missile We believe the executionenvironment in the defence sector is better under the current governmentamprdquo the analysts add

While the BEL stock hasnamprsquot reacted much since it announced its provisional results on April 11 Credit Suisse has revised its12-month target price for the stock to Rs 200 from the earlier Rs 180

However while the fundamentals remain promising for BEML and BEL investors could wait for a better entry point to the stockgiven the sharp 26 per cent year-to-date appreciation in their prices The overhang of the governmentamprsquos stake sale plan willalso weigh on both For BEML the government plans to invite a strategic private player stake reduction in BEL is part of the overalldivestment objectivehttpwwwbusiness-standardcomarticlecompanieshigher-defence-spending-revs-q4-show-of-beml-bel-117053101475_1html

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Private defence manufacturing Defence Ministry unveils strategic partnership policy The Indian Express

New Delhi To bolster defence manufacturing in India through indigenous private defence firms the defence ministry has unveiledthe Strategic Partnership (SP) policy as part of the Defence Procurement Procedure (DPP) The 17-page document delineating thecontours of the SP policy was put up on the defence ministry website on Wednesday

The new policy aims to ampldquoreduce current dependence on imports and gradually ensure greater self-reliance and dependabilityof supplies essential to meet national security objectivesamprdquo It was approved by the Defence Acquisition Committee (DAC)chaired by defence minister Arun Jaitley in May and noted by the Cabinet Committee on Security last week

The original recommendation for SP model included selection of a private Indian defence manufacturer for one particular segment(submarines helicopters etc) and guaranteeing them all orders of that product for the next 20 years That guarantee has beendispended with and subsequent acquisitions of any platform will be open to all though adequate weightage will be given toampldquocapacity creation and capability development including infrastructure tiered ecosystem of vendors skilled human resourcesfuturistic RampD etcamprdquo

The SP model will initially be applicable in four segments Fighter Aircraft Helicopters Submarines and Armoured fighting vehicles(AFV)Main Battle Tanks (MBT) Only oneSP will generally be selected per segment as per the criterion laid down Stringent conditions for a minimum of 51 per cent Indian

ownership of the SP have been laid out in the policy

As per the policy ampldquothe SP is expected to play the role of a System Integrator by building an extensive eco-system comprisingdevelopment partners specialised vendors and suppliers in particular those from the MSME sectoramprdquo The selection criteriafor SP therefore will be based on the inherent capacity and ability of the vendor to emerge as a systems integrator and to set up avendor network for sourcing

One of the highlights is the need for the chosen SP to enter into relevant tie-ups with foreign original equipment manufacturers(OEM) Accordingly the ministry will shortlist through an open process based on Staff Qualitative Requirements (SQRs)Technology Transfer needs and indigenisation roadmap a list of potential OEMs in each of these four segments The process ofshortlisting of OEMs will be done by the ministry simultaneously with the process of identifying potential SPs

The OEM will be jointly responsible along with the SP for certification and quality assurance of the platforms supplied to the armedforces To ensure amplsquoMake in Indiaamprsquo the policy states that only a minimum number of platforms not exceeding 10-15 percent of the number of units being procured can be manufactured in the OEMamprsquos premises Moreover the SP shall commit toa plan to indigenise in terms of value of production manufacturing of the platform over a set period for each platform as defined ineach proposal The unveiling of the SP model is likely to push the production of some of the longstanding procurement proposals ofthe defence serviceshttpindianexpresscomarticlebusinesseconomyprivate-defence-manufacturing-defence-ministry-unveils-strategic-partnership-policy-4683410

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INS Kalvari to join Navy by July The Hindu

The first of the six Scorpene submarines being built in India under technology transfer from France is likely to join the Navy by Julyor August the Chief of the Naval Staff Admiral Sunil Lanba said here on Wednesday

ampldquo Kalvari is going through the final phase of trials and we are hopeful that in July-August we will take deliveryamprdquo hetold presspersons on the sidelines of a seminar ampldquoBuilding Indiaamprsquos future Navy technology imperativesamprdquoorganised by the Navy and the FICCI

Kalvari is named after a deep-sea tiger shark

Six Scorpene submarines are being built under Project-75 by Mazagon Docks Ltd with technology transfer from DCNS a Frenchnaval shipbuilder

Trial for KhanderiThe second Scorpene submarine Khanderi ampmdash named after an island fort of Maratha ruler Chhatrapati Shivaji ampmdash waslaunched in the sea in January and will begin sea trials on June 1 ampldquo Khanderi will go into sea on Thursday and if weatherpermits will carry out its first diveamprdquo a defence source said The Navy hopes to complete the trials by year-end

