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CONTENTS Zil-Hajj 1434 H
COVER STORY
26 »
BUDGET PICKS
2013
| April - June 2013
EXPERT’S SPEAKS
22 » Budgetary Support to Minorities Union Government has been providing financial assistance to those communities who escape the attention of normal allocation of budgetary resources or any other efforts of government for the development of the country. As such the government's specific programmes for community development are being prepared and implemented every year. Dr. M. Y. Khan Former Economic Advisor SEBI
40 » Gold as currency in Islamic Finance Many advocates of Islamic banking suggest using gold as a replacement for the money created through the interest rate mechanism. This is an interesting proposition, especially in the context of Malaysia where the state of Kelantan has already started using gold and silver coins as a potential replacement for the federally issued legal tender of currency notes and coins. It is important to assess its economic implications with respect to growth and overall economic activity in the country. Dr. Humayun Dar Islamic Economist, Shariah Advisor
MARKETS SHARIAH COMPLIANT STOCK ANALYSIS 9 » Fund Focus 10» Stock Universe 46 » How the Investment Ideas fared 47» ITE Shariah Index - 35
48 » Zero Debt
ECONOMY 45 » Corporate News & IIP Data SCOREBOARD
50 » Top 211 Shariah Compliant Companies ACADEMIC
8 » Islamic Finance Books 12 » Islamic Finance Education in India
41 » Islamic Finance Course
FAITH & FINANCE HADEETH SPEAKS 3 » Supplication (Dua) to pay off Debt QURA’ANIC INJUNCTION
4 » Islamic Rules Concering Financial Dealings FATAWA & JURISTIC OPINIONS 14 » Distribution of Inherent Wealth
17 » Zakat on property trade ECONOMICS
19 » Ownership of Wealth in Islam FIQHUL MUAMLAAT
42 » Home Financing - An Islamic View GLOSSARY
62 » Islamic Finance
NEWS & VIEWS
18 » Malaysia to be one of most vitual Islamic Finance Centres in the world 24 » British Government Promotes Islamic Finance 44 » Monetary authority of Singapore committed to developing Islamic Finance Services
FINANCIAL INDICATOR
20 » World Indexes & Economic Data 21 » Indian Equity Index At A Glance
For Subscription Form Please Refer To Page 24
Quartely ©
E FE
Vol. 1 Issue 2
April - June 2013
Patrons Maulana Mohammad Wali Rahmani (Secretary All India Muslim Personal Law Board)
Dr. M. Y. Khan (Former Senior Director RBI & Economic Advisor to SEBI)
S. S. Thakur (Former Chairman HDFC Bank & Comptroller [Exchange] RBI
Editor Imtiaz Rehman Merchant Shariah Advisors Maulana Khalid Saifullah Rahmani (Gen. Secretory Islamic Fiqh Academy, India)
Mufti Fuzailur Rahman Hilal Uthmani (Grand Mufti of Punjab)
Mufti Shuaibullah Khan
D
This is to thank you for sending me a copy of your Islami Tijara publication. I trust this initiative and your efforts would receive Allah's blessings. Kamsani Tati Tokio Marine Retakaful, Singapore First of all I must compliment you to take this initiative of launching the magazine which will spread knowledge related to Islamic Finance & Banking and will open the gate for the Muslim as well as non Muslim to understand the halal business and investment and create the interest to invest as per the Shariah law. I would like you to please try to deliver the magazine to the students or professionals seeking the opportunity in Islamic Banking & Finance. Shahid Khan Asst. Mananger- CRA National Securities Depository Ltd.
(Editor-in-Cheif Islamic Vision, Bengaluru)
Mufti M. Riyaz Ahmed Qasmi Mufti Mohammad Yahya Qasmi Research Shabistan Khan Advertisement & Distribution Abdur Rasheed Ansari E-mail : [email protected]
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For Subscription and Queries - Write to us Email : [email protected] Is sue Date : April - June, 2013 Printed & Published by Imtiaz Rehman Merchant, 22, Red Cross St., Nazneen, 2nd Floor, Agripada, Mumbai – 400 011. MAH. Owned by Pragmatic Wealth Management Pvt. Ltd. 22, Red Cross St., Nazneen, 2nd Floor, Agripada, Mumbai – 400 011. MAH. and Printed at Printvision 31, Joyti Ind. Estate, Nooribaba Darga Road, Near Makhamali Talao, Thane (W) - 400601 and Published at 22, Red Cross St., Nazneen, 2nd Floor, Agripada, Mumbai – 400 011. MAH.
Disclaimer The information contained in this magazine Islami Tijara does not constitute an offer or solicitation to sell any security or fund to or by anyone in any jurisdictions, nor should it be regarded as a contractual document. Under no circumstances should the information provided on this magazine be considered as advice for any investment, or as a sufficient basis on which to make investment decisions. The information contained herein is research done by Pragmatic Wealth Management P. Ltd. (PWM) but no warranty of accuracy or completeness is given. PWM is not responsible for and provides no guarantee with respect to any of the information provided in this magazine past results are no indication of future performance. All information in this magazine is suggestive and informative and does not constitute investment. The Opinion expressed in various articles do not necessarily reflect the views or policy of ‘Islami Tijara’ and individual are responsible for their views. No part of this magazine may be reproduced without the prior written permission of the editor.
Islami Tijara is an excellent magazine providing us information on halaal income. I like your question and answer section very much. Azizur Rehman Ansari Mumbai I thank you for sending Islami Tijara magazine. It is a good magazine on Islamic Finance. Jameel Ahmed Warangal I am really happy to know about such a unique magazine on Islamic Finance and Investments. Will also inform others about it. Nazir Ahmed Srinagar
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FAITH & FINANCE
HADEETH SPEAKS
Supplications (Dua) to pay off Debt Recite: Allaahummak-finee bihalaalika 'an haraamika wa 'aghninee bifadhlika 'amman siwaaka. "O Allah, save me from haraam and make the halaal sufficient and by your boon/favour make me independent from others". (Mishkat) These words were spoken by Ali (R.A.) taught by Prophet Mohammad (SAW.) when a person expressed a shortfall in his wealth to Ali (R.A.) he said: "Shall I not show you what Prophet Mohammad (SAW) taught me, even if there is a debt equal to that of a huge mountain then Allah will pay it". Ali (R.A.) then recited the above dua. (Tirmidhi) Abu Saeed Kudri (R.A.) narrates that once a person mentioned to Prophet Mohammad (SAW.) that he was concerned about his major debts. Prophet Mohammad (SAW.) replied "Shall I not show you those words by saying which Allah will remove your concern and pay your debts?" The person asked "What is it, O Messenger of Allah?" Prophet Mohammad (SAW.) told him to recite the following morning and evening: Allahumma inni 'auzu bika min alhamma wal 'huzn, wal 'ajzi wal kasali wal bukhli wal jubn, wa dhala'iddini wa 'galabatir rajaal. "O Allah I seek refuge in You from worry and grief, I seek refuge in You from hopelessness and laziness, I seek refuge in You from miserliness and cowardice and I seek refuge in You from overwhelming debt and from the force of men". The person stated that he recited this dua and Allah removed all his worries and debts. (Abu Dawood)
Sayed-ul-Istighfaar (The leader of the duas of forgiveness), Shudaat bin Auwais Aas (R.A.) narrates that Prophet Mohammad (SAW.) said that Sayed Istighfaar is: Allahumma anta Rabbi la ilaha illa anta, Anta Khalaqtani wa ana abduka, wa ana 'ala ahdika wa wa'dika mastata'tu, A'udhu bika min Sharri ma sana'tu, abu'u Laka bini'matika 'alaiya, wa Abu Laka bidhanbi faghfirli innahu la yaghfiru adhdhunuba illa anta "O Allah, You are my Lord, there is none worthy of worship besides You, You have created me and I am Your servant, I am Your pact and promise, I seek refuge in You to the best of my ability from my evil sins. I testify to Your favours and to my sins, hence forgive me since there is no one else to forgive sins besides You". (Mishkat) The person who recites this dua sincerely in the course of the day and night and dies will be among the people of Jannah. (Bukhari) Paying one's debt comes in priority over performing Hajj If a person has debts and he has no money to repay his debts and to perform Hajj, then he is not considered as having the financial ability, which is a condition for Hajj to become an obligation (on a person). The financial ability for a person is to find a suitable means which will take him to Hajj after having fulfilled his obligations, legal expenses, and basic needs. Among fulfilling the obligations, a person should repay his debts.
Islami Tijara| April - June 2013 | 3
FAITH & FINANCE
QURANIC INJUNCTION
ISLAMIC RULES CONCERNING FINANCIAL DEALINGS
T
here are many examples of financial dealings among Muslims leading to disagreements, strain in relationships and even fights, instead of leading, as they normally should, to strengthening the bond of Muslim brotherhood and to mutual benefit. Almost everyone in our community must know cases, in which two or more Muslims become partners in a business or one gives a loan to another brother and the result is mutual pain instead of mutual benefit. On the basis of such examples many Muslims have decided that it is better not to deal with other Muslims in any way, but this negative solution is not very Islamic, since it is not quite consistent with the spirit of Muslim brotherhood. A more positive solution would be to revive the teachings of Islam regarding financial transactions; teachings which, if revived, could make such transactions far more pleasant and profitable and greatly increase the financial power of the community. If we analyze broken business partnerships or other difficulties in dealings of a financial nature, we will in every case find that these difficulties resulted from a failure on the part of one or more parties to fulfill some agreement implicit in those dealings. There are four possible reasons why any party may fail to fulfill an agreement: due to failure of memory, due to differing understandings of the terms of the agreement, due to bad faith or due to circumstances beyond the control of the party or parties concerned. The Qur'an and Hadith give guidance aimed at countering each of these causes of a breach of agreement. What the Holy Quran has to say about Writing and Witnessing the Deal To avoid failure of memory and to reduce the chances of misunderstanding and bad faith, the Qur'an commands the writing of financial deals and/or having the deal confirmed by witnesses. The Quranic commandment is contained in the following two verses, the first of which is the longest verse in the Qur'an: 4| April - June 2013 | Islami Tijara
“0 those who believe, when you transact a debt payable at a specified time, put it in writing. And let a scribe write it between you with fairness. And no scribe should refuse to write as Allah has educated him. He, therefore, should write. And the one who owes should give the dictation, but he must fear Allah, his Lord, and should not curtail anything from it. And if the one who owes is feebleminded or weak or cannot himself give the dictation, his guardian should dictate with fairness. And have two witnesses from among your men. And if two men are not there, then one man and two women from those witnesses you are pleased with, so that if one of the two women errs the other woman may remind her. And the witnesses should not refuse when summoned. And, be not loath to write it down, as payable at its time, no matter how short or long. That is more equitable with Allah and more establishing for the evidence and nearer to that you fall not in doubt, unless it be a cash deal you carry out among yourselves. In that case there is no sin on you if you do not write it. And have witnesses when you transact a sale. And neither scribe nor witness should be harmed. And if you do, it is certainly a sin on your part. And fear Allah. And Allah teaches you. And Allah is All-Knowing in respect of everything. And if you are in travel, and find no scribe, then (resort to) security, taken in possession. However, if one of you trusts the other, then the one who has been trusted upon should fulfill his trust, and should fear Allah, his Lord. And do not conceal the testimony. And whoever conceals it, his heart is, surely, a sinner. And Allah is All-Aware of what you do. (Verses 282 - 283) The Quranic injunctions on Loan An important principle of the Law of Dealings, or the Law of Contracts in modern legal terminology, has been taken up in the verses appearing above. Following this, appears a specific principle of the general rules of evidence. These are times when writing is the rage. The written word has taken the place of human speech but think of the days of fourteen
FAITH & FINANCE hundred years ago when almost the entire business of the world was conducted verbally. The principle of writing and retaining documents did not just exist. It was the Qur'an which first pointed out to its importance and said: When you transact a debt payable at a specified time, put it in writing. Two principles have been stated here. These are: 1. A written document should be prepared while concluding a transaction on deferred payment basis, so that it may be availed of in cases of error or refusal. 2. While making a transaction on deferred payment basis, it is necessary that the due date of its payment should be determined. It is not permissible to defer the payment for an indefinite period of time because this can open the doors of dispute. This is why the Muslim Jurists have stressed that the time limit so set should not have any ambiguity at all. It should specify the exact date and month. There should be nothing vague about it, for instance, the time of the harvesting of crops cannot be fixed, because the time of harvesting may vary subject to weather conditions. Since writing was not common in those days (and even after writing has become so common, the majority of world population is the same as does not know how to write), it was possible for the scribe of the agreement to write down what was not intended, thereby causing undue loss or gain to one or the other party. Therefore, it was said: And let a scribe write it between you with fairness. Firstly, the instruction given here requires that the scribe should not be prejudiced in favour of one of the parties. On the contrary, he should be impartial so that there remains no scope for doubt or concern for anyone. Secondly, the scribe was instructed to write justly. Let him incur no permanent loss on himself by working for the vanishing gain of others. After that, the attention of the scribe has been drawn to the fact that Allah Almighty has given him the ability to write, for which he can show his gratefulness by not refusing to write. As to who should initiate the writing of the document, it was said: And the one who owes should give the dictation, For instance, if a person has made a purchase on credit, then be is the one who should dictate the entries of the document because this will be a written agreement on his behalf. In order to offset the possibility of any addition or deletion in the written document, it was said: But he must fear Allah, his Lord, and should not curtail anything from it. It sometimes happens that the person incurring debt is fickle-minded, or superannuated in age, or a minor, or mute, or the speaker of a language not known to the scribe. Since such a person does not have the ability to dictate a document, it was said that, in a situation like this, his wali or guardian should dictate the written agreement.
For financial transactions involving credit, the Qur'an commands the writing of the terms of the transaction and having the deal confirmed by two male witnesses or one male and two female witnesses. For on-the-spot transactions, the writing of the deal is made optional while witnesses are apparently recommended. These instructions, it should be noted, are delivered on the assumption that people cannot not read or write. This assumption is still relevant and is likely to remain forever relevant. A majority of mankind still cannot read and/or write and it is likely that there will always be a large minority of such people. But there is another reason why the Qur'anic instructions will always remain relevant. As the level of literacy and education increases in the world so does the complexity of financial dealings, so that an average person is likely to remain incapable of writing and concluding every financial deal on his own. Just as in the time of Qur'anic revelation an average person needed a scribe because he was unlettered; in the modern times an average person needs a lawyer or a financial agent because despite being literate he does not know all that is involved in most modern deals. Similarly the role of witnesses is now often taken by signatures, thumb impressions, notaries/lawyers or court officials, although ordinary witnesses are frequently used. It might be surprising for some readers that the Qur'an recommends that even on-the-spot transactions such as sale of goods on cash-and-carry basis should have some proof in writing or through witnesses and perhaps because at first sight it looks unnecessary this Qur'anic recommendation has been almost completely ignored in practice in the Muslim world. However, as the business became more organized, the wisdom of the Qur'anic recommendation has been independently discovered in modern times. These days, each time we buy any small or large item in a shop, we are issued a receipt by the seller. This is because as a proof of sale the receipt serves the following purposes, among others: a) Defective items may be returned with little or no arguments; b) If the shopkeeper overcharged or cheated the buyer in some other way, he may be brought to justice.
In these verses the Qur'an distinguishes between two types of financial transactions: those that involve credit for a definite period and those that are carried out on the spot. Examples of the first type include loans for a definite period, purchase or sale of goods with either the payment or delivery of goods promised for some fixed time in the future, while the examples of the second type include buying something in a shop on a cash-and-carry basis.
Islami Tijara | April - June 2013 | 5
EXPERT’S SPEAK
Gold as a currency in Islamic finance? Dr Humayon Dar is an Islamic economist, transformational thinker, author, Sharia advisor and Islamic banking expert, focusing on how to create financial solutions that conform with Sharia law.
M
any advocates of Islamic banking suggest using gold as a replacement for the money created through the interest rate mechanism. This is an interesting proposition, especially in the context of Malaysia where the state of Kelantan has already started using gold and silver coins as a potential replacement for the federally issued legal tender of currency notes and coins. It is important to assess its economic implications with respect to growth and overall economic activity in the country. Americans find it difficult, and painful, to revert to the gold standard for reasons peculiar to the US economy, but these limitations are not relevant to Malaysia. In Malaysia, the government can experiment with the gold currency by limiting the use of gold and silver coins issued by the state governments for investment purposes only. This will allow people to buy gold and silver coins through paying in ringgit providing an alternative tool for saving on a long-term basis, even if gold and silver coins are not treated as legal tender. Furthermore, the Malaysian government can use Islamic banking as a tool to introduce gold deposits for customers who would like to save for the long term. In fact, Bank Negara Malaysia (BNM) may continue to issue coins like Kijang Emas bullion coins and distribute them through Islamic banks. At present, Malayan Banking Bhd (Maybank) designates 32 branches to sell Kijang Emas bullion coins, but an extended programme may be rolled out with the help of Islamic banks in the country. While Islamic banks could be allowed to use gold deposits (by way of selling gold for cash), they must return the depositors' gold if the latter wish to redeem after a specified time period. Alternatively, the gold deposits must be kept for safe custody, in which case the depositors must be willing to pay a safe custody fee to the banks. This alternative arrangement will also have a dampening effect on the ability of the Islamic banks to extend credit to their customers as they will not be able to use the depositors' gold (by selling it for cash) to offer financing to those who may need it. This will, in turn, have implications for economic growth. If Islamic banks are reluctant to offer gold deposits, the government may use the likes of Lembaga Tabung Haji and similar institutions to allow Muslims to save in gold and silver. It is expected that an overwhelming demand for the proposed gold deposits will compel Islamic banks to start offering such deposits out of market pressure. 6| April - June 2013 | Islami Tijara
Radical idea If the introduction of gold coins in the states of Kelantan and Perak proves successful (which appears to be the case so far), monetary authorities, that is, BNM, may consider using gold coins to bring about monetary reforms in the country. Indeed, advocates of monetary reform have long advocated a return to the gold standard. Some prominent economists, like Nobel laureates Robert Mundell and James Robertson, have written extensively on the benefits of returning to the gold standard. In the context of Islamic banking and trade, the likes of the former prime minister, Dr Mahathir Mohamad and activists like Tarek El Diwani, have been influential figures in advocating the introduction of gold dinars and replacing the fractional reserve-based banking system. While it may take some time for BNM to expand its Kijang Emas bullion coins issuance, the increasing demand for Islamic banking in Malaysia (25% of the country's financial sector's assets derive from Islamic banking) offers Islamic banks a window of opportunity to exploit the trend by offering bullion-based investments to those who consider gold coins to be more syariah-compliant than conventional money created through an interest-based credit system. If the gold deposits look like a radical idea, there are some other more acceptable ideas floating around. James Fierro of Recipco Holdings Ltd has for some time been advocating for an international currency based on the excess capacity the world's businesses have at any given point in time. This concept has similarities with the gold dinar in the sense that both the currencies are based on the real value of goods and services they represent (gold dinar representing the intrinsic value of the gold, and the Recipco's proposed currency representing the value of goods and services excessively produced by businesses). As these ideas are seen as radical by many, including Islamic bankers, it is important that the governments take a proactive role in implementing these proposals. As the government of Malaysia is spearheading an initiative to develop tools for liquidity management for Islamic banks, gold dinar and the issuance of a currency based on excess capacity may not be entirely abstruse concepts.
ACADEMIC
I SLAMIC F INANCE B OOKS Author/Publisher: John Wiley & Sons Descriptions: How the Islamic finance approach to risk can serve as a model for global reform. The recent U.S. financial debacle has affected the entire world and led to major reviews of risk management in Financial Institutions
Author/Publisher: Habib Ahmed Descriptions: A systematic study of the process of developing Islamic financial products for banks. Islamic banking began in the 1970s with the aim of providing financial services compatible with Islamic law.
Author/Publisher: Tarek El Diwany Descriptions: Tarek El Diwany's detailed and forthright commentary on the nature of usury and modern banking has attracted a wide readership since it was first published in 1997. This new edition has been extended with material arising from the recent financial crisis and includes a wealth of academic and popular references for readers who wish to delve deeper into the topic.
Author/Publisher: Brian B. Kettell Descriptions: Introduction to Islamic Banking and Finance is a succinct guide to the key characteristics of Islamic banking highlighting how these differ from conventional banking. This detailed book illustrates how Islamic banking is consistent with the Sharia'a, a key element of which is the prohibition on collecting and paying interest.
Author/Publisher: DR M. KABIR HASSAN Descriptions: Islamic Finance has experienced rapid growth in recent years, showing significant innovation and sophistication, and producing a broad range of investment products which are not limited to the complete replication of conventional fixed–income instruments, derivatives and fund structures.
Author/Publisher: Ibrahim Warde Descriptions: Islamic finance is growing at an astonishing rate and is now a $1,200 billion industry, with operations in over 100 countries. This book explains the paradox of a system rooted in the medieval era thriving in the global economy.
Author/Publisher: Mahmoud A. El-Gamal Descriptions: This book provides an overview of the practice of Islamic finance and the historical roots that define its modes of operation. The focus of the book is analytical and forward-looking. It show that Islamic finance exists mainly as a form of rent-seeking legal-arbitrage.
Author/Publisher: 1st Ethical Charitable Trust Descriptions: This text has been designed for use by professionals new to the field of Islamic banking and finance, and by students at undergraduate level or above. It covers the historical, theological, commercial, legal, institutional and macro-economic factors affecting the modern world of Islamic banking and finance
For more details you may visit www.globalislamicfinancemagazine.com 8| April - June 2013 | Islami Tijara
MARKETS
ISLAMIC INVESTOR FUND FOCUS BONANZA PRAGMATIC SHARIAH FUND (PMS) As on 28th March 2013
FACT SHEET Fund Manager Pragmatic Wealth Management P. Ltd. SEBI Licensed Bonanza Portfolio Ltd Product Shariah Advisor Islamic Investment & Finance Board
Fund Objective: The objective of the strategy is to secure long term gains from the investments in the combination of large and mid size companies which are Shariah Compliant. It excludes investments in the industries like Banking, Liquor, Tobacco, Entertainment, NBFCs and Securities trading business etc.
(IIFB)
Benchmark Sensex , Nifty, S&P Shariah Index (Index) Domicile/Type India / Equity Inception Date 16th August 2011 Fund (a) Fund Type : Open Ended (Portfolio Management Services- PMS) Characteristics
Fund Advisors: Imtiaz Merchant
(b) Fund Size : As of 28 March 2013 16.30 Million Rupees (163 Lakhs)
Minimum Investment: ` 25 lacs
(c) Returns on Shariah PMS Funds : 16.30
Sectors: Bonanza Pragmatic Shariah Fund (PMS) will invest in the following Shariah approved sectors: Automobiles, Consumer Goods & Services, Construction & Reality, Capital Goods & Industrials, Healthcare, Information Technology, Metal & Mines, Oil & Gas, Power & Utility and Telecom
BONANZA - PRAGMATIC SHARIAH FUND (PMS) Top 5 Holdings
7.5%
Information Technology
ONGC
6.4%
Oil & Gas
Reliance Industries
5.5%
Oil & Gas
HCL Technology
5.3%
Information Technology
Wockardt
4.8%
Health Care
: 11.00
SECTOR ALLOCATION
Sector
Wipro
(f) Returns on BSE Shariah-50
(h) Performance Fees : If Annualized profit is up to 20%, then 10% performance fees will be charged on profit. However, if the Annualized Profit is above 20%, then on the incremental profit above 20%, the performance fees will be charged at the rate of 15%.
Stock Selection: The stocks invested in the Shariah fund is selected from Shariah compliant stock universe of Pragmatic Wealth Management P. Ltd. The Shariah stocks are approved by Islamic Investment & Finance Board (IIFB)
Percent Holdings
: 12.60 : 12.80
(g) Minimum Investment : As per SEBI norms 2.50 Million Rupees (25 Lakhs)
Performance Benchmark: The Shariah PMS is benchmarked against Sensex, Nifty, S&P Shariah index.
Company Name
(d) Returns on Sensex (e) Returns on Nifty
8%
Automobiles 9%
27%
Consumer
Healthcare 16%
Industrials & Capital Goods Information Technology
14% 5%
21%
Oil & Gas Cash
Islami Tijara | April - June 2013 | 9
MARKETS
Shariah Comp liant Stock Universe Analysis ( April - June 2013)
P
ragmatic Wealth Management Pvt. Ltd (PWM) company specialized in Shariah Investments in stock market has been screening Shariah compliant stocks under the supervision of Shariah scholar. Shariah compliance check is done for the all the Stocks listed on BSE Stock Exchange on last trading day of every quarter. After screening of the listed universe, we arrive at the Non Complaint stocks due to Industry, Non compliant stock due to ratio and compliant companies. This list of compliant is called as the ITE Shariah Compliant Universe. The list of compliant companies such obtained is analyzed for sector and Industry weights and Size weight. For April – June 2013 quarter Shariah screening data of Indian stock markets, it was observed that out of the total 3,591 traded stocks on the BSE, 761 stocks are Shariah complaint which is about 21 percent in terms of numbers. However, The market capitalization of these 761 Shariah complaint stocks as of 28th March 2013 was Rs. 3,167,720
crore which is almost 50% percent of the total market capitalization of Rs. 6,350,357 of the BSE traded stocks. In terms of the size of the companies based on its market capitalization, 43 companies are large cap companies, 44 companies are mid cap companies. In quarter under preview 151 companies are small cap companies and 523 companies are micro cap having market cap less than 500 crore. In terms of sectors Information Technology have the highest weight of 22% followed by Oil & Gas at 17% and Consumer Goods and Services at 16%. The above analysis clearly demonstrates the scope for Islamic investment in Indian stock markets and it further goes to proves that Islamic Investment is not only a viable option for Shariah complaint investors but, ethically sounds and social responsible as a parameter for Islamic investment is considered.
