Innholdsfortegnelse for 3-Jun-2018 i Business Today

THOUGH the country’s GDP growth remained firmly over 6 per cent – no mean achievement – in the past three years, times were not particularly good for corporate India, barring a handful of sectors. The twin shocks of demonetisation and rollout of GST showed up in anaemic revenue growth. In the past three years, the 8,948 companies – listed and unlisted – that form the universe of the ACE equity corporate database used for this study, showed that revenue grew at a CAGR of 3.9 per cent. Of the three years, 2016 was the worst year, with annual revenues for the group as a whole actually declining by 0.5 per cent. When research head Niti Kiran made a shortlist of companies (after excluding banks, finance and trading companies), only 647 companies…

WALMART ANNOUNCED it had signed agreements to become the largest shareholder in Flipkart. The world’s largest retailer would pay $16 billion for an initial stake of approximately 77 per cent in India’s largest e-commerce company with a current GMV of $7.5 billion and net sales of $4.6 billion in 2017/18. The sale, one of the biggest e-commerce deals in the world, places a spotlight on Indian start-ups. Thus far, the sector has struggled for lack of exits. There are three exit options – IPO, acquisition or a big secondary sale. IPOs have been rare (Make-MyTrip, JustDial, Infibeam and BharatMatrimony are some of them). Estimates of secondary sales vary. Indian traditional businesses failed to make big-ticket acquisitions. Now, a top multinational buying the lion’s share of Flipkart changes things again. One,…

It is good news for the Indian pharmaceutical industry. After two years of stagnancy, exports grew 2.91 per cent to $17.27 billion in FY2017/18. Most of it came from exporting active pharmaceutical ingredients to China, 44 per cent growth at $182.67 million in the last fiscal. India’s pharmaceutical exports had decreased marginally to $16.4 billion during the financial year ended March 31, 2017, compared to exports worth $16.89 billion during 2015/16. Shipments to the US and North America – they account for over 30 per cent of drug exports – dropped in 2017/18 and the value of exports to the US fell by 8.35 per cent to $5,114.70 million. When regulatory hurdles, price erosion and consolidation by major distributors in the US market made things tough, Indian drug exporters shifted…

INNOVATIVE MANUFACTURING WHAT: CII Manufacturing Innovation Conclave 2018 WHEN: June 22, New Delhi WHAT TO LOOK FOR: CII is organising the eight edition of the conclave that will brainstorm the latest innovations in manufacturing globally. Participants will include CEOs, MDs, Presidents, Innovation Heads, Quality Heads, et al. THE SUPPLY CHAIN RIDDLE WHAT: Conference on Innovative Procurement & Supply Chain WHEN: June 26-27, Bengaluru WHAT TO LOOK FOR: Strategic supply chain procurement skill is going to play a vital role in the growth of small and large organisations in coming years. It can help organisations manage finances and embrace new opportunities in the industry. The conference will offer deeper insights of supply chain procurement. HARNESSING WATER WHAT: National Conference on Science, Technology & Innovation in Water Management WHEN: June 28, New…

LARGE COMPANIES/MARUTI SUZUKI INDIA LTD Total income >= ₹ 50,000 crore & < ₹1,00,000 crore INDIA'S LARGEST PASSENGER VEHICLE MAKER is on a high. In 2017/18, its domestic passenger vehicle market share edged up to nearly 50 per cent, the highest since the turn of the century when it had a 50.4 per cent share. In a big market like India, the world's fourth-largest, it is uncommon for a leader to have such a high market share. It looks even more striking when we consider that just six years ago, Maruti’s share had dipped to an all-time low of 38.3 per cent, as labour unrest at its factories crippled production for months. From that position of vulnerability, when a lot of people wrote it off, Maruti has hit a rich vein…

LARGE COMPANIES/INFOSYS CONTRARY TO analysts’ sentiments, the Infosys management, under the aegis of Salil S. Parekh, the new MD and CEO, is upbeat with its numbers for the year just concluded, as is evident from the company’s recent earnings call for last quarter of 2017. In the call, M.D. Ranganath, CFO, Infosys, declared that “digital revenues exceeded 25 per cent of the total revenues.” Besides, he stated that the number of $100 million clients increased to 20 and revenue per employee increased by 6.3 per cent during the year, crossing $54,500. Operating margin stayed resilient at 24.3 per cent, driven by improvement in operational parameters, productivity and automation benefits. During the quarter, Infosys had 10 large deal wins with TCV (total contract value) of $905 million. The company opened a…

