IOC hikes petrol prices by Rs 1.63 per litre

Ritika Dange, Riken Mehta

The Indian Oil Corp has hiked petrol prices by Rs 1.63 per litre effective midnight. The price hike is exclusive of the value added tax (VAT).

IOC has quoted reasons of a steep fall seen in the Indian rupee in the recent days as well as a surge in global crude prices. It added that the company is facing a revenue loss of Rs 14.50 per litre on the sale of diesel and the FY14 revenue loss on subsidised fuel is seen at Rs 82,000 crore.

However, the recent positivity seen on the currency has not gone unnoticed by the oil marketing company, who has said that it will pass on the benefit to customers if the Indian currency continues to rise in the days to come.

The domestic currency has depreciated close to 13 percent since June this year. Brent crude prices have surged 11 percent in the same period. This is the seventh increase in rates since June and in all petrol prices have gone up by a massive Rs 10.80 per litre, excluding VAT.

Following are the revised prices of petrol in four metros after oil firms hiked rates with effect from midnight tonight

Metro	Current Price (Rs/litre)	Revised Price (Rs/litre)	Increase (Rs)
Delhi	74.1	76.06	1.96
Kolkata	81.57	83.62	2.05
Mumbai	81.57	83.63	2.06
Chennai	77.48	79.55	2.07

Metro Current Price (Rs/litre) Revised Price (Rs/litre) Increase (Rs) Delhi 74.1 76.06 1.96 Kolkata 81.57 83.62 2.05 Mumbai 81.57 83.63 2.06 Chennai 77.48 79.55 2.07

Read more at: http://www.moneycontrol.com/news/economy/ioc-hikes-petrol-prices-by-rs-163-per-litre_949531.html?utm_source=ref_articl

Forward bookings for upcoming season up by 20%: Thomas Cook (India)

Riken Mehta

Travel firm Thomas Cook (India) reported a consolidated net profit of Rs 32.49 crore for the quarter ended June 30, 2013 compared to Rs 31.01 crore in the same period last fiscal.

The company's total income rose to Rs 306.34 crore, from Rs 137.13 crore for the year-ago period. The consolidated results for the quarter and half year ended June 30, 2013, include the consolidated results of HR solutions firm IKYA for the period May 14 to June 30, 2013, and consequently are not comparable with corresponding previous periods, the company said. Here is a moneycontrol exclusive interview with Mr. Madhavan Menon, managing director at Thomas Cook (India) on company's quarterly results.

1. What was the volume growth in the domestic and international holidays booking?

Anticipating price sensitivity, we had launched a range of products to cover every price point - from super budget, budget, value to premium- a strategy that we will continue to pursue. Further, our early bird discounts, and ‘Holiday pe Holiday, Free!’ offers created an impactful boost to spur demand. Against a challenging backdrop of spiraling airfares, a depreciating rupee and negative consumer sentiment in a sluggish economy, our outbound business at Thomas Cook India recorded strong growth with an increase of 15% over Q2 of the previous financial year. Our focus on domestic vertical has also delivered a sales growth of 10 percent over Q2 of 2012. Despite doom and gloom prophesies, the depreciating rupee has seen an interesting upswing with currencies like the Australian Dollar and stability against the New Zealand Dollar & South African Rand, and Thomas Cook India has leveraged this with significant savings and value add to consumers- Australia with New Zealand free, South Africa with Kenya free, upgrades to 5 star accommodations, child travels free, discount offers, etc. Our winter forwards for these destinations have already picked up strongly by 30 and 40 percent respectively.

2. The company also innovated by offering shorter and cheaper holidays. How was the response? With slowdown in the overall economy and discretionary spending will the company announce more sale and discount offers to attract more people? Has there been a drop in bookings of international holiday packages? If yes, what was the percentage drop?

Travel has now become a “must-do” in the Indian consumer’s calendar. While customers are weighing all options, our trend data indicates that even the most price sensitive travelers will continue to travel, albeit with a shift to short haul and value destinations like the Far East (Thailand, Singapore, Malaysia), Sri Lanka & Dubai. So our sense is that the movement of the rupee will impact merely his choice of destination not the decision to travel. Thomas Cook India introduced fresh new short hauls like Myanmar, Vietnam, Cambodia, Philippines and these works well in light of the depreciating rupee. These offers to rupee friendly destinations have also worked extremely well with growth of over 40% to South Africa and 30% to Australia-New Zealand. Wintervals holidays features impactful ‘saver’ options like stays at hostels and apartments; economical rail travel for a shorter duration via a newly launched 2 day Swiss Rail pass. Foray into new markets/segments (Regional Tier II & III) with specific Regional Tours; “Travel and Learn” for students and “Rock-On Holidays” targeting the upcoming GenY, was another strategic intent that panned out well for us, despite swings in the rupee. Our forward bookings overall for the upcoming season are up by about 20%. The depreciating rupee has also brought domestic travel to the fore, and is now a strategic focus for Thomas Cook India. Our new offers showcase engaging ‘value-adds’ like the under-sea walk and snorkeling at no extra cost and to further inspire demand, greats price savings. Our “Borderless” Multi currency Prepaid Forex Card, is seeing strong positive traction among corporate and retail customers alike, with 20% CMGR. We have doubled our customer base in the last 3 months alone.

