Innholdsfortegnelse for 11-Feb-2018 i Business Today

Finance Minister Arun Jaitley will present the last full Budget of this government on February 1. Next year, there will be a vote on account before the General elections (assuming the elections are not advanced to this year-end or early next year). What is he likely to do? What kind of a Budget can we expect? Let us first take a look at the state of the economy that forms the backdrop of this Budget. The Central Statistics Office (CSO) advance estimates for the full year show that the worst of the slowdown might well be over for the economy. After touching a low of 5.7 per cent growth in the first quarter and then recovering to 6.3 per cent in the second quarter, the CSO expects the GDP growth…

WHAT A DIFFERENCE a couple of years can make! India’s steel exports surged nearly 53 per cent in the first nine months of this fiscal to 7.6 million tonnes. This followed a 102 per cent jump in 2016/17. Back in 2014, when China was dumping steel, India was struggling to cope with overcapacity. But a slew of measures, including the imposition of safeguards, anti-dumping duties and minimum import prices, resulted in restricting imports. India has been a net exporter since 2016/17. The decline in imports, however, led to a gradual rise in domestic steel prices, bolstering the profitability of steel mills. This, in turn, increased costs for user industries such as engineering goods and automobile companies. It is said steel companies are charging domestic firms 20-25 per cent higher than…

THE UNIQUE IDENTIFICATION Authority of India (UIDAI), in charge of issuing the 12-digit Aadhaar number to citizens, has added several new features to its digital identity platform. These include things like virtual ID (VID) that masks your Aadhaar number and allows you to use a temporary 16-digit, randomly generated number for authentication purposes. Besides fingerprint and iris verification, UIDAI has also started allowing facial recognition. It took these measures even as the Supreme Court started its final hearing on a bunch of petitions challenging the Aadhaar Act, raising privacy and data protection concerns. Adding new features are fine as long as it makes lives easier without any privacy or security threat to individual beneficiaries and industry stakeholders. Winning the legal war should not be the only objective.…

15 TOURISM PUSH WHAT: Conference on Tourism & Hospitality WHEN: February 15, New Delhi WHAT TO LOOK FOR: This conference will provide a platform for charting the path for tourism and hospitality infrastructure development. The focus will be on raising funds and new-age marketing techniques for making India the most preferred tourist destination. This conference will focus on different financing facilities, and models available and acceptable to all. 20 THE ART OF PRESENTATION WHAT: CII Workshop on 'Business Presentation Skills for High Impact' WHEN: February 20, Chennai WHAT TO LOOK FOR: When a business presentation is unable to create the desired impact or leave a good impression, it becomes a challenge. This one-day workshop is framed to provide exposure on making purposeful business presentations. 21-22 UP WOOS INVESTORS WHAT: Uttar…

Profitability of large gold loan non-banking finance companies (NBFCs) rebounded to peak levels seen before the regulatory tightening began in 2012 and eroded returns. FY2016/17 saw their return on assets zoom to over 4 per cent from around 2.5 per cent in FY2013/14. The improvement started as large NBFCs made two changes to their business model in early 2014. One, they started a periodic collection of interest and second, they lowered product tenure. Earlier, gold loans had a one-year tenure with a bullet repayment that included interest. Borrowers had the option to repay any time, and over 80 per cent of them did so within six months. However, in the past couple of years, forced by a decline in gold prices, lenders started to collect interest from borrowers at periodic…

While upgrading India’s sovereign rating from Baa3 to Baa2 in November last year, Moody’s elucidated that “a material deterioration in fiscal metrics and the outlook for general government fiscal consolidation would put negative pressure on the rating”. Over two months after the upgrade – for many a testimony to Prime Minister Narendra Modi’s push for economic reforms – the government is staring at a possible slippage from its fiscal deficit roadmap. The government, which had announced an additional borrowing of ₹50,000 crore in the last quarter of the financial year, setting off talks of it missing the target of 3.2 per cent fiscal deficit by a wide margin, did partial damage control by reducing the figure to ₹20,000 crore. Is this the silver-lining economists and fiscal fundamentalists have been looking…