MEDIUM COMPANIES/RELIANCE RETAIL At a time when India is set to witness a pitched battle among global retail giants – Walmart, Amazon and Alibaba – with many homegrown businesses looking to get acquired by them, Mukesh Ambani-led Reliance Retail seems to be the only Indian company that can withstand the onslaught. In 2017/18, the company clocked a revenue of $10.6 billion (₹70,000 crore) while its PBDIT grew 114.5 per cent from ₹1,179 crore to ₹2,529 crore. It is the first Indian retail company to cross the $10-billion-revenue milestone. Since its inception in 2006, Reliance Retail has done several course corrections. Today, it has the widest network of close to 4,000 stores in 702 cities. According to a recent Edelweiss report, its CAGR has been 40 per cent between 2008/09 and…

Debt financing provided to venture-backed start-ups by venture debt funds Venture debt is cheaper than venture equity Venture debt offered to start-ups with at least Series A funding and visible cash flows Venture debt gets seniority over other debt taken by start-ups No collateral required but debt is secured with a pledge against the start-up's brand or intellectual property and lien on fixed assets Loans have fixed coupon and tenure with monthly repayments of principal and interest Typical loan tenure is three years Interest rates between 14% and 18% Loan also includes equity kicker in the form of share warrants…

WITH THE RAPIDLY evolving digital world of cryptocurrencies, global investors and startups are now being lured to a new form of investment and fund raising opportunity, the Initial Coin Offerings (ICO). Like Initial Public Offering (IPO), ICOs are means for raising money from public investors to fund a startup. However, under ICOs digital ‘tokens’ are allotted in lieu of shares, which represent an informal ownership share in business of the startup which is being funded. Raising money through IPOs in India requires business ventures to adhere to the compliance norms of Securities Exchange Board of India (SEBI). When it comes to ICOs, many countries, including India, have not yet formulated any rules and regulations. Hence, ICOs do not require compliance with any norms and as such are means to circumvent…

IN 2006, when the government introduced an excise duty structure for cars based on length and engine capacity that continues till this day, the industry was up in arms. Manufacturers wanted a level-playing field for all vehicles and preferred that the consumer, and not the government, decide what sells and what does not. With the advantage of hindsight, that policy seems like a stroke of genius. Aimed at encouraging production and development of small fuel efficient cars in India that were deemed best suited for the market, in four years, India dethroned Japan to become the biggest production hub for small cars in the world. Today, every third small car in the world is made in India. More importantly, the economies of scale from the domestic market have made export…

IT’S THE FIRST rule of customer service: When something goes wrong, apologise. In many cases, the apologies continue throughout the interaction as an employee goes the extra mile to convey empathy and concern. But surprising new research shows that approach can backfire: An apology that extends beyond the first seconds of an interaction can reduce customer satisfaction. Employees should instead focus on demonstrating how creatively and energetically they are trying to solve the customer’s problem – that, not warmth or empathy, is what drives satisfaction. Researchers reached these insights via a novel study that allowed them to observe exactly what happens when a customer rep is confronted with an unhappy customer. Although many companies record customer interac- tions, privacy concerns generally prevent them from sharing the results with researchers. However,…

OXFORD NANOPORE Technologies, a UK-based company, has come up with a DNA sequencing device that is smaller than a mobile phone. A protein nanopore is set in an electrically resistant polymer membrane. An ionic current is passed through the nanopore by setting a voltage across this membrane. If an analyte passes through the pore or near its aperture, this event creates a characteristic disruption in current, and measuring that current makes it possible to identify the molecule in question. A strand of DNA is passed through a nanopore and the current is changed in different combinations. The handheld device, called miniON, is portable, scalable, available commercially and accessible to anyone whose research involves sequencing DNA. It can process long strands of DNA fast. Priced at a mere $1,000, it is…

THE SPECIFICATIONS of the Asus Max Pro M1 on paper seemed too good to be true – the right hardware running stock Android at an unbelievable price. Asus has ditched its Zen UI and included the latest version of Android OS, 8.1.0. Although stock Android leaves no room for bloatware and unnecessary apps, Asus has added some – calculator, FM Radio, sound recorder, Facebook, Facebook Messenger and Instagram. These won’t be a nuisance as they are used quite often. My review unit was the base model which had 3 GB RAM with 32 GB onboard storage. Of this, 7.1 GB was consumed by the system and 2.2 GB by the apps, leaving close to 22 GB of onboard storage for use. There is also a dedicated memory card slot along…