3. Earlier there were reports of the company monetizing its land at Nariman Point. Can you give us more details on it?

Thomas Cook (India) Ltd, has as part of its strategic intent, consistently evaluated various business operating models, which include optimisation and consolidation of work places. Given our growth, as also our expansion plans, our current Nariman Point back office premises is limited, necessitating our search for alternative space. This also offers us opportunity to explore new potential in this domain, including significant new office space in key emerging micro markets- in proximity to our consumers.

4. Do you think the weakness in the rupee will give a boost to domestic tourism as against people holidaying abroad?

Our revenue is reported in Indian Rupees and not calculated in dollars. Indeed, the depreciating rupee has brought Domestic Tourism into the spotlight like never before, and Thomas Cook has ramped up its domestic portfolio to over 818 products this year to match demand. Our Inbound business too stands to benefit from rupee depreciation, with an improved value proposition of about 10% to the inbound consumer. Kashmir, Andamans, Kerala, Goa, and Rajasthan are been the flavour of the season with our domestic consumers.

5. How is the demand scenario? Are you experiencing a drop in foreign tourist arrivals? What was volume growth compared to the previous quarter?

At Thomas Cook India, the fall in rupee has made our Inbound product far more attractive and affordable for foreign tourists with an impactful value proposition upward of 10%, with more bang to the buck for extra shopping!

While traditionally considered a premium destination for foreign tourists, India has now seen renewed interest courtesy the depreciating rupee, and our Inbound Team has seen an increase of 7-10% in queries- Delhi, Agra, Rajasthan, Kerala continuing as favourites, and emergence of Punjab, the North East and Kashmir.

At Thomas Cook India, we are observing an interesting phenomenon- inbound travellers increasingly booking rather late; some even at the last minute. An emerging trend is a noticeable shift from traditional destinations towards exploring off beat locales like the North East, Kashmir, Gujarat, Punjab and Shimla. Source markets too are witnessing change- with Middle East, China, Russia, Indonesia now appearing on our radar. Customer target groups too are increasingly widening to include young, adventure travellers to the high-end luxury clientele. We are optimistic that the falling rupee will make India an attractive and affordable destination with an overall increase of upward of 5% tourist arrivals anticipated this winter.

Expect 15-20% sales growth, OPM at 11% in Q2:Vaibhav Global

Riken Mehta
Follow me on Twitter @mehtariken

Vaibhav Global  , a retailer of fashion jewelry and lifestyle accessories reported close to 30 percent jump in its net sales at Rs 261.4 crore. The company's net profit also surged by 42 percent from Rs 28 crore to Rs 40 crore.

Interest cost was down to Rs 3.46 crore from Rs 3.78 crore a year ago.

Here is a moneycontrol exclusive interview with Mr. Sunil Agrawal, chairman at  Vaibhav Global Limited on its quarterly results.

Q. Sales and net profits were up 30 percent in this quarter. Can you elaborate more on your quarterly performance and margins?

In FY2013, Vaibhav Global recorded total income of Rs 931 crore, up 38% YoY, EBITDA margin was 11%, profit after tax at Rs 78 crore (excluding exceptional items). The company reduced debt by Rs 31 crore from internal accruals and reported Return on Equity at 49% and Return on Capital Employed at 34%. Sales volume increased from 4 million units to almost 7 million units comprising the company’s fashion jewelry and lifestyle accessories products sold on TV and Internet. The company’s proprietary TV home shopping channels reach over 100 million households in the US, UK and Canada on all major DTH and cable platforms. VGL’s e-commerce websites in these countries create another important sales platform for its products.

In Q1 FY2014, VGL recorded total income of Rs. 264 crore, up 28% YoY, EBITDA margin was 14%, profit after tax at Rs. 40 crore. The company reported Return on Equity at 50% and Return on Capital Employed at 31%. Sales volume increased from 1.4 million units to 1.9 million units of the company’s fashion jewelry and lifestyle accessories products.  In Q2, we see 15 to 20% revenue growth and EBITDA margin at 11%. Q2 is traditionally a low quarter for our business as we organize the annual summer clearance sale before the holiday season. Last year in Q2, EBITDA margin was only 6%, so there should be strong growth this year. During the current year, we expect to deliver steady growth and margins.

Q. How the company will benefit from the recent rupee depreciation?

Vaibhav Global is an export oriented company with majority of its revenues in USD and GBP, and to that extent rupee devaluation is largely positive and favorable to our business subject to positions taken through forward contracts and hedging options.

