IGL: Strong margin, volume trend to continue
A strong rebound in compressed natural gas (CNG) volumes, which grew 8.4 per cent year-on-year (y-o-y), was the highlight of Indraprastha Gas (IGL)’s results for the March quarter (Q4). Notably, this is the fastest volume growth in this segment (78 per cent of IGL’s revenues) over the past eight quarters. CNG volumes grew in a narrow band of two to six per cent in these eight quarters. Volume growth in piped natural gas, too, was at a multi-quarter high of 8.9 per cent, though slightly lower than analysts’ estimates of 10-12 per cent. Overall, volumes grew 8.4 per cent in Q4. Falling realisations, though, took some sheen off the top line, which fell 3.4 per cent year-on-year to Rs 8.82 billion and missed the Bloomberg consensus estimate of Rs 9.20 billion. Strong gains in earnings before interest, taxes, depreciation and amortisation (Ebitda) margin fuelled earnings, which grew 12.3 per cent y-o-y to Rs 1.08 billion and were in line with the estimate of Rs 1.09 billion. the cost of IGL’s key input, natural gas, fell 674 basis points to 59.5 per cent in Q4 and enabled a 308 basis points Ebitda margin expansion to 22.3 per cent, compared to the year-ago period. Margin gains could have been higher but for price cuts. The trend of improving volumes and as margins is expected to continue for IGL. The odd-even rule in Delhi (April 15 to 30) had pushed up CNG volumes by 15-20 per cent and would add two per cent to IGL’s volumes in the ongoing quarter, estimate analysts at Jefferies in a note this month. Factors such as conversion of taxis to CNG along with regulatory push to the greener fuel will continue to aid volumes. Petronet LNG’s renegotiation with RasGas has lowered the price of long-term LNG, which could, in turn, aid IGL’s industrial segment. This, along with volume contribution from acquisitions of Maharashtra Natural Gas and Central UP Gas, augurs well for overall volumes. The company’s monopolistic position in Delhi, strong return ratios and improving margin trajectory are some of the reasons why analysts are positive on IGL. In fact, Bloomberg consensus estimates peg IGL’s Ebitda margin at 22.8 per cent in FY17, an increase of 183 basis points over FY16. The scrip currently trades at 15 times the FY17 estimated earnings and appears fairly valued. While the business case appears strong, any sharp, unprecedented rise in gas prices is a risk factor. Reggie Miller Authentic Jersey
Drones to monitor GAIL pipelines
The Indian Railways and National Highways Authority of India use drones for similar purposes. The government has granted permission to the Gas Authority of India Limited (GAIL) to use drones for aerial surveillance of its pipelines. This follows the use of drones for similar purposes by the Indian Railways and the National Highways Authority of India. “As line patrolling is extremely difficult for pipeline sections passing through forests, rivers, environmentally sensitive areas and other inaccessible areas, GAIL (India) Limited has awarded an order for aerial surveillance of 200 kilometres for the Hazira Vijaipur Jagdishpur/Dahej Vijaipur pipelines with drones as a pilot project,” Minister of State (independent charge) of Petroleum and Natural Gas Dharmendra Pradhan told Parliament. “Surveillance of a vast network of pipelines across the country is required to ensure the safety and reliability of pipelines and guard against sabotage, exposure, soil erosion, excavation and construction works,” Pradhan said. “Currently, it is being achieved through regular, periodic, foot-patrolling and air surveillance by hiring helicopter services on a monthly basis.” The drones will carry out surveillance using high-resolution and infrared cameras. NHAI signed a pact with the Indian Space Research Organization’s National Remote Sensing Centre and the North East Centre for Technology Application and Research for the use of UAVs to aid in surveillance of construction work. Separately, the Indian Railways has used drones to monitor the progress on the Dedicated Freight Corridor. Auston Matthews Womens Jersey
OPaL closes in on commissioning of Dahej units by procuring feedstocks
ONGC Petro additions Ltd (OPaL) is nearing commissioning of its dual feed cracker unit and dowstream polypropylene plant at Dahej. The company recently procured propylene and naphtha, which are the principal feedstock for the two upcoming units. An over $4.5 billion enterprise promoted by ONGC, OPaLis setting up SouthAsia’s largest integrated mega-petrochemicals complex at Dahej, Gujarat. The company recently procured propylene, a principal feedstock to start operations of its polyproylene unit wherein propylene was transported to OPaL’s petrochemical complex through road tankers. Moreover, Naphtha, the principal feedstock for OPaL’s Dual Feed Cracker Unit, arrived recently at GCPTCL port Dahej, through sea route from ONGC Hazira, for onward