AS THE MERCURY RISES, one must drink plenty of water throughout the day. Ask any doctor, and he/she will tell you how critical the water intake is to prevent the onset of kidney diseases. Ideally, one should drink at least three-five litres of water per day. Also, urologists say that people need to pass at least 1.5-2 litres of urine every day to stay healthy. If it falls below this limit, one runs the risk of higher concentration of certain materials such as calcium, oxalate and uric acid, which could lead to kidney stone formation. Drinking water can ward off urinary tract infections. Plus, a lot of fluid will help you avoid dehydration. Vikram Vuppala, founder and CEO of the dialysis centre chain NephroPlus, also recommends fitness training. Take up…

WASTE OF A NATION: GARBAGE AND GROWTH IN INDIA By Assa Doron and Robin Jeffrey Harvard University Press Pages: 416 Price: ₹799 GARBAGE ISN’T EXACTLY a sexy subject to write or read about. But it’s one that’s increasingly crucial for our modern world. Prime Minister Narendra Modi showed how important he thinks it is by making Swachh Bharat almost the centrepiece of his government’s programmes. A new book that’s making waves casts the spotlight on trash. The authors, academics Assa Doron and Robin Jeffrey, held a press conference in Washington and have already been interviewed by a financial daily. They asked Modi why he highlighted Swachh Bharat. In an emailed response (included as an appendix to the book), Modi said, “Swachh Bharat is the culmination of all the experience I had…

The Subtle Art of Not Giving a F*ck By Mark Manson Harper Collins Price: ₹499 The Power of your Subconscious Mind By Joseph Murphy Amazing Reads Price: ₹199 Attitude Is Everything: Change Your Attitude Change Your Life! By Jeff Keller Collins Price: ₹199 Thinking, Fast and Slow By Daniel Kahneman Penguin Price: ₹499 Elon Musk: How the Billionaire CEO of SpaceX and Tesla is Shaping Our Future By Ashlee Vance Virgin Books Price: ₹699 *Top books by sales for Apr 25 - May 9, 2018; Includes only books released after Jan 1, 2015; Information provided by amazon.in…

STAY CONNECTED WITH US ON www.facebook.com/BusinessToday@BT_India PERSPECTIVES Why It’s Time for Management Education to Turn the Page Singapore Management University President, Arnoud De Meyer, has a four-point mantra on how management education needs to change to stay relevant businesstoday.in/management-mantra Will China’s Tariff Exemption Lead to Increase in India’s Pharma Exports? The Chinese government’s decision to remove import duties on key medicines is an attempt to bring down this health care cost businesstoday.in/china-healthcare NEWS Carmakers Off to a Solid Start in 2019 Homegrown carmakers, like Maruti Suzuki, Tata Motors, and Mahindra and Mahindra, have reported healthy set of numbers businesstoday.in/healthy.numbers-carmakers Indian Rupee Is One of the Three Worst-performing Emerging Market Currencies Domestic factors are the major players behind the collapse of emerging market currencies businesstoday.in/emerging.markets-currencies Domino’s Pizza Is on Growth Mode…

THE DRAFT national telecom policy has stirred up debate on the overambitious targets of the government outlined in the policy document. The draft talks about a number of objectives with specific timelines. For instance, there is mention of providing wired broadband access to 50 per cent households in the next four years. The current broadband penetration stands at about 30 per cent, and a major chunk of it includes mobile broadband. Among other “exaggerated” targets, attracting investment of $100 billion over the next four years, has caught everyone’s attention. Over the past two years, some telcos have been forced to shut shop or quit the country. Airtel, Vodafone and Idea Cellular are not in the best of health either. While the existing telcos will continue to invest to stay competitive…

SPRINT, T-MOBILE EYE $26 BN MERGER Wireless carriers Sprint and T-Mobile have agreed to a $26 billion all-stock merger, their third attempt to join forces. If approved, the deal will see just three national players in the U.S. wireless market and give Japan’s SoftBank, Sprint’s parent company, a bigger footprint. The combined $146 billion entity will retain the name T-Mobile and will have nearly 100 million cell phone customers. TESLA UNFAZED DESPITE LOSS The electric car giant had its worst-ever quarter ending March 31, clocking a loss of $709.6 million compared to $330.3 million a year ago. Tesla, however, said its Model 3 production was on track to hit a target of about 5,000 cars a week by the end of June. The carmaker ended the quarter with $3.2 billion…