Analysis of Shariah Compliant Universe Compliant Status
Quarterly No. of No. of Market cap* Market Turnover % Companies Companies % cap in % Average Turnover
Compliant Stock Ratio Base Non Compliant Industry Base Nom Compliant Total
761 2,150 680 3,591
21% 60% 19% 100%
3,167,720 1,624,350 1,558,287 6,350,357
50% 26% 25% 100%
6,798,820,712 8,440,858,967 6,389,078,783 21,628,758,462
31% 39% 30% 100%
Free Float Market Cap
Weight
1,148,317 137,028 107,713 21,316 1,414,375
81% 10% 8% 2% 100%
Size Analysis of Shariah Compliant Universe Market Size
No. of Companies
Weight
43 44 151 523 761
6% 7% 16% 71% 100.00%
Large Size Companies Mid Size Companies Small Size Companies Micro Size Companies Total
Market cap* Weight 2,529,568 342,104 248,716 47,333 3,167,720
78% 13% 7% 2% 100%
Size Weight by Market Capitalization 2% 7%
Large Size 43 Companies : 78% Market Capitalization
13%
Mid Size 44 Companies : 11% Market Capitalization Small Size 151 Companies : 7% Market Capitalization Micro Size 523 Companies : 2% Market Capitalization 78%
10| April - June 2013 | Islami Tijara
MARKETS
Sector Analysis of Shariah Compliant Universe (April - June 2013) Sector
No. of Companies
Market cap*
Weight
FF Market Cap
Weight
34 63 276 156 77 108 31 13 3 761
351,568 160,427 332,476 573,344 323,168 723,402 102,464 575,787 25,085 3,167,720
11.10% 5.06% 10.50% 18.10% 10.20% 22.84% 3.23% 18.18% 0.79% 100%
187,325 75.398 171.524 229.673 147,898 313,010 27,797 244,977 16,702 1,414,303
13.25% 5.33% 12.13% 16.24% 10.46% 22.13% 1.97% 17.32% 1.18% 100%
Automobiles Conastuction & realty Industrials & Capital G. Consumer Healthcare Information tech Metal & Mining Oil & Gas Power & Utilities
Sector Weight by Market Capitalization 1%
Automobiles : 11.10% 11%
Construction & Realty : 5.06%
18% 5% 3%
Industrials & Capital Goods : 10.50% 11%
Consumer : 18.10% Healthcare : 10.20% Information Technology : 22.84%
23%
18%
Metals & Mining : 3.23% Oil & Gas : 18.18%
10%
Power & Utilities : .79%
Shariah Compliance Criteria* PRIMARY FILTER (INDUSTRY/ BUSINESS ACTIVITY)
SECONDARY FILTER (FINANCIAL RATIOS)
Non Permissible (Haram) Industries
Leverage & Liquid Ratios
Banks / NBFCs / Insurance / Securities Trading
l
Alcohol Beverages like wine & Distilleries
l
Pork & Non-Halal Food Products
1. Total Debt to Market Cap* less than 33 percent 2. Cash +Interest bearing securities to Market Cap less than 33 percent
l
3. Sundry Debtors to Market Cap less than 33 percent
Tobacco-Cigarettes / Pan masala / Chewing Tobacco
l
Advertising / Media and Casinos
l
Film Production Companies / Cinemas / Cable TV and Music Companies
l
4. Interest Income to Total Income less than 5 percent Notes : *Market Cap = Average Twelve Months Trailing Market Capitalisation Sundry Debtors = Receivables / Total Debt = Long-term debt + Short-term debt Total Income = Sales Turnover + Other Income
* Source : Pragmatic Wealth Management Pvt. Ltd.
Islami Tijara | April - June 2013 | 11
ACADEMIC
ISLAMIC FINANCE EDUCATION AT BUSINESS SCHOOLS IN INDIA
Infinity Consultants Promotes Islamic Finance Awareness at Leading Business Schools in India
I
nfinity Consultants is actively pursuing Islamic finance training and development in India through its exclusive partnership with Ethica Institute of Islamic Finance, a leading global provider of Islamic finance education. Even though Islamic finance is one of fastest growing segments of global finance and the largest alternative financial system in the world today, the absence of a formal Islamic banking industry in India has led to limited awareness among Indians on the scope and opportunities available in the industry. As part of its commitment to build Islamic finance awareness, Infinity launched a campus-talk initiative titled “Opportunities in Islamic Banking and Finance.” Saif Ahmed, Managing Partner at Infinity and a former Islamic banker and Wall Street investment banker delivered talks at some of the leading business schools across the country. Saif addressed hundreds of students in over 15 institutions across India and received tremendous feedback from the students as well as the faculty. Drawing on his experience as a former Islamic banker, Saif stressed on the underlying ethical nature of Islamic financial products during his talks and offered many practical insights on how to prepare for a career in this industry. Several institutions have expressed an intention to include an Islamic finance elective in their curriculum. 12| April - June 2013 | Islami Tijara
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Shariah
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FAITH & FINANCE
Fatwa & Juristic Opinions Distribution of Inherent Wealth Kindly let me know regarding the distribution of property of my grandfather. He passed away any years ago leaving behind an agricultural land and the house in which he used to live. He had 1 son & 6 daughters, i.e all together 7 children. He had given some piece of land when he was alive to some of his daughters because they were in need of the money at that time. Now my father (i.e only son of my grandfather) is planning to sell the agricultural land & he want to distribute the amount obtained from the sale of that land among her sisters as well. Can you tell me the share of each six daughters & the only son (as per the Quran and Hadith), supposing the amount obtained from the sale of that land be rupees 1000. Also my father lives in the house which belongs to my grandfather & he is taking care of it with all the repair and maintenance required. He says whenever he will sell it, he will distribute the money among her sisters as per their Shariah Haqq & none of her sister had any objection with that, Is it permissible to do this or should he sell the house as soon as possible & distribute the money among all her sisters? Praise be to Allah. Firstly: If the grandfather gave wealth to some of his daughters because they were in need of it, either because of poverty, sickness or some other reason that dictated that they be singled out for that, there is no blame on him for that and he does not have to give to the rest of his children except in the case of need. Secondly: If a father dies and leaves behind a son and six daughters, and there is no heir apart from them, then the son gets double the share of each daughter, because Allah, may He be exalted, says (interpretation of the meaning): “to the male, a portion equal to that of two females” [an-Nisa' 4:11]. If the price of the land is 1000 rupees, then your father gets 250 rupees and each of his sisters gets 125 rupees. This is how everything that was left behind by the grandfather after he died should be divided: the house in which he used to live, and in which your father is living and taking care of its maintenance, and everything else he left behind of money, property and land. The basic principle is that the estate should be divided immediately after the death of the owner of the wealth, because delaying it may come under the heading of neglecting some people's rights or lead to rights being withheld from some. But if your father had made an agreement with his sisters to sell the house in the future, with their willing consent, there is nothing wrong with that. And Allah knows best. I am married with no children. My wife has a daughter from a previous marriage. My mother and sister living, I had a brother who passed away and left a widow. If I were to die, how should my estate be distributed?
The distribution of the estate cannot be decisively determined before death takes place. The reason for this is because the inheritors might change. However, I will inform you of the way your estate should be distributed should those inheritors remain exactly as they are today. The division will be as follows: 1. Your wife receives 1/4 of the estate if you do not have children from her or from another woman. If you 14| April - June 2013 | Islami Tijara
FAITH & FINANCE have children, this percentage will change. 2. Your wife's daughter from a previous marriage receives nothing from your estate unless you choose to make a bequest to her. 3. Your mother receives 1/3. 4. Your sister, if she is your full sister or a half sister from your father's side, receives 1/2 of the estate. If she is a maternal half sister, the case will be different. We can only reply to you after you explain her position. 5. Your deceased brother is not entitled to anything. 6. Your sister-in-law is not entitled to anything. How to carry out the division: Since the shares 1/3, 1/4, and 1/2 total up to 13/12 an therefore exceed the total estate, everyone's shares will be reduced and the estate will be divided into 13 shares. Your wife will receive 3 of the 13 shares. The mother will receive 4 of the 13 shares. Your sister will receive 6 of the 13 shares. If you wish your stepdaughter (or some other person) to receive something, you may leave her a bequest. A person has a right to alot up to one-third of his total estate as bequests to non-inheritors. The bequests are to be distributed before the division of the inheritance described above. My father expired last year in May. Now his property is to be distributed. What should be the share percentage for each recipient? My mother, his only wife, is alive. I have five elder brothers all married with children. I, his only daughter, am also married and have a son.
Answered by Sheikh `Abd al-Wahhâb al-Turayrî, former professor at al-Imâm University in Riyadh Your father died leaving behind a wife, five sons, and a daughter. The division of the estate will be as follows: The wife will receive 1/8 of the total estate. The children will share in 7/8 of the estate with each male child receiving twice the share of the female child. The best way to facilitate this is to take the total value of the deceased's estate and divide it into 88 equal shares. The estate will be divided into 88 shares. The wife is entitled to 1/8 of the estate, so she receives 11 shares. Each of the five sons will receive 14 shares. The daughter will receive 7 shares. Expressed as percentages this means: The mother receives 12.5% of the total estate. Each son receives roughly 15.9%. (or 15 10/11 %) The daughter receives roughly 7.95% (or 7 and 84/88 %).
A man dies leaving behind his mother, father, and four daughters. He has no sons. His wife and his brothers passed away before him.
Islami Tijara | April - June 2013 | 15
FAITH & FINANCE This is a case of a man who is survived by no one else but his four daughters and his mother and father. His estate will be divided as follows: His mother will be entitled to one sixth of the estate. His four daughters will share collectively in two-thirds of the estate. His father will receive what remains, which will be one-sixth of the estate. Since the daughters share equally in their 2/3 portion, and since there are four daughters, each daughter will receive one-sixth of the estate.
Do children inherit from their parents? If they do, then how much do they receive?
Children definitely do inherit from their parents' estates. Allah says: “Allah directs you regarding your children, to the male a portion equal to that of two females. If only daughters, two or more, their share is two-thirds of the inheritance. If only one, her share is one-half.” [Sûrah al-Nisâ': 11] However, the exact portion that the children shall receive depends upon who the other inheritors are. This can only be determined by a scholar who looks directly into an inheritance case firsthand.
We were five brothers and three sisters. Two of my brothers died while my father was still alive. Now that my father has passed away, his legal heirs are 3 brothers, 3 sisters and my mother. I would like to know whether the children of my late brothers have a right to share in my father's property. ?
One of the reasons someone inherits is that he is alive when the owner of the estate dies. If the brothers and sisters were alive when the owner of the estate died, then their children deserve their fathers' or mothers' shares if they have yet to be distributed. The reason for this is that these children would be the inheritors of their parents and accordingly they have the right to receive their share. However, if any of the estate owner's sons and daughters die before he does, then their children have no right to receive any share in the estate after the death of the owner of the estate. And Allah knows best.
Prohibition of Bank Interest Is the use of Bank money permissible (Halal) or prohibited (Haram) ? Is what is taken of it for trade considered Riba or not (i.e are business loans taken from a bank at a fixed rate of interest considered to be Riba)?
Fatwa: To take business loans from a bank at a fixed rate of interest, as is the custom now, is Riba which is altogether forbidden. Allah, the Almighty knows best.
16| April - June 2013 | Islami Tijara
NEWS & VIEWS
Malaysia to be one of most vital Islamic Finance centres in the world.
M
alaysia is the world's most important Islamic finance centre, though Gulf States and Saudi Arabia accounts for having bigger Islamic banks but Malaysia is the leader in globe, for Sukuk (Islamic Bonds) The banking system and the Shariah compliant assents accounts for more than 25 percent of the entire financial system whereas the other Islamic countries have not more than twelve percent of its financial assets Islamic. Malaysia has set up Islamic Financial Services Board (IFSB), an international Shariah standard-setting body, it's a central body that monitors and supervises that the transaction done are in accordance to Shariah norms. They are also a certifying authority and this is a big achievement for a relatively small country of just 30 million people, of whom only about 60 per cent are Muslims. In compare to its neighbouring country Indonesia, which is has the largest Muslim population in the world, but only 4 per cent of its financial assets are Shariah compliant According to Mr Iqbal Khan founder and CEO of Dubai Fajr Capital “Although the much richer Gulf states and Saudi Arabia have bigger Islamic banks, it is Malaysia that is the centre for thought leadership in Islamic finance,” In Malaysia the two institutions in particular the International Centre for Education in Islamic Finance 18| April - June 2013 | Islami Tijara
(INCEIF) and the Islamic Banking and Finance Institute of Malaysia (IBFIM), both set up by the central bank have contributed to Malaysia's pre-eminence in the field of Islamic finance . INCEIF set up in 2005 and boasting about more than 2,000 students is the world's leading university for the study of Islamic finance. The International Shariah Research Academy, which is the part of INCEIF, brings together scholars to produce an internationally acceptable rule-book for Islamic finance, on the other hand the IBFIM concentrates on vocational training, offering a variety of certificates in Islamic finance as well as acts as a consultancy to banks and firms that want to become Shariah-compliant. This demonstrates the dedication and confidence of Malaysia toward Islamic Finance. According to Dr. Zeti Akhtar Aziz head of Bank Negara these institutes INCIEF & IBFIM are the pipeline to provide the bank with talents, not only in Malaysia but the entire world where Islamic finance is practised. Speaking at of the news conference recently, Dr. Zeti said 'With INCEIF & IBFIM Malaysia enjoys a greater status within the ummah (Muslim Brotherhood) and the global Islamic community,' She further said that Shariahcompliant banks are inherently more stable than conventional peers, Since “Speculation is forbidden and, because charging interest is prohibited under Shariah law, returns are based on profit-sharing,”
FAITH & FINANCE accumulated wealth and large holdings would be divided into relatively smaller fragments.
Ownership of wealth in Islam
I
slam has defined the concept of wealth in a unique way. Wealth in Islam is not an end in itself, but a means to higher values, contrary to the present conventional system wherein economic persuades is only objective of living. Islam says that wealth should be earned in Halal way, invested and spends in the correct avenues, and it should reward the individual, his family, and the society as a whole. Its rewards also span this life as well as the hereafter.3 According to the Islamic concept, wealth is considered as an endowment or a gift from God and human beings are considered as trustees on God's resources on earth. These resources are to be wisely treated, not abused, destroyed, wasted or left to idle. This dual ownership mitigates the selfish and unfair tendencies that often result from a mistaken notion of absolute ownership. However, Islam doesn't oppose any material pursuit neither it is against the accumulation of wealth. The only concern it put forward is the danger of obsessive preoccupation in accumulating and conglomerating wealth to the extent sidelining spirituality. Need is focused and not the greed. Islam also provides a broad foundation of the distribution of income and wealth to avoid its accumulation. It does not advocate equal distribution of wealth in the sense that all individuals should have the same means from livelihood, but guarantees a process of distribution where all participants in the marketplace are rewarded for being exposed to risk and liability. Land, labour and capital jointly create value and the capital owner has to share in the profit as well as in the loss. Price is determine by the market forces however speculation and hoarding is prohibited thus a fair distribution of wealth. Besides, Islam compulsorily retains a share of produced wealth by paying the Zakat (Charity) to the needy and other charitable deeds; and therefore spreads out wealth in the community. The institution of Zakat is not only a source of alleviating the sufferings of the poor, but also provides an incentive to invest the surplus wealth in the real sectors of the economy. Muslims are yet encouraged to voluntary give part of their income as a waqf (Endowment) for social economic welfare. Moreover, the abolition of Riba prevents unfair lending schemes which penalize the poor and allows for those possible alternatives of investment which distribute the return on capital on a broader basis.
The primary difference between Islamic economics and all materialist ones is that that economic well being is not viewed in Islam as the ultimate end of human life and cannot be the true purpose of life. Economic endeavours become a delusion if human beings lose sight of the real purpose in their pursuit. Instead Islam insists on the concept of human Welfare that has both a material and spiritual dimensions. In addition, unlike the materialistic perspective, the Shariah considers that the main economic problem that mankind will ever face is that of distribution of wealth and not of production. In the eyes of the conventional economics systems, there is relative scarcity of resources available on the earth, and people's demands for these resources are endless. Hence individuals and organisations should concentrate on more and more production. Whereas, Islam makes a distinction between basic needs such as food, clothing and shelter, and comfortable wants that are not necessities in life. It considers that there are enough resources to satisfy the basic needs of each and every individual and to satisfy some of their luxurious wants and that economic problem is that of distribution and not production. Islam advocates specific regulations by which wealth can be acquired, used and disposed of. It is through that specific economic system that economic justice in society is maintained. Notwithstanding this, Islam it gives full incentives to individuals to fully participate in the economy and it does not impose a maximum on the total of wealth that individuals or organisations can own. Rather, it controls the means of ownership such that everybody gets the right to wealth in a just manner. Through these ownership principles, Islam guarantees that everyone gets what is rightfully due to him from God, unlike the capitalist system where only those who take part in the production process have the right to wealth. Additionally, Interest rates form the backbone of the modern capitalist system in many fields. It is used as a tool to regulate economic growth and monetary supply by acting as an incentive for those who have surplus money to save. In Islam interest is prohibited, Investment, according to the Shariah, should offer individuals the opportunity to profit, not by lending at a guaranteed rate of return, but by sharing in ownership, and thus committing to share in the risks associated with ownership. The abolition of Riba avoids inequitable lending transactions which penalize the deprived part of the society. By this means, Islamic economics seeks to provide for a just and equitable distribution of wealth and aims at reestablishing a socio-economic balance, with a clear bias in favour of the poor and the needy. Equality and social justice is critical to Islamic philosophy.
Finally, the law of inheritance in Islam ensures that
Islami Tijara | April - June 2013 | 19
FINANCIAL INDICATORS
World Equity Market Index COUNTRIES
(Index Names)
ARGENTINA AUSTRALIA AUSTRIA BELGIUM BRAZIL CANADA Chile CHINA ENGLAND FRANCE GERMANY GREECE HONG KONG INDAI INDIA JAKARTA JAPAN KARACHI MALLAYSIA MEXICO NETHERLANDS NORWAY Philippines RUSSIA S. KORIA SINGAPORE SPAIN SRI LANKA SWITZERLAND TAIWAN THALAND TURKEY USA USA USA US Dollor Index Gold Cash
(Argentina Merval) (Australia Ordinary) (Austria ATX) (BEL - 20) (Brazil Bovespa) (Canada S & P TSX) IPSA (Shanghai) (FTSE 100) (CAC) (DAX) (Greece General) (Hang Seng) (Sensex) (NIFTY) (Jakarta Composite)
1 3 12 Index 28th Mar.. Month Months Months Returns Returns Returns 2013
3380.78 4979.87 2352.01 2592.19 56352.09 12749.90 4432.14 2236.30 6411.74 3731.42 7795.31 869.19 22299.63 18835.77 5682.55
7.02 -2.74 -4.65 0.90 -1.87 -0.56 -2.77 -5.47 0.80 0.23 0.69 -13.77 -3.13 -0.14 -0.18
4940.99 12335.96 17947.76 1674.04 44077.09 348.10 518.70
3.03 6.72 -1.24 2.22 0.69
6847.47 1454.72 1993.52 3308.10 798.39 5735.68 7813.67 7866.88 1544.57
3.49 -5.19 -1.63 1.17 -4.22 1.77 2.90 -0.39 0.19
85253.95 14578.54 (Dow Jones) (NASDAQ Composite) 3267.52 1562.70 (S & P 500) 83.18 1596.17
7.46 3.73 3.40 3.26 1.43 1.04
29443.00
-0.43
(NIKKEI 225) (Krachi 100) (KLSE) (Mexico IPC) (Netherlands AEX) (Norway OSE) PSE COMP (Russian RTS) (Seol Composite) (Straits Times) (Spain Madrid) (Sri Lank All Share) (Swiss Market) (Taiwan Weighted) (Thailand Set) (Turkey ISI)
Gold 10GM Data as on 28th March 2013
20| April - June 2013 | Islami Tijara
Economic Data
2.22 -0.25
3.52 3.04 0.14 8.21 3.07 2.40 -3.57 -1.62 -3.13 -3.82
35.55 13.02 12.55 9.22 -4.77 3.51 4.77 7.20 11.66 11.23 8.03 17.60 7.00 0.39 -0.36
14.46 18.67 5.93 -0.43 1.40 1.78 5.07
15.92 39.07 16.21 2.28 8.22 7.71 4.35
18.16 -4.73 -0.18 3.64 -2.69 2.29 14.53
29.16 -1.42 -0.13 8.10 2.75 -3.96 17.51
2.17 10.97
19.08 6.29 -2.05 5.11 -7.55
GDP*
0.7 3.1 0.4 -0.4 1.4 1.1 5.7 7.9 0.3 -3.0 0.4 -0.6 2.5 4.5 4.5 6.1 0.3 4.2 6.4 3.2 -0.9 2.1 -
Industrial UnemployProduction ment % %
0.2 4.8 2.5 -0.9 -3.5 -1.7 6.1 10.3 -1.7 -2.1 -1.1 -0.4 -0.1 -0.6 -0.6 11.0 -5.1 0.8 3.7 -1.1 1.1 -2.5 -
6.9 5.4 4.9 7.4 5.4 7.0 6.0 4.1 7.8 10.6 6.9 27.0 3.4 9.9 9.9 6.1 4.2 6.0 3.3 5.3 7.5 3.6 -
-1.8 -
-0.9 7.3 -0.4 -8.5 -
6.0 3.4 1.8 26.2 -
2.2 19.2 10.1
3.1
1.97 18.92
1.4 3.7 19.5
4.2 0.5
8.49 12.68 10.38 12.91 4.25 -3.59
28.40 8.49 4.85 8.96 3.94 -9.91
1.6 1.6 1.6 1.6 -
-3.8 2.1 2.1 2.1 -
9.4 7.9 7.9 7.9 -
-3.98
-5.63
-
2.9 1.6 1.5
-
-
*GDP = Gross Domestic Product
FINANCIAL INDICATORS
Indian Equity Market At A Glance
I
n the past one month(28th February 2013-28 March 2013) , the ITE Shariah 35 had plunged by -53.35 points or- 0.75 per cent. Whereas, the Bombay Stock Exchange 30-share barometer fell -25.77 point or -0.14 per cent an National Stock Exchange Nifty Index fell -10.5 point or -0.18 percent during the month of march. Rate-sensitive shares (Automobiles) were under pressure. Consumer, Healthcare and Information technology stocks had gone up. In ITE 35 , 17 scrips firmed up while 18 declined. Major gainers among ITE 35 constituents were Ranbaxy Labs. 15.87 per cent, Asian Paints 14.54per cent, HCL Technologies 9.85 per cent, Siemens 8.69 per cent, Dabur India 8.38 per cent, Godrej Consumer 7.75 per cent and Lupin 7.49 per cent. Among losers, Bharti Airtel dropped by -9.81 per centper cent, followed by Ambuja Cem. cent, ACC -8.64 per cent, Hero Motocorp -7.55per cent and Tata Motors -6.30 per cent.
-9.59 per cent, Bajaj Auto -8.96per
Sensex Stock Performance for Last 1 month Advance Decline
10.00%
10 20
5.00%
Tata Power Co.
0.00% -5.00% -10.00% -15.00%
Nifty Stock Performance for Last 1 month 20.00%
Advance Decline
18 32
15.00%
4.96%
3.77%
-0.12%
-8.78%
1.90%
1.98%
-6.30%
8.69%
-0.61%
0.74%
-22.62%
15.87%
-5.03%
1.68%
-8.94%
-0.57%
-5.80%
-5.67%
7.49%
-1.14%
-0.07%
-0.96%
-5.96%
-0.20%
0.49%
-0.55%
-3.75%
5.00%
-7.90%
-7.55%
9.85%
-0.24%
8.59%
-5.15%
-4.04%
0.33%
-15.23%
-0.37%
5.27%
-8.67%
-9.81%
-3.57%
-8.96%
1.71%
-12.05%
-3.13%
14.54%
-9.59%
5.00%
-8.64%
10.00%
0.00% -5.00%
-10.00% -15.00% -20.00%
-25.00%
ITE - 35 Stock Performance for Last 1 month 20.00%
17 18
Advance Decline
15.00%
Wockhardt 3.60%
Wipro 4.96%
UltraTech Cement -0.11%
Titan Inds. -1.48%
TCS 3.77%
Tata Motors 1.90%
Sun Pharma Inds. -6.30%
Siemens 1.98%
Sesa Goa 8.69%
Reliance Inds. 0.74%
Ranbaxy Lab -5.03%
O N G C 15.87%
Nestle India -0.57%
Maruti Suzuki -3.44%
M & M -5.67%
Lupin -1.14%
Larsen & Toubro 7.49%
Infosys -0.07%
Hind Zinc -0.55%
Hind. Unilever 4.98%
Hero Motocorp 5.00%
HCL Technologies -7.55%
Grasim Indus. 9.85%
Godrej Consumer -5.15%
GAIL (india) 7.75%
Dabur India 0.33%
DLF 8.38%
Colgate-Palm -2.29%
Cipla 5.27%
Bharti Airtel -9.81%
Dr. Reddy’s Lab -4.04%
-10.00%
Bajaj Auto -8.96%
-5.00%
Asian Paints 14.54%
0.00%
ACC -8.64%
5.00%
Abmbuja Cement -9.59%
10.00%
-15.00%
ITE = Islami Tijara Equity Index of 35 Large Cap Stocks , Created by : Pragmatic Wealth Management Pvt. Ltd.