transmission through pipeline to OPaL’s production facility. “Procuring the feedstocks is a big leap forward towards the commissioning of this mega-project, as it will lead to starting of production operations of our Dual Feed Cracker Unit and downstream Polypropylene Plant,” said K Satyanarayana, chief executive officer, OPaL. According to Satyanarayana, the procurement will act as a ‘huge confidence booster’ for all its stake-holders who are waiting to see the plant go on-stream in the coming months. The multi-billion joint venture company was incorporated in 2006, as a public limited company under the companies Act, 1956, promoted by Oil and Natural Gas Corporation Limited (ONGC) and co-promoted by GAIL (India) Limited and Gujarat State Petroleum Corporation (GSPC). OPaL’s grass root mega petrochemical project at Dahej in Gujarat mothers a Dual Feed Cracker with a capacity to produce 1,100 KTPA Ethylene, 400 KTPA Propylene along with Polymerisation Units and various Associated Units consisting of Pyrolysis Gasoline Hydrogenation Unit, Butadiene and Benzene Extraction Units. The Polymer plants of OPaL has 2X360 KTPA of LLDPE/HDPE Swing unit, 1X340 KTPA of Dedicated HDPE and 1×340 KTPA of PP. The project in the advance stages of commissioning and is expected to go on-stream in 2016. Von Miller Womens Jersey
Numaligarh signs bio-refinery unit agreement with Chempolis
Bharat Petroleum Corporation Ltd’s Assam-based facility Numaligarh Refinery Limited (NRL) has signed a term sheet with Chempolis Ltd, a Finland-based bio refining technology for setting up a bio-refinery unit. The term sheet will be the basis for formation of a joint venture agreement for implementation of the project. A partnership agreement for the biorefinery project was signed between NRL and Chempolis in 2014. According to a statement from NRL, the company is implementing India’s first bio-refinery in Assam at an estimated cost of Rs 9.50 billion which would produce bio-ethanol with co-production of furfural and acetic acid from locally available non-food bio-mass feedstock. Bamboo is one of the major non-food biomass resources available abundantly in North East India and is among the fastest growing plants. 49,000 tons of bio ethanol produced annually would primarily be used to blend NRL petrol as mandated by the National Policy on Biofuel, with the surplus to be sold to other oil marketing companies. The company added that NRL has already inked MoUs with Nagaland Bamboo Development Agency (NBDA) and Arunachal Pradesh Bamboo Resources Development Agency (APBRDA) last year for sourcing of bamboo for the Bio Refinery. Cam Atkinson Authentic Jersey
RIL gets green nod for exploratory drilling project in Tamil Nadu
The Centre’s green panel has given its nod to RIL for carrying out eight additional exploratory well drilling to ascertain reservoir capacity and commercial viability of hydrocarbons in the block CY-III-D5 in Bay of Bengal off the coast of Tamil Nadu. Reliance Industries has been awarded exploratory rights for hydrocarbons prospecting in the offshore block DY-III-D5 under the New Exploration Licensing Policy-III. RIL has already been given the environment clearance to drill 11 exploratory wells in this block. As on date, the company has drilled nine wells and discovered hydrocarbons in three wells. Since seismic data and the drilling campaign shows presence of hydrocarbons in the block, RIL is planning to carry out eight additional exploratory well drilling to establish the reservoir capacity in this block. “In a recent meeting, the Expert Appraisal Committee of the Environment Ministry examined the proposal. After detailed deliberations, the committee recommended the project for environment clearance,” a senior government official said. The Committee has recommended the Ministry to give final clearance to RIL’s project subject to certain specific and general conditions, the official added. Among key conditions specified, the Panel has suggested the company to ensure gas produced during the testing should be flared with appropriate flaring booms. The flare system should be designed as per good oil field practices and oil industry safety directorate guidelines. The company should ensure that there is no impact on flora and fauna due to drilling of wells in the offshore sea. It should undertake conservation measures to protect the marine animals/biota in the region. The company should monitor the petroleum hydrocarbons and heavy metals concentration in the marine fish species regularly and submit report to the government. Among others, the Panel suggested that all the hazardous waste generated at the rig/offshore facility should be properly treated, transported to on shore and disposed of in accordance with the norms. Reliance entered the exploration and production business by becoming a 30 per cent partner in an unincorporated joint venture with British Gas and RIL in the Panna Mukta and Mid and South Tapti blocks. Besides Panna Mukta and Tapti (PMT) blocks, their domestic portfolio comprises of five conventional oil and gas blocks in Krishna Godavari, Mahanadi, Cauvery Palar, Gujarat Saurashtra and Cambay Basin and two Coal Bed Methane (CBM) blocks in Sohagpur East and West in Madhya Pradesh. The company also has blocks in overseas. Bryan Trottier Jersey
