Biotech : India Inc.'s New Growth Engine 

--  N Janardhan Rao, Team Analyst

If Information Technology marked India's debut into the global big league, biotechnology is being tipped to be the next big thing, which could help the country firmly establish itself on the global science and technology map. Going by the reports of industry and research bodies, the sector holds immense potential for India's economy. Already parallels are being drawn between IT and BT to gauge the latter's impact on the country's future growth. The country enjoys all the advantages, which made it a great technology story: A vast pool of skilled human capital, world-class infrastructure, and cost competitiveness. But amidst all those growth promises lie some key concerns. Funding remains a key problem while lack of a modern regulatory system could prove to be a major deterrent.

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Spotlight

Indian Banks : Coming up trumps

--  D Satish, Team Analyst

The public sector banks have turned in a good performance. This has put them under the spotlight and their performance has been well appreciated; but is this good performance sustainable in the long run?

If the recent financial results of the banking sector are any indicators of the health of the economy then there is a lot to cheer about. The financial year 2001-02 has been a good year for the banking industry. Most of the banks have shown a noticeable rise in profit. What is more interesting is that the performance of Public Sector Banks (PSBs), which has seen more than 100 percent increase in their bottomline, has overshadowed that of the private sector. Perhaps this would put them in a better position to go in for the Initial Public Offering (IPO) later this year.

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Financial Services

BSE-DSE Merger : Merging destinies 

--  D G Prasuna, Team Analyst 

The proposed buy-out of Delhi Stock Exchange by Bombay Stock Exchange might bring out a sigh of relief from many. But the move has important implications for the survival strategies of other regional stock exchanges across the country. Is this merger a forerunner to many more such mergers?

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Business Environment

FDI in Print Media : Change in perception

-- Y Chandra Sekhar, Team Analyst

The government's decision to allow foreign direct investment in print media has resulted in both appreciation and criticism. In spite of all the criticism and opposition, it is clear that the sector is going to witness a lot of activity in the years to come.

Since the beginning of the liberalization of Indian economy, the issue of Foreign Direct Investment (FDI) has captured the center stage. Moving ahead with the reforms agenda, the Indian Government has announced the partial opening up of print media. Though the sector has never been under the rigid controls of the government, foreign players were restricted to operate in India after the 1955 resolution. From the time it was first mooted and refloated often, an enormous fuss has ensued in the print media. After all, why should FDI not be allowed in print media when all the other sectors of the economy are allowed to attract FDI?

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Energy Trading Industry : Trading in trouble

--  Amit Singh Sisodiya, Team Analyst

It seems there is no end to the woes of the energy trading companies. Amidst allegations of dodgy accounting and questionable trading practices, and a tarred public image, the industry as a whole faces a grim prospect. Will the energy-trading model, which helped create a whole new genre of market, survive?

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Debate

Can India Achieve Six Percent Economic Growth?

In spite of the pessimism surrounding the global economies, Indian policy makers right from the beginning of the current fiscal have been optimistic about higher economic growth rates in India. Policy makers, industry bodies and associations all claimed that this year the growth rates will be around 6-6.5 percent though this is comparatively low for a developing economy. Citing different reasons, everyone have agreed that the growth rate will be around 6 percent withholding the war tensions with Pakistan.

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Case Study

Marks & Spencer's Turnaround : Refocusing pays off 

-- C S V Ratna, Team Analyst

What does it take to turnaround a company gripped with mid-life crisis? For Marks & Spencer, the British retail giant, a change in culture to take away the complacency, a revamp of products range and a return to its roots, did the trick. By focusing on its core competence and market while broadening its competitive perspective, the company is back to its profitable days.

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Corporate Finance

Core Earnings Model : Will S&P's new initiative deliver? 

-- Amit Singh Sisodiya, Team Analyst

With a flurry of accounting scandals hitting corporate America in recent times, financial frauds are now a norm rather than an exception. Amidst such realizations, it would be interesting to know what difference the new valuation framework proposed by S&P makes.

