Innholdsfortegnelse for January 3, 2016 i Business Today

The job of the chief executive officer (CEO) in India has always been pretty difficult – and over the years, it has only grown more difficult. Till the early ’90s, very different skills were required to steer a big, listed company in India successfully because of the numerous government restrictions and regulations. Since then, many things have improved, while others have become much tougher. For example, economic reforms have ensured less government intervention and far more transparency in many markets. They have also ensured deeper capital markets, easier borrowing norms, and many opportunities to get into new areas of business, and also diversify away from maturing industries. You might still need multiple licençes to set up a new company or business, but certainly not anywhere near the number of licences…

By the time this appears in print, the negotiations at the United Nations Conference on Climate Change in Paris would have ended. The core issue that needs to be resolved is ‘differentiation’, or how to differentiate the actions of developed and developing countries. Developed countries want the annex-based differentiation to go. In the 1992 climate convention two annexes, or lists of countries, were created – Annex 1 (developed countries) and non-Annex-1 (developing countries). The formation of the two groups was to reflect the fact that some countries were historically responsible in causing climate change and that some countries had pressing, important priorities such as poverty eradication and, therefore, had the right to emit, for their economic development. Under the convention, developed countries were also mandated to support developing countries with…

The use of brand name Royal Enfield was licensed by the British Crown to Redditch Company in 1890. The motorcycles started selling in India in 1949. In 1955, the government started looking for a suitable motorcycle for its police forces and the army for patrolling the country's borders. Bullet 350 was found the most suitable for the job. It ordered 800 units, a big order for that time. Thus, in 1955, the UK-based Redditch partnered with Madras Motors for what was called Enfield India to assemble 350-cc Bullet bikes under licence in Chennai. Madras Motors owned a majority stake in the company. In 1957, tooling equipment was also sold to Enfield India so that it could manufacture components and start full-fledged production. Royal Enfield UK stopped production in 1970 and…

BEST CEO BANKING AXIS BANK LTD INCOME/ 3-YR CAGR: 43, 844 cr/ 17% CAPITAL ADEQUACY RATIO: 15.1 % PAT/ 3-YR CAGR: 7,358 cr/ 20% AVG MCAP/ 3-YR CAGR: 1,03,672 cr/ 30% AVG MCAP (APR-SEPT 2015)/ YOY GROWTH: 50% ROE/ ROA: 17.8%/ 1.8% NET NPA: 0.46% NET INTEREST MARGIN: 3.90% Standalone data, net of extraordinary income and expenses Shikha Sharma loves watching Bollywood movies, maintains a fitness regime, reads books of all sorts and even sings Hindustani classical music. But not many know that the 57-year-old MD & CEO of Axis Bank is also a devotee of the Hindu god Shiva. “I have worshiped Shiva for a long time,” says the soft-spoken Sharma, seated in her eighth floor corner room in Central Mumbai. The daughter of an army officer, she has…

BEST CEO FMCG DABUR INDIA LTD INCOME/ 3-YR CAGR: 5,569 cr/ 13% OP. PROFIT/ 3-YR CAGR: 939 cr/ 14% PAT/ 3-YR CAGR: 787 cr/16% AVG MCAP/ 3-YR CAGR: 38,734 cr/29% AVG MCAP (APR-SEPT 2015) YOY GROWTH: 40% ROE/ROCE: 38.4%/44.7% CASH/DEBT: 124 cr/129 cr NET PROFIT MARGIN: 13.90% Standalone data, net of extraordinary income and expenses It was a blustery weekend afternoon in the summer of 2002. Sunil Duggal had found time from his job of handling the personal care business of Dabur to oversee a long overdue paint job at his South Delhi home. He was in a rush, as the going was not too good for Dabur, even though the personal care division was doing well. Duggal knew his hands would be full on Monday. In the midst of…

Every country and economy comes to a fork in the road that decides if it will succeed or fail. India seems to be at that juncture in 2015. The next five years could result in another surge of growth for the economy and our citizens, or we could languish in that nether world for emerging economies called ‘the middle income trap’. Only, in our case, with the average GDP per capita less than $2,000 in real dollars, India could be a victim of the low income trap. For the largest democracy of the world, this would limit and stunt over 1.3 billion citizens and many generations to follow. Both celebration and angst exist about India’s demographic dividend. As one of the youngest countries in the world, we often feel relieved…