Iran ends free shipping of oil to India: Dharmendra Pradhan
Iran has ended free shipping of crude oil to India and has asked refiners like Mangalore Refineries (MRPL) and Essar Oil to arrange for freight, Oil Minister Dharmendra Pradhan said. Iran had in November 2013 offered free delivery of crude oil to Indian refiners as tough Western sanctions crippled its exports. With shipping lines refusing to transport Iranian crude for fear of being sanctioned, Iran used its shipping line for the delivery and did not charge for transportation. “From April 2016, NIOC has informed oil-importing companies like MRPL and Essar Oil that the future delivery would be based on Free on Board (FOB) basis and the freight has to be arranged by the buyer,” Pradhan said in a written reply to a question in the Rajya Sabha here. FOB is a trade term requiring the seller to deliver goods on board a vessel arranged by the buyer. During the last two-and-a-half years, Iran sold Indian refiners crude oil on cost, insurance and freight (CIF) basis. CIF is a trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination. Pradhan said the National Iranian Oil Company (NIOC), however, has agreed to provide vessels and insurance till such time Indian companies are able to arrange the same. Iran came out of western sanctions in January and has since then made several changes in the way it trades its vast oil. Besides ending free shipping, it has terminated a three-year-old system of getting paid for half of the oil dues in rupees. “NIOC has asked for all the payments in euros,” he added. Iran wants all bills raised from April to be settled in euros and the nearly USD 6.5 billion that refiners like Essar Oil and Mangalore Refinery and Petrochemicals Ltd (MPRL) owe it in past dues, to also be cleared in euros. Since February 2013, Indian refiners like Essar Oil and MRPL paid 45 per cent of their import bill in rupees to the UCO Bank account of the Iranian oil company. The remaining has been accumulating, pending finalisation of a payment mechanism. With the lifting of sanctions, the payment channels will reopen and Iran is seeking the pending dues in euros. MRPL owes close to USD 3 billion to Iran while Essar Oil has an outstanding of about USD 2.5 billion. Indian Oil Corporation (IOC) owes over USD 580 million to Iran while smaller payments are due from HPCL-Mittal Energy (HMEL) and Hindustan Petroleum Corporation. Iran has accumulated about Rs 12,000 crore in the UCO bank account which it could use to make payments for imports of steel and other commodities from India. “In the international market, contracts for supply of crude oil are negotiated on FOB or CIF basis. Hence, the cost of import of crude oil from Iran during 2016-17 will depend on the negotiated terms and conditions between NIOC and Indian oil companies,” Pradhan added. Jason Spezza Authentic Jersey
Tens of Thousands of Gallons of Crude Oil Spill Into Gulf of Mexico
The Coast Guard said that the spill had been contained and that two companies were being contracted to begin clean-up operations. The Bureau of Safety and Environmental Enforcement, which is part of the U.S. Interior Department, said Shell Offshore Inc. reported that production from all wells that flow to its Brutus platform, about 90 miles south of Timbalier Island, Louisiana, had been shut off. No injuries or evacuations were reported, the safety bureau said. Shell said Thursday night that a company helicopter spotted the sheen near its Glider subsea system at the Brutus platform. No drilling occurs at the site, which is an underwater pipe system that connects to a central hub, the company said. “No release is acceptable, and safety remains our priority as we respond to this incident,” Shell said. Adam Joseph Duhe Womens Jersey
Smart infra: Modi govt’s Delhi-Mumbai industrial corridor SPV+ Telangana search for foreign partners
