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Peerless Group to Exit Insurance Distribution and Double-Down on Hospitals
Business - May 2, 2020

IT firms to reduce subcontractors to control costs

IT firms to reduce subcontractors to control costs

Over the past few weeks, the COVID-19 pandemic has emerged as a significant and global challenge creating worldwide disruption. In order to combat this crisis and maintain the health of businesses, Indian IT Companies are planning partial self satiation by reducing their dependency on sub contractors. Believably, this will aid them in cost curtailing, since it becomes difficult to bear fall in businesses due to Covid -19 pandemic. According to Mr Debashis Chatterjee, CEO of Mindtree Ltd, which is an Indian multinational IT and Outsourcing Co., subcontracting costs shall fall in the coming months. TCS Wipro and Infosys agrees to the same.

Recently Mr. Chatterjee mentioned that in the coming quarters, the firm based in Bengaluru will continue reducing their subcontracting costs. Research says subcontracting alone makes up around 10-15% of the total employee cost. This was not the scenario few years back. Sub contracting expenses hiked in recent years because IT companies wanted new age technically skilled team. They did not bother their in house talent for the same. According to data, in the last fiscal year, TCS paid subcontracting cost that comprised of 13% of total employee cost. Similarly Wipro, Infosys and Mindtree shelled out around 22%, 12% and 11% respectively. Total employee cost is sum total of internal employees costs and subcontracting costs.

 

 

What are IT companies like TCS, Wipro, Infosys, Mindtree planning then?

It seems Covid-19 urges IT companies to get self sufficient and get their staff skilled. Milind Lakkad, Global Head Human Resources at TCS told media that they will try and lower their dependency on contractors. This step is taken to control cost. For meeting this goal, they look forward to build talent within the organization. They will go for hiring in a limited manner in hunt of specific skills. On similar lines, Wipro’s Chief Head, Human Resources Saurab Govil informs that they are screening the entire supply chain of employees, including hiring and subcontractors.

Narrating media on how huge chunk their billable are the sub contractors bills, he mentions they stand around 10-11%. The company is planning to replace them with their existing workforce. Infosys CFO Nilanjan Roy, reconfirms that according to him subcontracting will pave way towards cost optimization. Further adding he says their strategic cost optimization in automation, pyramid rationalization and also sub contracting shall not terminate and will continue. He believes the company’s strong clientele relationships and talented engine shall together enable them face this economic turbulence.

 

 

What Xpheno has to say?

Xpheno, a Specialist Staffing Solutions Company which is into offering IT Staffing, Engineering Services, Sales Staffing and Direct Hire says, IT companies are resorting to various ways to curtail their cost, by either planning to reduce the number of contractors, or expecting rate cuts from the sub contractors. While other companies are asking sub contractors to provide deferred payment options, mentions Kamal Karanth, co-founder of Xpheno.

 

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Volatility for Hindustan Unilever to continue

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The biggest Downfall of Nvidia in the market history
Business, Market News, Markets - May 1, 2020

Volatility for Hindustan Unilever to continue

Volatility for Hindustan Unilever to continue

India’s largest fast-moving consumer goods company announced its Q4 results on April 30. The company witnessed a downfall in volume by 7% in this quarter. The performance has been affected by the effects of Covid-19 since the second half of March. As per the Q4 result, Profit Before Tax (PBT) decreased by 10.6% and Net Profit decreased by 1.2%. The revenue of the company decreased by 9.4% to Rs 9.011 crore. The EBIDTA margin decreased by 160 basis points and growth decreased by 7%.

 

Impact on performance due to COVID-19:

The spread of COVID-19 affected the company from mid-march. This decline is due to the lock-down all across the world to control the spread of the COVID-19 pandemic. This has impacted the demand and supply chain. Beauty and personal care contributes 42% of sales, which is down by 14%. Other categories like homecare and food & refreshments are both down by 4% and 7% respectively. Only a part of the health and refreshment is a client base which includes tea and coffee. Even the recently purchased diet portfolio of the firm, comprising of Horlicks and Boost, does not count as a market base.

Other elements affecting stock prices are currency and crude oil price fluctuations. According to Sanjiv Metha, Chairman and Managing Director stated the human influence of the pandemic is unclear and they are completely committed to collaborating with the government to ensure that we solve the crisis. Instability in input expenses and currency will increment, with liquidity constrains prone to keep on developing. As indicated by HUL, it is hard to guess the market growth. The organization is currently running at around 70% of the normative standard and is planning to increase this in the coming days.

 

Strategies to improve efficiency:

Strategies to increase productivity are reduction in non-essential spending, Capex optimization, inventory management, credit allocation, emphasis on receivables, investment stability, etc. HUL has increased production in main categories such as sanitizers and handwashes. They are now working with shorter preparation cycles, improving the supply chain and increasing efficiency.

 

About the stock:

HUL has a Market cap of Rs.5,15,708 crore. The stock’s last traded price was Rs.2,195 and was 1.65% low. HUL’s 52 weeks low is 1656 and 52 weeks high is 2,614. The stock is likely to be corrected due to its overvaluation and extension of lockdown in the highly affected areas. This is disturbing for financial specialists, proposing that market request can not bounce back long after the lockout has finished.