Islami Tijara | April - June 2013 | 21
EXPERT’S SPEAK
BUDGETARY SUPPORT TO MINORITIES | Dr. M. Y. Khan l Former Economic Advisor SEBI
U
nion Government has been providing financial assistance to those communities who escape the attention of normal allocation of budgetary resources or any other efforts of government for the development of the country. As such the government's specific programmes for community development are being prepared and implemented every year. The union government has been also allocating funds for minority's development. These funds are spent every year by the government on various schemes meant for improvement of education standard of the minorities besides other aspects. The objective wise funds are provided for multi sectoral development programmes, pre-matric scholarship for minorities, post-matric scholarship for minorities and meritcum-means scholarship for professional and technical courses. For the year 2013-14 the union budget has provided Rs. 3511 crores as compared to Rs. 2300 crores during the past or previous year for welfare and development of minorities. In all, the total allocation represents 12% increase over the DE and 60% over the RE for the year 2012-13.However it would be seen that when compared to total expenditure budgeted by the government the increase is larger compared to just 1.2% in case of total expenditure. The Budget also has allocated for Maulana Azad Education Foundation an amount of Rs. 1500 crores for the 12th Plan Period and Rs. 160 crores to the corpus fund. The foundation has desired to add medical aids to its objectives. For this purpose the Budget has allocated Rs. 100 crores to medical facilities including the availability of resident doctors in educational institutions. The reason why minorities like muslims and others have been making criticism of government provision in the budget for assistance of them. We have data in case of muslim minority status in employment etc. as below. If we look at the pessimistic view of minority community towards the funds being allocated for their upliftment and farewell, the main argument is that the amount is very small in comparision to a large number of minority population of 16 crores. There is no doubt that the amount is small and cannot meet all the needs of the minorities. However it provides seed money to start developmental approach. As a matter of fact, government's financial help should be taken as a supplementary facility and the community should come forward to make its own efforts for the development. The self 22| April - June 2013 | Islami Tijara
assistance would provide not only a kind of confidence but also a sense of strength for their advancement. The criticism of minorities is based on their employment status estimated by Sachar Committee Report. Economic and Employment Status of Muslims: a) Self-employment is the main source of income of Muslims. They are engaged more in self-employed manufacturing and trade activities compared to others. b) The share of muslim workers engaged in street vending is the highest. More than 12% of Muslim male workers are engaged in street vending as compared to the national average of less than 8%. c) The percentage of women Muslim workers undertaking work within their own homes is much higher at 70% compared to all workers at 51%. d) The share of Muslims in the total workers engaged in tobacco and textiles / garment related industries is quite significant. e) The share of Muslim workers in production related activities and transport equipment operation is much higher at 34% as against 21% of all workers. f) More than 16% of Muslim workers were engaged as sales workers, while the national average was only about 10%. g) While the participation of Muslim workers is relatively higher in production and sales related occupations, their participation was relatively lower in professional, technical, clerical and to some extent managerial work. h) Muslims, by and large, are engaged in the unorganized sector of the economy and have to bear the brunt of liberalization. I) The participation of Muslims in regular salaried jobs is much less than workers of other socio-religious categories. j) Muslims are relatively more vulnerable in terms of conditions of work as their concentration in informal sector employment is higher and their job condition, even among regular workers, are less for Muslims than those of other socioreligious communities. k) Percentage of households availing banking facilities is much
lower in villages where the share of Muslim population is high. Status of Muslims in Private Corporate Sector: We can divide private corporate sector in two segments namely domestic with no foreign ownership participation and domestic with foreign partnership such as joint ventures and foreign partnership companies, foreign multinationals and Indian multinationals. The capital market institutions like Mutual Funds, Foreign institutional investors and young financial companies in this market are also important segment of private sector. In Indian domestic companies with no foreign participation, traditional Muslims received limited favour. The companies which employ muslims through market forces are foreign financial institutions, joint ventures with foreign institutions, securities and investment companies, Indian multi-nationals and other intermediaries in capital market. However, this segment has not reached its maturity level. It implies that in future there will be large opportunities for muslims to compete and secure their share in these sectors. It is also reported that young domestic companies are also muslim friendly. They engage people on merit based selection. On the other hand muslims are not significantly visible in public sector companies. This fact indicates some kind of deprivation of minority. There is a clean evidence to support the hypothesis that globalization of Indian corporate sector has given opportunities of employment to muslims. This conclusion is based on observations and assessment of various experts regarding the young muslims working in various modern organizations having foreign environment. They have been performing parallel to any other employee and have risen to senior positions. Now the question of Muslim backwardness in employment boils down to merit and competition. I am focusing on the issue of merit because today the world markets and economies are globalised and integrated and competition and merit are going to be the corner stone of advancement for everyone. We are well aware that public sector will be shrinking and the economic advancement of people will be determined by the expansion and high growth of economy in the free market which Islam also supports. However government will not be in a position to offer gainful employment to all unemployed muslims. Moreover, they should not think in terms of outside help, mercies and subsidies only. They have to stand on their own strength and pool the funds for education because it is only education which can help them in the competitive world of today. First of all, minority needs educational institutions for professional degrees and for training and coaching so that their wards can be enabled and equipped to enter the modern professional areas and themselves look for jobs and other avenues for employment. Today the world is marching towards integration and mobile professions. In view of this it is necessary that one should be efficient in multiple languages so that they can adjust themselves in any region of India or other countries easily. Now to have the institutions besides the infrastructure for education, we will need competent teachers and trainers. At present we do not have such human force. This is the lacuna right from the past centuries. The other important input is the commitment of the minority professionals to impart education and knowledge to young minority youths. It is generally seen
that neither the minority students nor the teachers are well competent to absorb professional education and professional teachers who can put their hardwork to convert the minority aspirants for jobs. We can also think in terms of minority employment bureaus which can help the young educated youths to get jobs. For instance, employment bureaus should collect information regarding employment opportunities in various industries and government sectors and bring them to the notice or knowledge of minorities so that they can apply for suitable jobs. We generally see that minority boys and girls do not come to know the existing opportunities and this is very sad. The employment bureaus can conduct coaching classes and other training and prepare the unemployed persons to enable them to get jobs on their own. Moreover, employment bureaus can conduct seminars also by inviting professionals. These employment centres can create links between the industry and the people which is not visible today similar to compound placements. Employment centres can also provide this opportunity. Since minority boys and girls do not even get newspapers to read, employment bureaus can provide newspapers in various languages. It will equip the unemployed force to impart basic knowledge of job market. Now I come to various avenues of employment in the country. There are a number of opportunities particularly in capital market and banking sector. The capital markets help the entrepreneurs to mobilize savings of the investors and provide opportunities to savers to invest their funds. For instance, broking services, merchant bankers, underwriters and some professions in the capital market offer several thousand jobs. Even the broking firms on a small scale can provide work for unemployed educated persons. In the same way merchant bankers also have good opportunities for persons with different types of educational qualifications. For instance, those who have degrees such as B.Com, C.A., M.B.A., Marketing, etc. can get good jobs as well as they can create self employment. Minorities suffer from stigma of social restrictions against education as well as service. In case of girls or women, this stigma has to be removed. Even maulvis should propagate the importance of knowledge and education. An uneducated woman cannot run her house properly. When we have educated mothers, they can give good coaching to their children. This will avoid and reduce the dropout rate. It has been seen that many students have to stop the education before matriculation because of scarcity of resources. Even if their mothers are educated they are not allowed to work outside in offices. If this stigma is removed they can provide financial help and create financial resources for imparting education to their children. Unfortunately this is not happening because Muslims are not aware about the commandments of the holy Quran regarding education. Allah has directed the educated Muslims that when somebody is writing some agreement of debt transaction, they should help such people in preparing the agreement. God has said that he would be very much pleased if people go to do that work without any hesitation or hurdle. So now we see how important education is. At many places Quran has recommended acquiring knowledge which cannot be done without acquiring education.
Islami Tijara | April - June 2013 | 23
NEWS & VIEWS
BRITISH GOVERNMENT Promotes
The British government has initiated a campaign to promote London as a centre for Islamic Finance seeking to counter growing competition in that industry from rising centres such as Dubai and Kuala Lumpur. A task force including Britain's Financial Secretary to the Treasury Greg Clark, ministers of state and private sector executives will advertise London around the world, the British Foreign Office said recently The group will try to attract foreign investment to Britain by facilitating Islamic financial business, including investment in British infrastructure by Islamic sovereign wealth funds. Because of its status as a top global financial centre, London has attracted a large amount of Islamic business; more than $34 billion worth of Sukuk (Islamic bonds) which are structured under religious principles such as a ban on interest payments have been issued through the London Stock Exchange. But competition from cities where Islamic funds originate is increasing. Kuala Lumpur is building its credentials as a centre for foreign companies to issue Sukuk (Islamic Bank) outside their domestic markets, while Dubai announced in January that it would revise regulations to attract Sukuk issuance and trading.
Britain has introduced legislation facilitating Islamic finance, and in 2009 it came close to issuing Europe's first sovereign Sukuk. The issue was ultimately postponed indefinitely because the government felt it would not provide value for money, The World Islamic Economic Forum, a conference of Islamic financiers to take place in London this October, will be an early opportunity for the new British task force. It will be the first time the forum is held outside of an Islamic city or Asia. Some other parts of Europe are also showing increased interest in Islamic finance as much of the conventional financial industry struggles. The European Central Bank and the Malaysia-based Islamic Financial Services Board, a global standard-setting body, are conducting a joint study on policies affecting Islamic finance in Europe. Source: Reuters.
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COVER STORY
BUDGET PICKS
2013 The Union Budget for 201314, presented in the P a r l i a m e n t b y M r. P. Chidambaram, Minister for Finance, reiterated that India is still one of the fastest growing economies in the world. The country, however, needs to rationalize expenditure in order to go back to the over 8 per cent growth levels. He emphasize on the fiscal consolidation a s a m e a s u re t o rationalize and reduce the fiscal deficit.
26| April - June 2013 | Islami Tijara
COVER STORY
HIGHLIGHTS ?
Fiscal deficit for 2012-13 pegged at 5.2 per cent of GDP and estimated at 4.8 per cent for 2013-14.
?
Revenue deficit for the current year at 3.9 per cent and for 2013-14 at 3.3 per cent.
?
Fiscal deficit to be brought down to 3 per cent, revenue deficit to 1.5 per cent and effective revenue deficit to zero per cent by 2016-17.
?
Plan expenditure in 2013-14 will be 29.4 per cent more than the Revised Estimate of 2012-13.
TAX PROPOSALS ? ? ?
Slabs and rate for personal income tax
around 5.0% in FY 2012-13
unchanged.
*
Agriculture - 1.8%
*
Industry - 3.1%
*
Services - 6.5%
Tax credit of Rs 2,000 to every person with total income up to Rs 5 lacs
?
10 per cent surcharge on persons (other than companies) with taxable income
?
exceeding Rs 1 crore.
?
GDP growth remains sluggish with higher inflation
Increase in surcharge from 5 to 10 per cent on domestic companies whose taxable income exceeds Rs 10 crores.
?
Economy expected to grow at
?
GDP Growth at 6.1% - 6.7%
?
Nominal GDP Growth at 13.4%
?
Assumed inflation rate at 7% if
Duty-free limit on gold rose to Rs 50,000 in case of males and Rs 100,000 in case of females.
?
Specific excise duty on cigarettes and SUVs increased.
?
Proposal for service tax on all air
real GDP growth is about 6.4%
conditioned restaurants.
Islami Tijara | April - June 2013 | 27
COVER STORY
Finance Minister P Chidambaram in his budget 2013 speech announced a lot of sector specific measures that will have far-reaching consequences on the companies operating within them. While some sectors have reasons to cheer, others may not find relief in the measures that have been initiated. For our readers we have evaluated the sectors and have recommended few stocks for investments.
BUDGET PICKS 2013-14 SECTOR & COMPANIES
SIZE
NET SALE
PAT
MARKET CAP
Bajaj Auto
Large
19529
3004
51939
Castrol
Mid
3082
481
15663
Large
9730
1297
Dabur
Large
3743
TATA Coffee
Mid
Cipla
EPS
P/E
FV
BV
P/BV
DIV. YIELD
8.60
2.51
9.05
34.99 10.00 13.13 24.12
2.37
26754
8.70
19.94
2.00
57.09
3.04
2.07
436
23886
3.23
42.43
1.00
7.47
18.35
0.95
509
79
2760
57.02 25.91
10.00
244.79
6.04
0.74
Large
6978
1124
30490
19.07 19.91
2.00
93.93
4.04
0.53
IPCA Lab
Large
2329
280
6646
26.35 19.98
2.00 100.02 5.26
0.61
Lupin
Large
5385
804
28153
30.75 20.46
2.00
83.45
7.54
0.51
Torrent Pharma
Large
2076
311
58.83
63.19 11.00
5.00
154.16
4.51
1.22
Wockhardt
Large
2560
184
21980
15.32 130.93
5.00
10.98
182.68
0.00
Large
53171
4457
83996
78.57 17.37
2.00
409.53
3.33
1.20
Satyam Computers
Large
5964
1203
15081
10.31 12.42
2.00
28.15
4.55
0.00
TCS
Large
38859
10976
307633
67.82 25.02
1.00
126.49 12.43
1.59
Wipro
Large
31683
4685
107663
23.19 18.85
2.00
98.88
4.42
1.37
Large
11405
5526
51190
14.56
8.32
2.00
63.62
1.90
1.98
ONGC
Large
76488
25123
266546
27.10 11.50
5.00
132.03
2.36
3.13
Relaince
Large
329904
20040
249801
60.67 12.75
10.00
504.63
1.53
1.01
A UTOMOBILES 104.87 17.12 10.00 208.77
CONSTRUCTION & REALTY Ambuja Cement
CONSUMER
HEALTHCARE
CAPITAL GOODS L&T
INFORMATION TECH.
METALS & MINING Hindustan Zinc
OIL & GAS
28| April - June 2013 | Islami Tijara
COVER STORY
Sectors AUTOMOBILES CP 1757
TARGET 2100
B
Ø Marginal reduction in excise duty on truck chassis from 14% to 13%. Ø Sharp increase in allocation for the JNNURM scheme, promising an addition of 10,000 buses by SRTUs, especially in the hill states. Ø Thrust on infrastructure spending increased through higher allocation and easier fund raising for infrastructure sector, especially roads & highways. Ø With no change in basic customs duty & excise duty, we do not expect any significant impact on the auto components and tyres industries. Ø Duty concessions on parts of electric & hybrid vehicles have been extended but its impact will be insignificant, given the low population of these vehicles in India.
Impact- Neutral
The reduction in excise duty on truck chassis from 14% to 13% would be marginally helpful for the commercial vehicle that is currently witnessing slowing sales trends owing to weak macro-economic indicators and low-cargo availability. The step up in infrastructure spending particularly in segments such as roads & highways and measures to encourage innovative funding mechanism for infrastructure projects will support demand for construction-enabling CVs (i.e. tippers) besides facilitating easier freight movement. Rising fuel prices and weak rupee may be deterrent for big upside in the intermediate term. Current Market Price as of 2nd April 2013
ajaj Auto Limited manufactures and sells scooters, motor cycles, three-wheeler vehicles, and spare parts in India and internationally. The company offers its two-wheeler products under the Avenger, Pulsar, Discover, Platina, and Ninja brands. It also provides commercial vehicles, such as goods and passenger carriers. The company sells its products and services through a network of two-wheeler and three-wheeler dealers. Bajaj Auto Limited was founded in 1945 and is headquartered in Pune, India. India's second largest two-wheeler maker Bajaj Auto reported a 3% rise in net profit at Rs 818.74 crore on a 9% growth in top line to Rs 5413 crore for the third quarter ended December 2012, both in-line with street expectations. The turnover was highest ever for the company in any particular quarter. The OPM fell by 100 bps to 18.7% thereby limiting rise in operating profit to 3% to Rs 1011.8 crore. The PBT grew by 11% to Rs 1173.76 crore largely aided by nil Forex loss (against Forex loss of Rs 59 crore in Dec 2011 quarter). Also the profits were aided by overall favorable non operating performance – other income grew by 21% to Rs 203.2 crore, negligible interest cost of Rs 10 lacs, and a modest 28% rise in depreciation cost to Rs 41.08 crore. However spike in effective tax rate by 520 bps to 30.25% limited the net profit growth to flat 3% to Rs 818.74 crore. Company expects the near term domestic volumes to remain sluggish. However, expect recovery, both in the domestic and exports market, going forward. In the 3W space, the company will be upgrading its existing product portfolio. In terms of new permits, the company mentioned that 4,000 new permits were opened up in Jaipur in November 2012. Going forward, the company said that there are talks of new permits opening up in Delhi and Maharashtra. In Hyderabad, 20,000 permits were given but the decision has been challenged in High Court. We are positive on the company but with a limited upside from the current levels.
Islami Tijara | April - June 2013 | 29
COVER STORY
CP 321
TARGET 370
C
astrol India Limited manufactures and markets automotive and industrial lubricants in India and internationally. The company also provides lube management solutions for the transport fleet, building construction, and mining markets; metal working fluids and high performance lubricants; marine and energy lubricants; and lubricants for original equipment manufacturers franchised workshops. Castrol India Limited offers its products through a network of 270 distributors, servicing approximately 70,000 retail outlets. Castrol India reported 10% increase in bottom line to Rs 117.90 crore in Q4CY'12 on a 2% fall in top line to Rs 760.9 crore compared to corresponding previous year period. OPM rose by 210 bps to 22.3% leading to a 9% rise in operating profits to Rs 169.4 crore. Other Income rose 33% to Rs 15.2 crore in Q4CY12 from Rs 11.4 crore in Q4CY11 while interest cost was negligible at Rs 1 crore and depreciation rose 27% to Rs 8 crore. As a result PBT was up 9% to Rs 175.6 crore. The effective rate of tax fell to 32.9% from 33.7% leading a 10% increase in PAT to Rs 117.9 crore. The Company also improved its product availability by widening its distribution through a strong foray into the rural market and increasing our footprint in independent workshops. In the franchised workshop business, company gained significant share by leveraging its strong and enduring partnerships with leading OEMs like Suzuki, Tata, Volkswagen and BMW'.
CONSTRUCTION AND REALTY
Ø Additional interest deduction of up to Rs. 0.1 million on housing loan to provide fillip to housing demand. 30| April - June 2013 | Islami Tijara
Enhancement in provisions under Rural Housing Ø Fund to ensure better flow of institutional credit for housing loans. Enhancement in provisions under Rural Housing Fund to ensure better flow of institutional credit for housing loans. Ø Several measures proposed for improving funding of infrastructure projects- encouragement to Infrastructure Debt Funds (IDFs), tax-free infrastructure bonds, credit enhancement by India Infrastructure Finance Corporation (IIFCL), setting up of regulatory authority to address the problems faced by road projects, planned award of 300 km highway projects and extension of 80IA benefits for power projects by one year.
Impact-Marginally Positive The Union Budget 2013 14 has proposed many schemes to boost infrastructure and housing segments. This is expected to prop up cement demand. However, this upside is likely to be offset by the increase in freight costs for cement companies, due to the proposed hike in railway freight. The Railway Budget 2013 14 has proposed a fuel adjustment component linked revision of freight rates.
CP 177
TARGET 220
A
mbuja Cements Limited manufactures and sells cement in India and internationally. It primarily offers Portland cement and cementations materials. The company was formerly known as Gujarat Ambuja Cements Ltd. and changed its name to Ambuja Cements Limited in April 2007. Ambuja Cements Limited was founded in 1983 and is based in Mumbai, India. Ambuja Cement has registered 30% fall in standalone net profit to Rs 211.97 crore for the quarter ended Dec 2012. Realization per ton during the quarter has improved by 8% to around Rs 4600 per ton but the dispatch of cement for the quarter stood lower by 8% to 5.054 million tons. On consolidated basis, revenues were up by 14% to Rs 9795.03 crore. The operating profit was thus up by 25% to Rs 2473.43 crore. Other income increased sharply by 41% to Rs 348.52 crore leaving the growth at PBIDT level at 27% to Rs 2821.95 Current Market Price as of 2nd April 2013
COVER STORY crore. The net profit after tax posted a growth of 5% to Rs 1291.82 crore during the year. During the year, the company commissioned a pre-grinder at Bhatapara plant, Chhattisgarh, resulting in increase in plant capacity by 0.6 million ton per annum. With this addition, the company has reached total cement grinding capacity at 27.95 million tons. Going ahead, expect these capacity expansions to drive the company's volume growth. A new Bulk Cement Terminal (BCT) of the capacity 1 million ton is nearing completion at Mangalore. With the operations to commence by 2013, company will expand its footprints in southern markets of India. Though this quarter was weak impacted due to lower volumes/realization, we maintain our positive view on the stock owing to better demand scenario over the next few years and 80% exposure to high growth Western and Northern regions resulting in volume and realization CAGR of 7% and 5% over CY12-14E.
CONSUMER
Ø Marginal reduction in personal income tax rates for income levels up to Rs 0.5 million. Ø Rapid rollout plans for direct benefit transfers to bank accounts of the beneficiaries. Ø 18% increase in special excise duty on cigarettes of length exceeding 65 mm. Ø Lack of firm roadmap for implementation of the proposed GST and Food Security bills.
Impact Marginally Positive The budget was largely positive for the FMCG & Consumer durable sector. While cigarettes will become expensive for consumers, the rate hike was lesser than expectations Further, hike in excise duty on beedi and other tobacco products is positive for cigarette manufacturers and could lead to
CP 141
TARGET 165
D
abur India Limited, a fast moving consumer goods company, together with its subsidiaries, engages in the production, sourcing, and marketing of personal care, health care, home care, consumer health care, and food products. Its health care products include health supplements, digestives, and ayurvedic over the counter products that address various problems ranging from women's health to baby care and cough and cold to rejuvenation. The company sells its products through agents, distributors, and retail outlets in India. It also serves customers in the Middle East, Africa, the United States, and south Asia. The company's net sales for quarter 3 have grown by 12% to Rs 1635.98 crore. It was a strong volume-driven growth across all its key categories like Hair Oils, Shampoo, Foods, Skin Care, & Home Care. Domestic FMCG business revenues grew by 14.3% led by near double digit volume growth International business reported 9% growth which was lower on account of some compression in Namaste Business. OPM increased by 90 bps to 16.8% the operating profit has increased by 19% to Rs 274.51 crore. Other income inclined by 32% to Rs 22.03 crore. Interest outgo has declined by 57% to Rs 7.78 crore. The profit before tax (PBT) has increased by 26% to Rs 258.24 crore. Total tax outgo has increased 42% to Rs 47.75 crore. After considering minority interest, the net profit jumped by 22% to Rs 211.11 crore due to rise in top line. According to the management, the growth outlook for shampoo is good as the disruptive competition has abated a bit and there is good potential still left in South India which it will be tapping going ahead. The company also expects good growth from Foods business as it plans to increase its dominance in South & West India which will be catered through a new plant coming up in Sri Lanka by Q1FY14. We expect benefits from recent innovations, distribution expansions & new products/variants launched in last 18 months to kick in from FY14 which will further drive recovery in core categories and consolidate its competitive positioning.
consumers shifting to cigarettes. Current Market Price as of 2nd April 2013
Islami Tijara | April - June 2013 | 31
COVER STORY
HEALTHCARE
COFFEE CP 1549
TARGET 1700
T
ata Coffee Limited engages in growing, curing, manufacturing, marketing, retailing, and exporting coffee and tea in India and internationally. The company owns 19 coffee estates and 7 tea estates located in the districts of Coorg, Hassan, and Chickmagalur districts of Karnataka, including one coffee estate and five tea gardens in the Annamallais region of Tamil Nadu. The company offers various instant coffee products, such as spray dried, agglomerated, and freeze dried coffee products under the International Tata Café, Mysore Gold, and Malabar brand names. It also provides various single estate coffees and monsoon coffees; pepper and cardamom; Indian coffee under the Monsoon Malabar, Mysore Nugget Extra Bold, and Robusta Kappi Royale brand name; and coffee beans under the Mr. Bean brand. The company was incorporated in 1943 and is based in Bengaluru, India. Tata Coffee Limited is a subsidiary of Tata Global Beverages Limited. Tata Coffee consolidated profits up 20.78 per cent to Rs 25.98 crore for the third-quarter ended December 31. The revenue for Q3 was flat at Rs 418.09 crore. Segment-wise revenue was coffee and other produce Rs 395.91 crore, tea Rs 16.10 crore, estate supplies division Rs 7.55 crore, others Rs 0.91 crore and un-allocated income Rs 0.08 crore. Domestic coffee consumption has been growing steadily over the last several years, driven by double digit growth in instant coffee category and out of home consumption. Tata coffee has cashed in on this and is supplying coffee beans to Cafes, Instant coffee to HORECA segment, Vending and to Hot tea shop segment in Tamil Nadu. Going forward, it is looking at Vending to offer innovative products and services. The company focuses to grow the market for differentiated coffee to show results with volumes growing to 2123 MT as against 1847 MT in the previous year. It has planned a long-term capital expenditure program, focusing on modernization of equipment, adoption of best practices and development of new products to cater to different segments. The conceptualization and design part has been completed and the project is expected to be commissioned by March 2013 this will go a long way in making the business sustainable. 32| April - June 2013 | Islami Tijara
Proposals Ø No major announcements apart from the increased budgetary allocation for the healthcare sector. Ø An allowance of 15% for investments of Rs. 1 billion or more into plant & machinery above would however encourage higher spending towards manufacturing and R&D facilities.
Impact Neutral In view of no specific announcements, the budget for 2013-14 is unlikely to have a material impact on the healthcare industry. Measures such as increased budgetary allocation towards public healthcare may only have a marginal impact. However, the proposal for an investment allowance of 15% will encourage higher spending by large pharmaceutical companies towards manufacturing and R&D facilities and would benefit their ongoing capital expenditure plans. The increase in surcharge on corporate tax and increase in dividend distribution tax to adversely impact large pharmaceutical companies with high tax and dividend payout rates.
CP 392
TARGET 420
C
ipla Limited engages in the manufacture and sale of pharmaceutical products in India and internationally. The company offers various prescription pharmaceutical products for various diseases; and animal health care products, including active pharmaceutical ingredients. It also provides OTC products, Further, it provides agrochemicals comprising pesticides; and technology services. The company Current Market Price as of 2nd April 2013
COVER STORY exports its products to approximately 180 countries. Cipla Limited was founded in 1935 and is based in Mumbai, India. Cipla posted inline quarter but the contribution for the Lexapro sharply decreased during the quarter. The Company Net sales grew by 19% YoY in Q3'FY 13 to Rs 2030.70 crore on the back of robust growth from the export formulations (38%) despite the moderate growth from the domestic business (10%). Notably, Due to lower contribution from Lexapro margins fell by Sharp 710 bps QoQ to 23.8% during the quarter. However, margins expanded by 150 bps YoY and after this operating profit grew by 25% YoY to Rs 492.89 crore. But sharp growth in other income coupled with the meager interest cost and marginal increase in depreciation was offset by the sharp rise in effective tax rate (500 bps YoY to 26.2%) during the quarter. Eventually, PAT grew by 26% YoY to Rs 338.78 crore. The management has upped its capex guidance for FY13 to Rs 650-700 crore (from earlier capex guidance of Rs 4-5 billion) due to office expansion for Rs 2700 crore. While other capex for API facility & R&D is likely to be Rs 400-500 crore. Capex for FY14E is likely to be Rs 300-400 crore. Strong capex of past years yet to be fully utilized which will have a long term positive impact. Commencement of exports of CFC-free inhalers to Europe will be a key positive; Cipla has the third largest capacity of inhalers in the world and could be a key beneficiary of the unfolding opportunity in the long term. Domestic formulations are guided to grow by more than 15% YoY for the year and the management is confident of sustaining this momentum in FY14. EBITDA margin is expected to improve on account of better product mix and positive impact of favorable currency. Management indicated that EBITDA margin at 22-23% can be expected, going forward.
