Today's Hot Stories - April 22, 2014 - PT education

Today's Hot Stories - April 22, 2014

10 Headlines for Today

(1) CBI summons P.C. Parakh
(2) FIR filed against Togadia
(3) More than 140 Japanese lawmakers visit war shrine
(4) DoT may withdraw penalty on Loop Telecom 7
(5) Nokia Chennai unit may be made contract manufacturing facility
(6) GSK to sell oncology arm to Novartis for $16 billion
(7) Giggs is interim Manchester United manager
(8) Schumacher sued over pre-coma road accident in Spain
(9) Brilliant Super Kings crush Daredevils
(10) Balasore boy grabs Nasa design award

5 Stories for Today

(1) Cobrapost sting claims police didn’t check 1984 rioters
(2) Russia displays a new military prowess in Ukraine
(3) Beat poll volatility with dividend-paying stocks
(4) 'Chief Yahoo' David Filo returns to board
(5) Hint of recovery: Top IT companies see a better FY15

(1) Cobrapost sting claims police didn’t check 1984 rioters


A sting operation carried out by a news portal on Tuesday claimed that the government had failed to take action to stop the 1984 anti-Sikh riots and senior police officers “colluded” with the then government to teach Sikhs a “lesson.”

An investigation conducted by Cobrapost — Chapter 84 — claimed to have confessions of officers of Delhi Police most of whom have admitted in the sting to their “failure” as a force to take action against the culprits.

Cobrapost recorded the conversations of Shoorveer Singh Tyagi, the then Station House Officer (SHO) Kalyanpuri, Rohtas Singh, SHO Delhi Cantonment, S.N. Bhaskar SHO Krishna Nagar, O.P. Yadav, SHO Srinivaspuri, and Jaipal Singh SHO Mehrauli.

The news portal claimed that S.C. Tandon — the then chief of police — conveniently parried all questions while Gautam Kaul, then Additional Commissioner of Police straightaway rejected the idea that he had any first-hand knowledge of rioting.

The news portal claimed that confessions of these officials revealed that while warnings about the simmering communal sentiments against Sikhs went unheard by senior officers, only two per cent of the messages of news of arson and rioting which bombarded the police control rooms, were recorded.

It also claimed that police logbooks were “conveniently” changed to eliminate evidence of inaction on the part of senior officers while some other officers did not act for fear of punishment being transferred.

According to the confessions of these officers, Cobrapost claimed, some police officers dumped bodies of victims somewhere else to minimise riot-related crimes and messages were broadcast directing police to not take action against rioters who were shouting slogans of Indira Gandhi zindabad.

“The government of the day did not allow the police to act while creating an impression that the police were not performing their duty,” the news portal alleged.

“While most of them candidly admitting to their failure as a force, some of them confessed that the top brass of the police force colluded with the government of the day to teach Sikhs a lesson,” the newsportal said in its statement.

The sting was carried out over one year with vast majority of the shoots in the last two months. “The idea behind it was to get a snapshot of the 1984 traumatic event which followed after the assassination of the then Prime Minister Indira Gandhi,” it said.

Source: The Hindu

(2) Russia displays a new military prowess in Ukraine


US Secretary of State John Kerry has accused Russia of behaving in a "19th-century fashion" because of its annexation of Crimea.

But Western experts who have followed the success of Russian forces in carrying out President Vladimir V Putin's policy in Crimea and eastern Ukraine have come to a different conclusion about Russian military strategy. They see a military disparaged for its decline since the fall of the Soviet Union skillfully employing 21st-century tactics that combine cyberwarfare, an energetic information campaign and the use of highly trained special operation troops to seize the initiative from the West.

"It is a significant shift in how Russian ground forces approach a problem," said James G. Stavridis, the retired admiral and former NATO commander. "They have played their hand of cards with finesse."

The abilities the Russian military has displayed are not only important to the high-stakes drama in Ukraine, they also have implications for the security of Moldova, Georgia, Central Asian nations and even the Central Europe nations that are members of NATO.

The dexterity with which the Russians have operated in Ukraine is a far cry from the bludgeoning artillery, airstrikes and surface-to-surface missiles used to retake Grozny, the Chechen capital, from Chechen separatists in 2000. In that conflict, the notion of avoiding collateral damage to civilians and civilian infrastructure appeared to be alien.

Since then Russia has sought to develop more effective ways of projecting power in the "near abroad," the non-Russian nations that emerged from the collapse of the Soviet Union. It has tried to upgrade its military, giving priority to its special forces, airborne and naval infantry — "rapid reaction" abilities that were "road tested" in Crimea, according to Roger McDermott, a senior fellow at the Jamestown Foundation.

