250 p.c. special dividend from Hero Honda

Hero Honda Motors has reported a significant improvement in its performance in the half year ended September 30,2001, despite overall slowdown in the economy. Sales were higher by 36 per cent to Rs. 1,990.46 crores from Rs. 1,467.62 crores while the profit after tax rose by 47 per cent to Rs. 177.15 crores from 120.57 crores.The operating margin in the first half of the year was 12.73 per cent against 11.37 per cent, in the same period last year.The company sold 6.37 lakh motorcycles an increase of 33 per cent over 4.80 lakh units in the year-ago period.

It has announced a special dividend of 250 per cent (Rs. 5 per share of Rs. 2 each). According to Mr. Brijmohal Lall, chairman and managing director, the excellent results could be attributed to the continued focus on understanding and satisfying customer needs to the finest level. He also announced the increase in stake limit for foreign institutional investors to 40 per cent from 24 per cent.Mr. Pawal Kant Munjal, director and CEO has stated with over six lakh units already sold, the company was well on its way to exceeding the target of 1.25 million motorcycles during this fiscal.

Satyam Infoway

The Nasdaq-listed network and e-commerce company Satyam Infoway (Sify) has reported a revenue of $10.9 million for the quarter ended September 2001, up from $9.3 million in the previous quarter. The cash loss during the quarter under review has come down to $4.8 million, down from $6.1 million in the preceding quarter.

Sify has chosen to make a one-time non-cash charge of $109.3 million during the quarter under discussion to write off goodwill and varied acquisition costs. Usually, companies are allowed to amortise goodwill and acquisition costs equally over 20 quarters. Since ``there is an opportunity for acceleration,'' as Mr. R. Ramaraj, Managing Director and CEO of the company put it, Sify has gone for this one-time exercise. Addressing a press conference here today to announce the second quarter results, the Managing Director, said, the move ``is a step towards the path of profitability.'' Due to this one-time non-cash charge, the net loss of the company for the second quarter has ballooned to $117 million, up from $16.8 million in the preceding quarter.

Significantly, however, the company has reported a 40 per cent reduction in cash burn at $4.6 million, down from $7.7 million in the previous quarter.

While the revenue from the portal business has remained static at $1.1 million ($1.1million) during the second quarter compared to the previous one, corporate services, at $6.6 million ($5.8 million), and retail Internet access, at $3 million ($2.1million), have fetched more income for the company. Mr. Ramaraj said the reduction in cash burn would not in any way impede Sify's capacity to take on new customers. He reasoned that the company had already spent enough on capex and built adequate infrastructure to take care of increased subscriber base. Currently, the focus would be more on rationalising the processes so as bring about greater discipline - monetary and otherwise - into the system, he pointed out.

Quizzed if the company would still look at inorganic route to growth, Mr. Ramaraj asserted that Sify would definitely look at right acquisition options. To a query if Sify was holding parleys for an equity arrangement in Masti.com, a portal for the youth promoted by P&G, he merely mentioned that ``it is very premature'' at this point to talk about it. On apprehensions reported in certain quarters about the possible delisting of Sify shares on Nasdaq as they sometime hovered around $1-1.5 per ADR, company officials ruled out such a possibility under existing laws. Mr. Ramaraj, however, said the only way one could quell this ``is to go ahead and produce good business results''.

Cognizant Tech

The Nasdaq listed Cognizant Technology Solutions Corporation (CTS), has increased its revenue by 23 per cent in the third quarter ended September 30, 2001 to $45.5 million from $37.1 million in the corresponding period of the previous year. Net income for the quarter rose by 28 per cent to $6.1 million from $4.8 million.

Mr. Kumar Mahadeva, Chairman and Chief Executive Officer, said, the company expected a revenue of $43 to 45million in the fourth quarter which could be negatively impacted because of its exposure to customers in the airline and travel industry from which it received nearly 4 per cent of its revenues during the third quarter.

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