CP 528
TARGET 400
I
PCA Laboratories Limited, a pharmaceutical company, engages in manufacture and supply of pharmaceutical formulations and active pharmaceutical ingredients for various therapeutic segments in India. It offers branded and generic formulations in various dosage forms. The company exports its products primarily to the United States, Canada, South America, Russia, Ukraine, Kazakhstan, Belarus, Africa, Nepal, Sri Lanka, Myanmar, the Philippines, Vietnam, Europe, Australia, and New Zealand. Ipca Laboratories Limited was incorporated in 1949 and is based in Mumbai, India. IPCA Labs net sales grew by 15% YoY in Q3'FY 13 to Rs 692.41 crore driven by the sharp growth from Exports API (37%) despite the below normal growth from Export Formulation business (10%). However, margins fell by 190 bps YoY to 22.6% and accordingly operating profit grew by moderate 5% YoY to Rs 158.38 crore. The lower interest cost (27%) was offset by the higher depreciation (19%) during the quarter. However, with the lower forex gains (-63%) coupled with lower effective tax rate (down by 260 bps YoY to 23.4%) helped PAT to grew 37% YoY to Rs 87.89 crore. Ipca has strong capability in API manufacturing business. The company has attained global leadership position in select APIs where it is the lowest cost producer which gives the company vertical integration advantage. IPCA has outperformed the domestic industry growth over the past 5 years on the back of its rising presence in fastgrowing chronic therapy segments, which contribute approximately 65% of domestic formulation revenue. Acceleration in export formulation revenues mainly led by the generics and sustained growth in branded promotional markets will lead the growth.
Current Market Price as of 2nd April 2013
Islami Tijara | April - June 2013 | 33
COVER STORY
LUPIN Pharmaceuticals
CP 637
TARGET 400
L
upin Limited, a pharmaceutical company, produces a range of generic and branded formulations and active pharmaceutical ingredients. The company also engages in the novel drug discovery and development programs for metabolic/endocrine diseases, pain/inflammation, auto-immune diseases, and central nervous system disorders. In addition, it develops and commercializes bio-similar and new biological entities. Lupin beat the street estimates and posted robust results during the quarter. The Company Consolidated net sales grew by robust 38% YoY in Q3FY 13 to Rs 2465.87 crore largely driven by Sharp growth from US (68%) coupled with Japan (48%) and South Africa (43%) despite the deceleration in the Europe(7%). The Operating profit margins expanded gradually by sharp 360 bps YoY to 24.2% Operating profit jump by 61% YoY to Rs 604.94 crore. With 10% fall in interest cost to Rs 7.65 crore and 19% rise in interest cost, PBT grew by 79% YoY to Rs 555 crore. But after the sharp jump in effective tax rate by 1560 bps YoY to 38.1% PAT growth curtailed to 43% YoY to Rs 343.38 crore. Lupin filed 8 ANDA's and received 3 approvals from the FDA during the quarter. The Company withdrew 16 ANDA's which were pending approval considering the cost-benefits linked to these products with PDUFA fees coming into existence. The company will be launching 2-3 new products in Q4FY13 and is confident of launching close to 20 products in FY14E alone. One of them is an ophthalmic product (cumulative filings in that category are 8 so far). There were 100 ANDA fs pipeline from the US FDA and market size of these are around USD 32 billion and out of this 25 ANDA• fs are FTFs with market size of USD 1.5 billion. It expects the domestic business grow more than 18% for FY f13 and expects to sustain going forward. However, the industry has witnessed slow down largely due to the slowdown in the acute portfolio despite the good growth from the chronic segment during the quarter. 34| April - June 2013 | Islami Tijara
CP 697
TARGET 820
T
orrent Pharmaceuticals Limited is a pharmaceutical company. The Company operates in Indian and global markets. The Company's revenues are mainly from manufacture and sale of branded, as well as unbranded generic pharmaceutical products. The Company is focused on new chemical entities (NCEs) and is also developing new processes and suitable formulations for known Active Pharmaceutical Ingredients (APIs). The Company is also engaged in the development of injectable formulations. Torrent Pharma's 3QFY13 overall revenue grew 14.5% year on year (YoY) to Rs 798 crore led by 46% YoY growth in US generics and 33% growth in ROW, Russia and CIS. International formulation business reported growth of 18.5% YoY to Rs 450 crore due to 5% YoY decline in revenue from Brazil on account of the Brazilian government's drug program. Adjusted for the same, growth was muted at 4%. The domestic formulation business reported another quarter of healthy performance, with growth of 14% YoY to Rs260 crore, led by both, acute and chronic therapeutic segments. Earnings before interest tax depreciation and amortization (EBITDA) grew 32.7% YoY to Rs.161 crore. EBITDA margin expanded 2.80 percent YoY to 20.2%. PAT grew 35% YoY to Rs.112 crore aided by higher other income. Management had indicated that it may not be able to achieve its past guidance of 18-20% growth if the current trends continue. Management has guided for strong growth going forward as it scales up the US operations to be led primarily by new launches. It received approval for 2 ANDAs & 1 ANDA filled during the quarter. The 41 ANDAs & 24 DMFs approved till date (28 actively marketed, 7 under patent & 6 under cost improvement), 24 ANDAs pending approval. The growing product pipelines through Product Development & New product launches for dossier out licensing business will drive the growth. With the revival in growth in domestic formulation business and strong growth in US and ROW markets, the company is expected to report strong performance, going forward. Current Market Price as of 2nd April 2013
COVER STORY
INDUSTRIAL AND CAPITAL GOOD
CP 1993
TARGET 2400
W
ockhardt Limited, a pharmaceutical and biotechnology company, engages in the manufacture and marketing of pharmaceutical and bio-pharmaceutical formulations, active pharmaceutical ingredients, and vaccines worldwide. The company has approximately 87 ANDAs approved in the United States and 23 ANDAs approved in the European Union markets. Wockhardt posted robust quarter growth and maintained margins during the quarter. Revenues grew by robust 26% year on year(YoY) to Rs 1435 crore for the quarter ended December 2012. The growth was primarily driven by strong growth from US market 45% but grew by 26% in dollar terms on the back of earlier generic niche launches such as Prevacid, Geodon, Flonase, Stalevo and Comtan. In US market, it has launched 3 products during the quarter The Operating profit margins expanded by 6.3 percent YoY to 38%. Eventually, Operating profit jump by 51% YoY to Rs 545 crore. After the sharp 56% growth in other income to Rs 14.00 crore, earnings before interest depreciation tax and amortization (EBIDTA) grew by 51% YoY to Rs 559 crore. Profit before tax (PBT) grew by 105% YoY to Rs 483 crore. Due to the fall in effective tax rate by 300 bps YoY to 11.4% profit after tax (PAT) growth was 112% YoY to Rs 428 crore. Wockhardt has settled all its liabilities related to currency derivatives last year. Debt, which has been a major overhang on the stock, is likely to reduce to nil by FY14E on the back of strong cash flows from the business and sale of its nutrition business. The revenues from the India's domestic formulation business were Rs 240 crore during the quarter. It indicated that restructuring of the India field force has started showing some positive results with a steady India business. It has one of the best in class operating and balance sheet ratios. The Capex expected to be USD 50 million for FY'14. Wockhardt has one of the largest and the most profitable US businesses. It is expected to launch 15-20 products every year for the next 2-3 years in US market. The US business is the important strategic growth driver going forward with complex niche products in the pipeline. Current Market Price as of 2nd April 2013
Ø Investment allowance of 15% for the companies investing more than Rs. 1 billion in plant and machinery over the next two financial years. Ø Customs duty exempted on semi-conductor water fabs. Ø Customs duty & CVD on steam coal and bituminous coal rationalized to 2% each. Ø Several measures proposed for improving funding of infrastructure projects (encouragement to IDFs, tax-free infrastructure bonds, credit enhancement by IIFCL).
Impact Marginally Positive Given the slowdown in industrial capex in last one year period, provision of investment allowance is likely to incentivize companies across the manufacturing & infrastructure sector to invest in fresh projects, which is likely to improve demand for capital goods. Further, measures announced to encourage long term funding in the infrastructure sector also are a positive for the capital goods sector.
CP 1422
TARGET 1600
L
arsen & Toubro Limited operates as a technology, engineering, construction, and manufacturing company. The company engages in the design, engineering, and construction of hydrocarbon upstream, mid and downstream, and construction and pipelines projects; coal and gas based power plants; and refinery, petrochemical, fertilizers, modular process plant, and gas processing projects. Further, it provides various financial services, including portfolio management, equipment and infrastructure finance, general insurance, and mutual funds; undertakes railway projects; and engages in the shipbuilding activities.
Islami Tijara | April - June 2013 | 35
COVER STORY Larsen & Toubro, the engineering & construction major, has registered a standalone net-profit of Rs 1121.75 crore for the quarter translating into a growth of 13%. On a revenue of Rs 15429.36 crore (up 10%) and 20 bps contraction in operating margin, the growth at operating profit level was restricted to 8% (to Rs 1474.93 crore) but aided by higher other income and lower tax incidence the company posted early double digit growth in bottom-line. Order inflow in Q3FY13 at Rs 19545 crore was higher by 14% yoy with major orders coming from building and factories, infrastructure and power T&D sector. International orders accounted about 22% of order inflow of the quarter. Order inflow for the 9mFY13 grew by 22%. Order Book as end of Dec 2012 stood healthy at Rs 162334 crore and of which international order book constituted 13%. The order Book of the Engineering & Construction (E&C) segment as at Dec 30, 2012 stood at a healthy Rs 159985 crore (Rs 156183 crore as end of Sep 2012. The order intake of E&C segment in Q2FY13 was higher by 16% to Rs 17818 crore. L&T is certainly facing the turmoil of a slow economic growth environment. However, with the recent news flow in terms of order wins in Jan-Feb 2013 were close to Rs39bn which were a mix of B&F (Government), Defense, Hydrocarbon and Power. Further, with the impetus given to DMIC, DFC and other BOT projects in transportation (Budget 2013-14), along with a
Impact Neutral The Budget does not have any specific proposals for the IT sector. The increase in surcharge from 5% to 10% for Income tax as well as dividend distribution tax will lead to marginal higher tax outflow for 2013-14. Global Indian IT companies are likely to benefit from one-year extension of concessional 15% tax rate dividend received from their foreign subsidiary. Moreover, they will save on the dividend distribution tax to the extent of such dividends received and distributed to shareholders. The increase in tax rate for royalty and technical services payments to non-residents will result in higher withholding tax payments by Indian IT companies; as in few cases the same has to be eventually borne by the Indian companies. The appointment of Rangachary committee for development centers in addition to IT sector for Safe Harbor rules will help captive IT centers of foreign companies from tax compliance point of view.
strong financial backing, we expect L&T to be able to secure sizeable orders. L&T looks on a comfortable wicket and poised to end the year with a 15% order inflow growth. With strong order book, the company expects to sustain its growth in the period ahead. However, any adverse mix in terms of order inflow may alter the margins.
INFORMATION TECHNOLOGY
CP 120
TARGET 170
Satyam Computer Services Limited operates as a business and information technology services company. The company provides business consulting, information technology, and communication services. Further, the company provides business process outsourcing services, including HR, finance and accounting, customer contact, and industry-specific transaction processing services. The company has operations primarily in the Americas, Europe, the Asia Pacific, and India. Satyam Computer Services Limited was founded in 1987 and is headquartered in Hyderabad, India Ø One Year extension of concessional rate of 15% tax on dividend received by Indian company from foreign subsidiary together with waiver on dividend distribution tax to its shareholders of that portion of the income received from its foreign subsidiary. Ø Increase in surcharge on Income tax (taxable income greater than 0.1 billion) and dividend distribution tax from 5% to 10% for FY 2013-14. Ø Increase in tax rate for royalty and fee for technical service to non-residents from 10% to 25%. The applicable tax rate would be 25% or in case of Double Tax Avoidance Agreement (DTAA), the lower of the two. Ø Appointment of committee to look into tax matters (safe harbor rules) related to Development centers and IT sector.
36| April - June 2013 | Islami Tijara
Mahindra Satyam performance impacted due to one off's above and below the EBIDTA level during the quarter. The Company Consolidated Sales growth was flat in Q3'FY 13 at Rs 1939.53 crore on the back of 1.5% volume growth. Notably, Americas contributed 52%, Europe 24% and Rest of the World 24% to the revenues during the quarter. Also, margins remained flat on QoQ basis at 21.6% due to oneoff expenses and accordingly operating profit growth was flat at Rs 418.42 crore. However, after the sharp jump in other Current Market Price as of 2nd April 2013
COVER STORY income (Rs 111.08 crore vis-à-vis Rs 0.34 crore), PBIDT grew by 27% YoY to Rs 529.50 crore. With the meager interest cost coupled with lower depreciation cost (-16%) PBT was up 32% QoQ to Rs 490.12 crore. However, after adjusting for the EO losses Rs 294.04 crore pertaining to the Aberdeen UK claim settlements coupled with the sharp rise in effective tax rate PAT was down by sharp 70% YoY to Rs 83.78 crore. The attrition is stable at 13% in Q3FY13 and the Total headcount stood at 36,956 as of December 31, 2012, a net addition of 169 QoQ during the quarter. The Active number of clients stood at 368 on a consolidated basis. Notably, it indicated that the margins lever going forward expected to be on account of the employee pyramid correction, Utilization is improvement coupled with control of SG&A expenses. Further, it indicated the demand environment is good and discretionary spend is picking up and management is cautiously optimistic about FY'14.
CP 1567
TARGET 1740
Tata Consultancy Services Limited provides information technology (IT) services, business solutions, and outsourcing services worldwide. It has strategic partnership with JDA Software Group, Inc.; Sun Microsystems, Inc.; and Xerox
on the client's spending intention; decision delays are getting over and annuity deals are coming back to the market. Big data, Digital Spending, Analytics are also picking up momentum. Europe (especially Continental Europe) is expected to perform better in the coming years, as more clients are moving towards the off shore model to curtail the cost. Management also indicated early signs of improvement in discretionary spend as companies worldwide are targeting more efficiency to get better growth and higher margin. TCS is expected to maintain its industry leading growth in near to medium term backed by its strong order pipeline and recent big deal wins. Based on the recent pick up in the large deal market, TCS is expected to maintain its continuous growth momentum.
CP 450
TARGET 540
W
ipro Limited provides information technology (IT) products and services, and consumer care and lighting products primarily in India, the United States, and Europe. The company operates in four segments: IT Services, IT Products, Consumer Care and Lighting, and Other.
Corporation, as well as with Alcatel-Lucent, Cisco, EMC,
4881.68 crore. PAT grew by 3% QoQ to Rs 3590.62 crore.
The Results of Wipro were in line of the market expectation for the quarter, it held its margins during the quarter but some disappointed was witnessed on Q4 Guidance. The Company Consolidated Sales grew by 3% QoQ in Q3'FY 13 to Rs 10989.10 crore largely on the back of growth in price realizations. Notably, the onsite price realization grew 3.6% and the offsite realization of 3.4% but Volumes declined by 1% for the same period. In dollar terms, Revenues from IT Services grew by 2.4% QoQ and 4.8% YoY to USD 1.57 billion for the quarter ended December 2012. Also, OPM improved 10 bps QoQ to 20.2% and accordingly operating profit grew by 4% QoQ to Rs 2218.10 crore. After the flat growth in other income coupled with meager interest cost and marginal decline in depreciation PBT growth was 4% QoQ to Rs 2216.70 crore. Thanks to the sharp fall in effective tax rate by 200 bps QoQ to 21.9%, PAT grew by 7% QoQ to Rs 1731.90 crore.
TCS management indicated that FY14 would be a better year for TCS as well as Indian IT as the company has better clarity
Wipro has gone through organizational restructuring over the last eight quarters. The restructuring has been a bumpy ride where it has
Google, HP, IBM, Microsoft, Oracle, Net Applications, Research In Motion, and SAP. The company was founded in 1968 and is based in Mumbai, India. Tata Consultancy Services Limited is a subsidiary of Tata Sons Limited. TCS Consolidated sales grew by 3% QoQ in Q3'FY 13 to Rs 16069.63 crore on the back of 1.25% Volume growth; Constant currency realization up 1.3% QoQ during the quarter. In dollar terms, Revenues grew by 3.3% QoQ and 14% YoY to USD 2.95 billion for the same period. The operating profit grew by 5% QoQ to Rs 4660.49 crore, but due to fall in other income (33% QoQ to Rs 221.29 crore) PBIDT grew by 2% QoQ to Rs
Current Market Price as of 2nd April 2013
Islami Tijara | April - June 2013 | 37
COVER STORY
seen changes at the senior management levels, organizational structure, S&M investment and tail-trimming of clients. The company is now reaching the end of restructuring process. Going forward Wipro is likely to have steady investment in S&M. The company's structure to mine its top clients have started showing results and so is new client addition. It has improved deal pipeline, pick-up in sales cycle and better win ratio to help pushing result in improved business momentum in Fy14. CP 120
TARGET 160
METALS & MINING
H
Ø The 10 per cent export duty levied on bauxite Ø Excise duty of 4 per cent has been levied on silver obtained from smelting zinc or lead Impact Neutral The 10 per cent export duty levied on bauxite will help improve its domestic availability. However, the impact will be negligible as India exports less than 5 per cent of its production. In 2011, 0.4 mn tonnes of bauxite (2 per cent of production) were exported. Excise duty of 4 per cent has been levied on silver obtained from smelting zinc or lead, to bring the rate on par with the duty levied on silver obtained from copper ores and concentrates. As the sale of by-products such as silver typically accounts for a mere 5-10 per cent of a zinc manufacturer's revenues, the impact of the increase in excise duty is expected to be negligible.
industan Zinc Limited engages in mining and smelting zinc, lead, and silver. The company's primary mining asset is the Rampura Agucha mine located to the north of Udaipur in Rajasthan, India. Its mining units also comprise the Sindesar Khurd, Rajpura Dariba, Zawar, and Maton mines in the state of Rajasthan. The company's products consist of refined zinc metal, refined lead metal, silver, cadmium, sulphuric acid, and rock-phosphate. It also engages in wind power generation with a generation capacity of 273.5 megawatts in Rajasthan, Gujarat, Karnataka, Tamil Nadu, and Maharashtra in India. Hindustan Zinc Limited offers its products in India and internationally. The company was incorporated in 1966 and is based in Udaipur, India. Hindustan Zinc Limited is a subsidiary of Sterlite Opportunities and Ventures Limited. Hindustan Zinc registered a top-line growth of 14% for the quarter ended December 2012. As raw material cost, royalties and other mining cost stood higher as % to sales the operating margin contracted by 260 bps to 47% and thus the growth at operating profit level moderated to 8% at Rs 1494.01 crore. But, with the help of higher other income and lower effective tax rate net profit grew by 27% to Rs 1612.54 crore. Upside in segment profit was largely on account of silver segment (up 153% to Rs 598.51 crore) on sales of Rs 644.43 crore, which was up by 152%. On the other hand the segment profit of Zinc & Lead was lower by 26% (to Rs 746.23 crore) on flat sales of Rs 2472.66 crore. Zinc is expected to remain in deficit for couple of years, primarily on account of growth in consumption outpacing the rise in production. Pb is expected to be in marginal surplus in 2013; however the trend is expected to reverse on the back of lower growth in production. Going forward, company expects large number of mines that's coming to end of life which shall lead to supply side shortage. Backed by firm outlook on Zn and Pb, attractive valuations and strong asset quality company's outlook is positive in long run.
38| April - June 2013 | Islami Tijara
Current Market Price as of 2nd April 2013
COVER STORY
OIL & GAS NEUTRAL
Proposals Ø Shift from profit sharing to revenue sharing policy for exploration and production of oil & gas. Ø Review of natural gas policy to reduce uncertainty on domestic gas prices. Ø Shale gas policy to be announced. Ø Faster clearance of stalled NELP blocks. Ø Investment allowance of 15% for investments above Rs. 1 billion. Ø Provision of subsidy for sensitive petroleum products: Rs. 969 billion under 2012-13 RE and Rs. 650 billion under 2013-14 BE. Ø 5 MMTPA Dabhol terminals to be fully operational in 2013-14.
5562.72 crore over the same period. Bottom line of the company fell 17% as the company had an EO income of Rs 3142.08 crore in Q3FY'12 received from Cairn India towards Royalty paid for the period August 2009 to September 2011. Net profit excluding EO income (net of taxes) rose 17%. OPM fell 240 bps to 44% leading to a 10% increase in operating profit to Rs 9272.22 crore as statutory levies as a percentage of adjusted net sales rose to 27% from 21% offset by fall in exploration cost written off to 10% from 13%. Other expenditure remained flat at 17%. Staff cost too remained flat at 2%. Other income rose 2% to Rs 1281.17 crore. Interest cost fell to Rs 1.21 crore from 1.86 crore. Depreciation (includes Depletion, Amortization and impairment losses) cost increased 5% to Rs 2341.65 crore. PBT before EO rose 10% to Rs 8210.53 crore. The company had an EO income of Rs 3142.08 crore in Q3FY'12 received from Cairn India towards Royalty paid for the period August 2009 to September 2011. PBT after EO fell 23%. Effective tax rate fell to 32% from 37% leading to net profit decline of 17% to Rs 5562.72 crore. The recent move of diesel price hike will benefit ONGC significantly, as its share of under-recovery will reduce. Upstream companies have a significant share in the underrecovery. ONGC will also benefit if the recent Oil Ministry's recommendation of doubling the price of natural gas produced by PSU upstream companies to $8.5/mmbtu is implemented.
CP 794
TARGET 900
R
il and Natural Gas Corporation Limited engages in the exploration, development, production, and refining of oil and gas in India and internationally. The company's products include crude oil, natural gas, liquefied petroleum gas, naphtha, ethane/propane, kerosene oil, low sulphur heavy stock, high speed diesel, motor spirit, aviation turbine fuel, liquid diesel oil, and mineral turpentine oil. It is also involved in power generation, liquefied natural gas supply, and pipeline transportation activities; and the provision of petrochemicals. Oil and Natural Gas Corporation was incorporated in 1993 and is headquartered in Dehradun, India.
eliance Industries Limited, together with its subsidiaries, engages in exploration, development, and production of crude oil and natural gas in India and internationally. The company offers textile products, like Fabrics, Readymade Garment. In addition, the company operates retail outlets comprising reliance retail, food and grocery specialty stores, hypermarkets, wholesale and products specialty stores. Further, it engages in the retail of transportation fuels, convenience shopping, auto LPG, petroleum, and lubricant products, as well as offers fleet management services, highway hospitality services, and vehicle care services. Additionally, the company focuses on SEZ development and telecom/broadband business. Reliance Industries Limited has strategic partnership with BP Exploration (Alpha) Limited. The company is based in Mumbai, India.
ONGC reported 16% increase in its top line to Rs 21093.21 crore in Q3FY'13 compared to corresponding previous year period while it reported 17% decrease in bottom line to Rs
Reliance Industries' net profit for the third quarter ended December 2012 grew 23.9 per cent from the year-ago, this was achieved on the back of higher Gross Refining
CP 143
TARGET 380
O
Current Market Price as of 2nd April 2013
Islami Tijara | April - June 2013 | 39
COVER STORY Margins (GRMs) and improved petroleum margins. The company reported an average gross refining margin of $9.6 a barrel for the quarter, compared with $6.8 a year earlier and $9.5 in the previous three months. The company posted a net profit of Rs 5,502 crore for the quarter ended December 31, 2012, against Rs 4,440 crore in the year-ago period. For the third quarter, net sales increased 10.27 per cent to Rs 93,886 crore, while in the year-ago quarter it was Rs 85,135 crore. Other income was also marginally up by 1.3 per cent in the period to Rs 1,740 crore on a year-on-year (y-o-y) basis, though it was lower compared with Rs 2,112 crore reported in the previous quarter ended September 2012. The oil and gas giant reported cash and cash equivalents of Rs 80,962 crore in its books despite a dividend payout, a share buy-back of around 10,000 crore and capital expansion during the year. RIL plans to drill 3 wells in coming period: 1) G2 development well in KG-D6, followed by 2) appraisal well in CY-D6 block and 3) MJ1 well, in KG-D6. Further, it is in process of submitting development plan for R-series/other satellites in 4QFY13 and assuming DGH approvals come through, production from these fields will begin in 3-4 years post approvals. While in pet coke gasification project, it has completed basic engineering and has started detailed engineering work which will be followed by ordering of long lead items. Management indicated that the capital expansion on these projects will be back ended i.e. major capex will be in the 3rd year/project completion year. The Government has given its approval to Reliance Industries' plans of denotifying more than 40 per cent of its multi-product Special Economic Zone in Jamnagar subject to refund of all tax benefits it received for developing the area. The governments deregulate diesel prices, this move expected to increase natural gas prices by 2014, it would help Reliance Industries performance over a period of time.
POWER
PPP policy framework in partnership with CIL Ø proposed to encourage investments in coal mining. Ø Generation based incentive for wind energy projects reintroduced; Rs. 8 billion allocated for the same. Ø Funds allocated from National Clean Energy Fund (NCEF) so as to enable low interest rate funding of viable renewable energy projects. Ø Scheme to be proposed for encouraging investments by municipalities through PPP mode in waste to energy generation projects. Ø Eligibility date for power projects to avail the Section 80 IA benefit (tax holiday) extended till FY14.