In this article we’ve highlighted the benefits that CEOs derive from top-level mentoring relationships. But what makes them valuable to mentors — especially those who are eminent and easily able to fill their time with other important activities? In-depth interviews with 15 mentors revealed the answers: SENSE OF IMPACT. Our survey of mentees and mentors shows that they seek different elements in a match. Mentees consider reputation, capabilities relevant to their needs, and compatibility of styles. Mentors try to evaluate openness to learning and potential for success. They have wisdom to share, and they don’t want to waste it on people who won’t put it to use. Said another way, they are motivated by the opportunity to have an impact. PERSONAL LEARNING. Mentors also consider whether a mentee has knowledge,…

“Should have given more space to CEO” Ashok Soota, 73, Executive Chairman of Happiest Minds, talks to Goutam Das about tough decisions, leadership style and separation of powers between the executive chairman and the CEO. Given that you are dealing with younger people at Happiest Minds, what sort of issues do you face because of the age gap? The years I have spent help in the relationships. My role is to help and, at the same time, call a spade a spade when they do not measure up. The industry is more informal and there should not be barriers in what people tell you. How has the nature of leadership changed? Earlier, managerial talent in IT came from other industries. Now, they are younger and belong to IT. They understand…

This is a compounding market and, for the next 3-5 years, we would see earnings recovery driving stock prices, while debt investments seem attractive for the next one year The financial markets are at the cusp of a revival. The Indian household, which was so far underweight in financial assets, has made some progress in 2015. Investors, both big and small, made a small beginning by investing in financial assets. Therefore, we are positive that a more meaningful shift will take place in 2016. Underperformance of physical assets, such as gold and real estate, was largely responsible for this strategic shift. The inflows into mutual funds in 2015 were at 2.15 lakh crore – by far the best year in recent memory. 2016 is expected to do equally well, if…

The agenda of the life insurance industry should not be viewed as individualistic in nature but one where the entire BFSI industry can come together to create the best products The year 2015 has been interesting for the Indian life insurance industry. Overall, the private sector has grown 16 per cent in the first eight months of the year despite the overall industry seeing very little growth due to LIC’s performance. One may argue that growth in any form is good. But this raises concerns about what is driving that growth. For the most part, the growth in the private sector is being driven by Unit-Linked Insurance Plans or ULIPs. However, the volatility associated with ULIPs is something that Indian customers have not yet come to terms with. Agents need…

4G: Will It Turn a Damp Squib? This refers to your cover story on 4G network (Battle Ready, December 20, 2015). It was a SWOT analysis of the intended participants of 4G spectrum in India, clearly indicating their outlook of drawing lines of business enhancement rather than building a platform for 4G operations. While 4G has more distinctive features to improve the ecosystem of telecom users, the limitations of these companies, both geographically and technologically, will be the determinants to match the increasing expectations of the clientele going by the shattered experience in the past with 3G network. The hidden costs in tariff structure, inept services, including inexplicable call-drops and the inefficacy of the TRAI in streamlining service delivery as per contractual obligations, still do not lend to turn optimistic.…

The government has embarked on an ambitious mission to usher in sweeping changes to the country’s bankruptcy law. It unveiled the first draft of the new Bankruptcy Code recently. T.K. Vishwanathan , chairman of the committee that drafted the law, talks to Business Today’s Dipak Mondal on various aspects of the Bill. Excerpts: How will the new bankruptcy code be different from the existing laws? The existing laws are out of tune with market realities. They are scattered, and they are housed in different statutes. The corporate insolvency law comes under the Companies Act, and the individual insolvency laws are under two old acts – Provincial Towns Insolvency Act and Presidency Towns Insolvency Act – that are almost 100 years old. The district courts responsible for dealing with these…

*CEO till September 30, 2015. Standalone data; Figures in crore; Average market cap: Average of daily market capitalisation of the latest financial year; Total income & net profit: Net of extraordinary income and expenses for the latest financial year; RoE: return on quity (excludes exceptoional items) Source: Ace Equity Standalone data; Figures in crore; Average market cap: Average of daily market capitalisation of the latest financial year; Total income & net profit: Net of extraordinary income and expenses for the latest financial year; RoE: return on quity (excludes exceptoional items) Source: Ace Equity **Retired on September 30, 2015 Standalone data; Figures in crore; Average market cap: Average of daily market capitalisation of the latest financial year; Total income & net profit: Net of extraordinary income and expenses for the latest…