The speedy success that Russia had in Crimea does not mean that the overall quality of the Russian Army, made up mainly of conscripts and no match for the high-tech American military, has been transformed.

"The operation reveals very little about the current condition of the Russian armed forces," said Mr. McDermott. "Its real strength lay in covert action combined with sound intelligence concerning the weakness of the Kiev government and their will to respond militarily."

Still, Russia's operations in Ukraine have been a swift meshing of hard and soft power. The Obama administration, which once held out hope that Mr. Putin would seek an "off ramp" from the pursuit of Crimea, has repeatedly been forced to play catch-up after the Kremlin changed what was happening on the ground.

"It is much more sophisticated, and it reflects the evolution of the Russian military and of Russian training and thinking about operations and strategy over the years," said Stephen J. Blank, a former expert on the Russian military at the United States Army War College who is a senior fellow at the American Foreign Policy Council.

For its intervention in Crimea, the Russians used a so-called snap military exercise to distract attention and hide their preparations. Then specially trained troops, without identifying patches, moved quickly to secure key installations. Once the operation was underway, the Russian force cut telephone cables, jammed communications and used cyberwarfare to cut off the Ukrainian military forces on the peninsula.

"They disconnected the Ukrainian forces in Crimea from their command and control," the NATO commander, Gen. Philip M. Breedlove, said in a recent interview.

As it cemented control, the Kremlin has employed an unrelenting media campaign to reinforce its narrative that a Russian-abetted intervention had been needed to rescue the Russian-speaking population from right-wing extremists and chaos.

No sooner had the Obama administration demanded that Russia pull back from Crimea than the Kremlin raised the stakes by massing about 40,000 troops near Ukraine's eastern frontier.

Soon, the Russians were sending small, well-equipped teams across the Ukrainian border to seize government buildings that could be turned over to sympathizers and local militias, American officials said. Police stations and Interior Ministry buildings, which stored arms that could be turned over to local supporters, were targeted.

"Because they have some local support they can keep leveraging a very small cadre of very good fighters and move forward," said Daniel Goure, an expert on the Russian military at the Lexington Institute, a policy research group.

While the Kremlin retains the option of mounting a large-scale intervention in eastern Ukraine, the immediate purposes of the air and ground forces massed near Ukraine appears to be to deter the Ukrainian military from cracking down in the east and to dissuade the United States from providing substantial military support.

The Kremlin has used its military deployment to buttress its diplomatic strategy of insisting on an extensive degree of federalism in Ukraine, one in which the eastern provinces would be largely autonomous and under Moscow's influence.

And as Russians have flexed their muscles, the White House appears to have refocused its demands. Crimea barely figured in the talks in Geneva that involved Mr. Kerry and his counterparts from Russia, Ukraine and the European Union.

The Obama administration's urgent goal is to persuade the Kremlin to relinquish control over the government buildings in eastern Ukraine that the American officials insist have been held by small teams of Russian troops or pro-Russian separatists under Moscow's influence. Despite the focus on the combustible situation in eastern Ukraine, the joint statement the diplomats issued in Geneva did not even mention the presence of Russia's 40,000 troops near the border, which President Obama has urged be withdrawn.

Military experts say that the sort of strategy the Kremlin has employed in Ukraine is likely to work best in areas in which there are pockets of ethnic Russians to provide local support. The strategy is also easier to carry out if it is done close to Russian territory, where a large and intimidating force can be assembled and the Russian military can easily supply special forces.

"It can be used in the whole former Soviet space," said Chris Donnelly, a former top adviser at NATO, who added that Georgia, Moldova, Armenia, Azerbaijan and the Central Asia states were "very vulnerable."

"The Baltic States are much less vulnerable, but there will still be pressure on them and there will on Poland and Central Europe," Mr. Donnelly added.

Admiral Stavridis agreed that Russia's strategy would be most effective when employed against a nation with a large number of sympathizers. But he said that Russia's deft use of cyber-warfare, special forces and conventional troops was a development that NATO needed to study and factor into its planning.

"In all of those areas they have raised their game, and they have integrated them quite capably," he said. "And I think that has utility no matter where you are operating in the world."