Impact Positive
Funding availability for the sector will improve with issuance of tax-free bonds of Rs 500 billion and credit enhancement through IIFCL. Additionally, the proposal to adopt a PPP framework for coal production will improve domestic coal supply in the long term. Customs duty on imported coal, which was previously exempt, has been increased to 2 per cent, while CVD has been increased by 1 per cent. For imported coal-based power projects, generation costs are expected to increase by 5-6 paisa per unit. Investments in wind energy, which nearly halved in 2012-13 due to withdrawal of benefits, are expected to increase significantly due to reinstatement of generation-based incentive (GBI), with an outlay of Rs 8 billion. Further, capacity additions in solar power are expected to increase, with interest subvention for a period of five years by IREDA, through the National Clean Energy Fund. Extension of the sunset clause by one year, to avail the 10-year tax holiday, would benefit 18-20 GW of capacities expected to be commissioned in 2013-14.
Ø Constitution of IDF encouraged; credit enhancement mechanism to be offered by IIFCL & ADB for the long term financing through bonds.
Disclaimer : The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representation can be made that the recommendations contained herein will be profitable or that they will not result in loses. Readers using the information contained herein are solely responsible for their action. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness. The above recommendation on based on the theory of Technical & Fundamental Analysis Combined. Pragmetic Wealth Management Pvt. Ltd.
Ø Fund raising limit of up to Rs. 550 billion allowed through issuance of tax free bonds. 40| April - June 2013 | Islami Tijara
Current Market Price as of 2nd April 2013
ACADEMIC
Islamic Finance Courses INDIA Sr.No.
INSTITUTE
DESCRIPTION WEBSITE STATE Kerala www.aljamia.net Post Graduate Diploma in Islamic Economics and Finance (PGDIEF) www.islamicbankinst.com A.P. (Hyderabad) Post Graduate Diploma in Islamic Banking & Finance www.amu.ac.in Post Graduate Diploma in Islamic Banking & Finance U.P. (Aligarh)
1
AL JAMIA AL ISLAMIYA SANTHAPURAM
2
Institute of Islamic Banking and Finance
3
Aligarh Muslim University
4
Institute of Certified Islamic Financial Analysts Certified Islamic Financial Analyst Certified Shariah Auditor
5
Intl. Institute of Islamic Business & Finance Diploma in Islamic Business and Finance (PGDIBF) Institute of Islamic Banking Finance & Insurance On-Line Courses on “Islamic Banking, Finance & Insurance”
6 7 8
Al-Mahad Al-Aali Al-Islami
Diploma in Islamic Finance
Ethica Istitute of Islamic Finance
1) Ethica's Certified Islamic Finance Executive™ (CIFE™) 2) Advanced CIFE™ in Islamic !ccounting
www.icifai.com www.iiibf.org
Kerala India
Tamil Nadu (Chennai) www.iibfi.com www.almahad.org AP (Hyderabad) www.ethicaistitute.com Karnataka (Bangalore)
INTERNATIONAL Sr.No. 1 2 3 4 5 6
INSTITUTE
The ICLIF Leadership and Governance Centre (ICLIF)
8
International Shariah Research Academy for Islamic Finance (ISRA)
9
Securities Industry Development Corporation (SIDC)
10
Center for Islamic Finance Studies of Bahrain Institute of Banking and Finance
11
University College of Bahrain
12
Bahrain financial exchange-the BFX-TI
13
Addax Bank
15 16
WEBSITE www.cisi.org
COUNTRY United Kingdom
Leadership Development Programs: Leadership Advisory Services E:xecutive Coaching C,orporate Governance for FT Applied research on Shariah issues in Islamic Finance, strengthening human capital development
www.iclif.org
Malaysia
www.isra.my
Malaysia
Shariah Advisor Programme Industry Transformation Initiative Programme, Licensing Examinations, Islamic Mkt. Prog. Advanced Diploma in Islamic Finance, Advanced Diploma in Islamic Commercial Jurisprudence (Fiqh al-Muamalat), MBA in Islamic Finance, Evening MBA Program
www.sidc.com.my
Malaysia
www.bibf.com
Bahrain
www.ucb.edu.bh
Bahrain
www.bfx.bh www.addaxbank.com/en
Bahrain Bahrain
www.bm.ust.hk
Hong Kong
www.latrobe.edu.au
Australia (Malbourne)
Chartered Institute for Securities & Investment CISI Islamic Finance Qualification (IFQ) www.cimaglobal.com United Kingdom Chartered Institute of Management Accountants CIMA Advanced Diploma in Islamic Finance (CADIF),CIMA Diploma in Islamic Finance (CDIF), CIMA Certificates in Islamic Finance www.islamicbankingcourses.com United Kingdom Islamic Banking and Finance Training Islamic banking and finance training courses Universiti Tun Abdul Razak www.unirazak.edu.my Malaysia M.B.A. in Global Islamic Finance International Centre for Education in Islamic Malaysia www.inceif.org/ Masters in Islamic Finance, PhD in Islamic Finance, MSc in Finance (INCEIF) Investment Banking and Islamic Finance, (CIFP) Malaysia www.ibfim.com Islamic Banking and Finance Institute Malaysia Continuous Professional Development (CPD) Programs , (IBFIM) Certified Credit Professional - Islamic (CCP-i),
7
14
DESCRIPTION
HKUST Business School La Trobe University in Melbourne
Islamic Finance Qualification (IFQ) Training program in 'Fundamentals of Islamic Finance' MBA in Islamic Banking and Finance Postgraduate in Islamic banking and finance.
Universitas Indonesia
www.ui.ac.id/en
Indonesia
18
Master’s in Islamic Banking Bachelor of Islamic Finance and Banking with honours-BIFB University Utara Malaysia (UUM)) (Honours) M, aster of Science (Islamic banking and Finance) International Islamic University Malaysia (IIUM) Master of Science in Islamic Banking and Finance (MIBF)
www.iium.edu.my
Malaysia
19
UNIVERSITI MALAYSIA SABAH
Bachelor of Islamic Finance with Honours
www.ums.edu.my
Malaysia
20
Business School's ICMA Centre
MSc in Investment Banking and Islamic Finance
www.reading.ac.uk
Malaysia
21
London School of Business & Finance
MSc Finance and Investment (Islamic Finance and Banking)
www.lsbf.org.uk
United Kingdom
22
Umm Al-Qura University
www.uqu.edu.sa
Saudi Arabia
23
Islamic Development Bank, Saudi Arabia
Bachelor and Master in Islamic Banking and Finance training opportunities to staff engaged in development activities
www.irti.org
Saudi Arabia
17
www.uum.org.my
Malaysia
Islami Tijara| April - June 2013 |41
FAITH & FINANCE
FIQHUL MUAMLAAT
HOME FINANCING - AN ISLAMIC VIEW he concept of financing in itself has taken a shape of a huge industry, which spreads across all the continents. The industry caters to the needs of people looking for financial solutions for several reasons. Finance could be needed for starting a new business, for buying a car, for taking a holiday/vacation, to make investments and to buy a house to live in etc. Our focus right now is on financing for the sake of buying a house to live in i.e. house mortgage.
T
everyone knows what happened when the bubble burst back in year 2008. Lehmann brothers were the first to come in limelight. The others followed them. The idea behind giving a brief about real estate bubble is that many people took advantage of buying homes in this real estate frenzy. Some of these investors were genuinely in need of a house, while others were only mere traders. Some of them made money, while others lost heavily.
The last stupendous rally in stock markets that ended by arrival of the famous recession in later months of 2008 was driven mainly by two sectors: construction/real estate and banking. There was a boom in all fields of construction: infrastructure, residential buildings, office space, leisure space etc. The real estate boom saw banks coming up with new ideas to cater to the needs of aspiring investors. There was a particular class of investors who were not investors as such, but the temptation of rapid growth of the property prices and the lucrative financing schemes from the institutions attracted them towards buying a residential apartment. And then it started… everyone was busy buying a house worth much-much more than his/her financial capability, courtesy bank finance. This also raised the real estate prices unrealistically higher, thus encourages speculation. And
Have we ever tried to think: Why did it happen?
42| April - June 2013 | Islami Tijara
Many explanations can be put forward by the economists. But let us try to understand this in the most authentic manner i.e. from Islamic perspective. Even from Islamic point of view, several wrong practices can be attributed to the downfall of real estate and financing boom, but we shall discuss the biggest mistake of all; the mistake which is not just a mistake, but a major sin. The business model of property financing in modern times is based on conventional banking system. And the conventional
FAITH & FINANCE banking system is based on the principles of interest i.e. Riba'. Islam prohibits Riba'. It is one of the biggest sins in Islam. There is no other sin in Islam for which there is a declaration of war against the sinners by Allah and His Messenger (PBUH); refer toAayah No's 278 & 279, Surah Al-Baqarah, Chapter No. 2, Holy Qur'an. Just imagine how big the sin it is. In another verse of Qur'an, Allah says: “Allah will destroy Riba' and will give increase for Sadaqât; And Allah likes not the disbelievers, sinners.” (Al-Baqarah: 276). One more reference in chapter 3 Al Imran Allah says '0 those who believe, do not eat Riba (usury or interest) multiplied many times. And fear Allah, so that you may be successful.' Verse 130 surah al- Imran Allah does not bless transactions based on Riba' and ultimately the business thriving on Riba' shall be destroyed, as Allah has promised to destroy Riba'. This accounts for the doom of the real estate, the crash. Thus, buying a home through conventional banking system is against the principles of Islam; it is not allowed. Abdur-Rahman bin Abdullah bin Masoud narrated that his father said: Allah's Messenger (PBUH) cursed the one who consumes Riba', the one who pays it and the one who records it. (Abu Dawud: Vol. 4 Hadith No. 3333). Similar narration has been reported by Imam Tirmidhi also. And for those who are still in doubt about the sin of paying Riba'. It was narrated that Jabir (RA) said: “Allah's Messenger (PBUH) cursed the one who consumes Riba' and the one who pays it, the one who writes it down and the two who witness it,” and he said, “they are all the same.” (Sahih Muslim, Vol. 4, Hadith No. 4093). Do I need to highlight the last phrase of the hadith – they are all the same? There shouldn't be a trace of doubt now. These narrations show the severity of Riba'. Dealing in Riba' is so abominable and such a grave sin that any kind of participation in it is a cause of curse. Please be very clear, all types of participations in Riba' (taking, paying, writing, witnessing etc.) are liable to punishment from Allah. We should realize that there is nothing in the entire creation of the world which has no goodness or utility at all. Even in serpents, scorpions, wolves, lions, and in arsenic, that fatal poison, there are thousands of utilities for human beings. Is there anything in this vastness of nature which could really be called bad? Take theft, robbery, villainy, bribery - not one of these remains without this or that benefit. But, it is commonly recognized in every religion and community, in every school of thought, those things which have more benefits and less harm are called beneficial and useful. Conversely, things that
cause more harm and less benefit are taken to be harmful and useless. Even the noble Qur'an, while declaring liquor and gambling to be haram, proclaimed that they do hold some benefits for people, but the curse of sins they generate is far greater than the benefits they yield. Therefore, these cannot be called good or useful; on the contrary, taking these to be acutely harmful and destructive, it is necessary that they be completely avoided. The case of riba (interest) is not different. Here the consumer of riba does have some temporal benefit apparently coming to him, but its curse in this world and in the Hereafter is much too severe as compared to this benefit. There may be some benefit to the people who take loans for hosing but they are indebted for their life, at times remain in misery for year to pay the Debt and Interest. Yet another economic drawback of riba (here we refer to bank interest) lies in the predicament of the borrower on interest when he is hit by a major loss. Once this happens he is unable to survive anymore. To begin with, he never had enough capital the loss of which he could cushion. The loss throws him into a double distress. Not only does he lose his profit and capital but also, at the same time, gets buried under the bank loan for the liquidation of which he has no means. As compared to this, should he lose his entire capital in an interest-free business, he would, at the most become penniless but, burdened with debt he definitely will not be. Now let us look at the economic disaster engineered through bank interests. Here is a person with a capital of ten thousand and he goes in business worth a hundred thousand, the additional capital advanced by a bank as interest-bearing loan. If by chance, he is hit by loss, his capital sinks and he goes insolvent then the outcome is interesting. Just imagine that he bears only ten per cent of the loss, while the rest of the loss, that is ninety per cent, is absorbed by the whole community, whose money he had borrowed from the bank to invest in his business. Even if the bank writes off the loss as an interim measure, it is clear that the bank is the pocket of a nation, and the loss will ultimately hit the nation. The outcome is that the borrowing capitalist was the sole owner of the profit as far as the profit kept coming, leaving nothing or very little for the community. , When came the loss, it was passed on to the whole community. How grave is the sin of dealing in Riba (Interest) Prophet (pbuh) said that ' There are four kinds of people about whom Allah has decided not to admit them to Paradise and not to let them taste its bliss: The one who is addicted to wine, the one who takes the riba, the one who exploits the property of an orphan and the man who is disobedient to his parents.’
Islami Tijara | April - June 2013 | 43
NEWS & VIEWS
Monetary authority of Singapore committed to developing Islamic financial services Singapore's central bank said it remains committed to developing Islamic financial services in Singapore.
C
ommenting about the lapse of two tax incentives for Islamic finance recently, Assistant Managing Director of the Monetary Authority of Singapore (MAS), Ng Nam Sin, said this was "no reflection of MAS' continuing commitment to develop Islamic financial services in Singapore."
"Like all our tax incentives, they have a fixed tenure and in this case, of five years. It is useful to note that Islamic finance activities will continue to be incentivized alongside conventional finance activities under our other existing schemes," But he pointed out that Singapore's proposition for Islamic finance must be broader than just tax advantage. He said, "Singapore's success as an international financial sector stems from its high standards of regulation, deep and liquid capital market, the presence of international buy side players, and a critical mass of financial intermediaries with expertise to address a wide range of financing needs. It is these strengths that allow Singapore to support the growth of Islamic finance. ". Meanwhile, banks from the region are contributing to the Islamic financial sector in Singapore. A growing cluster of banks from the Middle East region operating in Singapore has also started to offer Islamic financial services. Given the strong growth potential for Islamic finance in Singapore, Mr Ng Nam Sin said MAS will provide an environment that is conducive for growth, support talent development and continue to refine its regulatory framework.
Gulf Islamic banking assets rise to $445bn Islamic banking assets with commercial banks in the GCC reached $445 billion at the end of last year, up from $390bn in 2011, according to recent estimates by Ernst & Young's Global Islamic Banking Centre. Reports indicate that in 2012, the Islamic banking industry in the GCC registered a 14 per cent year-on-year growth, which represents a slight deceleration in the average growth rate over the past five years of 19pc. Reports also indicate that profitability now looks to be stabilizing in major Islamic banking markets though Islamic banks have experienced a mixed recovery across markets. With the global Islamic banking assets with commercial banks now surpassing the $1.5 trillion mark and estimates projecting the industry to hit $2trn by 2015, the global Islamic finance industry is undoubtedly one of the fastest growing components of the global financial system. The Islamic banking industry is growing 50 percent faster than overall banking sector in several core markets, according to Ernst & Young World Islamic Banking Competitiveness Report. Given the current market conditions and the increasing demand for Islamic finance not only in the traditional markets of Middle East and Southeast Asia, but globally, the time is now perfect for the Islamic finance industry to further leverage its inherent strengths of being linked to real economic activities and play a key role in putting in place a holistic Islamic economic ecosystem. It is against this background that the third Annual Middle East Islamic Finance and Investment Conference (MEIFIC 2013) will be held at the Dusit Thani Hotel in Dubai on April 17. Co-located with the eighth Annual World Takaful Conference and held under the theme "Building the Islamic Economy: Strengthening Islamic Finance's Links to the Real Economy", MEIFIC 2013 is set to gather more than 250 regional and international Islamic finance leaders in a powerful dynamic platform. A key highlight will be the high profile keynote debate that will focus discussions on boosting growth and the value of Islamic finance by strengthening linkages to the real economy and mainstreaming products. The session, chaired by Thomson Reuters global head for Islamic capital markets Dr Sayd Farook, and featuring Dubai government's economic adviser Harun Kapetanovic, Mashreq Al Islami chief executive Moinuddin Malim, ADCB Islamic Banking head of Islamic Banking Amr Al Menhali, and QIB-UK head of asset management Anouar Adham, will assess new growth opportunities for Islamic finance and will analyse how institutions can scale-up to better meet the needs of the real economy. 44| April - June 2013 | Islami Tijara
ECONOMY
CORPORATE NEWS Novartis loses cancer drug Glivec patent case: The Supreme Court rejected the Swiss drug major's patent plea on blockbuster cancer drug Glivec, on 1st April , 2013 ending a dispute that has dragged on for over six years. The Supreme Court ruled that Glivec is not new, not innovative and failed to fulfil the section 3(d) criteria which states that inventions that are a mere "discovery" of a "new form" of a "known substance" do not result in increased efficacy of that substance and are not patentable. The judgement has been welcomed by many, as it prohibits global pharma firms from repeatedly claiming a patent on the same drug by making minor changes to it. That allows domestic companies to come out with cheaper generic versions, making lifesaving drugs affordable to a large section of patients in a developing country like India.Novartis' patent plea was first rejected by the Indian Patent Office, the appeal was turned down by the Madras High Court, and yet again by the Intellectual Property Appellate Board. This case has been keenly watched by global pharma giants as well as by Indian generic drug makers and aid groups. The big pharma companies see huge demand for drugs in India, given the huge population and increasing health risks. But many of these lifesaving drugs are expensive and so Indian companies making cheaper generic versions of blockbuster drugs thrive. In this case for instance, Novartis' Glivec costs around Rs 1.2 lakh for a month's dosage. In contrast, a generic version is available in India for a tenth of that. MCX-SX goes live with equity, derivative trading with SX40 index: MCX Stock Exchange (MCX-SX) will begin live trading in equities and equity derivatives from Monday. With its 40-stock index named SX40. MCX-SX is the third full-fledged equity bourse after BSE and NSE. The bourse was formally launched by Finance Minister P Chidambaram. SX40 will be a free-float based index of large-cap and liquid stocks, representing diverse sectors. The base value will be 10,000 with a base date of March 31, 2010, MCX-SX Vice-chairman Jignesh Shah said at the launch. The index is designed to measure the economic performance with better representation of various industries and sectors based on the ICB (industry classification benchmark), a global classification from the FTSE of the London bourse. The index allows fast entry for companies with better free float, market cap and liquidity. SX40 includes companies that have a minimum free float of 10 percent and is within the top 100 liquid companies.
IIP: Industrial Growth Update The Central Statistics Office (CSO) has released the data for industrial production for the month of January 2013. Changing track from the decline in industrial production, IIP for the month of January 2013 registered growth of 2.4% compared with 1.0% for the same period last fiscal. The positive growth has been primarily influenced by relatively higher growth in electricity and some recovery in manufacturing activities. The IIP growth for December is revised upwards to -0.5%. Manufacturing sector grew at 2.7% in January 2013 after contracting for the previous two months. Mining registered -1.9% growth in April – Jan 2013. The mining sector continues to be in trouble plagued by policy hurdles. Growth in electricity has moderated to 4.7% in April – Jan 2013, as against 8.8% in same period last year. Output of 11 out of 22 manufacturing industry groups in January 2013 have registered positive growth (y-o-y). Electrical machinery and apparatus has shown highest growth of 46.7%, followed by tobacco Products growing by 19.8%. Other industry groups which showed healthy growth include wearing apparel (18.1%), chemical and chemical products (11.2%), coke, refined petroleum products &nuclear fuel (11.1%) and other transport equipment (11.3%). Output of the eight core infra industries having nearly 38% weight in IIP, grew by 3.9% in January 2013 as compared to 2.5% a month ago Consumer durable and consumer non-durable goods have witnessed growth of 3.2% and 2.3% respectively, with the overall growth in Consumer goods being 2.7% for Apr- Jan FY13. Inflation (WPI) Update WPI-based inflation rose to 6.84 per cent in February 2013 after falling to a three-year low of 6.62 per cent in the previous month. However, core inflation an indicator of demand side
pressures on prices fell below the 4.0 per cent mark for the first time in past 35 months. Here are the key inflation components: Primary Articles Inflation stood at 9.70 percent in February 2013 , as compare to 10.31 percent in January 2013. For the fuel and power category, inflation risen considerably moving up to 10.47 per cent during the month from 7.06 percent in January 2013. The manufactured products segment has registered considerable moderation, moving down to 4.51% in February 2013 when compared with 4.81 in January 2013. Non-food Manufactured Products Inflation stood at 3.8 percent in February2013 as compare to 4.1 percent in January 2013. Non-food Articles Index up 1.6 percent in February2013 Mid-Quarter Monetary Policy Review: March 2013 The Reserve Bank of India (RBI), reduced the repo rate by 25 basis points from 7.75 per cent to 7.5 per cent with immediate effect; in its monetary policy as of March 2013. The reverse repo rate adjusted to 6.5 per cent . The Bank Rate kept to 8.5 per cent.
Islami Tijara | April - June 2013 | 45
MARKETS
Investment Ideas - 2012 How The Investment Ideas Fared
Consumer Automobiles
Industrial & Capital Goods Information Technology
We recommended 17 Shariah compliant stocks for investment in our magazine Islami Tijara - February 2012 issue. As on 28th, March 2013 we have evaluated as to how the diversified portfolio fared. It was observed that 16 out of 17 stocks gave a positive return. And the returns on the portfolio was 28.66% whereas Sensex and the Nifty gave 10.82% . Stock
Eicher Motors Maruti Suzuki Tata Motors Ambuja Cem. Grasim Inds Bata India Marico Tata Coffee TTK Prestige Cipla Divi's Lab. Dr Reddy's Labs Havells India HCL Technologies Hexaware Tech. TCS Petronet LNG Recom. Portfolio Sensex Sensex 500 Nifty
Size
Investment Price as at 26/03/12
Midcap LargeCap LargeCap LargeCap LargeCap Midcap Midcap SmallCap SmallCap LargeCap Midcap LargeCap Midcap LargeCap SmallCap LargeCap Midcap -
1638 1157 222 159 2490 613 147 884 2401 344 793 1645 427 427 78 1087 159 -
Investment Value
100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 1700000 16995.77 6444.56 5127.35
CMP as at 28/03/2013
2512.00 1279.70 269.30 173.45 2811.80 715.80 210.10 1477.55 3234.40 379.75 983.70 1765.10 647.70 795.95 84.90 1571.80 135.40 -
Current Value
Absolute Returns
153358 110605 121306 109088 112924 116770 142925 167144 134711 110392 124048 107301 151686 186405 108846 144600 85157 2187266 18835.77 7084.96 5682.55
53.36% 10.61% 21.31% 9.09% 12.92% 16.77% 42.93% 67.14% 34.71% 10.39% 24.05% 7.30% 51.69% 86.41% 8.85% 44.60% -14.84% 28.66 % 10.82% 9.94% 10.83%
Healthcare
Oil & Gas
Annualised Returns
46.17% 9.18% 18.44% 7.86% 11.18% 14.51% 37.14% 58.10% 30.03% 8.99% 20.81% 6.32% 44.72% 74.76% 7.65% 38.59% -12.84% 24.80 % 9.28% 8.52% 9.28%
Best Pick-Post Budget
Union Budget (2012-13) & Shariah Companies
We recommended 11 Shariah compliant stocks Post Union Budget - 2012 in our magazine Islami Tijara - April issue. Upon evaluation on As on 28th ,March 2013 we found that 7 out of recommended 11 stocks gave positive return and the returns on portfolio as a whole was pleasantly better than all the indices. Stock
Size
Maruti Suzuki Tata Motors ACC UltraTech Cem. Berger Paints Colgate-Palm. Godrej Consumer Shoppers St. Fag Bearings HCL Technologies BOC India
LargeCap LargeCap LargeCap LargeCap SmallCap LargeCap LargeCap SmallCap SmallCap LargeCap Midcap
Portfolio Sensex Sensex 500 Nifty
-
Purchase Price as at 26/03/12
1298 268 1328 1487 105 1086 477 402 1545 476 457 -
Investment Value
CMP as at 28/03/2013
Current Value
Absolute Returns
Annualised Returns
100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000
1279.70 269.30 1161.25 1885.00 195.50 1246.45 779.25 403.55 1460.00 795.95 279.45
98560 100448 87414 126684 185837 114716 163091 100386 94449 166936 61042
-1.44% 0.45% -12.59% 26.68% 85.84% 14.72% 63.09% 0.39% -5.55% 66.94% -38.96%
-1.45% 0.45% -12.66% 26.83% 86.31% 14.80% 63.44% 0.39% -5.58% 67.30% -39.17%
1100000 17361.74 6737.92 5278.20
-
1299562 19444.84 7572.36 5908.35
18.14 % 12.00 % 12.38 % 11.94 %
18.24 % 15.85 % 16.36 % 15.77 %
Disclaimer : The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness. The above recommendations are based on the theory of Technical Analysis and fundamental analysis of the Scrip. Readers are advised to use the data for the purpose of information only and rely on their own judgment while making investment decisions. Imtiaz Merchant or Pragmatic Wealth Management Pvt. Ltd does not warranty the timeliness, accuracy or quality of the electronic content.
46| April - June 2013 | Islami Tijara
MARKETS
ITE Shariah Index - 35 April 2013 - June 2013 Pragmatic Wealth Management Research group have develop a front line Index based on Shariah principles. The Shariah Index comprise of 35 Shariah compliant large cap stocks. This index is benchmarked against Sensex, Nifty & CNX S&P Shariah index.
SR.