Asked about Sri Lankaamprsquos decision to deny a Chinese submarine permission to dock at Colombo Admiral Lanba saidampldquoWe have no dialogue on this with the Sri Lankans It was a decision they have taken on their ownamprdquo It coincided withPrime Minister Narendra Modiamprsquos visit to that country Chinese submarines on anti-piracy patrols had in the past docked in SriLanka causing concerns in New Delhi

As for the construction of the first indigenous aircraft-carrier Vikrant Admiral Lanba said the Navy hoped it would start trials in 2019and ampldquowe take delivery in 2020amprdquohttpwwwthehinducomtodays-papertp-nationalins-kalvari-to-join-navy-by-julyarticle18685221ece

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INS Kalvari to join Navy by July The Hindu The first of the six Scorpene submarines being built in India under technology transfer from France is likely to join the Navy by Julyor August the Chief of the Naval Staff Admiral Sunil Lanba said here on Wednesday

ampldquo Kalvari is going through the final phase of trials and we are hopeful that in July-August we will take deliveryamprdquo hetold presspersons on the sidelines of a seminar ampldquoBuilding Indiaamprsquos future Navy technology imperativesamprdquoorganised by the Navy and the FICCI

Kalvari is named after a deep-sea tiger shark

Six Scorpene submarines are being built under Project-75 by Mazagon Docks Ltd with technology transfer from DCNS a Frenchnaval shipbuilder

Trial for KhanderiThe second Scorpene submarine Khanderi ampmdash named after an island fort of Maratha ruler Chhatrapati Shivaji ampmdash waslaunched in the sea in January and will begin sea trials on June 1 ampldquo Khanderi will go into sea on Thursday and if weatherpermits will carry out its first diveamprdquo a defence source said The Navy hopes to complete the trials by year-end

Asked about Sri Lankaamprsquos decision to deny a Chinese submarine permission to dock at Colombo Admiral Lanba saidampldquoWe have no dialogue on this with the Sri Lankans It was a decision they have taken on their ownamprdquo It coincided withPrime Minister Narendra Modiamprsquos visit to that country Chinese submarines on anti-piracy patrols had in the past docked in SriLanka causing concerns in New Delhi

As for the construction of the first indigenous aircraft-carrier Vikrant Admiral Lanba said the Navy hoped it would start trials in 2019and ampldquowe take delivery in 2020amprdquohttpwwwthehinducomtodays-papertp-nationalins-kalvari-to-join-navy-by-julyarticle18685221ece

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Oil amp Gas

Indias record diesel demand to continue in 2017 growth to slow Reuters Jessica JaganathanSee this story in The Economic Times

Singapore Indias diesel demand is expected to rise to record levels again this year as a slew of infrastructure projects boosts useof the transport and industrial fuel although a government-induced cash shortage will hold growth to its slowest in three years

Increased fuel efficiency a fall in commercial vehicle sales and the use of other fuels for power generation are also expected todent demand growth for diesel analysts and traders told Reuters

The first quarter saw delayed effects of demonetisation butI think (diesel demand) should improve as there are a number ofprojects going on such as road and railways which should drive diesel demand up said Tushar Bansal director of IvyGlobalEnergy a Singapore-based consultancy

India has budgeted a record $59 billion for 201718 for infrastructure such as ports roads railways and power

The worlds third largest oil consumer guzzled 6955 million tonnes of diesel in April the highest so far this year and near a record of6958 million tonnes hit in May 2016 the latest government data showed

Still a weak first quarter is expected to hold Indias diesel demand growth at 16 to 3 percent this year a gain to163 million to 165million barrels a day analysts from energy consultancies FGE and Wood Mackenzie said

This is the slowest annual growth for diesel since 2014 down from a rise of more than 5 percent in 2015 and 2016

The slowdown is a result of the demonetization drive which dampened economic growth for a few months since its implementationin November last year said Sri Paravaikkarasu head of FGEs East of Suez Oil

Prime Minister Narendra Modi in November declared notes of500 rupees and 1000 rupees illegal tender taking about 86percent oftotal currency out of circulation in a move that hit sales of cars and motorcycles and small businesses

April sales of Indias commercial vehicles which consume mainly diesel fell 23 percent year-on-year for instance Sales ofpassenger cars and motorcycles however mostly powered by gasoline have started to recover

Woodmac expects Indias diesel growth to moderate at 32percent a year over 2017 to 2025 down from an average annual growthrate of 39 percent from 2010 to 2016

The main reasons for a slowdown lies in increasing fuel efficiency more substitution (for) oil primarily diesel in the power sectorand a bearish outlook for diesel cars inIndia said Sushant Gupta research director for WoodmacsAsia-Pacific refining