Source: The Times of India

(3) Beat poll volatility with dividend-paying stocks


In the past 10 years, the day Lok Sabha poll results are announced, markets have witnessed record high volatility. On May 17, 2004, the sensex hit lower circuit and ended over 11% down. On May 18, 2009, it hit two upper circuits and closed over 15% up. Now, as May 16 approaches - the day current poll results will be out - investors on Dalal Street are readying themselves for another rollercoaster ride. Worse, there are chances that the market volatility may not end on the very day and depending on the election outcome may even extend for weeks or months.

So, is there a way to protect oneself from the expected volatility? One of the ways could be to look at stocks with a history of high dividend payment, because such stocks bring in a degree of safety and also some potential for upside, analysts and fund managers said. Stocks with high dividend payout also put a floor to the downside risk in uncertain times, they said.

Consider this: Among the NSE nifty constituents, there are 37 companies which paid total dividend of over Rs 500 crore or more during the 2012-13 fiscal. Among them, the top ones include PSUs like Coal India, ONGC and NTPC, while from the private sector are TCS, ITC and HUL. Outside of the nifty, there were 11 more companies which paid aggregate dividend of an equal amount or more. And here the list of PSUs includes Oil India, IOC, Power Finance Corp; non-PSUs are Hindustan Zinc, Bharti Infratel and Indiabulls Housing Finance.

Analysts believe once all the results for FY14 are out, payouts by top corporates are sure to show a jump from last year's levels.

Dividends have contributed about 33% of the returns from equities over the long run. And this is one of the reasons why there are several investors who look at sustainable dividend income from their portfolio of stocks.

According to an analysis done by S&P Dow Jones Indices (SPDJI), since August 1996 to date, the sensex has gained 537% on price return basis: The returns which only take price movements of the index into account.

However, when one looks at the total return for sensex - that is the price movements and also a situation where all dividends paid by each constituent stocks are reinvestment into the index constituents itself - the total gains jump to 759%. This shows that 222%, or close to a third of the returns from investing in the sensex, came from the dividends earned since 1996.

"During volatile periods, the value of dividend income rises even more," said Alka Banerjee, MD-strategy and global equity indices, S&P Dow Jones Indices. It is observed that as investors become more doubtful about rise in stock prices and the risks of losing money increase, they rely more on dividend incomes. "In (such a) scenario investors can look to investing in high dividend paying stocks which would provide a cushion against sharp market downturn by assuring an income stream. Dividends provide a downside protection to the portfolio in times of market downturns and continue to remain an added attraction during upturns," Banerjee said.

In India, PSUs have mostly been the top dividend payers: As the government needed money, they tapped PSUs for dividend payout, which also benefited other shareholders.

Market players also pointed out that if investors are not sure how to play the dividend yield game, they can take the mutual fund route with several of the fund houses having dividend yield schemes under their umbrella, with ICICI Prudential MF being the latest players planning to launch one such scheme.

Source: The Economic Times

(4) 'Chief Yahoo' David Filo returns to board


Filo was named along with Charles Schwab, head of a big investment firm bearing his name, and H. Lee Scott, former president and chief executive at Walmart.

"As a co-founder and long time Chief Yahoo, Filo is the heart and soul of the company and in re-joining the board, he adds 19 years of deep and personal knowledge of Yahoo's business and culture to the conversation," Yahoo chief executive Marissa Mayer said.

Filo has been outside the board and executive leadership in recent years but he has continued to hold the "chief Yahoo" title, drawing an annual salary of $1 over the past three years.

Filo co-developed Yahoo in 1994 with Jerry Yang while working towards his Ph.D. in electrical engineering at Stanford University, and he has been an officer since the company was founded in 1995.

"I am incredibly proud to return to the Yahoo board," said Filo. "Jerry and I founded Yahoo as a product focused company that creates compelling experiences through technology, and I'm excited that today we are solidly back on that path."

He added "I am very familiar with Yahoo's history and with the technology underlying everything we do today and more importantly, everything we want to do tomorrow. I look forward to working alongside the other directors as we continue our mission to build the best possible consumer experiences for our users."

The appointments come with Mayer seeking to revive the fortunes of the Internet pioneer, which is seeking a new direction since losing its crown as the leading search engine to Google.

Yahoo also filed documents showing the compensation of top executives including Mayer and Henrique de Castro, who walked away with a huge payout after clashing with Mayer.

Mayer's total 2013 compensation was $24.9 million, down from $36.6 million in 2012 when she was lured from a top job at Google.

De Castro was paid $10.9 million in 2013 for his brief tenure as chief operating officer. But he got a whopping $39 million credited for 2012, including his payout for leaving the company in early 2014.

