BHUSHAN CASEQueering
The Pitch
INDIA’S largest IT services com-
panies, TCS and Infosys, which
recently reported FY2020 Q
results, continue to stress on the
banking and financial services
(BFSI) vertical. Both companies
have witnessed flat growth for
close to four quarters in the seg-
ment, which contributes a third
of their revenues. TCS reported
segment revenue share of 30.
per cent this quarter compared to
30.9 per cent in the last quarter.
For Infosys, this was 31.4 per
cent this quarter compared to31.6 per cent in the last quar-
ter. The management of both the
companies agreed that the soft-
ness in capital markets in the US
and Europe was the main reason
for this. However, both seem to
be optimistic, as TCS signed $billion BFSI contracts last quarter,
while Infosys is looking to grab op-
portunities in cards & payments,
corporate banking, digital trans-
formation and modernisation of
legacy systems.- Rukmini Rao
SLOWING
GROWTH
DRUG SALES in India are
slowing as price control mea-
sures and a sluggish market
caused the Indian pharmaceutical
market to post the lowest growth in the
last seven quarters. As per the data of drug sales tracking
agency AIOCD Pharmasofttech AWACS, drug sales growth
slowed to just 7.9 per cent in the first quarter of FY2020,
among the lowest in the past five years. Growth in May was
just 7 per cent, and fell further to 6.6 per cent in June, says
the data.
Normally, drug sales peak during the monsoon. This
year, the onset of the monsoon got delayed in most parts of
the country. While price caps for most drugs were hurting
profitability of companies, the industry is yet to fully absorb
the issues of moving to GST and rationalise inventory lev-
els. An analyst firm said most companies are likely to report
5-10 per cent growth for the year, as opposed to over 10
per cent for most leading firms in the past. The market was
expected to grow over 15 per cent per annum between
2015 and 2020 to over $55 billion.-P.B. JayakumarTHE BUZZBFSI
Stays Soft
IT SERVICESDRUG SALESAS MORE skeletons tumble out of Bhushan
Power and Steel's closet, it has put the
ongoing insolvency process in danger.
With Punjab National Bank (PNB) and
Allahabad Bank — two creditors to the com-
pany — making allegations of fund diversion
to the tune of `5,500 crore (PNB reporting
`3,800 crore and Allahabad Bank `1,
crore), enforcement agencies such as the
CBI and the ED may take charge of investi-
gations and, if required, seek permission
for attachment of properties.
This may jeopardise the insolvency
process as the bidders — in this case JSW
Steel, whose resolution plan has been
approved by the lenders — may find the
offer unattractive.
In case of Rei Agro, another company
that was being investigated and whose prop-
erties were attached by the ED, the insolven-
cy process failed to attract any bidders as the
attached assets could not be claimed. This
led to liquidation of the company.
-Dipak MondalPHOTOGRAPH BY REUBEN SINGH