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DLF to RIL, TCS midway: Indian firms in hard times
Published on Tue, Nov 25, 2008 at 01:39 in Business section
Tags: Financial Crisis, Recession
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Economists expect India's economy to grow about 7 per cent in 2008/09, slowing from 9 per cent in the fiscal year ending March 2008 as high inflation and the global credit crisis take a toll. Here is a fact-box on some affected sectors and companies.
Real estate
DLF Ltd, India's top listed realty firm, has deferred some projects due to a slump in demand and liquidity crunch, warning slowing construction activity could affect other sectors. DLF's chairman said developers could accelerate layoffs and some could even shut down as the market contracts drastically after a boom in the past three years when land prices quadrupled in many parts of the country. At Monday's close, shares of the four largest real estate firms, DLF, Unitech, Housing Development & Infrastructure and Indiabulls Real Estate are all down more than 80 per cent this year.
Automobile
Tata Motors: Vehicle sales have been slumping across the world as economies weaken and consumers cut back on spending, forcing many automakers to consider output cuts. Shares of India's largest vehicle maker, Tata Motors Ltd, have fallen more than 80 per cent this year. The company has announced temporary shutdowns at three of its plants this month to avoid an unnecessary build-up of inventories. British-based carmaker Jaguar Land Rover, bought by Tata Motors earlier this year, is in secret talks with the UK government over a 1 billion pound ($1.5 billion) loan, according to a report by the Sunday Times newspaper.
Aviation
Jet Airways: Leading private carrier posted a net loss of 3.85 billion rupees ($77 million) in the July-September quarter as a result of slowing demand, high fuel prices and the global credit crunch. It reinstated 800 sacked flight attendants in October following protests in cities and demands for a probe by politicians.
Textiles
Indian textile firms, which export half their produce, mostly to the United States, Europe and Japan, have been among the worst hit by the global downturn. The textile sector could shed a further 500,000 jobs over five months, the federal trade secretary said on Nov 21, adding to industry estimates of 700,000 lost since June. Annual export growth for April-October stood at 21 per cent, 10 percentage points below the figure a month earlier, and falling behind the fiscal year target for expansion of 25 per cent.
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