The Week in review for 23 Oct 2009

The Week in review for 23 Oct 2009

The Prime Minister’s Economic Advisory Council unveiled its economic outlook on Wednesday. The head of the council, C. Rangarajan, said India’s economy would grow 6.5% in the current fiscal year. Growth is expected to pick in next fiscal year, reaching 7-8% in 2010-11. Rangarajan also said India’s easy monetary policy would have to change, but that it would depend on both growth prospects and inflationary pressures. On the downside the council also forecast a consolidated fiscal deficit of 10.09% of GDP in the current fiscal year compared to 8.6% last year.

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Inflation continues to rise. The Wholesale Price Index went up 1.21% in the week ending the 10 October compared to a year earlier.

The Supreme Court introduced a new dimension to the Reliance gas dispute on Wednesday, when it suggested the Ambani brothers come to a compromise instead of slugging it out in the courts. Referring to similar advice from the Bombay High Court, it said RIL and RNRL should try and find an informal solution through mediation or third party intervention. The Supreme Court started hearing the case between the two companies on Tuesday. Mukesh Ambani’s RIL and Anil Ambani’s RNRL are arguing over the supply and price of gas from RIL’s KG D6 fields.

Hero Honda beat expectations with its second quarter results. Net profits nearly doubled, shooting up 95% to Rs597 crore compared to a year earlier. Hero Honda is India’s largest manufacturer of two-wheelers and has seen the festive season driving up its sales in recent weeks.

The service tax department has issued a show cause notice to Tata Motors claiming owes it Rs325 crore worth of service tax over five fiscal years from 2004 to 2009. Tata Motors officials have indicated they will contest the notice.

On Tuesday some 8,000 workers from the auto industry went on strike in Gurgaon, near Delhi to protest the death of a fellow worker. On Sunday an employee of auto component maker Rico Auto Industries was killed in police firing. The striking workers were also from auto component companies.

State Bank of India raised $750 million through a sale of global bonds on Wednesday. The last Indian company to sell more than $500 million of bonds was ICICI Bank in 2007.

The government has approved a sale of 5% of its stake in NTPC to raise about Rs8,600 crore. NTPC is India’s largest power generation firm and is valued at about Rs170,000 crore. The government currently has an 89.5% stake in the company.

And NTPC also posted its second quarter numbers on Friday. Its net profits grew less than 2% to Rs2,152 crore. NTPC’s chairman told Mint the marginal rise in net profits was because the company had received a special tax refund of more than Rs500 crore in the same period last year.

Another government-run company announced its quarterly results on Friday.

BHEL posted a 39% rise in its net profits to Rs858 crore compared to a year earlier.

Several other companies also unveiled their second quarter results this week.

Tech Mahindra posted disappointing figures with Net profits falling 44% to Rs169 crore compared to the same period last year. Tech Mahindra’s numbers have been under pressure after it borrowed money to buy Satyam Computers.

Larsen and Toubro’s results, on the other hand, beat expectations. Net profits went up 26% to reach Rs580 crores compared to the same period last year

ITC’s net profits also rose 26% getting to Rs10,10 crore. The results beat expectations and were helped by strong performance in all its operations other than hotels.

Infrastructure Development Finance Company or IDFC also posted it results over the week. It too saw net profits going up 26%, reaching Rs292 crore for the quarter.

And finally, Sony Pictures is about to release its Michael Jackson movie This Is It in India. The movie offers fans a behind-the-scenes look at Michael Jackson as he rehearsed for the world tour he was supposed to undertake before he died. This Is It will be released on Wednesday, 28 October.