1 2 3 4 5 6 7 8 9
COMPANY NAME
BOOK VALUE
FACE VALUE
10.00 2.00 2.00
Market Cap*
Weight
Free Float
Free Float Mcap
Weight
52 Week High/Low
Info-tech
195.72
Oil & Gas Oil & Gas Info-tech
4277.74 3228.51
126.49 132.03 504.65
Bharti Airtel Wipro
Consumer Info-tech
Hind. Unilever
Consumer Automobiles Healthcare Inds. & C. Goods Info-tech
287.12 1898.76 492.49 221.51
518.20 2.00 130.16 10.00 98.90 10.00 15.88 10.00
637.95 103.56
62.07 10.00 78.30 10.00
85908.05 84748.33
3.62% 0.65 3.57% 0.36
56084.21 30778.99
5.09% 2.79%
122.98 138.91
409.86 10.00 95.08 10.00
83995.95 55406.08
3.54% 1.00 2.33% 0.38
83995.95 20982.97
306.99 289.37
198.26 208.77
10.00 10.00
52872.89 51939.02
2.23% 0.75 2.19% 0.50
39494.03 25960.57
7.62% 1720/1106 805/454 1.90% 975/622 3.58% 2.36% 2229/1423
274.16 845.06 95.92 96.42
469.07 10.00 63.62 2.00 259.36 10.00 132.13 10.00
51216.82 51189.51 47138.92 44251.48
2.16% 2.15% 1.98% 1.86%
0.38 0.35 0.47 0.37
19455.20 17956.34 22253.98 16477.15
1268.48 144.46
170.48 525.66
10.00 10.00
40483.54 36973.09
1.70% 0.43 1.56% 0.46
17268.34 16929.94
39.94 160.58 84.91 89.48
214.81 93.93 395.59 83.47
2.00 2.00 2.00 2.00
30791.74 30490.13 29995.31 28153.13
1.30% 1.28% 1.26% 1.19%
0.48 0.63 0.74 0.53
14714.96 19269.35 22327.05 14964.12
52.15 10.00 74.17 10.00
26753.80 26517.88
1.13% 0.49 1.12% 0.36
13217.02 9676.84
2.00 2.00
25806.70 23886.44
1.09% 0.74 1.01% 0.31
19217.16 7485.47
237.31 88.78
50.39 10.00 16.33 2.00
22876.68 22772.07
0.96% 0.68 0.96% 0.47
15612.50 10690.53
54.72 187.75 70.41 211.45
10.98 10.00 383.07 10.00 112.53 10.00 45.53 2.00
21979.56 21802.47 19518.73 18607.77
0.93% 0.92% 0.82% 0.78%
5812.51 10836.62 4936.33 6784.75
13.60 86.91
32.01 10.00 148.58 2.00
10 11 12 13
M&M Bajaj Auto
14 15
UltraTech Cem. Hind.Zinc Asian Paints Nestle India GAIL (India)
18 19
Equity
TCS ONGC Reliance Inds. Infosys
Tata Motors Sun Pharma.Inds. Larsen & Toubro HCL Technologies
16 17
SECTOR
20 21 22 23
Maruti Suzuki Hero Motocorp Cipla Dr Reddy's Labs Lupin
24 25
Ambuja Cem. Godrej Consumer
26 27 28 29
Grasim Inds Dabur India
30 31 32 33
Wockhardt ACC Siemens Ranbaxy Labs.
34 35
Colgate-Palm.
Tata Power Co. Titan Inds.
Sesa Goa
Automobiles Automobiles Cons. & Realty Metals & Mining Consumer Consumer Oil & Gas Automobiles Automobiles Healthcare Healthcare Healthcare Cons. & Realty Consumer Cons. & Realty Consumer Power & Utilities Consumer Healthcare Cons. & Realty Inds. & C. Goods Healthcare Consumer Metals & Mining
*Market Capitalization as on 28th March 2013
308.29 34.03 91.75 174.29
991.76 7.47
307632.70 12.95% 0.26 80106.73 7.27% 1598/1047 354/240 266545.98 11.22% 0.31 82029.26 7.45% 955/671 249801.42 10.51% 0.55 136531.94 12.39% 165949.62 6.99% 0.84 139337.78 12.65% 3010/2102 370/239 110811.63 4.66% 0.32 34910.94 3.17% 456/326 107663.49 4.53% 0.22 23376.08 2.12% 580/398 100784.80 4.24% 0.48 47881.18 4.35%
0.26 0.50 0.25 0.36
337/203 848/554
1.77% 2075/1255 147/111 1.63% 2.02% 5047/3004 1.50% 5040/4306 396/300 1.57% 1.54% 1638/1052 1.34% 2279/1519 435/295 1.75% 2.03% 1969/1528 639/507 1.36% 221/136 1.20% 832/465 0.88% 1.74% 3511/2216 140/101 0.68% 113/83 1.42% 314/204 0.97% 0.53% 2166/544 0.98% 1515/1105 839/482 0.45% 578/371 0.62% 0.75% 1580/1030 208/148 0.55%
16951.72 0.71% 0.49 8306.34 13527.54 0.57% 0.45 6070.15 2375744.99 100.00% 1101733.27 100.00%
Islami Tijara | April- June 2013 | 47
MARKETS
Zero Debt SHARIAH COMPLIANT COMPANIES
Zero Debt Companies as of 28 th March 2013 Minimum Market Cap. of 1000 Crore Sr. No.
Company Name
Islami Tijara Sector
Equity (in Rs. Cr)
F.V.
B.V
EPS
P.E. Ratio
Market Cap. 28 March 2013 (Rs. crore)
Current Mkt. Price as on 28 March 2013
1
Infosys
Info-Tech
287.12
5.00
518.20
157.02
18.40
165950
2890
2
Hind. Unilever
Consumer
221.51
1.00
15.88
13.74
38.00
100785
466
70.41
2.00
112.53
10.26
65.19
19519
549
3
Siemens
Inds. & C. Goods
4
GlaxoSmith C H L
Consumer
5
Castrol India
Automobiles
6
Cummins India
7
Exide Inds.
8 9
ABB Hind.Copper
Inds. & C. Goods Metals & Mining
10
P & G Hygiene
42.06
10.00
272.04
101.34
37.53
17609
4187
494.56
10.00
12.22
8.82
33.85
15663
317
Inds. & C. Goods
55.44
2.00
73.71
22.62
23.13
13780
497
Automobiles
85.00
1.00
35.67
6.11
23.04
10982
129 489
42.38
2.00
119.61
8.72
80.35
10366
462.61
5.00
15.11
3.33
41.13
8577
93
Consumer
32.46
10.00
214.74
56.62
47.20
8207
2528
11
Gillette India
Consumer
32.59
10.00
190.02
25.20
97.35
6549
2010
12
CRISIL
Consumer
7.02
1.00
52.50
27.60
37.95
6221
886
13
Sanofi India Blue Dart Exp.
14 15
Healthcare
23.03
10.00
479.67
72.95
31.53
5946
2582
Inds. & C. Goods Metals & Mining
23.73
10.00
277.33
52.38
38.21
5568
2346
63.60
2.00
64.33
19.20
10.84
5268
166
16
GMDC Engineers India
Inds. & C. Goods
168.47
5.00
54.73
19.50
11.53
5207
155
17
Bayer Crop Sci.
Inds. & C. Goods
39.50
10.00
200.68
62.83
20.36
4760
1205
18
CMC
Info-Tech
30.30
10.00
229.84
57.54
21.01
4066
1342
19
SKF India
Automobiles
52.73
10.00
191.78
36.81
17.06
2900
550
20
Abbott India Whirlpool India
Healthcare
21.25
10.00
256.07
66.50
22.35
2866
1349
Consumer
126.87
10.00
37.54
11.92
22.55
2794
220
Info-Tech
59.31
2.00
28.97
10.47
8.08
2533
85
23
Hexaware Tech. Fag Bearings
Inds. & C. Goods
16.62
10.00
437.95
103.76
16.27
2443
1470
24
Honeywell Auto
Inds. & C. Goods
8.84
10.00
712.95
94.25
29.10
2271
2569
25
Lak. Mach. Works Infotech Enterp.
Inds. & C. Goods
11.27
10.00
797.26
96.08
23.49
2089
1854
Info-Tech
55.80
5.00
92.74
19.66
9.09
1888
169
Info-Tech
29.59
10.00
113.53
49.59
13.93
1836
615
28
eClerx Services Zydus Wellness
Consumer
39.07
10.00
47.83
20.28
24.42
1697
434
29
Astrazeneca Phar
Healthcare
5.00
2.00
75.71
0.00
0.00
1635
654
30
LS Industries
Inds. & C. Goods
84.88
1.00
1.24
0.41
0.00
1371
16
31
Anukaran Commerc
Inds. & C. Goods
19.37
10.00
10.66
0.00
0.00
1332
69
27.68
5.00
83.45
18.74
14.30
1294
234
21 22
26 27
32
Grindwell Norton Agro Tech Foods.
Inds. & C. Goods
33
Inds. & C. Goods
24.37
10.00
85.62
15.65
31.63
1202
493
34
Elgi Equipment
Inds. & C. Goods
15.84
1.00
24.22
4.90
18.63
1188
75
35
NESCO
Inds. & C. Goods
14.09
10.00
201.33
52.78
14.08
1083
769
36
Kennametal India
Inds. & C. Goods
21.98
10.00
137.16
22.15
3.22
1077
490
37
Merck
Healthcare
16.60
10.00
247.04
37.01
17.65
1050
632
48 | April - June 2013 | Islami Tijara
Data Source Capitaline
SCOREBOARD
Top 211 Shariah Comp liant Comp anies
P
ragmatic Wealth Management designed ranking for Top 211 companies from the Shariah Complaint Stock Universe. Shariah Ranking is a source to identify the best stocks i.e. least compromise on financial ratios. We screened all the 5000 plus listed companies on the Bombay Stock Exchange on 31st March 2013. The companies have gone through two level of filtration namely, primary and secondary. Primary filter eliminates the companies that are doing businesses not permitted in Islam such as Banking, Insurance, Securities trading, Tobacco, Alcohol, Entertainment etc. The companies which qualify in primary filtration have gone through secondary screening for the four financial ratio filters as approved by the Shariah Board We have further filtered the illiquid stocks and those Companies that have not been consistent in submitting the Annual Reports & Balance Sheet for last two financial years. Post all screening of the listed BSE Stock, we got a list of 761 Shariah compliant companies and we called it ITE- Shariah Compliant Stock Universe. We have ranked the top 211 compliant stocks based on their yearly average market capitalization and given Shariah ranking based on the score arriving by giving appropriate weight to four Shariah financial ratios as explained above.
LEGENDS
PAT
Profit After Tax
VAR
Variance to preceding quarter
FV
It is the original cost of the stock
Is the portion of a company's profit allocated to each outstanding share of common stock.
P/E
The P/E ratio (price-to-earnings ratio) of a stock is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share.
(Earnings Per Share)
(Face Value) shown on the certificate.
BV
A measure used by owners of common in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly.
P/BV
A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share.
(Price to Earnings Ratio)
(Book Value) shares
(Price to Book Value)
EPS
Mkt Cap Market Capitalization or Market
(Market Capitalization) Cap
is a measurement of size of the company equal to the share price times the number of shares outstanding of the listed company.
ITE 211 Top 10 Losers
ITE 211 Top 10 Gainers Company Name Guj Alkalies Rasoya Proteins
Market Price* 215.40
1Month Return 59.97
9.10
36.43
Company Name
49.01
1Year Return 76.41
37.46
531.94
Financial Tech.
3Months Return
ICRA
1Month 3Months Return Return -18.83 -31.14
1Year Return -39.84
711.40
-15.75
-36.16
5.91
1008.85
-15.74
-30.80
-8.05
192.00
-15.27
-42.90
-47.48
63.65
-14.56
-19.94
-25.12
73.30
31.01
104.15
25.11
51.05
120.42
BF Utilities
60.30
21.21
-43.25
-68.19
Greaves Cotton
TBZ
229.45
20.64
3.43
106.34
ABB
489.20
-14.30
-29.94
-40.56
Ranbaxy Labs.
439.90
15.87
-12.45
5.30
Hinduja Ventures
399.40
-14.02
-29.45
12.51
4914.40
14.54
11.93
58.45
Guj Gas Company
239.75
-13.51
-21.52
-37.86
28.15
14.20
-14.31
17.93
Texmaco Rail
48.40
-12.95
-24.67
-15.90
220.70
14.15
12.32
61.51
EIH
55.30
-12.84
-20.83
-34.32
Radford Global Alembic Pharma Opto Circuits
Asian Paints TV18 Broadcast Claris Lifescien
50 | April - June 2013 | Islami Tijara
125.12 10840.30
Engineers India
Market Price* 154.55
* As on 28th March 2013
SCOREBOARD
Inclusion and Exclusion List of Companies included & excluded in the Shariah Universe April - June 2013 INCLUSION (94) Aksh Optifibre Alembic Pharma Amani Trad.& Exp Aptus Indust. Ashiana Agro Ind Aviva Industries Bhilwara Tech Blazon Marbles Centerac Tech. Citurgia Biochem Claris Lifescien Control Print Count N Denier Datasoft Applica Dhoot Inds. Dhruv Estates DIL Eastcoast Steel Eco Friendly Emami Infra. Ensa Steel Inds. Esaar (India) Esteem Bio Org. Fomento Resorts Garodia Chemical Gee El Woollens Gorani Inds. Grandma Trading Hil Ltd HRB Floriculture India Infras. Indian Bright St Indo Amer. Adv.
EXCLUSION (33) J Kumar Infra Jay Mahesh Infra JMDE Packaging Joy Reality Kellton Tech Lak. Mach. Works Lifeline Drugs Macro Intl. Expo Mapro Industries Marath.Refra. Maruti Infra. Mayur Floorings Midland Polymers Monnet Inds. Narendra Prop. NCC Finance Nilachal Refract Novopan Inds. Nucleus Soft. Nylofils India Pacheli Enter. Parth Aluminium PC Jeweller Perfect-Octave PFL Infotech Press. Senstive Principal Pharma Rajkamal Synth. Rasoya Proteins REIL Electricals Richirich Invent Rotam Commercial Safari Inds.
Sagar Soya Prod Sanwaria Agro Secund. Health. Sequel e-Routers Shree Mfg. Co. Sikozy Realtors Sobha Developer. Sri KPR Inds. Sterling Intl Strides Arcolab Sunil Inds. Sunstar Realty Talwal.Better Thana Electric Trinity League Tutis Tech. TV18 Broadcast Unimode Overseas Universal Pr. Al VCCL Vertical Indust. Victoria Mills Vinati Organics Visesh Infotec. V-Mart Retail VTM Welcure Drugs Zyden Gentec
7Seas Enter. ABM Knowledge Allcargo Logist. Anuvin Inds. Bhanot Constn. Coromandel Inter Deccan Bearings Elegant Floricul Glodyne Techno. GMR Infra. Hind.Bio Science Infronics Sys. Jubilant Food. Kavveri Telecom KCL Infra Landmarc Leisur. Madhur Inds Maha.Shree Umaid Navin Fluo.Intl. Nova Iron &Steel Phaarmasia Prakash Constro. Premier Polyfilm SAARC Net Santowin Corp. Shri Krishna SRHHL Industries SVC Resources Titan Biotech Transgene Biotek Turbotech Engg. Valuemart Retail VHCL Indust.
Islami Tijara | April - June 2013 | 51
SCOREBOARD EARNINGS
Mar ch Dec. 2013 2012 Rank Rank
Dr Reddy's Laboratories Ltd. Pharma major has launched zoledronic acid injection, a therapeutic equivalent generic version of Reclast injection in the US market. It is generally indicated for the treatment of osteoporosis. The Reclast brand had a total US sales of about $355 million for the 12 months ended February 2013, according to IMS Health, the Hyderabad-based company said in a release.
Company Name
Sector
Size
Net Sale 2012
Net Sale 2011
VAR
PAT 2012
1
1
Reliance Inds.
Oil & Gas
LargeCap
329904
248170.00
32.93%
20040
2
2
TCS
Info-Tech
LargeCap 38858.54
29275.41
32.73%
10975.98
3
3
ONGC
Oil & Gas
LargeCap 76488.02
68316.17
11.96%
25122.92
4
4
Infosys
Info-Tech
LargeCap
31254
25385.00
23.12%
8470
5
5
Bharti Airtel
Consumer
LargeCap
41603.8
38017.70
9.43%
5730
6
6
Hind. Unilever
Consumer
LargeCap 22116.37
19735.51
12.06%
2691.4
7
7
Wipro
Info-Tech
LargeCap
26300.50
20.47%
4685.1
8
8
Larsen & Toubro Inds. & C. Goods LargeCap 53170.52
43905.87
21.10%
4456.5
9
9
Tata Motors
LargeCap 54306.56
47088.44
15.33%
1242.23
10
10
Sun Pharma.Inds. Healthcare
4015.56
3107.57
29.22%
1927.98
11
11
Hind.Zinc
M&M
LargeCap 11405.31
10039.17
13.61%
5526.04
12
12
Bajaj Auto
Automobiles
LargeCap 19528.98
16398.23
19.09%
3004.05
13
13
M&M
Automobiles
LargeCap 31853.52
23460.26
35.78%
2878.89
14
15
UltraTech Cem.
Cons. & Realty LargeCap 18313.13
13312.58
37.56%
2446.19
15
16
Nestle India
Consumer
LargeCap
7490.82
6254.74
19.76%
961.55
16
14
GAIL (India)
Oil & Gas
LargeCap 40397.95
32536.52
24.16%
3653.84
17
19
HCL Technologies Info-Tech
LargeCap
8907.22
6794.48
31.09%
1950.42
18
18
Maruti Suzuki
Automobiles
LargeCap
35587.1
36618.40
-2.82%
1635.2
Automobiles
LargeCap
31682.9
19
20
Asian Paints
Consumer
LargeCap
8335.32
6621.01
25.89%
958.39
20
17
Hero Motocorp
Automobiles
LargeCap 23579.03
19397.93
21.55%
2378.13
21
21
Dr Reddy's Labs
Healthcare
LargeCap
6686.3
5242.80
27.53%
912.4
22
22
Cipla
Healthcare
LargeCap
6977.5
6331.09
10.21%
1123.96
Cons. & Realty LargeCap
23
23
Ambuja Cem.
8514.52
7390.21
15.21%
1228.86
24
24
Bosch
Automobiles
LargeCap
7997.19
6681.75
19.69%
1122.56
25
25
Grasim Inds
Cons. & Realty LargeCap
4969.72
4640.06
7.10%
1177
26
29
Lupin
Healthcare
LargeCap
5384.83
4494.88
19.80%
804.37
27
26
Adani Ports
Inds. & C. Goods LargeCap
2481.9
1885.07
31.66%
1177.26
28
28
ACC
Cons. & Realty LargeCap
9438.66
7717.33
22.30%
1325.26
29
30
Tata Power Co.
Power & Utilities LargeCap
8562.14
6977.08
22.72%
1169.73
30
27
Siemens
Inds. & C. Goods LargeCap
12919.9
12028.90
7.41%
343.2
31
31
Titan Inds.
Consumer
LargeCap
8838.38
6520.89
35.54%
600.16
32
34
Godrej Consumer Consumer
LargeCap
2980.08
2468.90
20.70%
604.39
33
33
Oil & Gas
Consumer
LargeCap
3743.18
3264.98
14.65%
463.24
34
32
Ranbaxy Labs.
Healthcare
LargeCap
7590.18
5593.45
35.70%
-3052.05
35
38
Colgate-Palm.
Consumer
LargeCap
2693.23
2286.12
17.81%
446.47
36
37
Cadila Health.
Healthcare
LargeCap
3150.8
2920.30
7.89%
657.5
LargeCap
37
35
Sesa Goa
M&M
38
36
ABB
Inds. & C. Goods Midcap
39
39
Castrol India
Automobiles
LargeCap
40
47
Wockhardt
Healthcare
41
40
Divi's Lab.
Healthcare
42
42
GlaxoSmith C H L Consumer
52| April - June 2013 | Islami Tijara
7025.45
8231.57
-14.65%
1679.94
7370.27
6287.12
17.23%
184.54
3082.11
2801.97
10.00%
481.03
LargeCap
2560.4
1754.92
45.90%
184
Midcap
1844.93
1314.87
40.31%
545.97
LargeCap
2685.51
2306.12
16.45%
355.21
SCOREBOARD EARNINGS
PAT 2011
BALANCE SHEET
VAR
Equity 2012
FV
BV
P/BV
EPS
P/E
SHARIAH COMPLIANT RATIO Debt Cash Recv Interest Dec.-12 Mar.-13 Income to to to total Shariah Shariah Mcap Mcap Mcap income Ranking Ranking
20286
-1.21%
3228.51
10
504.65
1.53
60.67
12.75
26.75
18.20
7.20
1.31
166
197
7569.99
44.99%
195.72
1
126.49
12.43
62.82
25.02
0.04
1.63
3.58
1.59
37
36
18924
32.76%
4277.74
5
132.03
2.36
27.1
11.5
1.87
8.81
2.58
3.70
150
91
6443
31.46%
287.12
5
518.2
5.58 157.02
18.4
0.00
13.63
3.77
5.05
170
106
7716.9
-25.75%
1898.76
5
130.16
2.24
14.71
19.84
13.35
0.42
1.86
0.39
73
109
2305.99
16.71%
221.51
1
15.88
28.7
14.6
31.92
0.00
1.88
0.64
0.52
23
7
4843.7
-3.27%
492.49
2
98.9
4.42
23.19
18.85
5.51
6.50
8.30
1.92
140
123
3957.89
12.60%
122.98
2
409.86
3.33
78.57
17.37
11.13
3.10
21.06
1.03
167
174
1811.82
-31.44%
637.95
2
62.07
4.34
5.41
49.78
18.39
2.12
3.12
0.66
125
143
1383.8
39.33%
103.56
1
78.3
10.45
13.9
58.87
0.06
1.99
1.19
3.65
36
34
4900.49
12.77%
845.06
2
63.62
1.9
14.56
8.32
0.00
12.39
0.62
4.65
155
84
3339.73
-10.05%
289.37
10
208.77
8.6 104.87
17.12
0.24
9.34
0.82
1.60
145
56
2662.1
8.14%
306.99
5
198.26
4.34
52.66
16.35
7.23
3.51
4.02
0.33
103
94
1404.23
74.20%
274.16
10
469.07
3.98
102
18.31
8.66
0.58
1.60
0.05
60
80
818.67
17.45%
96.42
10
132.13
24.61 110.76
41.44
2.17
0.51
0.26
0.32
10
12
3561.13
2.60%
1268.48
10
170.48
1.87
30.65
10.41
12.02
2.12
4.28
0.42
91
117
1198.28
62.77%
138.91
2
95.08
8.39
35.68
22.31
2.56
2.80
4.91
0.96
84
72
2288.6
-28.55%
144.46
5
525.66
2.43
62.04
20.63
3.21
6.32
2.43
1.10
121
77
775.15
23.64%
95.92
10
259.36
18.95 109.99
44.68
0.49
1.34
1.31
0.03
22
8
1927.9
23.35%
39.94
2
214.81
7.18 107.54
14.34
1.91
1.70
0.72
0.33
27
18
893.4
2.13%
84.91
5
395.59
4.46
64.72
27.29
5.57
2.87
6.58
0.89
95
98
960.39
17.03%
160.58
2
93.93
4.04
19.07
19.91
0.04
0.19
5.24
0.13
15
32
1263.61
-2.75%
308.29
2
52.15
3.04
8.7
19.94
0.15
8.03
0.75
2.28
116
52
858.91
30.70%
31.4
10
1505.87
5.1 305.15
29.67
1.11
4.87
3.42
2.13
92
66
1181.71
-0.40%
91.75
10
991.76
2.84 119.54
23.52
2.69
0.64
1.90
1.35
46
41
809.98
-0.69%
89.48
2
83.47
7.54
30.75
20.46
4.28
0.07
5.81
0.06
57
75
986.16
19.38%
400.68
2
26.13
5.31
8
17.34
24.15
2.10
0.73
1.15
132
159
1120.01
18.33%
187.75
10
383.07
2.95
60.74
19.12
0.66
2.77
1.23
1.47
109
25
941.49
24.24%
237.31
1
50.39
1.91
3.97
24.28
33.12
6.16
4.20
2.26
184
190
845.4
-59.40%
70.41
2
112.53
4.93
13.43
40.88
0.00
4.19
16.78
0.44
120
122
430.41
39.44%
88.78
1
16.33
15.71
7.71
33.27
0.05
4.30
0.73
0.96
69
20
434.96
38.95%
34.03
1
74.17
10.51
14.66
53.15
1.07
1.67
0.42
1.01
30
14
471.41
-1.73%
174.29
1
7.47
18.35
3.23
42.43
1.33
1.95
1.05
1.17
44
23
1148.73
-365.69%
211.45
5
45.53
9.69
5.17
85.09
20.72
9.27
17.64
1.10
195
194
402.58
10.90%
13.6
1
32.01
38.94
37.08
33.62
0.00
2.08
0.51
1.49
32
11
610.4
7.72%
102.37
5
124.51
5.95
20.15
36.79
7.71
0.71
3.49
0.50
62
88
3432.8
-51.06%
86.91
1
148.58
1.05
11.49
13.55
22.99
0.46
2.95
0.18
111
157
63.23
191.86%
42.38
2
119.61
3.97
6.48
75.49
0.00
1.83
20.04
0.21
97
131
490.31
-1.89%
494.56
10
12.22
24.12
9.05
34.99
0.00
3.84
1.53
1.61
71
29
-132.07
-239.32%
54.72
5
15.32 130.93
9.50
0.53
1.83
0.43
83
90
435.57
25.35%
26.55
2
163.83
6
48.54
20.27
0.40
0.16
3.87
0.04
11
22
299.85
18.46%
42.06
10
272.04
12.94
96.43
43.42
0.00
10.93
0.84
2.98
133
70
10.98 182.68
Islami Tijara | April - June 2013 | 53
SCOREBOARD EARNINGS
Mar ch Dec. 2013 2012 Rank Rank
Apollo Hospitals Apollo Hospitals is taking over the defunct facility of Lifeline MultiSpeciality Hospital in Perungudi, Chennai on a longterm facility lease. Lifeline Multispeciality Hospital, Perungudi, a 180bed tertiary care hospital headed by Dr J. S. Rajkumar, s h u t d o w n operations over a month ago. According to sources, this facility was making losses. The lease is for 29 years, extendable by another 29 years, said a source close to the deal. Apollo will refurbish this facility and operate it under its brand name. It will bring i n i t s o w n equipment and staff, said the source. The new facility will specialise in cardiology, n e u ro l o g y, orthopaedic, critical and trauma care and is expected to start operations in three to four months.
Company Name
Sector
Size
Net Sale 2012
Net Sale 2011
VAR
PAT 2012
43
41
Cummins India
Inds. & C. Goods Midcap
4117.22
4042.53
1.85%
591.27
44
43
Marico
Consumer
Midcap
2970.3
2350.41
26.37%
336.59
45
46
Shree Cement
Cons. & Realty LargeCap
5898.12
3453.53
70.79%
618.5
46
48
Satyam Computer Info-Tech
LargeCap
5964.3
4776.10
24.88%
1202.8
Midcap
47
45
Exide Inds.