Still Indias diesel demand growth in 2017 accounts for one third of Asias demand growth for the fuel he said

It is a positive story compared with China where we expect diesel demand to be in slow decline in 2017httpautoeconomictimesindiatimescomnewsindustryindias-record-diesel-demand-to-continue-in-2017-growth-to-slow58922683

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Oil falls as rising Libyan US output undermines cuts ReutersSee this story in The Hindu Business Line

Singapore Oil prices fell on Wednesday as rising output from Libya added to concerns about increasing US production which isundermining OPEC-led production cuts aimed at tightening the market

Brent crude futures the international benchmark for oil prices were at $5172 per barrel at 0155 GMT down 12 cents or 02 percent from their last close

US West Texas Intermediate (WTI) crude futures were at $4947 per barrel down 19 cents or 04 per cent from their last

settlement

Traders said the price declines were a result of higher output in conflict-torn Libya which was adding to a relentless rise in USproduction

Libyas oil production is expected to rise to 800000 barrels per day (bpd) this week according to state-run National Oil Corporationsaid on Monday

That compares to an average of 500000 bpd exported on tankers so far this year and to just 300000 bpd shipped on average in2016 according to shipping data in Thomson Reuters Eikon

Libyas rising production adds to a rise in US output which largely thanks to shale oil drilling has jumped by more than 10 per centsince the middle of last year to over 93 million bpd close to top producers Saudi Arabia and Russia

ampldquoLibyan and shale oil production seems to have occupied the mind of traders overnight Thats consistent with my sense thatthis is all about inventories and the associated supply overhang in crude oil markets at the momentamprdquo said Greg McKennachief market strategist at futures brokerage AxiTrader

Rising output from the United States and Libya undermines efforts by the Organization of the Petroleum Exporting Countries(OPEC) and other producers including Russia to tighten an oversupplied market by cutting production by around 18 million bpduntil the end of the first quarter of 2018

An initial deal which has been in place since January would have expired this June but the production cutback has so far not hadthe desired effect of substantially drawing down excess inventories

Libya is an OPEC member but it was exempt from the cuts The United States is not participating in the self-imposed productioncutshttpwwwthehindubusinesslinecommarketscommoditiesoil-falls-as-rising-libyan-us-output-undermines-cutsarticle9716490ece

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Petrol price hiked by Rs 123litre diesel by 89 paisePTISee this story in The Hindu Business Line New Delhi Petrol price was today hiked by Rs 123 per litre and diesel by 89 paise a litre in sync with rising international fuel rates

The increase in price effective midnight tonight comes on the back of a Rs 216 per litre cut in petrol and Rs 210 a litre reductionin diesel prices effected from May 16

Petrol price in Delhi will cost Rs 6691 per litre from tomorrow as against Rs 6532 a litre currently Similarly a litre of diesel will bepriced at Rs 594 as compared to Rs 5490 at present

Announcing the price hike Indian Oil Corp (IOC) the nationamprsquos largest fuel retailer said the rates have been hiked excludinglocal state levies or VAT and actual increase will be higher depending on tax rate

ampldquoThe current level of international product prices of petrol and diesel and INR-USD exchange rate warrant decrease in sellingprice of petrol and diesel the impact of which is being passed on to the consumers with this price revisionamprdquo IOC said in astatement

The movement of prices in the international oil market and INR-USD exchange rate will continue to be monitored closely anddeveloping trends of the market will be reflected in future price changes it saidhttpwwwthehindubusinesslinecomeconomypolicypetrol-price-hiked-by-rs-123litre-diesel-by-89-paisearticle9717105ece

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Castrol India Net up 4 at Rs 179 cr in January-March quarter PTISee this story in Daily News amp Analysis

Castrol India today posted 4 per cent jump in net profit at Rs 179 crore in the quarter ended March 31 2017

The companys net profit was Rs 1724 crore in the quarter ended on March 31 2016 Castrol India Ltd stated in a BSE filing

According to statement the companys total income rose to Rs 10306 crore in the quarter under review as compared to Rs 10003crore year ago

Commenting on the results Castrol India Limited Managing Director Omer Dormen said in a statement Castrol India delivered astrong set of results for the quarter ended March 2017 despite the lingering effects of demonetisation and rising cost of goods

The company stated that the environment continues to be challenging as the country is going through some major structuralchanges in its economy including the upcoming GST implementation

According to company these may lead to short term pressures but will positively impact the economyhttpwwwdnaindiacombusinessreport-castrol-india-net-up-4-at-rs-179-cr-in-january-march-quarter-2456920