“There are two aspects (to acquisitions). One is finding the right asset. But, far more important is to make it work. And that is where we differentiate” BEST CEO MID-SIZED COMPANIES TECH MAHINDRA LTD INCOME/ 3-YR CAGR: 19,639 cr/ 55% OP. PROFIT/ 3-YR CAGR: 2,867 cr/ 52% PAT/ 3-YR CAGR: 2,195 cr/ 61% AVG MCAP/ 3-YR CAGR: 55,872 cr/ 89% AVG MCAP (APR-SEPT 2015)/ YOY GROWTH: 11% ROE/ ROCE: 22.8%/ 29.2% CASH/DEBT: 1,820 cr/ 5 cr NET PROFIT MARGIN: 11.80% ROCE: return on capital employed; CAGR: compounded annual growth rate RoE: return on equity; PAT: profit after tax standalone data; operating profit excludes other income Figures in ` crore; Average market cap: Average of daily market capitalisation of latest financial year; Total income, PAT, RoE: Net of extraordinary income and…

“We have prioritised the regions and suitably optimised our resource allocation, which has enabled us to outperform the sectoral growth. We have carefully chosen new products to add to our portfolio with a clear emphasis on profitability” BEST CEO AGRICULTURE & ALLIED PI INDUSTRIES LTD INCOME/ 3-YR CAGR: 2,137 cr/ 31% OP. PROFIT/ 3-YR CAGR: 372 cr/ 38% PAT/ 3-YR CAGR: 243 cr/ 51% AVG MCAP/ 3-YR CAGR: 5,905 cr/ 70% AVG MCAP (APR-SEPT 2015)/ YOY GROWTH: 90% ROE/ ROCE: 31.2%/ 40.5% CASH/DEBT: 24 cr/ `115 cr NET PROFIT MARGIN: 11.10% Standalone data, net of extraordinary income and expenses It began as ‘Pesticides India’ in the early 1960s, but changed its name to ‘PI Industries’ as its products moved way beyond pesticides. Today, the company, with revenue of 2,137 crore…

“In about 10-15 years, if we succeed, we will have built a brand in the home improvement space, which will not only expand our business, but also protect the paints business” BEST CEO CHEMICALS ASIAN PAINTS LTD INCOME/ 3-YR CAGR: 12,451 cr/ 14% OP. PROFIT/ 3-YR CAGR: 2,015 cr/ 14% PAT/ 3-YR CAGR: 1,341 cr/ 12% AVG MCAP/ 3-YR CAGR: 64, 196 cr/ 31% AVG MCAP (APR-SEPT 2015)/ YOY GROWTH: 39% ROE/ ROCE: 34.2%/ 49.6% CASH/ DEBT: 62 cr/ 40 cr NET PROFIT MARGIN: 9.70% Standalone data, net of extraordinary income and expenses The friendly, jovial, kind-looking, bespectacled Sikh gentleman before you says, deadpan: “We are a small paint company.” Coming from Kanwar Bir Singh Anand, Managing Director & CEO of Asian Paints, India’s big daddy in decorative paints for…

“I want Lupin to become a $5 billion (`32,500 crore) company by 2018. It is doable. About $4 billion should come from organic growth and the remaining from acquisitions” BEST CEO PHARMA & HEALTHCARE LUPIN LTD INCOME/ 3-YR CAGR: 9,933 cr/ 23% OP. PROFIT/ 3-YR CAGR: 3,373 cr/ 43% PAT/ 3-YR CAGR: 2,397 cr/ 44% AVG MCAP/ 3-YR CAGR: 59,127 cr/ 43% AVG MCAP (APR-SEPT 2015)/ YOY GROWTH: 66% ROE/ ROCE: 30.1%/ 39.7% CASH/DEBT: 59 cr/ 45 cr NET PROFIT MARGIN: 24.30% Standalone data, net of extraordinary income and expenses Vinita Gupta works hard and expects her team to do the same. This year, the 47-year-old CEO of Lupin Ltd even cancelled the usual holiday on Diwali at its Baltimore, US, headquarters, making do with just a puja, a traditional…

Women of the World: The Rise of the Female Diplomat By Helen McCarthy PAGES: 416 PRICE: 438 Bloomsbury It was not until the Second World War that women were given more substantive positions This is a book largely about the role of women in the diplomatic profession in Britain and their struggle to enter the British Foreign Office, a struggle they finally won in 1946, almost 30 years after they won the right to vote and 20 years after they were allowed into the British Home Civil Service. It is an interesting study of the mindsets that prevailed in Britain at that time, relating to whether women were suited to work in the diplomatic arena as full-fledged professionals. While the book confines itself in the main to Britain and the…

Revival in the office sector is expected to trickle-down to the residential sector. Higher consumer confidence, greater job prospects and lower interest rates will drive residential demand Since the NDA government came to power, a slew of policy initiatives – housing for all by 2022, smart cities, Goods and Services Tax, and Real Estate Investment Trust – led to renewed sentiments in the real estate sector. At the same time, it also attempted to strengthen affordability by cutting interest rates and bringing down inflation. The Centre also relaxed FDI norms by removing two major hurdles – the minimum built up area and capital requirement – to boost foreign investor participation. India’s rating on “ease of doing business” is also expected to allay fears of investors wanting to invest in the…