Dr. Prathap C. Reddy, Chairman, Apollo Hospitals, pioneered private health care as a business in India way back in 1983. He elaborates on health care challenges in the country in an interview with Business Today’s P.B. Jayakumar. Excerpts: Q. As the pioneer of private health care enterprise, how do you evaluate growth of the sector over the years? A: Private players have built world-class infrastructure comparable to the best in the world and offer world-class health care at 1/10th the cost of developed countries. But one of the main challenges for the health care sector in India is the shortage of beds. We need to add 100,000 beds per year for next decade. So there is room for more providers and expansion. While Indian health care is growing rapidly at…

Q: Has it become more difficult to create competitive advantage? A: Absolutely. The analogy I make is to open-source software. Companies used to do proprietary stuff, and they tended to innovate slowly. Today companies are willing to talk about their innovations more openly and to post code and have thousands of people look at it so that they can modify it, test it, and get more reactions. The rate of feedback from open sourcing is an order of magnitude greater, but you also get more imitation. The barriers to entry haven’t entirely disappeared – but they’ve been moved a bit further along, beyond the product innovation stage. Now the barrier to entry is whether you can get user attention. Q: Is it easier to build moats around physical products? A:…

DO YOU FLY FREQUENTLY because your job demands it? At first, it seems exciting and glamorous. But after a time you realise there is no charm left in amassing frequent flyer miles just as George Clooney did in the Hollywood classic Up in the Air. The grim reality: Frequent air travel can cause a whole range of health problems due to loss of sleep, lack of exercise, poor eating and added stress. There could be potentially fatal health hazards such as deep vein thrombosis, caused by sitting in one posture for too long, especially on long-distance flights. In such cases, blood clots form in a large vein, and if a clot breaks loose, it can end up blocking an artery. Flying too often could also lead to lower immunity, obesity,…

STAY CONNECTED WITH US ON www.facebook.com/BusinessToday@BT_India INTERVIEW: Robotic Process Automation Failure Rate Is 30-50% The ExlService Holdings CEO Rohit Kapoor, in an interaction with BT's Goutam Das, tells why the BPO industry is expanding despite its "cannibalisation" by robotic process automation businesstoday.in/bpo-automation NEWS: Robust Growth in FMCG Sector Likely Reduction of prices in several categories post GST and direct distribution by big retail firms in the rural sector are the main factors behind the FMCG industry growth businesstoday.in/fmcg-growth Big Battle for Binani Cement: Jhunjhunwala Joins Forces with Damani Binani Cement – facing insolvency proceedings in NCLT – had an outstanding debt of ₹3,608 crore at the end of the last financial year businesstoday.in/binani-nclt Humble Cafeterias Go High-tech As Companies Eye Digitisation Foodtech firm HungerBox brings the cafeteria on the app so the employee…

INDIA AND ISRAEL inked nine MoUs during the recent visit of Israeli Prime Minister Benjamin Netanyahu. These range from co-operation in cybersecurity and space to film co-production and oil and gas. Last year, the two countries also announced an ‘India-Israel Industrial R&D and Technological Innovation Fund’. Business leaders from both countries think bilateral trade can touch $20 billion in the next five years from current $5 billion. While Indian firms hope to tap into Israel’s innovation ecosystem and technology, Israeli companies see a potential market here in areas such as agriculture, smart cities, clean energy and water management.…

