To: Mohan Marette who wrote (4923 ) 7/5/1999 10:48:00 AM From: Mohan Marette Read Replies (1) | Respond to
The Insider: Global Tele,Citicorp,KLG Systel,Voltas & Raymond.(Courtesy:ET) A big jump GLOBAL Telesystems (http://www.gtl.co.in/) is slated to post a 50 per cent jump in the bottomline for the quarter ended June over the corresponding period in the previous year. Net profit would be over Rs 10 crore against Rs 6.9 crore in the first quarter previous year. For the full fiscal 2000, GTL would show a growth of about 20 per cent in revenue and 50 per cent in bottomline, The Insider learns. In addition, GTL is expected to realise Rs 70-75 crore from the sale of its stake in Global E-Commerce Services Ltd and will result in a capital gain of around Rs 45 crore in the current fiscal. Nine executives from Tata Consultancy Services, including a former chief operating officer have joined the company and would give a thrust to its e-commerce solutions business. Creeping to acquire THE Citicorp group ( citibank.com is enhancing its stake in Citicorp Securities Ltd through the creeping acquisition route, The Insider learns. This involves purchases from the open market upto a limit of 5 per cent per annum. Citicorp Securities has emerged a major player in Citicorp's software plans by bagging the lucrative transaction processing business of the Citibank group. It has acquired software from associate CITIL to handle this business. Earlier, there was talk of an open offer from Citicorp to acquire the public stake in the company. The Insider learns that until financial ‘98 Citicorp's holding was 38 per cent which rose to over 40 per cent last fiscal. This is likely to rise further now with a new financial year beginning for the company from July. A new rosy look VOLTAS Ltd (http://www.tata.com/voltas/) will post a five-fold jump in its bottomline in financial 2000. The growth in bottomline would be reflected in the first quarter 2000 where it is expected to report a profit against a loss of Rs 7.10 crore in in the corresponding period ‘99. Bottomline for the full fiscal 1999-2000 is estimated at Rs 60 crore against Rs 12.80 crore in ‘99. This would be a result of restructuring initiated by the company in ‘98 which has started yielding dividends now. With the hiving off of the loss-making white goods division, a loss of about Rs 35 crore has been avoided. VRS has resulted in a slash in employee strength by 500 and a further reduction of 1000 employees at Hyderabad is targeted by the end of the year. Higher contribution from air-conditioners from the ultra-efficient Dadra unit will enhance productivity. Significant reduction in debt would save on interest costs too. With EPS for current fiscal expected at Rs 18, the scrip is available at a PE of just over 4. Placing itself well KLG Systel Ltd ( klgsystel.com has placed 5 lakh shares with a US-based insurance company at a price of around Rs 250 per share. Proceeds from the issue would be used to fund the acquisition of a US-based software company, Coade, that has a premium clientele. Exim Bank has also sanctioned financing for the deal, The Insider learns. KLG is involved in software development for process industries and has virtually no exposure to Y2K business. With a revival in the fortunes of commodity industries, business for KLG is projected to grow rapidly. The company is expected to double its EPS in financial ‘99 to Rs 12 per share, rising to Rs 20 per share in financial 2000. In tatters RAYMOND Ltd ( raymondindia.com is expected to post a loss of over Rs 15 crore in the first quarter 2000 against a loss of Rs 12.31 crore in the corresponding period previous fiscal. Divestment of the loss-making steel business continues to be in doldrums. According to reliable sources, there is a significant gap between the valuation expected by Raymond of the steel unit and that offered by Thyssen, Germany. Sources also confirmed that there were no other bids from any buyers, upsetting the entire restructuring process. The steel division has been making cash losses and the situation is not expected to change in the near future. The much rumoured sale of its cement division is also not on the agenda for the present. BSE statistics as of Friday showed a long position of over 28 lakh shares indicating a huge speculative buildup in anticipation of good a performance. The recently launched readymade garments division, a profitable activity is under a subsidiary and not under Raymond directly.