De Castro was given a million dollar "make good" cash bonus when he was hired from Google in October of 2012, and his annual base pay was $600,000.

He also secured an award of $20 million worth of "make-good" stock shares, which are his to keep if Yahoo is letting him go without cause, according to a termination clause in his hiring letter.

Source: Hindustan Times

(5) Hint of recovery: Top IT companies see a better FY15


On the back of strong operating margins, the top four IT services companies have reported good growth in net profit for the last quarter of FY14 with a majority of them indicating better visibility ahead as demand grows. The companies are largely positive on the new fiscal with most of them reporting strong pipeline. The industry body Nasscom has also projected a higher growth for the current fiscal at of 13-15%, as against the 12-14% for FY 14.

Bangalore-based Wipro, which was seen as a laggard till Q3, saw its operating margins go up by 150 basis points (bps) touching 24.5% at the end of fourth quarter, its highest in three years. Its peer from the city, Infosys also saw its operating profit margins rise by 50 basis to 25.5% in the March quarter boosted largely by cost optimisation measures. Meanwhile the largest software exporter Tata Consultancy Services (TCS) has reported an operating margin of 29.1%, which reflected a year-on-year (y-o-y) growth of 210 bps, widening its gap with other big IT firms. Delhi-based HCL Technologies also showed a sequential growth of 7.1% in its Ebit margin, which stood at 24.6% for the last quarter.

The top IT services companies are largely confident about the demand in healthcare, retail, banking, auto and pharma while most of them see spending cuts in retail, insurance and high-tech. They reported a strong deal pipeline which indicated some confidence about the volumes and realisations for the current fiscal with growth momentum expected to continue for a few quarters.

The companies are also creating separate divisions for new growth areas in the sector and are seeing huge growth in the digital system integration business. HCL president and CEO Anant Gupta said that the company is expecting that the business will get to scale and size in three years. The company also got one large deal in this space during the March quarter. TCS said that it will be a $3 billion market in a few years.

While Wipro CEO TK Kurien, who announced a new independent unit Wipro Digital, said that there is demand for leveraging new digital technologies in optimising technology spends and also to differentiate in the marketplace. “We see value at the intersection of physical and digital. We need a new business unit as the DNA is quite different and won’t succeed in the same environment and need a different leadership. We cannot mix both DNAs,” he said.

TCS

TCS reported a net profit of Rs 5,297 crore, up 2.3% sequentially on the back of a rise in revenues to Rs 21,551 crore, an increase of 1.2% quarter-on-quarter (q-o-q). The numbers were supported by a 2.6% increase in volumes, stable pricing and a pick- up in business across a host of geographies led by Europe and Asia Pacific. India’s biggest software services exporter ended FY14 with revenues of Rs 81,809.4 crore, up 29.9% and net profit of Rs 19,116.8 crore, up 37.5%. In dollar terms, TCS’ revenues in FY14 rose to $13.4 billion, up 16.2% while profits rose to $3.1 billion, up 22.9%.

N Chandrasekaran, managing director and CEO, said that the current year would be a stronger one for the company based on the discussions with clients, the deal pipeline, the general sentiment and the trends in discretionary spends. “We are getting positive feedback from our clients and we believe there is good growth momentum,” Chandrasekaran said, adding that customers appeared to be focussed on IT spends in three areas, namely simplification, digital and governance. He added that the flat trend in pricing will continue for some time and the growth will come from volumes. At the end of March, TCS had 24 clients with revenues of $100-million plus.

Infosys

The country’s second largest software services exporter beat street estimates with better margins that drove a 25% year-on-year growth in net profit for the March quarter of FY14. It forecast a 7-9% dollar revenue growth for FY15 that was in line with expectations but is below its own growth rate of 11.5% in the last fiscal. Infosys saw its annual revenue cross Rs 50,000 crore and net profit crossing Rs 10,000 crore this fiscal with the company’s cash pile reaching Rs 30,000 crore at the end of the fiscal.

Infosys reported net profit of Rs 2,992 crore for the quarter ended March as against Rs 2,394 crore in the year ago period while it grew 4.1% over profit of Rs 2,875 crore in the October-December period. The company’s revenue grew 23.2% to Rs 12,875 crore as against Rs 10,454 a year ago, while it declined 1.2% sequentially.