STAY CONNECTED WITH US ON www.facebook.com/BusinessToday @BT_India INTERVIEW “Any deal in Paris unlikely to keep global temperature rise in check” In an interaction with Business Today’s Sarika Malhotra, CEO of the Council on Energy, Environment and Water, Arunabha Ghosh, says that India’s leadership of the International Solar Alliance is an example of the country setting the agenda for action on climate change. businesstoday.in/councilonenergy-arunabha NEWS Start-ups Need to Learn More About Business Traditional businesses can also teach new-age companies a few lessons. businesstoday.in/startups-innovation PERSPECTIVES Indian Automakers Hail Stringent Emission Norms The auto industry is under fire for high pollution and being one of the largest contributors to environment degradation in urban areas. businesstoday.in/autoindustry-emission GST: A Major Gain for Manufacturers Government has proposed a three-tiered tax structure – low rate (12%), standard…

ARUNDHATI BHATTACHARYA (SUPER LARGE COMPANIES) State Bank of India ADITYA PURI (LARGE COMPANIES) HDFC Bank VINEET NAYYAR (MID-SIZED COMPANIES) Tech Mahindra SIDDHARTHA LAL (SMALL COMPANIES/ AUTOMOBILES) Eicher Motors SALIL SINGHAL (AGRICULTURE & ALLIED) PI Industries JAYADEV GALLA (AUTO ANCILLARIES) Amara Raja Batteries SHIKHA SHARMA (BANKING) Axis Bank K. B. S. ANAND (CHEMICALS) Asian Paints ARVIND UPPAL (CONSUMER DURABLES) Whirlpool of India SUNIL DUGGAL (FMCG) Dabur India N. CHANDRASEKARAN (IT & ITES) Tata Consultancy Services RAJEEV JAIN (NBFC) Bajaj Finance S. VARADARAJAN (OIL & GAS) Bharat Petroleum Corporation VINITA GUPTA (PHARMA & HEALTHCARE) Lupin SANJAY SAGAR (POWER) JSW Energy HIMANSHU KAPANIA (TELECOM) Idea Cellular SUNDER GENOMAL (TEXTILES) Page Industries RAJEEV SHARMA (PSU) Rural Electrification Corporation You would think an average CEO spends a disproportionate amount of time worrying about that fierce…

“You have to think differently for solutions as a leader. If you believe there is only one solution to every problem then there will be times when you will not be able to solve it” BEST CEO CHAMPION OF CHAMPIONS & SUPER LARGE COMPANIES STATE BANK OF INDIA INCOME/ 3YR CAGR 1,74,973 cr/13% TOTAL CAR 12% PAT/ 3 YR CAGR 13,102 cr/4% AVG MCAP/ 3YR CAGR 1,99,922 cr/ 14% AVG MCAP (APR-SEPT 2015)/ YOY GROWTH 10% ROE/ ROA: 10.6%/0.68% NET NPA 2.10% NET INTEREST MARGIN 3.20% CAR: capital adequacy ratio, CAGR: compounded annual growth rate; RoA: Return on assets; RoE: return on equity; NPA: Nonperforming asset; PAT: profit after tax standalone data; operating profit excludes other income Figures in Rs crore; Average market cap: Average of daily market capitalisation of…

The company has embarked upon a plan to double production to nine-lakh bikes over the next two years, which is quite spectacular given that it had sold just 20,000 units in 2000 BEST CEO Overall (Small Companies) and Automobiles EICHER MOTORS LTD INCOME/ 3-YR CAGR: 3,148 cr/ 61% OP. PROFIT/ 3-YR CAGR: 733 cr/ 109% PAT/ 3-YR CAGR: 559 cr/ 65% AVG MCAP/ 3-YR CAGR: 23,558 cr/ 87% AVG MCAP (APR-SEPT 2015) YOY GROWTH: 123% ROE/ROCE: 54.4%/ 77.7% CASH/DEBT: 43 cr/0 NET PROFIT MARGIN: 16.80% Standalone data, net of extraordinary income and expenses Even if imitation is indeed the best form of flattery, it is not often that one gets a compliment like this. Listen to Pawan Munjal, the Chairman of Hero Motocorp and the undisputed king of commuter bikes,…