THE FEAR OF MISSING out, commonly known as FOMO, is gripping the Indian equity market. Early warning signs are evident with penny stocks (shares of companies whose stocks prices are lower than their face value) gaining momentum. In the past three months, stock prices of 36 such companies have gained over 50 per cent, of which 12 companies gained more that 100 per cent. In comparison, the BSE Sensex rose 6.7 per cent. With large-cap riding high on sustained liquidity flows, especially from mutual funds, players looking to make a quick buck are getting into junk stocks, hoping these will rally. With the BSE Sensex touching 35,000 for the first time on January 17, 2018, the price/earnings ratio in India is the highest among its peers across the globe, including…

KODAK RIDING CRYPTO BULL Kodak is developing KODAKOne, a blockchain-based platform for image rights management, and KODAKCoin, a cryptocurrency to pay lensmen for selling and licensing their works on the platform. It will also rent systems to mine bitcoin. A Kodak licensee will charge $3,400 for two years’ use and keep half of the bitcoins a renter generates. CARILLION COLLAPSE SHAKES UP UK Carillion, UK’s second-biggest construction services company, has gone into compulsory liquidation after the government and the lenders failed to reach a bailout deal. The century-old firm has incurred debt and liabilities of around £1.5 billion. It employs 43,000 people globally and services key sectors, including public sector contracts. SOFTBANK FOR SPIN-OFF, $18 BN IPO Masayoshi Son’s SoftBank Group may list its Japanese telecom business and raise around…

Yoga Guru Baba Ramdev’s brainchild, Patanjali Ayurved, consistently manages to grab headlines. It was only recently that the company’s MD Acharya Balkrishna had spurned the interest shown by luxury brand LVMH’s private equity fund, L. Catterton, in Patanjali. He had commented that they will never sell stake to a foreign company. The Ramdev-Balkrishna duo have always referred to their enterprise as swadeshi and have openly expressed their opposition to multinational corporations. Barely a week later, the flamboyant yoga guru announced that Patanjali Ayurved will be turned into a non-profit charitable trust and all the revenue and profit it generates would be used for charity. Ramdev is known to have clearly stated to his associates that the reins of Patanjali can be passed on only to a sanyasi. "Turnover and profits…

Q. AirAsia has been here for a little over three years, but you were still in the red as per the last reported quarter numbers (losses of ₹24.4 crore on revenues of ₹348.18 crore). When do you expect to be profitable? A: I will give you an airline analogy. We are off the aerobridge and taxiing towards the runway and poised for a takeoff. Not quite there yet. To be honest, we can be profitable now if we choose, but we continue to invest by adding aircraft, adding capacity, and we have not got optimal scale yet. We have been doing this for 16 years now and can smell a few things. The building blocks are in place. The partnership (with Tatas) is fine. They are committed to us, and…

For a company that has been doing something mysterious for the past six to seven years, Magic Leap has raised a lot of funding – no less than $1.9 billion. Its investors include the Alibaba Group, Fidelity Management & Research Company, Google LLC, J.P. Morgan Investment Management, Temasek EDBI, and funds and accounts advised by T. Rowe Price Associates, Inc. The company is valued at $4.5 billion. Fascinatingly, until recently, the start-up has had no product to show. However, the computer demos have been compelling enough to excite the few VIPs and celebrities who have seen what it is doing. Except for Beyoncé, who was apparently bored. Magic Leap is based on the idea whatever is inside the computer is spilling over into the real world. It is similar to…

It sounds like a well-packaged marketing pitch, but an Indian company claims it serves the health conscious. Last year, ITC came up with a ‘sleep’ menu to promote a good night’s rest and in 2016, introduced ‘alert meets’, a range of ‘alert’ foods low on carbs and sugars to ensure no one feels drowsy at a post-lunch meeting. The idea is to use ingredients that induces sleep or keeps you awake, as required. Vijay Nagpal, Corporate Chef at ITC Hotels, says, “We have developed the menu in consultation with the scientists at ITC’s Life Sciences & Technology Centre in Bengaluru. During the trials (at a non-invasive sleep lab), we monitored sleep patterns that showed significant improvement in the quality of sleep upon consumption of the items from the ‘Swasthya’ menu…