“I am pleased that we have been able to double our growth rate for the full year compared to last year, though performance in the last quarter of FY14 has been disappointing.” said SD Shibulal, CEO and managing director. “We have guided for a revenue growth of 7%-9% next year and remain firmly focused on building the growth momentum by making all the necessary investments in our business.” He added that clients were undergoing cost optimisation drive and cutting down their discretionary spend, terming the demand environment as volatile. Infosys added 50 clients during the fourth quarter of FY14, which is lower than the comparable sequential period, taking the total number to 890.

The company has improved its employee utilisation—including trainees—by 4% over the previous fiscal at 73.6% as against the 69.5% it reported for the previous fiscal. The utilisation rate excluding trainees stood at 78% at the end of FY 14. The IT sector’s largest market, North America showed a decline of 0.8% sequentially for the company. Europe grew by 1% q-o-q while demand from India remained flat at 0.1%. The rest of the world also saw the demand declining by 1.5% for the same period. Banking, financial services and insurance segment, the largest industry segment for the IT giant, saw a decline of 0.5% sequentially.

Wipro

India’s third largest IT services exporter saw its net profit rise by 41% for the fourth quarter ending March, 2014 driven by higher productivity and automation. The company also sounded optimistic of FY15, providing a revenue growth guidance for the first quarter in the range of -0.3 to 2%, though it is lower than 2-4% range provided in the previous sequential period. “We always had a poor first quarter and much should not be read from the guidance. We expect linearity in our performance and growth coming back in Q2. We are affected by the seasonality of India business being low in the Q1 and the low retail business. The first quarter cannot be seen as a precursor to the full year,” said Kurien.

At the end of the fourth quarter of FY14, the net profit of Wipro touched Rs 2,230 crore and as against Rs 1,737 crore it reported for the same period of the previous fiscal. The revenue from IT services was Rs 11,653 crore at the end of the fourth quarter as against Rs 9,607 crore it reported for the corresponding period of previous fiscal, recording a y-o-y rise of 22%. The consolidated revenues including the hardware business crossed $2 billion for the quarter. For FY15, the consolidated revenue touched Rs 43,760 crore and a net profit of Rs 7,800 crore.

“The steady improvement in global economy, coupled with the exciting pace of technological advancements, presents us with opportunities to create innovative solutions to help our customer differentiate, compete and succeed in their respective markets,” said Wipro chairman Azim Premji. The growth rates of Wipro across geographies – US, Europe, India & Middle-East was higher than the company’s overall average with the only drag being Asia Pacific and other emerging markets, which saw a sequential decline of 4.1%.

HCL Technologies

HCL also saw its numbers beating estimates and reported a 59% growth in its net profit for the quarter. It reported a net profit of R1,624 crore for the third quarter—the company follows July-June fiscal— ended March 31, 2014, compared with R1,021 crore it posted in the corresponding period of the previous fiscal. The revenue stood at R8,349 crore for the period as against R6,430 crore it reported during the same period of the previous fiscal, a growth of 30%.

HCL Tech added two clients each in the $50 million and $30 million categories in the quarter. The company said that it signed 12 transformational engagements in the quarter totalling over $1 billion in contract value led by financial services and manufacturing verticals in the US and Europe. The firm is eyeing capital expenditure of 3.4% of the revenue in current quarter.

“We continue on our growth momentum with strong revenue growth along with the 10th straight quarter of margin expansion. The application services business registered a robust performance led by digital systems integration proposition on the discretionary side. Infrastructure services have continued to punch their weight in the market,” said Gupta.

Human resources

TCS will hire 55,000 employees this fiscal, of which the campus recruitment of 25,000 have been completed. In FY14, the company hired 61,200 people and the head count has crossed the 300,000 mark. The attrition rate stood at 11.3%. The company announced wage hikes of 10% for India employees, with a 14%-plus increment for high-level performers; the hike in developed markets is 2-4% while in developing markets it is 4-6 %.

Meanwhile Wipro, which hired just 241 people in FY14, said that the trend is likely to be the same for the current fiscal too. At the end of the March quarter, the total employee strength was 146,053 as against 146,402 in the year-ago period, showing a decline of 349, even as the attrition rate rose sequentially by 0.8% to 15.1%. Wipro has also announced a salary increase in the range of 6-8% for offshore employees and 2-3% for onsite, effective from June 1.

Infosys had a net addition of 2,000 employees during the quarter with the total number of employees on its rolls rising to 1,60,405. Despite the two salary hikes announced by the company recently, the attrition climbed to 18.7% as against the 18.1% it reported in the previous quarter. HCL had a net addition of 1,858 during the quarter with the total headcount raising to 90,190.

Source: The Indian Express

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