The Indian government’s newly formed SPV Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC) has started scouting for foreign partners in a bid to converge next generation technologies across infrastructure sectors. The corporation has already held talks with technical partners in Hong Kong, Taiwan, Germany and Sweden, before it floats an RFQ (request for quotation) in June to select partners for specific projects. Following the RFQ, the DMICDC would appoint a transaction adviser to finalise a detailed project report and select partners. While visiting the Volvo Experience Center at Gothenburg in Sweden recently, DMICDC CEO and managing director Alkesh K Sharma told FE that there were opportunities in developing electric and hybrid energy based transportation in the newly conceived eight smart cities across the Delhi-Mumbai Industrial Corridor, and generating hybrid energy with a mix of solar, biogas, wind and tidal was also a possibility. Such hybrid energy could be transmitted through micro and mini grids in the residential zones of smart cities and DMICDC was weighing those options, he added. European companies like FOB Biogas, PPAM Solarcraft and Team Maksus were already running mini and micro grid pilot projects with hybrid power in the Andaman and Nicobar Islands. Volvo has already introduced hybrid and mini buses for the European market. The Indian smart cities could be another market for them if DMICDC agreed to incorporate infrastructure for running hi-tech vehicles. “We will incorporate facilities in our trunk infrastructure to run electric and hybrid buses in the smart cities,” Sharma said after meeting Haken Agnevall, president, Volvo Bus Corporation. MG Gopal, special chief secretary in the Telangana government, who also visited Volvo’s Gothenburg experience center, said there were opportunities to create hi-tech infrastructure in Telangana since the government there would have to start most of the things from scratch. Sharma said the first phase of developing a smart city and investment region at Dholera in Gujarat was in the offing, entailing an investment of `40,000 crore. The investment would be basically used for creating trunk infrastructure,” Sharma said, adding that the project work would take off through first constructing a `2,300-crore international airport followed by a complete aerotropolis project. He said DMICDC would source funds from infrastructure financing companies like IFCL and HUDCO. The corporation would also issue land and infra bonds to raise money. “We are looking at the time frame between now and 2030 and there will be a point of time when we will run into deficit financing. So, we will have to work out a mix of financing options like sovereign funds and external commercial borrowings. But all such financing options will be used for funding the entire $100-billion project which would comprise trunk infrastructure for eight smart city projects across the entire Delhi–Mumbai Industrial Corridor,” Sharma said. Although Japan government is partnering with the government of India in implementing the project, DMICDC will keep options flexible for participation of foreign partners. “We can make outright offer of land, it can be a leasing model depending on the type of financing the developer is looking at. Even DMICDC can give a hand-holding support to a technological partner by picking up majority stake in certain trunk infrastructure projects,” he added. At an interactive session with investors at Gothenburg organised by India Unlimited, an initiative of the Indian embassy in Sweden, Telangana special chief secretary Gopal said, in case of selecting technological partners, the Telangana government under its Industries Development Enabling Act can depart from the traditional route of competitive bidding and adopt a process of reverse bidding for unsolicited proposal. “In case the initial proponent matches the best price proposal in the reverse bidding, the initial proponent will be roped in as the qualified bidder,” he said, adding that industrial projects can be started at Telangana through self-certification and online application, which gets clearance in 15 days. Meanwhile, Akash Passey, Volvo Buses’ vice-president-Business Region International, said Volvo would start exporting India-made buses to Europe this year, initially on a small scale to a select few countries. Earlier, Volvo announced its plan to export India-made buses to Europe in 2015. Ryan Hartman Authentic Jersey
Indian Railways to lay tracks at 7.7 km per day, save thousands of crores with new techniques
Indian Railways is set to commission 2,800 kms broad gauge track at the rate of 7.7 km per day, a senior railways official said. V.K. Gupta, member engineering (ME) of Railway Board said that railways has commissioned around 4,800 km of broad gauge track in the last two years which includes about 1,200 km of new line, 1,900 km of gauge conversion and 1,700 km of doubling. “In the North-East region, Indian Railways commissioned about 900 km of broad gauge in the last two years, leaving only about 50 km of metre gauge lines to be converted in 2016-17. In addition, a 132 km part of third alternative connectivity route to the North-East (New Maynaguri – Jogighopa) was also commissioned,” Gupta said here. “Udhampur-Katra (25 km) railway line in Jammu and Kashmir, Rangapara-Murkongselek and Balipara-Bhalukpong (362 km) section in Arunachal Pradesh, Lumding-Silchar (210 km) gauge conversion in Assam are some of the important railway lines commissioned in the last two years,” he added. He further said that railways was committed to