The Subtle Art of Not Giving a F*ck By Mark Manson Harper Collins Price: ₹599 I Do What I Do By Raghuram G. Rajan Harper Business Price: ₹699 Eat That Frog! By Brian Tracy Berrett Koehler Publishers Price: ₹199 Hit Refresh: The Quest to Rediscover Microsoft’s Soul and Imagine a Better Future for Everyone By Harper Business Hardcover Price: ₹599 Principles: Life and Work By Ray Dalio Simon & Schuster Price: ₹999 *Top books by sales for January 1-14, 2018; Information provided by amazon.in…

While questions remain about when and how the government will disinvest Air India, some clarity finally emerged when the government said the national carrier would be hived off into four distinct entities, to be sold separately. The four entities will be – Air India and Air India Express (the low-fare international carrier); Ground Handling Services; Maintenance, Repair and Operations; and Alliance Air (the regional arm), said Minister of State for Civil Aviation, Jayant Sinha. To sweeten the deal and attract potential buyers, the government will retain Air India’s debt on its own balance sheet while borrowings linked to core operations will be passed on to new investors. Creating separate entities is a sound decision because the envisaged entities, despite being part of the aviation business, are all vastly different from…

With $60.08 billion foreign direct investment, or FDI, coming in during 2016/17 (an all-time high), India’s ability to attract foreign investors is indisputable. The government rightly deserves credit for the policy tweaks – liberalising and simplifying norms for investors – to attract FDI in a big way. These numbers, however, are not reason enough to celebrate. The quality of inflows and their contribution to the growth of the economy, job creation and manufacturing capacities need to be carefully analysed. Two Delhi-based economists examined the FDI inflow to India over the last three years. The preliminary finding raises concerns that several of these investments will not be able to trigger additional economic growth. Also, it debunks the government’s claim that FDI has benefited ‘Make in India’. India needs policy measures that…

VERY LITTLE has been said about equity restructuring in companies facing bankruptcy proceedings at the National Company Law Tribunal (NCLT). In fact, there is a very strong probability of lenders approaching the NCLT for share reductions to bring in new promoters with fresh equity capital. The value of equity in these companies is technically zero because of unsustainable debts and subsequent erosion of net worth. If these companies are liquidated, in many cases, equity shareholders will get nothing. Share capital can be reduced by trimming the number of shares or reducing the face value. Either way, there will be a reduction of paid-up capital. Recently, there has also been considerable interest from investors in ailing firms such as Monnet Ispat, Bhushan Steel, Amtek Auto, Electrosteel and Jaypee Infratech.…

The year 2017 would go down in history as a year of acute distress for a large number of farmers in India. After two consecutive drought years, they were hoping to realise a good income in 2017/18, but low prices of most agricultural produce left them high and dry. The central government has introduced several schemes in the last four years for the farming sector, but it has not found a solution to non-realisation of remunerative prices by farmers for their produce. Sugar cane farmers are best placed in terms of profitability as they are assured of buyers in the form of sugar mills, and they realise at least the fair and remunerative price (FRP) fixed by the government of India (GoI). In some states, they get the state-advised price,…

WHEN AN ENGLISH movie channel wanted to create buzz around its launch in India, it identified women who consumed a great deal of English language content, based on the information gathered from their social media profiles. The channel then contacted them to be a part of an exclusive ‘invite-only’ club. As a member of the club, the women would get passes to movie premieres and free merchandise and collectibles. On special occasions, such as birthdays and anniversaries, the channel started sending members of the club cakes and other freebies. This helped the brand earn brownie points – through brand advocacy and word of mouth, piquing others’ interest in the channel and the ‘exclusive’ club. “A lot of other people started sending requests to be a part of the club,” says…