5107.04
4547.33
12.31%
461.17
48
49
Glenmark Pharma. Healthcare
Midcap
1619.98
1210.75
33.80%
265.3
49
44
Petronet LNG
Oil & Gas
Midcap
22695.86
13197.29
71.97%
1057.54
50
50
Tech Mahindra
Info-Tech
Midcap
5243
4965.50
5.59%
460.6
51
53
Pidilite Inds.
Inds. & C. Goods Midcap
2816.32
2367.03
18.98%
334.51
52
52
Apollo Hospitals
Healthcare
Midcap
2800.07
2331.96
20.07%
230.99
53
54
Godrej Inds.
Inds. & C. Goods Midcap
201.56
Automobiles
1438.04
1112.33
29.28%
Midcap
54
61
Motherson Sumi Automobiles
3571.8
2823.60
26.50%
317.2
55
58
Tata Global
Consumer
Midcap
2035.29
1811.11
12.38%
302.68
56
56
MphasiS
Info-Tech
Midcap
3404.13
3770.09
-9.71%
782.01
57
64
Emami
Consumer
Midcap
1389.82
1202.38
15.59%
256.81
58
63
P & G Hygiene
Consumer
Midcap
1297.41
1002.88
29.37%
181.29
59
57
Engineers India
Inds. & C. Goods Midcap
3698.82
2823.28
31.01%
636.32
60
62
Gillette India
Consumer
Midcap
1232.9
1058.38
16.49%
75.73
61
55
Crompton Greaves Inds. & C. Goods Midcap
6485.38
5951.47
8.97%
504.86
62
65
Havells India
Inds. & C. Goods Midcap
3783.23
3010.31
25.68%
305.43
63
67
CRISIL
Consumer
Midcap
639.16
528.71
20.89%
186.51
64
68
Tata Comm
Consumer
Midcap
4091.77
3611.77
13.29%
171.34
65
66
Bharat Forge
Automobiles
Midcap
3685.98
2947.00
25.08%
362.07
66
73
Eicher Motors
Automobiles
Midcap
666.45
438.47
51.99%
124.55
67
71
Thermax
Inds. & C. Goods Midcap
5304.06
4852.36
9.31%
406.86
Midcap
68
70
GMDC
M&M
1630.7
1421.10
14.75%
486.83
69
69
Britannia Inds.
Consumer
Midcap
4974.19
4223.52
17.77%
186.74
70
74
Torrent Pharma.
Healthcare
Midcap
2076.04
1751.73
18.51%
311.25
71
72
United Phosp.
Inds. & C. Goods Midcap
3308
2911.09
13.63%
227.04
72
75
Bata India
Consumer
Midcap
1542.08
1258.20
22.56%
225.84
73
79
Ipca Labs.
Healthcare
Midcap
2329.37
1881.10
23.83%
280.17
74
78
Kansai Nerolac
Consumer
Midcap
2731.17
2255.48
21.09%
215.89
75
76
Biocon
Healthcare
Midcap
1555.8
1561.10
-0.34%
255.5
76
77
Sanofi India
Healthcare
Midcap
1229.75
1084.95
13.35%
191.19
77
83
Berger Paints
Consumer
Midcap
2662.1
2107.10
26.34%
177.4
78
-
Strides Arcolab
Healthcare
Midcap
709.51
503.98
40.78%
117.92
Inds. & C. Goods Midcap
79
81
Blue Dart Exp.
1489.6
1147.41
29.82%
122.24
80
86
Prestige Estates
Cons. & Realty Midcap
745.47
1385.00
-46.18%
129.07
81
84
3M India
Inds. & C. Goods SmallCap
1405.1
1191.41
17.94%
64.77
82
80
EIH
Consumer
SmallCap
1101.8
1027.51
7.23%
122.42
83
90
Financial Tech.
Info-Tech
SmallCap
425.55
357.68
18.98%
478.03
84
82
Guj Fluorochem
Inds. & C. Goods SmallCap
2069
982.85
110.51%
431.6
54| April - June 2013 | Islami Tijara
SCOREBOARD EARNINGS
PAT 2011
BALANCE SHEET
VAR
Equity 2012
FV
BV
P/BV
SHARIAH COMPLIANT RATIO
EPS
P/E
Debt Cash Recv to to Mcap Mcap Mcap
Interest Dec.-12 Mar.-13 Income Shariah Shariah to total income Ranking Ranking
590.99
0.05%
55.44
2
73.71
6.74
24.46
20.32
0.00
1.92
5.15
0.41
56
42
315.32
6.75%
64.47
1
25.19
8.43
6.3
33.69
4.46
0.44
0.79
0.26
20
37
209.7
194.95%
34.84
10
784.71
5.17
265.28
15.3
13.45
13.65
1.43
1.67
196
146
-127.6
-1042.63%
235.39
2
28.16
4.55
10.31
12.42
0.25
23.31
11.50
2.64
209
158
666.36
-30.79%
85
1
35.67
3.62
6.1
21.18
0.00
0.50
3.51
0.01
12
17
212.18
25.04%
27.07
1
80.74
5.73
16.59
27.88
4.29
0.42
3.14
2.56
53
73
619.62
-
750
10
46.93
2.89
15.32
8.84
28.81
9.09
11.31
0.14
193
196
696.7
-33.89%
127.83
10
269.38
3.94
50.76
20.87
10.31
1.27
11.38
0.13
119
138
303.89
10.08%
51.26
1
28.83
9.13
8.48
31.03
2.60
2.54
3.21
0.32
70
53
181.72
27.11%
69.56
5
180.43
4.62
21.06
39.58
5.65
2.49
3.57
0.50
80
81
133.43
51.06%
33.51
1
47.52
6.21
3.24
91.05
5.55
1.33
1.46
1.16
59
65
287.5
10.33%
58.79
1
21.7
8.9
7.75
24.92
10.66
0.23
6.16
0.14
87
113
180.59
67.61%
61.84
1
35.39
3.62
3.78
33.86
4.38
0.65
1.08
1.14
31
47
996.88
-21.55%
210.14
10
172.84
2.27
29.16
13.44
3.33
1.94
7.70
0.11
79
87
227.49
12.89%
15.13
1
46.08
13.04
20.12
29.87
1.93
3.40
0.98
2.17
74
45
150.88
20.16%
32.46
10
214.74
11.77
57.48
43.99
0.00
2.36
0.62
3.53
54
28
522.52
21.78%
168.47
5
54.73
2.82
18.94
8.16
0.00
21.63
4.05
4.19
200
128
86.15
-12.10%
32.59
10
190.02
10.58
24.81
81
0.00
1.55
0.91
2.52
24
19
694.33
-27.29%
128.3
2
41.88
2.24
7.4
12.66
1.01
4.43
23.20
0.37
142
152
242.05
26.18%
62.39
5
128.89
5.03
28.31
22.88
1.73
1.83
2.14
0.02
45
26
195.75
-4.72%
7.02
1
52.5
13.69
24.71
35.87
0.00
0.54
1.56
1.11
58
10
162.56
5.40%
285
10
250.42
0.93
9.17
25.51
14.34
0.80
10.70
0.91
114
154
310.83
16.48%
46.56
2
92.06
2.22
14.58
14.05
30.52
8.30
7.57
0.78
189
191
75.44
65.10%
27
10
200.02
10.92
43.71
58.21
0.32
0.05
0.10
0.08
4
2
382.42
6.39%
23.83
2
134.38
4.23
30.59
18.59
2.64
9.04
19.77
1.06
181
160
375.07
29.80%
63.6
2
64.33
2.58
19.62
8.44
0.00
0.93
0.73
2.75
13
16
145.29
28.53%
23.91
2
43.62
12.02
16.65
31.49
7.19
2.81
0.86
0.64
75
78
290.86
7.01%
42.31
5
154.16
4.51
63.19
11
10.22
6.47
7.23
1.70
159
139
157.5
44.15%
91.01
2
77.02
1.52
5.07
23.12
28.46
2.07
24.82
2.60
185
205
95.35
136.85%
64.26
10
84.76
6.85
26.7
26.81
0.35
2.23
0.57
0.51
33
9
255.37
9.71%
25.23
2
100.06
5.26
26.35
19.98
11.15
0.17
6.40
0.35
86
118
205.98
4.81%
53.89
10
197.28
6.27
37.95
32.61
1.40
1.86
6.75
0.09
65
67
459.3
-44.37%
100
5
104.78
2.62
14.99
18.32
3.10
0.77
8.56
0.10
63
86
230.75
-17.14%
23.03
10
479.67
5
76.73
33.65
0.00
4.55
1.42
3.68
81
49
148.3
19.62%
69.26
2
24.39
8.02
6
32.58
3.32
3.47
5.97
0.56
101
85
73.56
60.30%
58.8
10
230.76
3.75
19.73
44.18
28.51
1.61
5.23
0.84
-
180
94.37
29.53%
23.73
10
277.33
6.96
61.91
37.9
0.00
0.80
4.02
0.99
21
30
203.55
-36.59%
328.07
10
64.83
2.29
6.44
25.26
24.84
4.40
17.81
3.23
197
201
98.8
-34.44%
11.27
10
536.09
7.02
46.98
80.05
1.74
1.23
5.35
0.01
50
55
64.54
89.68%
114.31
2
42.09
1.31
1.21
45.7
6.29
0.28
3.29
0.29
39
74
91.93
419.99%
9.22
2
532.5
1.34
57.65
12.34
13.93
10.74
0.90
2.46
183
142
263.63
63.71%
10.99
1
194.88
1.54
18.71
15.99
21.34
5.30
6.21
0.89
154
170
Islami Tijara | April - June 2013 | 55
SCOREBOARD EARNINGS
Mar ch Dec. 2013 2012 Rank Rank
PC Jeweller PC Jeweller has plan to open four new showrooms during the month of April 2013 at Jabalpur in the state of Madhya Pradesh, Sri Ganganagar in the state of Rajasthan, Ahmedabad and Vadodra in the state of Gujarat. By the addition of these f o u r n e w showrooms, the total number of showrooms of the company will become 34 by the end of April 2013.
Company Name
Sector
Size
Net Sale 2012
Net Sale 2011
VAR
PAT 2012
85
93
Bayer Crop Sci.
Inds. & C. Goods Midcap
2272.3
2137.30
6.32%
139
86
96
Akzo Nobel
Consumer
Midcap
1987.8
1096.80
81.24%
201.8
87
85
Guj Gas Company Oil & Gas
SmallCap
2415.94
1846.03
30.87%
273.88
88
91
D B Corp
Consumer
Midcap
1441.81
1256.46
14.75%
208.47
89
89
Info Edg.(India)
Info-tech
SmallCap
377.08
294.01
28.25%
122.62
90
92
TTK Prestige
Consumer
SmallCap
1103.43
763.57
44.51%
113.36
91
97
Essar Ports
Inds. & C. Goods SmallCap
36.22
486.87
-92.56%
-71
92
110
Amara Raja Batt. Inds. & C. Goods Midcap
93
101
Page Industries
94
87
Indraprastha Gas Oil & Gas
95
-
2367.36
1761.05
34.43%
215.06
SmallCap
683.41
491.56
39.03%
89.98
SmallCap
2538.83
1761.53
44.13%
306.43
Sobha Developer. Cons. & Realty SmallCap
1396.57
1376.69
1.44%
200.85
Consumer
96
105
Mcleod Russel
Consumer
SmallCap
1237.83
1101.11
12.42%
220.27
97
94
Voltas
Consumer
SmallCap
5169.77
5148.40
0.42%
151.87
98
95
EID Parry
Consumer
SmallCap
1536.65
1271.41
20.86%
137.32
99
98
BOC India
Inds. & C. Goods SmallCap
1105.39
985.75
12.14%
121.66
100
107
Supreme Inds.
Inds. & C. Goods SmallCap
2965.3
2468.98
20.10%
240.52
101
99
SKF India
Automobiles
SmallCap
2416.72
2068.41
16.84%
208.49
102
108
CMC
Info- Tech
SmallCap
955.34
798.08
19.70%
143.33
103
100
Hexaware Tech.
Info-Tech
SmallCap
678.58
423.65
60.17%
231.98
104
102
Redington India
Info-Tech
SmallCap
9840.41
8131.95
21.01%
156.81
105
104
AIA Engg.
Inds. & C. Goods SmallCap
1272.44
985.35
29.14%
150.91
106
109
Shoppers St.
Consumer
SmallCap
2166.67
1858.56
16.58%
64.26
107
103
Abbott India
Healthcare
SmallCap
1518.75
1036.87
46.47%
120.39
108
-
TV18 Broadcast
Consumer
Midcap
620.7
252.65
145.68%
9.24
109
88
Opto Circuits
Healthcare
SmallCap
669.74
603.20
11.03%
234.77
110
106
Jagran Prakashan Consumer
SmallCap
1244.41
1115.32
11.57%
179.64
111
114
Tube Investments Automobiles
SmallCap
3489.77
2981.10
17.06%
180.09
112
113
Whirlpool India
Consumer
SmallCap
3036.61
3081.67
-1.46%
123.73
113
111
WABCO India
Automobiles
SmallCap
1045.64
892.51
17.16%
153.4
Info-Tech
SmallCap
114
120
Mindtree
1915.2
1509.00
26.92%
218.7
115
112
Carborundum Uni. Inds. & C. Goods SmallCap
1125.37
925.29
21.62%
146.67
116
117
BASF India
Inds. & C. Goods SmallCap
3515.94
3063.88
14.75%
100.86
117
118
Fag Bearings
Inds. & C. Goods SmallCap
1299.33
1040.08
24.93%
175.97
118
115
Rallis India
Inds. & C. Goods SmallCap
1181.25
1067.26
10.68%
101.39
119
-
PC Jeweller
Consumer
SmallCap
3041.93
1977.06
53.86%
231.29
120
122
Kirloskar Oil
Inds. & C. Goods SmallCap
2326.03
2423.02
-4.00%
191.8
121
-
Responsive Ind
Consumer
SmallCap
1070.76
724.95
47.70%
48.94
122
129
Vakrangee Soft.
Info-Tech
SmallCap
1352.15
852.34
58.64%
67.51
123
116
H T Media
Consumer
SmallCap
1319.14
1221.39
8.00%
159.82
124
119
Guj Pipavav Port Inds. & C. Goods SmallCap
396.77
283.93
39.74%
57.1
125
123
Honeywell Auto
Inds. & C. Goods SmallCap
1612.5
1354.71
19.03%
107.14
126
121
Mah. Seamless
M&M
2291.69
1761.27
30.12%
310.73
56| April - June 2013 | Islami Tijara
SmallCap
SCOREBOARD EARNINGS
PAT 2011
BALANCE SHEET
VAR
Equity 2012
FV
BV
P/BV
SHARIAH COMPLIANT RATIO
EPS
P/E
Debt Cash Recv to to Mcap Mcap Mcap
Interest Dec.-12 Mar.-13 Income Shariah Shariah to total income Ranking Ranking
131.6
5.62%
39.5
10
200.68
6
65.69
18.34
0.00
10.81
6.44
0.55
168
92
176.6
14.27%
46.66
10
308.24
3.32
50.27
20.38
0.04
2.89
5.73
0.57
72
57
258.73
5.86%
25.65
2
59.28
4.02
22.35
10.73
6.57
0.24
4.72
0.14
49
83
267.32
-22.01%
183.35
10
52.35
4.32
11.8
19.18
5.48
5.93
6.29
0.77
135
105
83.97
46.03%
109.18
10
52.61
6.83
12.46
28.84
0.02
5.43
0.09
4.65
93
50
83.75
35.36%
11.32
10
249.95
12.94
110.25
29.34
1.57
0.59
2.78
0.07
16
24
20.87
-440.20%
410.46
10
64.39
1.37
0
0
19.71
0.06
0.19
4.26
102
145
148.1
45.21%
17.08
1
48.21
5.68
17.09
16.01
2.38
6.38
8.89
0.36
152
100
58.55
53.68%
11.15
10
148.69
22.34
95.05
34.95
2.14
0.09
1.23
0.17
9
15
259.77
17.96%
140
10
87.78
3.14
25.04
11
11.08
0.91
3.70
0.00
67
102
182.46
10.08%
98.06
10
204.01
1.71
23.2
15.05
32.10
1.52
3.19
0.18
-
183
232.23
-5.15%
54.73
5
100.6
3.48
20.56
17.01
4.99
0.09
0.42
2.44
28
58
353.53
-57.04%
33.09
1
41.21
1.83
6.49
11.63
5.08
6.71
28.76
0.14
178
181
79.26
73.25%
17.38
1
69.75
2.14
12.12
12.29
25.76
1.02
6.69
1.26
141
176
93.63
29.94%
85.28
10
147.79
1.79
4.48
62.38
24.67
0.68
9.54
0.61
144
178
174.97
37.46%
25.41
2
50.38
6.24
19.08
16.47
10.38
0.41
5.07
0.10
78
107
177.02
17.78%
52.73
10
191.78
2.51
36.05
15.26
0.00
6.85
11.35
1.38
136
108
155.73
-7.96%
30.3
10
229.84
5.84
61.25
21.91
0.00
0.68
8.13
0.01
51
63
92.83
149.90%
59.31
2
28.97
2.57
9.57
8.87
0.00
10.85
6.07
4.23
162
104
128.44
22.09%
79.81
2
22.81
3.55
4.46
18.15
19.24
1.92
25.86
0.21
171
198
129.75
16.31%
18.86
2
101.67
3.14
16.14
19.81
0.84
2.43
9.26
0.13
77
82
75.18
-14.53%
41.44
5
79.47
5.08
4.61
87.54
8.17
0.23
0.60
0.74
48
71
60.94
97.55%
21.25
10
256.07
4.43
64.8
20.81
0.00
8.18
4.19
1.12
128
69
-49.25
-118.76%
342.33
2
20.31
1.39
0
0
22.57
6.42
8.10
2.10
-
182
244.38
-3.93%
242.32
10
50.06
1.2
10.25
5.88
21.41
1.48
8.38
0.01
112
164
205.83
-12.72%
63.25
2
23.76
4.08
7.05
13.14
10.88
2.53
7.99
1.18
115
132
169.66
6.15%
37.32
2
59.77
2.74
7.69
21.32
27.58
2.85
14.44
0.11
180
193
166.03
-
126.87
10
37.54
5.87
11.05
19.93
0.00
2.86
4.57
0.12
66
40
127.43
20.38%
9.48
5
279.06
4.83
74.81
18.01
0.03
2.77
5.33
0.22
64
46
123.1
77.66%
41.21
10
233.23
3.95
79.04
11.53
1.60
2.09
14.55
0.27
108
112
124.26
18.03%
18.74
1
33.83
3.51
4.96
23.95
3.47
0.37
6.63
0.02
47
76
117.83
-14.40%
43.29
10
242.25
2.39
26.61
21.72
7.16
1.24
22.90
0.04
143
163
121.5
44.83%
16.62
10
437.95
2.78
94.97
15.47
0.00
7.39
9.66
1.56
153
99
126.21
-19.67%
19.44
1
28.48
4.05
5.81
19.85
4.42
0.56
3.14
0.07
35
60
144.86
59.66%
133.97
10
68.78
1.74
12.92
8.77
22.69
0.44
26.95
0.47
-
202
173.73
10.40%
29
2
71.21
2.39
14.31
11.91
6.76
1.10
11.97
0.32
98
126 150
54.86
-10.79%
26.69
1
14.39
6.3
2.45
37
21.44
1.91
2.77
0.11
-
48.08
40.41%
50.22
1
8.25
8.14
1.94
34.59
18.35
1.05
18.09
0.28
173
185
177.59
-10.01%
47
2
55.75
1.85
5.91
17.42
12.82
10.02
8.07
3.41
176
161
-54.72
-204.35%
483.44
10
23.64
1.99
1.53
32.61
28.36
5.34
1.24
2.99
169
179
105.05
1.99%
8.84
10
712.95
3.22
96.35
26.67
0.00
7.68
15.91
0.63
158
130
341.66
-9.05%
35.27
5
297.6
0.74
31.28
7.04
1.69
1.89
16.43
0.78
90
125
Islami Tijara | April - June 2013 | 57
SCOREBOARD EARNINGS
Mar ch Dec. 2013 2012 Rank Rank
Nitin Fire Protection Industries net profit rose 143.22% to Rs 6.64 crore in the quarter ended December 2012 as against Rs 2.73 crore during the previous quarter ended December 2011. Sales rose 30.88% to Rs 97.79 crore in the quarter ended December 2012 as against Rs 74.72 crore during the previous quarter ended December 2011.
Net Sale 2012
Net Sale 2011
Lak. Mach. Works Inds. & C. Goods SmallCap
Company Name
Sector
Size
VAR
PAT 2012
127
-
2113.45
1803.74
17.17%
137.02
128
133
SPARC
Healthcare
SmallCap
28.98
58.35
-50.33%
-72.23
129
134
Tata Coffee
Consumer
SmallCap
508.52
400.74
26.90%
78.85
130
128
KPIT Infosys.
Info-Tech
SmallCap
612.89
527.64
16.16%
74.67
131
124
eClerx Services
Info-Tech
SmallCap
472.47
341.91
38.19%
157.33
132
127
Wyeth
Healthcare
SmallCap
594.07
641.25
-7.36%
144.69
133
126
Schneider Elect. Inds. & C. Goods SmallCap
1349.19
0.00
#DIV/0!
39.77
134
131
Infotech Enterp. Info-Tech
SmallCap
863.8
647.67
33.37%
158.6
135
132
Greaves Cotton
Inds. & C. Goods SmallCap
1753.44
1252.17
40.03%
185.49
136
143
Persistent Sys
Info-Tech
SmallCap
810.36
610.13
32.82%
137.39
137
142
Unichem Labs.
Healthcare
SmallCap
803.19
764.74
5.03%
82.46
138
139
Zydus Wellness
Consumer
SmallCap
253.59
336.37
-24.61%
67.68
139
140
Solar Inds.
Inds. & C. Goods SmallCap
723.75
534.01
35.53%
60.89
140
-
Fres.Kabi Onco.
Healthcare
SmallCap
524.32
412.77
27.02%
50.95
141
138
Graphite India
Inds. & C. Goods SmallCap
1670.84
1225.94
36.29%
237.89
142
136
Nava Bharat Vent Power & Utilities SmallCap
968.92
1088.72
-11.00%
180.81
143
141
NIIT Tech.
Info-Tech
SmallCap
827.46
729.28
13.46%
113.13
144
146
Triveni Turbine
Inds. & C. Goods SmallCap
631.88
305.04
107.15%
91.08
145
137
Clariant Chemica Inds. & C. Goods SmallCap
956.08
974.72
-1.91%
304.04
146
145
FDC
Healthcare
SmallCap
699.24
700.36
-0.16%
132.69
147
149
Mahindra Life.
Cons. & Realty SmallCap
468.95
476.56
-1.60%
120.16
148
144
Gateway Distr.
Inds. & C. Goods SmallCap
225.99
186.24
-
82.01
149
155
Kajaria Ceramics Cons. & Realty SmallCap
1312.79
953.27
37.71%
80.72
150
154
P I Inds.
Inds. & C. Goods SmallCap
954.9
789.89
20.89%
100.54
151
150
Navneet Publicat Consumer
SmallCap
620.18
545.55
13.68%
80.26
152
147
BF Utilities
Power & Utilities SmallCap
22.37
16.17
38.34%
-2.27
153
165
Kaveri Seed Co.
Inds. & C. Goods SmallCap
372.18
233.50
59.39%
58.11
154
148
HFCL
Inds. & C. Goods SmallCap
260.71
86.41
201.71%
11.43
155
156
Elgi Equipment
Inds. & C. Goods SmallCap
794.76
775.71
2.46%
76.02
156
160
Nitin Fire Prot.
Inds. & C. Goods SmallCap
163.47
146.50
11.58%
10.06
157
-
Claris Lifescien
Healthcare
SmallCap
649.67
625.59
3.85%
69.75
158
-
Alembic Pharma Healthcare
SmallCap
120.54
1375.28
1164.93
18.06%
Inds. & C. Goods SmallCap
159
162
Swan Energy
138.65
403.11
-65.60%
26.5
160
158
Century Ply.
Inds. & C. Goods SmallCap
1118.35
877.05
27.51%
60.09
161
159
ICRA
Consumer
SmallCap
139.36
129.31
7.77%
50.9
162
164
Natco Pharma
Healthcare
SmallCap
432
348.35
24.01%
62.13
163
-
Sanwaria Agro
Inds. & C. Goods SmallCap
1411.75
1562.52
-9.65%
17.05
164
152
Polaris Finan.
Info-Tech
SmallCap
1762.09
1385.06
27.22%
188.52
165
153
Federal-Mogul Go Automobiles
SmallCap
1119.06
907.43
23.32%
37.46
166
157
V I P Inds.
Consumer
SmallCap
860.22
742.00
15.93%
67.69
167
168
Dalmia Bhar.