Q. Can you give us the revenue break-up in terms of domestic and exports along with margins? Also list of major countries where the company exports its diamonds and jewellery.

Vaibhav Global's key markets are in the US, UK and Canada, there are no domestic sales. Therefore, the business does not have the same cost structures as traditional precious jewelry companies.

We assess our business in the following segments fashion jewelry and lifestyle accessories on three platforms: TV retail, web retail and B2B. In Q1, volumes in TV Retail segment grew from 1.1million units to 1.4 million units on a y-on-y basis, revenues expanded from Rs. 150 crore to Rs. 188 crore. Our e-commerce websites are liquidationchannel.com in the US/Canada and thejewellerychannel.tv in UK. In Q1, volumes on web sales grew from 0.3 million units to 0.5 million units on a y-on-y basis, revenues increased from Rs 21 crore to Rs 33 crore. The B2B segment is the wholesale part of the business, which largely supplies to our own TV and web platforms. B2B Q1 external revenues increased marginally from Rs 29 crore to Rs 30 crore.

Our revenue mix is 75% from TV retail sales, 13% from web retail sales and 12% from B2B sales in Q1.

Q. What is your outlook on gems and diamond prices and availability going ahead?

There is very limited usage of gold and diamonds in the company’s range of products.

Q. What is the total outstanding loan book?

The outstanding net debt as on 31st March 2013 was Rs. 114 crore, compared to Rs. 146 crore as on 31st March 2012. The management is now focused on fully paying down debt from the company’s strong internal cash accruals.

Q. Have making, polishing and cutting charges (labor charges) gone up in this quarter?

Vaibhav Global is a retailer of fashion jewelry and lifestyle accessories. Therefore the business does not have the same cost structures as traditional precious jewelry companies.

Q. Is the company planning to introduce new schemes to lure customers? Order bookings via web and TV have also registered phenomenal growth in this quarter. Will the company invest heavily in these mediums going ahead?

We are looking at long term and will continue to invest in marketing, operations, facilities, people and technology to create a great customer experience. Most of these investments are reflected in our financials, being expensed out every quarter. Our business model requires low incremental capital investments and throws up strong operating and free cash flows. Last year, we generated cash of Rs. 76.7 crore from operations, capital expenditure was Rs. 13.5 crore, resulting in free cash flow of over Rs. 63 crore. We expect to drive strong cash flows this year as well.

Q. How much of the future receivables has the company hedge in FY14? What was net forex gain/loss in this quarter? What is your outlook on exports going ahead?

For FY14 our hedging is to the tune of USD 15m receivables. Net forex gain/loss in Q1 was Rs 10.78 crore.

Q. Can you give us the full year sales, profit and margin guidance for FY14?

During the current year, we expect to deliver steady growth with margins of 11-12%. We will be focused on paying down debt from operating cash accruals, allowing revenue and profit growth on a smaller balance sheet leading to strong return ratios. As indicated earlier, in Q1 we reported Return on Equity at 50% and Return on Capital Employed at 31%. We believe that there is scope to deliver even stronger returns on long term basis.

Q. How many stores are operational by end of June quarter? How many new stores are you planning to add in FY14?

The company plans to expand household access in existing markets to create growth opportunities. It does not operate any brick and mortar shops/stores.

Q. Can you give us some details about the Rs 163 crore loss and Rs 10 crore exceptional loss incurred in FY 13 & FY 12 respectively. Is this recurring in nature?

For FY'13 goodwill written off was Rs 151.10 crore, CDR interest Rs 11.17 crore and loss on subsidiary Rs. 1.44 crore. For FY'12 loss on 2 subsidiaries were Rs 8.11 crore and Rs 1.93 crore respectively. These are non recurring transactions.

Q. What is your outlook on the demand for imitation jewellery going ahead?

Being a retailer of fashion jewelry and lifestyle accessories on TV and Internet platforms, we are currently focused on improving on our key operating of average revenue per household, contribution per minute of TV airtime, repeat buying activity and lifetime value per customer. We will use the wide access of our US and UK home shopping channels to engage deeper with existing customers and add more customers. We are also making some strategic investments in our web interface to improve the customer experience. Further, the company plans to expand TV household access in existing markets to create growth opportunities. At present, we sell about 20,000 products every day which is 3-4 times volume growth over the last 2-3 years, indicative of the tremendous progress made by our business model. We expect to continue the strong growth momentum this year.

Our strategy is to create a value perception through lowest price guarantee. Our focus is on the discount seeking buyer, a market that has historically continued to expand across various stages of the growth cycle. To support our customer proposition, we have developed a strong supply chain infrastructure that includes our manufacturing operations in Jaipur and outsourcing from micro markets in China, Thailand and Indonesia. We closely follow the latest fashion trends to keep the product aligned with our customers’ needs. Given these unique attributes of our business, we are confident that the markets for our products will keep expanding in the foreseeable future along with increase in our market share. This will deliver growth and create value for all stakeholders.