 

 

 

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Equity Right
Business, Market News, Markets - May 1, 2020

Microsoft completes 5 year deal with Coca-Cola

Microsoft completes 5 year deal with Coca-Cola

The Washington based tech giant, Microsoft Corporation cracks a five year deal with Atlanta based beverage giant Coca-Cola Company. Microsoft Corp will supply business software to the former company. Apart from this, Microsoft Corporation will also provide tools for customer service agents and its Teams chat app to Coca-Cola Co. Describing their agreement as a strategic partnership, the size of the deal is kept unknown by the companies. But the said deal shall be inclusive of the suit of Microsoft Tools which is Dynamics 365. To enhance your knowledge, Microsoft’s Dynamics 365 is the tool which directly competes with the Salesforce.com Incorporation.

 

Microsoft’s technology:

Business operations of Coca-Cola Co. will be conducted on cloud platform of Microsoft. The name of the cloud platform that Microsoft will extend to Coca Cola Co. is “Azure”. In the past, Coca-Cola Company has availed Amazon and Salesforce’s cloud technology and business software. Now they are building a new relation with Microsoft for the similar services. As the lock-down prevails and majority of Coke’s workforce is working from home, they are using Microsoft 365 Live Events for large-scale video presentations.

Microsoft has a solid grip in general-purpose business software. General purpose business software includes E-mails and word processing applications. These are widely used by the employees working in Customer service and Sales. The VP of Microsoft’s business applications group, James Phillips gave an interview. He informed Reuters that they shall be providing Coca-Cola Company with Microsoft’s technology. It will enable their smooth working. Their technology shall empower Coca-Cola Company to get answers to their unanswered queries. By use of Artificial intelligence (AI), Coca-Cola Company will be able to fetch relevant data for the same.

 

How Microsoft will help Coca-Cola?

During the first half of his interview, Phillips mentions that Coke is willing to have a systematic internal programme in place for the employees. A programme that will enable the employees of their company to get one stop quick answers at a glance. Coke wants to eliminate the time consuming process that employees undergo every time they want to get answers to repetitive questions. For example, to know how and where to go to apply for vacation time, where they should go to have a look at their last payroll slip, which educational programme they can pursue to enhance their skills and many such questions.

In a statement, Senior VP of Coca-Cola Mr. Barry Simpson said that Microsoft Corporation will help Coke to get rid of some of its redundant and fragmented Systems. Lastly, Microsoft’s Phillips added, Coke plans its customer service department to be equipped with a system in hand which will aid them in providing quick solutions to the questions raised at the customer end. Its beverage maker’s customers majorly include grocers and big retailers. It is expected of Microsoft to have an increase in its post revenue of $33.9 billion for the quarter, from $30.6 billion last year, and its earnings per share (EPS) climbing up to 1.28 from 1.14 which was a year back.

 

 

Mutual fund industry in crisis due to pandemic

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Equity Right
Business - April 30, 2020

How will businesses survive social distancing?

How will businesses survive social distancing?

India is a firm believer of unity. In the wake of Covid-19 outbreak, upholding social distancing is the requisite act to follow. In India, most of the businesses are done because of the good relationship maintained with their clients and all other stakeholders. Personal connections and physical interactions are valued at its peak. Current scenario of the country has almost all the companies shift to work from home model. This work from home model has created a buzz in the country, and a 100% absence of personal connection among all the stakeholders.

 

Importance of IT department:

This pandemic situation has abruptly provided utmost importance to the IT department. IT department is working immensely to give the best service to their clients. But there are many untraceable problems which may come in their way. Problems such as, how the productivity and efficiency of an employee can be traced? How impactful this can be while delivering the services to the clients? All this factors will be a foremost concern for all the companies. Inherently, there are many difficulties faced in maintaining social distancing and organizing businesses online. However, doing the businesses online can be proved a hectic task as most of the businesses will use the Cloud based operations and day by day their services are more perilous and unsecure.

 

Threats faced by businesses:

Media reports states that Cloud based operations have many threats like security problems This can cause a major problem to the companies as their crucial information and company secrets are at risk. Organizations are facing dilemma to find the exact match between “least cost” and “Best service offered” to the clients. IT department is the key to all the problems. Software’s which ensures highest security, developing a program which will assemble maximum data and ensuring data safety and transferability are the need of several companies. Developing this kind of software can be a trump card for the developers. Such software can be constructed using DevOps and DevSecOps.

The current situation is an enormous opportunity for the companies to study the market in a hasty manner. Every department in an organization is crucial and has its own advantage for the benefits of the company. Analyzing and forecasting data can help companies to mark a competitive advantage.

Learning from the crisis:

It is very important for all the companies to break the previous working pattern and construct themselves as per the situation demands. Now, it’s time to share the maximum knowledge a person possesses at any level of hierarchy with their subordinates. It will help the company gain maximum profit and expand business. Another vital aim that companies should not forget is that to keep the cost under control and boost the revenue. Customer satisfaction should be the priority. Otherwise it will just take few minutes for a customer to change their source where they are beneficial the most.

But a big question arises, will all these activities continue once we pull through this pandemic? Well, once all the things get restored hope, everything will bounce to as we expect.

 

 

Effects of Covid-19 on cryptocurrency market

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