bring the North-East region on the railway map. “Passenger services have been introduced between Silchar and Agartala, thereby bringing, the capital of Tripura on broad gauge. Similarly, Dudhnoi-Mendipathar (20 km) new line has brought Meghalaya on Indian Railway broad gauge network. With the commissioning of Kathakal-Bhairabi and Arunachal-Jiribam sections, the states of Mizoram and Manipur have also come on broad gauge map of the country,” he informed. He added that railways have adopted innovative techniques in the last two years which resulted in savings of hundreds of crores. “Many innovations were done in design of bridges, formation etc. resulting into an immediate saving of about Rs. 700 crores for Northern Railway. In fact, these innovations would result in perpetual savings of thousands of crores every year for Indian Railways,” he concluded. Walter Payton Jersey
Kishore Biyani believes online fashion retail won’t click
Fashion retailers such as Aditya Birla Group, Reliance Retail Ltd and Arvind Ltd may have taken the plunge into the online fashion retailing business, but the man once described as India’s Sam Walton, Kishore Biyani, isn’t budging. The “model of spending so much money to acquire a customer”, doesn’t appeal to him, admits Biyani, chief executive officer of Future Group. “The cost of doing business in online fashion retail is not profitable,” he said on Thursday, during the relaunch of the Future Group’s Central store in Bengaluru. It’s a relaunch that has cost the company around Rs.88 crore—all spent on making the 110,000 sq. ft outlet in the city’s Commissariat Road neighbourhood more upscale. That may seem counter-intuitive, especially because fashion is the most profitable category for online retailers such as Flipkart, Myntra, Jabong and Amazon India. Then, Biyani has always been a contrarian. And this time, his contrariness is backed by numerical logic. “In the online model, the minimum cost of acquiring a customer is 20% of total sales, but for us, it 2-2.5% of total sales. So, there is no comparison between the two models. At the moment, no, we won’t get into online fashion retail,” said Biyani. He still recognizes the competition posed by these firms, though. That’s one reason for the relaunch of Central. The store now houses designer brands such as Satya Paul and high-street fashion brands such as Tommy Hilfiger and Global Desi. It has also more than doubled the number of brands available in the store from 200 to 500. “Competition is making us work harder. To compete with the new businesses, we need to make it all about the experience and seduction in order to make them spend more money,” said Biyani. The store has fashion consultants with whom shoppers can schedule sessions. It will also help customers find garments they have seen somewhere and want. Indeed, customers can even Instagram a picture of a garment and the store can help find it. Biyani expects all these efforts to lead to at least a 100% increase in the ticket size when it comes to spending. He didn’t disclose the takings of the store. An expert says Biyani may be missing a trick: “Online retail cannot be ignored, as the demand in a country like India is extremely scattered. It is actually a perfect solution to cater to customers that exist beyond the top 20 cities where brick-and-mortar retailers exist,” said Harminder Sahni, founder and managing director of Wazir Advisors, a retail consultancy firm. Still, the decision to go premium is a good one, he added. “Indian customers are aspirational. Anyone who is trying to go cheaper is dead,” says Sahni. The chain of Central stores comes under the listed entity Future Lifestyle Fashions Ltd, which also has other retail stores such as Brand Factory. Future Lifestyle earned a profit of Rs.18.55 crore in 2014-15 on revenue of Rs.3,134.09 crore. Biyani is happy that the government’s new regulations for online marketplaces places constraints on indiscriminate discounts. Biyani also says he has picked up some valuable lessons from his online competitors. “I think online business has taught us about velocity—how fast you pick up stock, how fast you deliver, how fast you sell. We are now making velocity a key driving force in our company. We are very slow now. I can’t tell you the current velocity rate, but it is very low. But we want to get to a place where we will be selling everything in eight weeks.” So, is there anything that will make Biyani take up online retailing of fashion? “The world has to change. The one where it thinks of profitability,” he said. Online retail is now a $14 billion market compared to the $1 billion it was in 2012. This growth has been fuelled by venture capital investors, who pumped in more than $9 billion into the business over the past two years alone. A huge chunk of this money has been spent on luring customers through advertising and, more importantly, discounts. Michael Strahan Womens Jersey