BEST CEO AUTO ANCILLARIES AMARA RAJA BATTERIES INCOME/ 3-YR CAGR: 4,254 cr/ 21% OP. PROFIT/ 3-YR CAGR: 701 cr/ 27% PAT/ 3-YR CAGR : 418 cr/ 25 % AVG MCAP/ 3-YR CAGR : 10,776 cr/ 78% AVG MCAP (APR-SEPT 2015)/ YOY GROWTH: 86% ROE/ ROCE: 27.3%/ 37.8% CASH/DEBT: 222 cr/ `76 cr NET PROFIT MARGIN: 8.90% Standalone data, net of extraordinary income and expenses When the US- educated 37- year-old took over as the Vice Chairman and Managing Director of Amara Raja Batteries in 2003, few would have imagined that one day he will eclipse many of his peers to emerge as the best-performing CEO. Today, Jayadev Galla, or Jay Galla, has come a long way to prove his mettle. “My first few years as MD were not attractive at…

”I like to build businesses from scratch. I like the start-up atmosphere and the enthusiasm associated with it to create a growth story“ BEST CEO NBFC BAJAJ FINANCE LTD INCOME/ 3-YR CAGR: 5,558 cr/ 35% OP. PROFIT/ 3-YR CAGR: 3,490 cr/ 40% PAT/ 3-YR CAGR: 898 cr/ 30% AVG MCAP/ 3-YR CAGR: 14,167 cr/ 79% AVG MCAP (APR-SEPT 2015)/ YOY GROWTH: 138% ROE/ ROCE: 20.4%/ 13.1% NET NPA: 0.45% NET INTEREST MARGIN: 10.30% CAGR: compounded annual growth rate; RoE: return on equity; NPA: Non-performing asset; PAT: profit after tax standalone data; operating profit excludes other income Figures in `crore; Average market cap: Average of daily market capitalisation of latest financial year; Total income, PAT, RoE: Net of extraordinary income and expenses for the latest financial year Source: Ace Equity Past…

BEST CEO POWER JSW ENERGY LTD INCOME/ 3-YR CAGR: 6,626 cr/ 9% OP. PROFIT/ 3-YR CAGR: 2,103 cr/ 20% PAT/ 3-YR CAGR: 1,029 cr/ 39 % AVG MCAP/ 3-YR CAGR: 14,052 cr/ 13% AVG MCAP (APR-SEPT 2015)/ YOY GROWTH: 33% ROE/ ROCE: 14.1%/ 16.3% CASH/DEBT: 268 cr/ 4,232 cr NET PROFIT MARGIN: 15.70% Standalone data, net of extraordinary income and expenses Slow and steady wins the race, goes the adage. That is true for Sanjay Sagar-led JSW Energy, part of the OP Jindal Group and one of the largest private sector power companies in India. When all the major power companies like Tata Power, Adani Power and Lanco were racing each other in the 2005/12 period for capacity addition to perch at the top, Sajjan Jindal chose a strategy of…

What could be more valuable to a CEO than having an experienced and trusted external mentor? Perhaps having two. When Paul Geddes became the chief executive of Royal Bank of Scotland’s insurance division, in 2009, he sought the counsel of two prominent board chairmen, each of whom had led a large business over three or four decades. Likewise, Gavin Patterson, the CEO of BT Group since September 2013, started meeting with both Niall FitzGerald (a former chairman of Unilever) and David Simon (a former chairman of British Petroleum) after his promotion to chief executive of BT’s retail business, in 2008. The practice may strike some observers as an invitation to confusion. But these executives recognise that even the smartest mentor has blind spots — some of which can overlap with…

Bond markets are factoring in negative news and, from a valuation perspective, long bonds are looking good. The spread over the repo rate is 100 bps against the median spread of 50 bps As we step into the New Year, debt fund investors may look back at the year gone by with mixed feelings. The year started with big expectations and the RBI obliged with 125 bps rate cuts, which was more than market expectations. The yield curve steepened as a result of these rate cuts with the shorter end outperforming the longer end of the curve. The 10-year benchmark yield largely remained unchanged, primarily due to the fear of an adverse impact on the INR if the US Fed had raised policy rates. Understandably, there is some anxiety in…

Understanding taxes is not easy. At the time of buying a house, the broker may talk about the huge tax benefits of taking a home loan, even suggest that bigger is better. However, if you do not look at the terms and conditions, what he says could be misleading. So, before signing on the dotted lines, understand the tax rules that govern home loans, as a decision made in hurry can impact your future cash flow adversely. For instance, tax benefits for under-construction and ready-to-move properties are not the same. In case of under-construction homes, tax benefits do not start immediately, while buying a ready-to-move house makes you eligible for tax benefits from day one. Read on to find out the other points you must keep in mind while taking…