Order book stands at Rs 1035 cr: Bajaj Electricals

Topline performance has been good for the company in terms of volume growth. Topline has grown by 16.4 % from Rs 365 Cr to Rs 425 Cr. In terms of segment wise performance 30% growth in appliances; 22% growth in fans; 20% growth in lighting & 26% growth in luminaires business. 11% growth in E&P segment was better as compared to the last quarter of 8%. Consumer Durables & E&P businesses have shown better profitability in this quarter.

Segment wise performance:

Lighting: Net profit grew from Rs 7.7 Cr to Rs 8 Cr

Consumer Durables: Net profit grew from Rs 15.95 Cr to Rs 18.6 Cr

Engineering & Project Business: Net profit grew from Rs 12.7 Cr to Rs 17 Cr

The interest cost has gone up significantly from Rs 7.7 Cr to Rs 10.9 Cr; a rise of 41%. The total outstanding order book of the company stands at Rs 1035 Cr. No order cancellation was witnessed in this quarter. Order Book Break-up:

Special projects of Lighting & Rural Electrification Rs 500 Cr

Galvanised Poll: Rs 62 Cr; a rise of 15% in this segment

Street Light: Rs 60 Cr

Transmission lines tower: Rs 420 Cr

Since the company’s products are sold on cash system basis & not on loan system it is better insulated from the slowdown compared to its peers. The replacement sales are also doing well for the company. Bajaj Electricals still maintains the guidance of Rs 1700 Cr topline for FY09. With major commodities hitting multi year lows, the consumption of raw materials has gone down by 7% of sales. However purchase of goods has gone up from 70% to 73.4% of sales.

Also with lower commodity prices, the company has passed on the discount to consumers. A 3-4% price reduction in Fans segment was done while going forward the company will reduce the prices of mixer grinder as well. Inventory has considerably dried down by the company. A 7% increase in inventory compared to its 24% growth in the turnover of consumer business is reasonably well. However, in the E&P business, the inventory at the company level has gone up by 22%

The outstanding for the company has gone up by 6%. The total working capital deployment has gone up by 9-11% compared to its growth in turnover of 22%. The Luminaires segment witnessed margin pressures on bottomline in this quarter. In the Building Management System; the company may finalise some initial contracts in the near term. Bajaj Appliances has recently launched its new application named Platina in the northern region. It is witnessing good response from there & the company will soon launch it in other parts of India.

Bajaj Electricals is also implementing ERP solution from Oracle for better productivity across its enterprise. The company is also deploying strategy of assigning super distributors to sell some of its products in Haryana, Uttar Pradesh & Rajasthan. These distributors will sell more products in the rural areas going forward where the company has very little coverage. It is not seeing any pullback in the rural areas in consumer spending. The import comprises 4-5% of the company’s turnover. The rupee depreciation will not impact much to the company’s bottomline.

-Riken Mehta

21-day recap: From Maytas to Raju's fall from grace

Satyam Computer Services got exposed in 21 days. On December 16, Satyam broke the news of Maytas buyout. The acquisition eventually did not go through as it was severy opposed by the shareholders. A series of resigations from the Satyam board took place subesequently. The final blow came on January 7, when Satyam's promoter Ramalinga Raju wrote a letter to the board saying that Satyam's balance sheet was forged. The balance sheet showed inflated cash & bank balance of Rs 5040 crore. The accrued interest of Rs 376 crore in the books too was non-existent.

In the Q2 of FY09, reported revenues was to the Rs 2700 crore Vs actual revenue of Rs 2112 crore. The Q2FY09 operating margin reported was Rs 649 crore against Rs 61 crore. The Q2FY09 numbers had Rs 588 crore of artificial cash in books.

Here's a recap of what happened in the past 21 days.

December 16: Software major Satyam decided to buy Maytas Properties for USD 1.3 billion & 51% stake in Maytas Infra for USD 0.3 billion. Satyam's ADR plunged 55%

December 17: Satyam called off the deal; stock was down 30%, Maytas locked at 20% down circuit

December 18: Satyam announced Board meeting on December 29 to consider buyback

December 19: Post Maytas U-turn, Upaid filed motion against Satyam for USD 1.1 billion. Earlier in October, Satyam had filed a case against Upaid alleging it of ‘business disparagement’

December 23: World Bank admitted to put a ban on Satyam for data theft

December 25: Mangalam Srinivasan, Non-executive and independent Director resigned

December 26: Maytas ended its downward journey of six consecutive circuits

December 28: Prof. Krishna G Palepu, Non-executive Director and Mr. Vinod K Dham, Non-executive and independent Director of the company resigned

December 29: Satyam Board meeting postponed to January 10

January 3: A sale of pledged shares by lenders of the Ramalinga Raju family led to the family's stake in Satyam falling to 4.4% from 8.27%

January 6: Satyam clarified news item of merger with Tech Mahindra; ILFS announced sale of 2.45 crore equity shares of Satyam

January 7: Mr. B Rama Raju, Managing Director, admitted fraud; resigned; Satyam books inflated of Rs 5040 crore; DSP Merrill Lynch terminated its engagement with the company. Satyam down 78%

In this period, Satyam has lost market cap from Rs 15183 crore to Rs 2662 crore, a fall of 82%. It has certainly raised questions on corporate governance standards of Indian companies. If one looks at the whole scenario, then it is clearly visible that Satyam never had cash of USD 1 billion. By buying Maytas, Raju wanted to transfer company’s dummy entry of cash reserves from Satyam’s book to Maytas balance sheet. However, strong opposition evident from its ADR fall forced Raju to take a U-turrn and then the stock started falling like a pack of cards. Raju revealed that balance sheet figures were manipulated for the last six quarters. It is indeed a sad day for the Indian markets. Satyam’s historic journey ends on a tragic note.