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Governance

US Capital Markets : Regulators and reforms 

--  D G Prasuna, Team Analyst

The regulators are finally into action and the `cleansing' of corporate America seems to have begun in right earnest. Important issues being addressed are auditing practices, corporate governance, increasing accountability and transparency.

The pattern seems familiar. A prolonged period of strong growth, followed by the bursting of the bubble, a series of corporate wrongdoing and manipulations coming into light forcing powerful legislations. After the 1930s, this is the first time that such momentous reform is being contemplated in the American capital markets. The series of events over the last few months have contributed their share in speeding up the reform process as well as driving home strongly the need for some real reform in the oversight and regulatory aspects in governing auditing professions and companies in America.

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Industry

US Telecom : Tumultuous times 

--  C S V Ratna, Team Analyst

The US telecom industry is in turmoil; demand slump, price competition and a cash crunch, have resulted in a stock-price collapse. Add to this, high-profile bankruptcies and frauds like those of Global Crossing and WorldCom and the woes of the industry seem far from over.

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By Invitation

Biotechnology : Emerging opportunities

A large reservoir of scientific human resource, cost competitive innovation and fast developing clinical capabilities provide Indian biotechnology with the vital ingredients for a recipe for success, says Kiran Mazumdar Shaw, Chairperson and Managing Director, Biocon India Ltd., Bangalore.

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Business Process Outsourcing in India : Gaining momentum

Outsourcing to India means substantial cost and time saving compared to the rest of the world. India has people with excellent project management skills and in-depth experience in state-of-the-art software and IT-enabled services. These crucial elements are contributing to the success of outsourcing in India, says Ashish Chand, President, Call Center Association, India.

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Corporate

Mahindra & Mahindra : Betting on Scorpio 

--  Rama Krishna Neti, Team Analyst

The thrust which Mahindra & Mahindra seems to be lacking since its entry into the utility vehicles segment in India is likely to be acquired with the launch of the all new SCORPIO.

It was all a silent, but salient event in the history of utility vehicles in India. On June 20, 2002, Mahindra and Mahindra (M&M) launched its first ever, much awaited and most economic Sports Utility Vehicle (SUV), Scorpio. Spurred by the failure of its previous launch, the Bolero, which had promised to place M&M in an unassailable position, M&M in its latest move has launched Scorpio to sting its competitors and change its fortunes.

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Sterlite Industries : Buy-back blues

--  T Aparna, Team Analyst

Sterlite Industries' objective to become a major player across the entire non-ferrous metal chain in India and make its presence felt globally entails financial restructuring and foreign capital. It has already started on this path but obstacles seem to be cropping up.

Sterlite Industries' company officials must have sighed with relief when the Bombay High Court rejected the petition of the Securities and Exchange Board of India (SEBI) to stay the buy-back scheme, which was being implemented by the company. The Court has ruled that the petition had no locus standi. But the Court has also said that the petition filed by the Department of Company Affairs (DCA) had locus standi. The DCA can proceed with an appeal to a higher court. This means that the company's troubles are not yet over.

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Financial Markets

Primary Markets : Back after a hiatus

--  Aparna Mehta, Team Analyst

Indian primary markets are shrugging off all sorts of fears and inhibitions as a number of companies including some industry leaders gear up to raise Rs. 30,000 crore through IPOs. Will the IPO boom this time around be any different from the ones that have hit the Indian primary markets in the past?

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Indian Derivatives Market : A perfect `Future(s)'?

--  Sowdeepti Anantuni, Team Analyst

Trading in derivatives, which was initiated two years ago, has seen vibrant activity after the introduction of stock futures and the cessation of badla. Can the volumes in the derivative segment overtake cash volumes? Judging by the pace at which volumes on the futures and options segment are growing in the past few months, the possibility cannot be ruled out.

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