ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Infosys Technologies, Gujarat Alkalies and Chemicals, JBF Industries

INFOSYS TECHNOLOGIES At the Pinnacle Infosys is one of India

Companias

INFOSYS TECHNOLOGIES

At the Pinnacle

I
nfosys is one of India’s leading information technology (IT) services companies and was incorporated as Infosys Consultants in 1981. In 1992 it was renamed and converted to a public limited company headquartered in Bangalore. It provides software maintenance, development, e-commerce, business process outsourcing (BPO) services for the domestic and overseas market. Infosys has 17 development facilities in India and one global development centre in Canada. The company has four subsidiaries located in India, US, Shanghai and Australia. In 1999, Infosys became the first Indian company to be listed on the American stock exchange.

Infosys has maintained consistent growth over the years. During 2004-05, its income from operations surged by 44 per cent to Rs 6,859 crore over 2003-04, likewise, net profit galloped by 53 per cent to Rs 1,904 crore. The company’s spending on research and development (R & D) climbed up by 67 per cent to Rs 74.4 crore during the year under review. The company’s software exports revenue increased by 43 per cent over 2003-04 to Rs 6,726 crore.

Infosys has expanded its presence in Kerala; the state government allotted 50 acres of land to the company to set up a special economic zone in Thiruvananthapuram. In the first phase it will invest Rs 50 crore to start construction of the software development centre and in the second and third phases, it will invest an additional Rs 100 crore to enhance capacity. Infosys has signed a partnership agreement with Paris-based embedded communications company Wavecom SA to address the growing machine-to-machine wireless connectivity market. Infosys has received a three-year contract of 31 million euros to set up a R & D facility for Alstom, a French engineering group that makes power plants, locomotives and ships. Infosys has won outsourcing contracts worth $ 140 million for five years from Dutch bank ABN Amro. The company’s main focus would be to develop, support and enhance a wide spectrum of applications for ABN Amro bank for north America, part of Europe and new markets such as Hong Kong and Singapore.

Infosys posted strong financial results for the first three quarters of 2005. For April-June 2005, its income from operations went up by 33.7 per cent to Rs 1,967 crore over the same period of the previous year and net profit increased by 32.8 per cent to Rs 523.9 crore. For July-September 2005, the company’s total revenue rose by 28 per cent to Rs 2,170 crore and net profit grew by 30 per cent to Rs 592 crore over the same period of the previous year. During the quarter ended September 2005, the company invested around Rs 22 crore in its wholly owned subsidiary, Infosys Consulting Incorporated (USA). For the third quarter ended December 2005, its total income expanded by 33 per cent to Rs 2,398 crore over the corresponding period of the previous year and net profit grew by 29 per cent to Rs 642 crore. Infosys added 36 new clients during the third quarter of 2005.

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GUJARAT ALKALIES AND CHEMICALS

Diversifying

G
ujarat Alkalies and Chemicals (GACL) was incorporated in 1973 and commenced its operations in 1976. It was financed by Gujarat Industrial Investment Corporation, a wholly owned corporation of the government of Gujarat. GACL is the single largest producer of caustic soda and chlorine (chlor-alkali) in India and involved in developing, manufacturing and distributing caustic soda lye, chloromethane, caustic flakes, chlorine gas, sodium cyanide, hydrochloric acid, hydrogen gas and related chemicals. The company has two plants located north of Vadodara and at Dahej, which is in Bharuch district. The company mainly exports its chemicals to Australia, China, Japan, South Africa and Egypt.

GACL reported robust financial performance during 2004-05. Its net sales rose by 19 per cent to Rs 1,278 crore over the previous year and net profit registered a whopping 128 per cent increase to reach Rs 144 crore. During the year under review, production of the caustic soda group of products increased by 7.49 per cent to 10.04 lakh MT and other products reported healthy growth. The company manufactures 23 products and derives 65 per cent of its revenues from the chlor-alkali business and 35 per cent from other products.

GACL undertook various expansion and diversification plans during 2004-05. It installed a 100-TPD caustic soda flaking unit at Dahej and commenced production in April 2005. The company is also setting up a 12,540 TPA hydrogen peroxide unit at Dahej that is to be completed by October 2006.

GACL has become the first Indian entity to get carbon trading credit by switching over to less polluting fuels at its four projects. These credits were gained by switching fuel from naphtha to natural gas in the captive power plant, changing from natural gas to hydrogen in its plant located at the Dahej complex and energy efficient and fuel switching measures in the caustic soda and sodium cyanide plants located at the Baroda complex of the company. These measures will help in reducing green house gas (GHG) emissions by the use of less GHG intensive fossil fuel, contributing to lower contamination of the environment.

For the first two quarters of 2005, GACL reported strong financial results. For April-June 2005, the company’s net sales jumped by 36 per cent to Rs 246 crore over the same period of the previous year and net profit

Economic and Political Weekly February 4, 2006

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the previous year, its net profit went up