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Government panels to monitor ONGC and Oil India fields Sanjeev ChoudharyThe Economic Times

New Delhi The government is going to monitor oilfields of ONGC and Oil India and ordered setting up separate committees led by abureaucrat for supervision as part of its broader plan to make these firms more accountable and boost output from their ageingfields that contribute 70 of Indiaamprsquos crude output

The Directorate General of Hydrocarbons (DGH) the technical arm of the oil ministry has ordered the constitution of theamplsquoreview committees for the purpose of management of oil and gas resources of nomination fieldsamprsquo of ONGC and OilIndia respectivelyamprsquo Each committee will be chaired by the Director General of DGH and include another official of DGH andtop executives of the oil company according to the 25th May order ONGC and Oil India must name their nominees within afortnight of the order

The committee has the power to review all key matters such as annual work programmes and budgets for exploration developmentand production field development plans of commercial discoveries and performance of producing or non-producing fieldsProposals for surrender of acreage appraisal programme declaration of commercial discovery ampldquofield surveillanceamprdquo byDGH would also go to the committee The panel would also review collaboration with licensees or contractors of other areas

Decision of the committee shall be implemented by ONGC and Oil India and the progress of implementation reported to thecommittee through DGH at its next meeting the Director General of DGH said in the order With such close supervision the oilministry hopes to make ONGC and Oil India more efficient and accountable resulting in bettering falling crude output

Oil Minister Dharmendra Pradhan recently told ET that the fields nominated to ONGC and Oil India didnamprsquot attract much officialscrutiny in the past and his plan now was to closely monitor these fields and make companies more accountable

Fields were given to state firms without auction or production sharing contracts before the sector opened to private investment in1990shttpeconomictimesindiatimescomindustryenergyoil-gasgovernment-panels-to-monitor-ongc-and-oil-india-fieldsarticleshow58935740cms

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IOC partners in talks to buy stake in Russias Vankor field PTISee this story in The Economic Times

St Petersburg State-owned Indian Oil Corp (IOC) and its partners are in talks to buy 49 per cent stake in Russias Vankor clusteroilfields to consolidate their presence in the energy-rich Arctic region

IOC Oil India Ltd and Bharat PetroResources Ltd (a unit of Bharat Petroleum Corp Ltd or BPCL) is looking at buying a stake inSuzunskoye Tagulskoye and Lodochnoye fields collectively known as Vankor Cluster sources privy to the development said

ONGC Videsh Ltd (OVL) the overseas arm of state-owned Oil and Natural Gas Corp (ONGC) is also interested in the fields

Rosneft Russias national oil company that owns the fields wants to retain a majority stake and is keen to sell only up to 49 percent stake In case OVL is accommodated the entire 49 per cent stake would have to be split between the Indian companies

OVL may possibly take 26 per cent in proportion of the stake it bought in the main Vankor oilfield OIL-IOC-BPRL may take 239 percent stake in line with its holding in the main Vankor field

Vankorneft a subsidiary of Rosneft is developing the Vankor oil and gas condensate field situated in the northern part of EasternSiberia In 2013 Vankorneft was chosen as an operator on development of new fields of Vankor cluster -- Suzunskoye Tagulskoyeand Lodochnoye fields located close to the Vankor field The reserves of Suzunskoye field exceed 56 million tonnes of oil andcondensate and 35 billion cubic meters of gas

Last year OVL first acquired 15 per cent stake in Russias second biggest oilfield of Vankor for USD 1268 billion and then boughtanother 11 per cent for USD 930 million The 26 per cent stake would give OVL 731 million tonnes of oil

The consortium of OIL-IOC-BPRL acquired 239 per cent stake in the field at a cost of USD 202 billion giving them 656 milliontonnes of oil Rosneft continues to hold the remaining 501 per cent shares of JSC Vankorneft The field has recoverable reserves of25 billion barrels

Besides the OIL-IOC-BPRL consortium has taken another 299 per cent stake in a separate Taas-Yuryakh oilfield in East Siberiafor USD 112 billion The investments have taken the total outlay in Russia this year to USD 546 billion

These investments will give India 1518 million tonnes of oil equivalent The investment made compares to USD 2848 billioninvestment by Indian companies overseas in the past 50 years giving it about 10 million tonnes of oil equivalent

While Vankor produces about 442000 barrels of oil per day (4 per cent of Russian crude oil production) Taas currently producesabout 21000 barrels per day of oil and a peak of 100000 bpd is expected by 2021httpeconomictimesindiatimescomindustryenergyoil-gasioc-partners-in-talks-to-buy-stake-in-russias-vankor-fieldarticleshow58925580cms

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