Cons. & Realty SmallCap
156.79
134.56
16.52%
32.4
168
173
TBZ
Consumer
SmallCap
1385.47
1193.93
16.04%
57.19
58| April - June 2013 | Islami Tijara
SCOREBOARD EARNINGS
PAT 2011
BALANCE SHEET
VAR
Equity 2012
FV
BV
SHARIAH COMPLIANT RATIO
P/BV
EPS
P/E
Debt Cash Recv to to Mcap Mcap Mcap
Interest Dec.-12 Mar.-13 Income Shariah Shariah to total income Ranking Ranking
165.98
-17.45%
11.27
10
797.26
2.33
78.96
23.48
0.00
32.26
6.02
2.78
-
155
-8.5
749.76%
23.67
1
5.56
20.45
0
0
3.20
0.30
0.20
1.92
17
33
55.08
43.16%
18.68
10
244.79
6.04
57.02
25.91
3.37
0.67
2.08
1.29
41
48
69.49
7.45%
38.4
2
40.44
2.38
5.55
17.31
6.74
1.91
9.35
0.29
99
114
118.56
32.70%
29.59
10
113.53
5.46
48.54
12.66
0.00
7.87
2.06
2.00
122
62
165.29
-12.46%
22.72
10
212.12
4.29
60.97
14.91
0.12
17.89
2.68
4.32
191
110
-0.02
-198950.00%
47.82
2
11.17
6.44
0
0
11.10
0.53
31.73
0.00
160
189
117.88
-
55.8
5
92.74
1.82
21.06
8.03
0.00
19.88
9.22
0.00
202
129
127.28
45.73%
48.84
2
26.42
2.41
6.29
10.12
1.13
3.89
14.16
0.02
110
111
133.59
2.84%
40
10
209.44
2.59
41.59
13.02
0.04
6.72
9.45
1.24
146
97
108.5
-24.00%
23.75
2
61.95
2.14
13.47
12.83
2.83
0.81
10.81
0.19
76
96
59.48
13.79%
39.07
10
47.83
9.08
21.29
20.4
0.00
7.51
0.02
3.45
123
51
50.29
21.08%
18.1
10
188.78
5.46
42.5
24.24
13.94
1.15
5.53
2.05
107
136
49.24
3.47%
15.82
1
37.46
2.89
5.67
19.1
8.88
0.82
12.16
0.25
-
133
172.32
38.05%
39.08
2
79.93
0.99
10.16
7.78
27.99
2.74
22.75
0.19
186
204
303.79
-
17.86
2
236.96
0.7
28.78
5.78
11.80
29.83
7.09
2.40
210
186
123.25
-8.21%
60.16
10
105.83
2.66
25.19
11.17
0.48
5.03
14.28
0.25
130
115
-7.27
-1352.82%
32.99
1
2
26.23
3.06
17.14
2.23
0.72
3.97
0.08
34
43
112.41
170.47%
26.66
10
182.08
2.57
35.54
13.62
0.01
1.81
8.20
0.31
61
68
148.75
-10.80%
18.27
1
37.62
2.45
8.49
10.85
0.11
7.34
2.59
0.98
118
54
103.05
16.60%
40.83
10
274.34
1.39
26.06
14.62
11.32
8.47
5.88
4.30
175
151
84.83
-
108.43
10
63.55
1.97
5.68
22.01
0.83
7.39
0.35
2.81
113
59
60.66
33.07%
14.72
2
38.3
5.02
13.29
14.47
12.17
0.41
9.82
0.03
105
137
64.12
56.80%
12.58
5
126.18
4.03
35.07
18.42
17.87
0.55
12.32
0.40
137
168
77.55
3.49%
47.64
2
15.99
3.63
4.4
13.2
10.41
0.28
8.01
0.99
85
127
-3.45
-34.20%
18.83
5
17.64
10.8
2.47
77.73
7.48
1.22
0.44
1.86
29
79
42.48
36.79%
13.7
10
176.19
6.8
88.71
13.5
1.57
0.69
2.06
0.00
19
21
40.22
-71.58%
123.94
1
4.64
1.77
0.45
18.2
24.71
14.75
23.39
1.42
206
206
81.39
-6.60%
15.84
1
24.22
3.1
4.51
16.63
0.00
8.29
8.23
1.14
149
95
23.72
-57.59%
44.11
2
6.23
9.45
1.15
51.22
13.85
1.16
3.56
0.30
100
120
79.02
-11.73%
63.82
10
137.36
1.5
11.71
18.85
31.72
11.81
18.83
2.10
-
208
81.51
47.88%
37.7
2
19.14
5.44
7.25
14.37
28.15
2.05
14.87
0.78
-
195
43.82
-39.53%
19
2
19.79
6.25
5.27
23.47
10.20
14.13
2.64
0.79
192
134
74.51
-19.35%
22.22
1
13.97
3.9
0.56
97.32
28.30
3.36
13.31
0.23
174
192
44.91
13.34%
10
10
282.92
3.57
55.49
18.18
0.00
1.67
1.29
1.21
25
13
52.12
19.21%
31.37
10
149.09
2.88
28.51
15.05
20.86
2.72
7.53
0.69
157
167 203
29.33
-41.87%
34.8
1
5.48
4.94
1.63
16.6
30.33
4.89
17.97
1.07
-
187.03
0.80%
49.72
5
103.47
1.08
15.15
7.35
8.30
7.92
22.55
0.16
177
177
34.39
8.93%
55.63
10
74.63
2.86
0
0
12.65
0.22
12.39
0.02
96
149
62.02
9.14%
28.26
2
17.17
3.53
2.36
25.66
7.25
1.57
10.75
0.07
89
119
21.44
51.12%
16.24
2
63.29
2.34
4.59
32.32
0.36
1.40
1.15
4.21
42
38
39.43
45.04%
66.67
10
53.93
4.25
10.13
22.65
18.07
0.47
0.26
0.03
94
124
Islami Tijara | April - June 2013 | 59
EARNINGS
Mar ch Dec. 2013 2012 Rank Rank
Agro Tech Foods Agro Tech Foods n e t p ro f i t ro s e 16.3% to Rs 13.06 crore on 21.6% growth in net sales to Rs 219.90 crore in Q3 December 2012 over Q3 December 2011. Agro Tech Foods is engaged in the business of marketing food and food ingredients to consumers and institutional c u s t o m e r s . ConAgra Foods Inc., which is one of the world's largest food companies, holds 51.77% stake in Agro Tech Foods through its affiliate C A G T e c h Mauritius.
Company Name
Sector
Size
Net Sale 2012
Net Sale 2011
VAR
PAT 2012
169
163
Cons. & Realty SmallCap 1337.95
1195.81
11.89%
104.49
170
167
Inds. & C. Goods SmallCap 704.55 Inds. & C. Goods SmallCap 1781.88
720.70
-2.24%
36.14
1946.89
-8.48%
31.19
993.63
726.63
36.74%
50.8
161
Inds. & C. Goods SmallCap Inds. & C. Goods SmallCap
373.77
363.41
2.85%
50.19
174
174
Consumer
SmallCap
250.13
232.76
7.46%
50.34
175
175
Info-Tech
SmallCap
712.75
577.61
23.40%
94.55
176
169
Inds. & C. Goods SmallCap
767.44
938.55
-18.23%
93.06
171
171
172
179
173
177
166
Inds. & C. Goods SmallCap
725.76
677.83
7.07%
92.65
178
172
Healthcare
SmallCap
557.57
509.08
9.53%
63.68
179
180
Consumer
SmallCap
367.53
333.83
10.09%
30.08
180
176
Inds. & C. Goods SmallCap 1710.97
1434.67
19.26%
153.61
181
178
Inds. & C. Goods SmallCap
128.46
116.35
10.41%
67.34
182
191
Healthcare
SmallCap
599.18
457.15
31.07%
66.49
183
183
Info-Tech
SmallCap
90.09
83.23
8.24%
65.03
184
181
Inds. & C. Goods SmallCap
625.21
487.88
-
49.82
185
182
Consumer
SmallCap
196.23
173.11
13.36%
17.24
186
187
Inds. & C. Goods SmallCap
284.1
233.66
21.59%
4.73
187
185
Oil & Gas
SmallCap
959.49
902.93
6.26%
62.11
260.3
318.91
-18.38%
136.49
77.21
39.24
96.76%
21.66
188
188
Consumer
SmallCap
189
189
Consumer
SmallCap
190
-
Inds. & C. Goods SmallCap
301.9
236.62
27.59%
52.14
191
193
Cons. & Realty SmallCap
724.44
544.24
33.11%
8.69
192
190
Inds. & C. Goods SmallCap
540.25
440.12
22.75%
55.23
193
192
Inds. & C. Goods SmallCap
745.46
607.40
22.73%
42.98
194
211
Info-Tech
SmallCap
0
0.00
#DIV/0!
-0.21
195
-
Inds. & C. Goods SmallCap
536.09
500.35
7.14%
47.44
196
200
Inds. & C. Goods SmallCap 2063.95
2035.75
1.39%
98.19
197
195
Info-Tech
SmallCap
514.46
411.01
25.17%
33.95
198
-
Consumer
SmallCap
798.25
416.90
91.47%
16.75
875.34
759.58
15.24%
59.08
579.32
410.82
41.02%
39.75
199
197
Inds. & C. Goods SmallCap
200
204
Inds. & C. Goods SmallCap Healthcare
201
198
SmallCap
257.55
234.46
9.85%
50.88
202
-
Cons. & Realty SmallCap
319.39
242.95
31.46%
32.03
203
-
Inds. & C. Goods SmallCap
44.27
40.32
9.80%
4.5
204
196
Oil & Gas
SmallCap
877.39
1052.60
-16.65%
51.15
205
203
Inds. & C. Goods SmallCap
666.61
491.73
35.56%
61.91
206
206
Info-Tech
SmallCap
269.73
234.99
14.78%
41.2
207
-
Healthcare
SmallCap
568.77
481.06
18.23%
46.34
208
-
Cons. & Realty SmallCap
931.56
949.19
-1.86%
68.07
209
209
Info-Tech
SmallCap
199.65
133.04
50.07%
1.38
210
-
Info-Tech
SmallCap
154.74
176.75
-12.45%
0.54
211
-
Consumer
SmallCap
2.28
0.00
#DIV/0!
0.01
60| April - June 2013 | Islami Tijara
SCOREBOARD EARNINGS
BALANCE SHEET
PAT 2011
VAR
84.74 31.78
Equity 2012
FV
BV
23.31%
52.65
10
13.72%
24.37
10
SHARIAH COMPLIANT RATIO
P/E
Debt Cash Recv to to Mcap Mcap Mcap
Interest Dec.-12 Mar.-13 Income Shariah Shariah to total income Ranking Ranking
P/BV
EPS
147.98
1.31
24.08
8.03
27.59
3.41
15.15
1.40
179
199
85.62
5.76
16.41
30.05
0.00
3.61
3.07
0.34
68
31
61.36
-49.17%
15.87
2
94.98
1.56
0
0
31.05
1.82
26.44
0.21
190
207
42.64
19.14%
29.85
10
70.57
6.17
24.5
17.77
9.73
0.30
13.18
0.09
124
140
42.83
17.18%
17.26
10
222.71
2.57
33.73
16.97
0.00
1.72
4.55
0.26
40
35
44.93
12.04%
7
2
43.14
8.35
15.26
23.62
0.68
4.52
1.31
2.36
88
44
88.48
6.86%
43.55
10
95.88
2.55
27.28
8.96
0.36
3.51
20.08
0.25
139
135
121.48
-23.39%
18.2
1
27.28
1.77
6.3
7.68
6.66
5.60
20.46
0.39
163
162
100.89
-8.17%
11.42
2
92.91
1.65
14.11
10.87
17.84
1.40
19.04
1.78
151
187
63.18
0.79%
16.6
10
247.04
2.17
46.85
13.5
0.00
18.67
6.23
2.45
164
121
31.76
-5.29%
5.29
10
97.52
21.97
61.08
35.08
1.23
5.15
3.14
0.99
104
61
114.3
34.39%
73.44
10
218.93
0.98
28.69
7.51
31.63
5.88
25.43
0.17
201
211
68.62
-1.87%
14.09
10
201.33
3.82
56.86
13.52
0.00
0.44
0.83
0.35
7
5
46.45
43.14%
11.71
5
116.03
5.55
41.69
15.43
20.07
0.54
13.22
0.18
165
173
57.61
12.88%
20.55
10
328.31
1.22
38.58
10.35
0.00
0.32
0.97
0.00
6
3
41.64
19.64%
33.24
10
130.32
1.94
12.52
20.24
3.95
23.08
16.31
1.99
208
175
16.02
7.62%
46.96
10
61.96
2.71
4.32
38.81
3.46
0.56
0.87
0.26
14
27
0.58
715.52%
12.9
10
106.12
5.94
4.56 138.16
16.44
2.79
4.62
0.28
134
141
54.19
14.62%
19.83
2
40.72
1.58
4.93
13.04
32.60
23.06
13.55
1.70
211
210
20.01
12.07
1.72
2.29
194
169
6.42
5.95
0.73
2.74
127
93
76.54
78.33%
13.95
2
38.66
2.92
1.09 103.62
9.2
135.43%
35.96
10
82.86
2.78
8.64
26.7
46.23
12.78%
12.33
10
182.93
3.96
40.01
18.11
1.86
12.69
6.31
2.97
-
116
8.54
1.76%
20.1
1
10.6
3.81
0.43
93.95
16.84
1.01
15.31
0.10
147
172
48.85
13.06%
20.3
10
146.85
1.85
26.78
11.71
0.00
7.50
20.54
0.22
161
144
51.57
-16.66%
34.81
10
112.07
1.66
15.74
12.92
2.32
13.81
20.02
1.41
198
165
-0.25
-16.00%
29.39
1
0.93
57.8
0
0
0.09
0.01
0.00
0.00
1
1
58.96
-19.54%
15.39
10
137.49
2.74
24.54
17.09
0.00
5.56
2.86
0.24
-
39
86.81
13.11%
30.59
2
52.33
0.87
11.37
4
25.11
7.17
16.69
0.42
199
200
31.73
7.00%
31.14
10
60.72
3.15
10.69
17.88
5.04
3.48
18.23
0.01
138
148
7.15
134.27%
56.96
5
26.43
5.17
0.06 151.67
28.63
6.90
3.02
0.09
-
184
64.16
-7.92%
0.87
10
3523.68
1.99
655.75
10.69
0.00
5.14
12.56
0.49
126
103
33.59
18.34%
11.24
5
82.03
4.39
27.58
13.06
13.38
5.28
15.46
0.16
182
171
46.12
10.32%
4.9
2
117.26
2.06
20.44
12.02
7.38
0.24
4.96
2.91
187
101
26.54
20.69%
6.32
5
110.1
4.03
32.88
13.49
10.90
7.17
10.41
0.68
-
153
3.66
22.95%
25.16
10
69.33
3.96
2.73 100.55
0.00
0.61
0.39
0.55
-
4
100.84
-49.28%
12.84
5
220.26
0.89
23.56
8.35
0.08
1.94
23.93
0.54
117
147
43.91
40.99%
12.84
10
178.92
2.46
35.69
12.33
2.10
4.23
22.64
0.19
148
156
22.31
84.67%
12.56
2
33.03
3.03
3.29
30.36
0.00
5.97
7.94
1.22
129
89 188
51.12
-9.35%
18.43
2
41.75
1.39
4.59
12.6
19.97
1.83
19.89
0.26
-
73.92
-7.91%
27.8
10
157.91
1.24
26.87
7.29
31.27
20.89
16.29
0.58
-
209
1.42
-2.82%
23
10
24.82
10.03
0.55 452.73
0.00
0.03
8.22
0.81
38
64 166 6
1.1
-50.91%
343.13
10
13.6
1.44
0
0
8.41
9.24
16.52
0.43
-
0
#DIV/0!
14.06
10
13.27
26.85
0.08
0
0.00
0.08
0.53
1.27
-
Islami Tijara | April - June 2013 | 61
FAITH & FINANCE
Glossary Islamic Finance
Ahliyah Legal capacity
profits (like a shopkeeper leaving his shop with another shopkeeper during his absence).
Amana / Amanah Lit: reliability, trustworthiness, loyalty, honesty; Technically, an important value of Islamic society in mutual dealings; anything, which is in possession of a person who is not the owner of it for safekeeping. In case of unintended loss to the thing, he is not obliged to pay compensation.
Dain/ Dayn Loan, due, receivable, debt.
Ameen / Ami Custodian or guardian; trustee . Amwal Wealth; in business context wealth that is contributed as capital in a partnership; Plural: mal. Aqd Agreement, contract. Awkaf/ Awqaf A religious foundation set up for the benefit of the poor; property voluntarily transferred to a charity or trust so that it is use for public benefits . Bai al Arboon This is an agreement between a Bank and a Depositor in which the latter deposits in Advance security to the bank for the commodity which he purchased from bank. Security will not be refundable if the depositor does not meet his obligations. Bai Bithaman Ajil Under this concept, the Bank will purchase an asset at cost price and sell the same to the customer at cost plus profit, on deferred payment basis, at the time and price agreed to by both parties, payable by fixed instalments. Bai Inah This is contract for a buyback. Under this contract, a seller buys back the assets he or she sold on a deferred basis but at a higher price. Bai Istijrar It is a Shariah principle governing a contract between a client and a supplier where the supplier agrees to deliver goods on a regular basis at an agreed price and mode of payment. Baytul Mal The treasury of an Islamic state. Buda'ah goods given to another for trading without giving wages or sharing
62| April - June 2013 | Islami Tijara
Diminishing Musharakah In this contract the fund supplier and business manager agrees on a contract where they start the business on the partnership as described in Mudarabha and Musharaka but the fund supplier (bank) gradually sells its capital share to the business manager at pre determined prices and schedule. Fiqh Muslim jurisprudence; it covers all aspects of life, religious, political, social or economic. In addition to religious observances (prayer, fasting, zakat and pilgrimage) it covers family law, inheritance, social obligations, commerce, criminal law, constitutional law and international relations, including war. The whole corpus of fiqh is based primarily on the Quran and the Sunnah and secondarily on ijma and ijtihad. Fuqaha (singular, faqih): Jurists who give opinion on various issues in the light of the Quran and the Sunnah and who have thereby led to the development of Fiqh. Gharar Uncertainty, hazard, chance or risk, ambiguity and uncertainty in transactions. Technically, the sale of something which is not present at hand; or the sale of something where the consequences or outcome is not known. It can also be a sale involving risk or hazard in which one does not know whether it will come to be or not, such as fish in water or a bird in the air; or an event where assurance or nonassurance is subject to chance and thus not known to parties of a transaction. Can also mean uncertainty or a hazard that is likely to lead to a dispute in a contract. Gharim A person in debt; debtor unable to pay the debt from his wealth. Hawala Endorsement; assignment; avail; Lit: bill of exchange, promissory note, cheque or draft. Technically, a debtor passes on the responsibility of payment of his debt to a third party who owes the former a debt. Thus the responsibility of payment is ultimately shifted to a third party. Hawala is a mechanism for settling international accounts, by book transfers. This obviates, to a large extent, the necessity of physical transfer of cash. The term was also used historically in public finance during the Abbaside period to refer to cases where the state treasury could not meet the claims presented to it and it directed the claimants to occupy a certain region for a specified period of time and procure their claims themselves by
FAITH & FINANCE
taxing the people. This method was also known as "Tasabbub". The taxes collected and transmitted to the central treasury were known as "Mahmul", while those assigned to the claimants were known as "Musabbub".
Ittifaq Dhimni This type of contract is a pre-agreed contract where the price for sales and purchase of assets is decided in advance.
Hibah This term means gift. When somebody takes a loan from any Islamic bank, they do not charge any interest on it, but the person who borrows money gives some gift voluntarily, known as Hibah.
Joalah / Joaalah The undertaking of one party (the Jael, bank or employer) to pay a specified amount of money to another party in return for rendering a specified service in accordance with the terms of contract.
Hudud The boundary between what is Halal (lawful) and what is Haram (unlawful), set by Allah. Whoever transgresses these limits may be punished or forgiven by Allah.
Jualal Lit: stipulated price for performing any service. Technically applied in the model of Islamic banking by some bank charges and commission have been interpreted to be juala by the jurists and thus considered lawful.
Iflas Bankcrupcy. Ijara/Ijarah This financial instrument is designed for financing vehicles, machinery and equipment, and airplanes. This is a lease agreement in which one party leases the asset to another at a pre determined condition and rent. Before that bank buys the item from market and leases it to the client, than at the maturity of the contract the lessee pays the amount (lump sum or installment decided at the time of contract) and if he wishes he can become the owner of the item (optional). The ownership risks are borne by the bank as well as the right to sell the asset in the market. Ijarah wa iqtina Contract of renting, hiring or leasing. This term refers to a mode of financing adopted by Islamic banks. It is a contract under which the Islamic bank finances equipment, a building or other facility for the client against an agreed rental together with an undertaking from the client to purchase the equipment or the facility. The rental as well as the purchase price is fixed in such a manner that the bank gets back its principal sum along with some profit, which is usually determined in advance. Ijma / Ijmaa Consensus of opinion of Muslim jurists on a specific matter; consensus of the jurists on any issues of fiqh after the death of the Prophet, peace is on him. See also fiqh. Ijtihad Lit: effort, exertion, industry, diligence. Technically, endeavour of a jurist to derive or formulate a rule of law on the basis of evidence found in the sources; scholarly effort through which a jurist/scholar derives Islamic law on the basis of Quran and Sunnah. Iktinaz Hoarding wealth without fulfilling legal obligations on it. Istisna'a / Istisna The literal meaning of the word is 'asking someone to manufacture'. Such contracts are widely used for construction of buildings and related products, manufacturing of aircrafts, ship, machines etc. Such contracts also involve a sale contract between a buyer and a seller to sell an asset before it comes into existence. To fulfill the contractual conditions either the seller will manufacture the asset on his own or ask someone else to deliver it to the buyer on a pre determined date.
Kafil surety; person providing the surety; guarantor. Maysir / Maiser Gambling. Literally means getting something too easily. Mudarabha This is a kind of partnership between two parties where one partner promises to provide the capital (rabb-ul-maal) and the other one promise to be an investment manager. Profit is distributed on predetermined ratio while entering into the contract but in case of loss, only the capital investor (rabb-ul-maal) will bear it. The investment manager does not guarantee to earn profits unless it is a case of violation of contractual terms. Muqarada A way to structure a bond for which bondholders are entitled to cash flow from the project that the bond intends to finance. Muqarada bonds give its owner the right to receive his capital at the time the bonds are surrendered, and an annual proportion of the realized profits as mentioned in the issuance publication. Unlike conventional bonds, however, muqarada "coupons" are not guaranteed and the bondholder takes a risk that the project will not generate cash flow. Holders are only entitled to cash flow as it becomes available. Murabahah These agreements allow Islamic banks to purchase specific commodity on the client's behalf. In return the client promises the bank to purchase the commodity from bank at deferred price (which includes the cost plus profit margin). Hence it includes two contracts, one between bank and the seller (generally bank authorizes the ultimate buyer to receive the delivery of goods as its agent) and the other one is between bank and the client. Musharaka Musharaka is quite similar to mudarabha with a small difference that in case of musharaka both parties are the capital owners and manager can participate in management as well as profit and loss. Profits can be distributed on pre determined ratio but the losses have to be borne in capital investment ratio only. Qard Hassan No cost loans are designed for poor or needy people. These are mostly backed by collateral securities. Otherwise generally loans provided by banks do not charge any interest but they take service
Islami Tijara | April - June 2013 | 63
FAITH & FINANCE
Glossary Islamic Finance
charges to cover up the costs. Quirat gold, coin used during the time of Holy Prophet PBUH
Samsarah Brokrage, agency, business of commisson.
Rabb al-mal investor; owner of capital; a person who invests in Mudarabah / Musharkah. See also sahib al-mal.
Sarf contract for the exchange of gold, silver, and currencies whether the currency or commodity exchanged is the same from both sides or is different, that is, whether dinars are exchanged with dinars or dinars are exchanged with dirhams.
Ras al-mal capital; principal amount invested; capital invested in Mudarabah Musharkah.
Sharik partner.
Riba Riba literally means increase, addition, expansion or growth. It is, however, not every increase, or growth, which has been prohibited by Islam. In the Shariah, Riba technically refers to the premium that must be paid without any consideration. According to the jurists of Islam this definition covers the two types of Riba, namely Riba Al Fadhl and Riba Al Naseah. Example 1 of Riba: If A sells 100 $ to B with 110 $. The premium of 10 $ is without any consideration or compensation. Therefore this amount of 10 $ will b e R i b a . Example 2 of Riba: If A lends 100 $ to B (a borrower) with a condition that B shall return him 110$ after one month. In this case the premium paid that must be paid by the borrower to the lender along with the price is Riba. Because the premium of 10 $ is without any consideration. Riba aI-Fadl An extension of Riba to trade, because while trade is allowed, not everything is permitted in trade. The prohibition of Ribaal-fadl closes all back doors to Riba through trade. unlawful excess in the exchange of two counter-values where the excess is measurable through weight or measure. According to some Ahadith (Sayings of the Holy Prophet) if six things i.e. gold, silver, wheat, barley, dates and salt are exchanged against themselves, they should be spot and be equal and been specified. If these conditions are not found, this transaction will become Riba Al Fadhl. Riba al Nasiah Literally means increase or addition of debt and it refers to the premium that must be paid by the borrower to the lender along with the principal amount as a condition for the loan or an extension in its maturity." It is thus equivalent to interest. the addition of the premium which is paid to the lender in return for his waiting as a condition for the loan and is technically the same as interest. Ribah Is from rayb which literally means "doubt or suspicion and refers to the income which has the semblance of Riba or which raises doubts in the mind about its rightfulness. It covers all income derived from injustice to or exploitation of, others. Salam It is a kind of sale where a prepaid item is delivered at future pre determined time. Here the price is paid on the spot but the delivery is received in the future. This is an exception to Islamic law where existence of goods is necessary to enter in the contract but in case of salam it is not necessary that the goods sold are in physical existence while entering into the contract.
64| April - June 2013 | Islami Tijara
Sharikah al-wujuh partnership based on credit-worthiness of the partners in which the ratio of profit and loss is based on the liability borne, but the partnership has to be of the type inan or mufawadah. Sharikah ammah general partnership; a partnership in which each partner is a general attorney for the other partners; a partnership that permits trading in all types of goods. Sharikah khassah special partnership; partnership for a single venture or for trading in a particular item; partnership in which each partner is a special attorney of the other partners. Sharikah / Shirkah Partnership between two or more persons launching a business to make profit. Unlike mudarabah, all partners have a share in finance as well as entrepreneurship and management, though not necessarily equally. Sharikat al- inan A basic contract of partnership based on agency in which participation may either be on the basis of wealth or labor or creditworthiness, and in which equality of contribution or legal capacity is not necessary. Sharikat al-amwal / Sharikat al-mal a partnership in which participation is based on the contribution of wealth by all partners, but the partnership has to be of the type indn or mufdwadah. Shirikat al- aqd a partnership created through contract as opposed to co-ownership that may be the result of a joint purchase or agreement or it may result from inheritance or from some other legal situation. Shira' bi al-nasiah Credit-purchase. Sukuk Plural of Sak, Check, certificate of debt, certificates of investment. Takaful Islamic Insurance. A scheme of mutual support that provides insurance to individuals against hazards of falling into unexpected and dire need. Ujrah This term broadly refers to as fee or a financial charge for services.