The Week’s Companies (Rs lakh) swelled by 507 per cent to Rs 63 crore. For the quarter ended September 2005,
Infosys GACL JBF Industries GACL’s net sales increased by 9.5 per
Financial Indicators 2004-05 2003-04 2004-05 2003-04 2004-05 2003-04 cent to Rs 235 crore over the same period
Income/Appropriations of the previous year and net profit grew by 59 per cent to Rs 57.6 crore.
1 Net sales 685966 476089 127849 107163 73961 53465
2 Value of production 685966 476089 127583 106962 73593 53531 JBF INDUSTRIES
3 Other income 12750 12739 391 218 60 74
4 Total income 698716 488828 127974 107181 73653 53605
5 Raw materials/stores and spares/ Momentum Continues
power and fuel consumed 4020 2872 60126 60554 62105 41637
6 Other manufacturing expenses 0 0 96 401 578 740
7 Remuneration to employees 318200 236586 4674 4797 830 715
8 Other expenses 129021 78222 23179 17174 1030 1262 as a private company under the nameJBF Industries (JBF) incorporated in 1982
9 Depreciation 26822 23090 7683 7782 2312 2195 JBF Synthetics became a public limited
10 Gross profit 220653 148058 32217 16472 6797 7054
11 Interest 0 0 5976 7913 1826 2368 company in the year 1986 and was renamed
12 Operating profit 220653 148058 26242 8560 4971 4686 in 1989. Its manufacturing factory situated
13 Non-operating surplus/deficit 2315 -1011 685 276 63 54 at Silvassa produces partially oriented yarn
14 Profit before tax 222968 147047 26926 8836 5034 4740 (POY) and polyester chips.
15 Tax provisions 32530 22700 12499 2521 2110 2003 JBF has maintained its growth momen
16 Profit after tax 190438 124347 14428 6315 2924 2737
17 Dividends (includes tax on dist profit) 30980 86246 1102 551 620 620 tum in sales and profit over the years.
18 Retained profits 159458 38101 13326 5764 2304 2117 During 2004-05, its net sales rose by 38
Liabilities/assets per cent to Rs 739.6 crore over 2003-04
19 Paid-up capital 13529 3332 7344 7344 3102 3102 and net profit increased by 6.8 per cent to
20 Reserves and surplus 510644 322011 46841 33671 16441 14509 Rs 29 crore. During the year under review,
21 Long-term loan 0 0 3649 16357 2049 230 the company’s production of polyester
22 Short-term loan 0 0 50332 60721 13365 14695
(i) of which, bank borrowings 0 0 48785 56612 8046 14020 chips increased by 26 per cent to about 1
23 Gross fixed assets 250024 177371 167554 161951 47565 45401 lakh MT and its POY production grew by
24 Accumulated depreciation 100582 80341 73485 65788 14355 11684 6 per cent to 57,572 MT over the same
25 Inventories 0 0 6500 6126 1644 1716 period of the previous year. The company’s
26 Total assets/liabilities 655374 496142 138401 137193 42328 41077 earnings in foreign exchange grew by 416
Miscellaneous items
27 Excise duty 0 0 0 0 15476 12728 per cent to Rs 10.7 crore during the year under review.
28 Gross value added 557096 399429 44239 28857 10024 10012
29 Total foreign exchange earnings 610502 453253 1157 1179 1074 208 JBF Industries is on a Rs 300 crore
30 Total foreign exchange outgo 290301 200754 1709 236 528 1486 expansion mode, aimed at enhancing
Key financial and performance ratios the capacity of its POY manufacturing unit
31 Turnover ratio (sales to total assets) 1.2 1.1 0.9 0.8 2.1 1.6 and setting up a new plant for producing
32 Gross value added to gross polyester chips. The new plant at Sarigram,
fixed assets (%) 260.7 255.8 26.9 17.9 21.6 22.9
33 Return on investment (gross profit near the present one in Silvassa, will manu
to total assets) (%) 38.3 34.9 23.4 12.0 16.3 17.6 facture polyester chips and will be opera
34 Gross profit to sales tional by March 2006. The Sarigram plant
(gross margin) (%) 32.2 31.1 25.2 15.4 9.2 13.2 will have a production capacity of 2.16
35 Operating profit to sales (%) 32.2 31.1 20.5 8.0 6.7 8.8 lakh tonne per annum, thereby raising the
36 Profit before tax to sales (%) 32.5 30.9 21.1 8.2 6.8 8.9
37 Tax provisions to profit before tax (%) 14.6 15.4 46.4 28.5 41.9 42.3 company’s total capacity to 3.36 lakh tonne
38 Profit after tax to net worth a year and will have an investment of
(return on equity) (%) 44.8 40.7 30.3 17.3 15.7 15.9 Rs 170 crore. The company has entered
39 Dividend (%) 197.8 2256.8 12.9 6.5 17.1 17.4 into a joint venture agreement with
40 Earnings per share (Rs) 70.4 186.6 19.6 13.8 9.4 8.8 Ras Al Khaimah Investment Authority
41 Book value per share (Rs) 193.7 488.2 73.8 89.3 63.0 56.8 (RAKIA), for setting up a world scale
42 P/E ratio (multiple) 34.8 28.7 7.6 4.6 7.2 7.4
43 Debt-equity ratio (adjusted for PET polymer resins plant in the emirate of
revaluation) 0.0 0.0 1.0 1.9 0.8 0.9 Ras Al Khaimah.
44 Short-term bank borrowings JBF has performed well during the first
to inventories (%) 0.0 0.0 750.6 924.1 489.4 817.1 two quarters of 2005. For the quarter
45 Sundry creditors to sundry ended June, its net sales improved by 15 per
debtors (%) 37.0 68.0 22.0 23.7 12.8 50.2 cent to Rs 191.9 crore over the same period
46 Total remuneration to employees
to value added (%) 57.1 59.2 10.6 16.6 8.3 7.1 of the previous year and net profit jumped
47 Total remunerations to employees by 148 per cent to Rs 9.5 crore. For July
to value of production (%) 46.4 49.7 3.7 4.5 1.1 1.3 September 2005, though the company’s
48 Gross fixed assets formation net sales declined by 5 per cent to Rs 178
(% growth) 41.0 31.4 3.5 0.5 4.8 8.2 crore over the corresponding period of
49 Growth in inventories (%) 0.0 0.0 6.1 21.5 -4.2 17.5

Note: P/E multiples are the latest with corresponding last year’s figures. by 25 per cent to Rs 10 crore.

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Economic and Political Weekly February 4, 2006

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