71 Apollo's hospital strength, with a total bed capacity of 10,084 IN 1972, cardiac surgeon Dr Prathap C. Reddy returned to India with his family, sacrificing his flourishing practice in Springfield, US, and at the renowned Massachusetts General Hospital. The doctor from Chittoor in Andhra Pradesh settled in Chennai and first started practising at HM Hospital, but always dreamt of creating a world-class private health care facility in India. Dr Reddy lobbied with the government and mobilised support of some 10,000 fellow doctors and contacts in the US and other countries to float Apollo Enterprises Ltd in 1979. Then he hired top doctors like Dr M.R. Girinath and professional managers like V.J. Chacko. “Apollo Hospitals in the erstwhile Madras opened its doors on September 18, 1983. I was 50 years…

Q: Your success story is too good to be true... A: The reason we have reached this level is because we are working for people at large. The day I start working to fulfill financial ambitions, set profit and turnover targets, I dont think I will be able to achieve this kind of growth. When there is business motive there is aggression, oneupmanship and competition. We achieve turnover on the back of our work. Companies work for turnover, our approach is to work hard without having a turnover goal. When the turnover happens we plough that money into our various charitable activities, hospitals and universities. Q: There have been lot of negative reports on the quality standards of Patanjali... A: Patanjali’s strength is purity and authenticity and our goal is…

IT’S ONE OF THOSE stats that’s constantly thrown around at conferences: 80 per cent of the companies that existed before 1980 are no longer around – and another 17 per cent probably won’t be here in five years. Dartmouth professor Vijay Govindarajan heard versions of this so often that he eventually began using it himself – even though he didn’t know whether it was accurate or, if it was, why it was true. So he and his colleague Anup Srivastava decided to take a rigorous look at corporate longevity. Prior researchers had examined survival rates of the Fortune 500 and the S&P 500 firms, but the Dartmouth professors cast a wider net, including all 29,688 companies that listed on US stock markets from 1960 to 2009. (They reasoned that the…

YOU ARE not the only one to be breaking sweat during a workout. A robot does it too. Japanese-made Kengoro and its cousin Kenshiro are the University of Tokyo’s way of understanding the human body better. Researchers built a human-like musculoskeletal nervous system and even a Linux-based brain into the machine and got it to do the sort of movements and exercises people typically do in a workout. That included crunches, neck rolls, squats, push-ups and more. As the robot heats up, it sweats. By design. The emission of fluid is, just as in humans, meant to cool it down. More than the effort and the sweat, however, the engineers think the robots can provide insights into how movement is processed within the body. This, in turn, feeds into other…

AT MOST WORKPLACES, MEETINGS start on Monday mornings, right after the weekend break. Not the best time as people have not yet wound up after winding down. Some may not even have returned from an extended time off. Andrew Jensen, business efficiency and performance expert, rules out both Mondays and Fridays for important meetings. “Employees are still typically in ‘weekend mode’ on Mondays. On Fridays they are likely to be rushing through the day in anticipation of two days off,” he writes. Quoting a study, Jensen says respondents in a survey accepted Tuesday 3 p.m. as the best time for a meeting. In early morning meetings, participants may still feel tired or sleepy and may not be adequately prepared. Towards the end of the day, enthusiasm will wane as people…

Fashion More Than a Label Luxury brands have ceased to be mere labels on handbags and shoes. For instance, the new Gucci Garden in Florence, designed by Creative Director Alessandro Michele, has a wide range of pieces from collections dating back to the fashion house’s origins in 1921; clothing, accessories, video installations, artworks, documents and artefacts are displayed over two floors of the Gucci Garden Galleria, organised by themes. Contemporary items are juxtaposed with vintage pieces; artists Jayde Fish, Trevor Andrew and Coco Capitán have been invited to decorate walls, and their works sit alongside the Gucci fabric patterned wallpaper and a giant 19th equestrian oil portrait, Fantino con bambina, by Domenico Induno. Chef Massimo Bottura, internationally famed for his three-Michelin-star Osteria Francescana, has been invited to open a restaurant…