LARGE COMPANIES/TCS WHEN RAJESH Gopinathan took over the reins of TCS in February 2017, the IT space was under tremendous pressure, especially owing to digital disruptions across sectors. Hence, foremost on his agenda was to invest in new capabilities across technologies like artificial intelligence, automation, Internet of things and analytics. Hiring local talent has also taken precedence in the wake of the visa restrictions imposed by the US. TCS is addressing the dearth of professionals with technical flair in the US, by investing in STEM (science, technology, engineering and mathematics) education in the country. Between April 2014 and March 2018, TCS’ standalone profit increased from ₹18,475 crore to ₹25,241 crore, thanks to strong demand in digital across all industry verticals. “Our Business 4.0 thought leadership framework that allows enterprises to…

MEDIUM COMPANIES/ASHOK LEYLAND THE BEGINNING of fiscal 2018 was ominous for the domestic commercial vehicle industry. Still reeling under the effects of demonetisation, the industry was jolted by a Supreme Court ruling that only those vehicles that complied with the stricter Bharat Stage IV emission norms could be registered and sold in the country from April 1, 2017. Till that time the industry believed the new norms applied only on manufacturing and not sale of vehicles. It now had to find a way to quickly liquidate the inventory that was in the supply chain as part of normal business. That the SC ruling came barely 24 hours before it had to be implemented, made it even more difficult for the industry. As the second largest commercial vehicle manufacturer in the…

METHODOLOGY THIS IS BUSINESS TODAY’S FIFTH EDITION of India’s Fastest Growing Companies. We have included both listed and unlisted companies in our survey. But unlike last year, the revenue benchmarks have been changed to ₹1,000 crore and above. The study has been done using the Ace Equity database and the years under consideration include FY2014/15, 2015/16 and 2016/17. To date, very few companies have filed their 2017/18 annual reports, and those numbers are beyond the scope of this study. We have considered growth in total income as our primary evaluation criterion. Total income has been calculated as net sales (gross sales – interdivisional transfers – sales returns and – excise duty). All total income and profit numbers (operating profits) are standalone. A series of filters have also been introduced at…

THE POSITIVES Little or no capex is required. Entrepreneurs and employees can move in and get going from day one Millennials not used to working in conventional workspaces find them appealing Co-working spaces factor in and include things such as water, power, legal, administration and maintenance costs unlike traditional rented/leased spaces Scaling up can happen quickly Co-working spaces have an eclectic mix of entrepreneurs, employees and enterprises from different backgrounds and so can be great for learning new things THE NEGATIVES More expensive in the long term compared to the traditional model Privacy might be an issue, unless you are ready to pay for it Limited storage space for things like books, tools and personal belongings Offers an informal environment. Those used to a formal corporate setting may find it…

How have AI for professional use and AI for the consumer evolved in the past few years? A: The core of AI is machine learning. The field of learning continues to advance. In Watson, a lot of our advancements have been about learning more from past data. We are more focused on professional use. So, the ability to learn a specific domain – around regulation, around health, law, and others – is happening at a much faster rate. On the other end, the consumer guys are focused on general intelligence, which is also growing. A consumer field is closer to the way search works, which is the ability to look at a broad range across all fields. It works for simple tasks. There is breadth. Then, there is depth of…

MEET MIKO a toy-like robot barely seven inches tall. Look past its appearance and what you get is a well-read, sprightly companion – with a screen as its face and LEDs as its hands – who is constantly watching your back, making it ideal for children above five years. From wishing ‘good morning’ to inculcating healthy eating habits to imparting general knowledge, Miko has got it all covered. Companion robots have been particularly useful for the elderly and children with special needs. Now, technology giants and start-ups are developing robots that appeal to all. Ones that can serve as companions and teachers for children are gaining popularity. These robots have been designed to converse with kids, satiate their curiosity, entertain them, read out stories, keep an eye on them, teach them…

Art History in Nine Stories DID YOU KNOW that while the Harappans were worshipping the mother goddess, the Mesopotamians had an entire pantheon of different deities? That while Mughal courts in South Asia were filled with intricate miniature paintings, the Chinese were also creating exquisite scrolls on silk? ‘India and the World: A History in Nine Stories’ at the National Museum in Delhi will explore these and other questions with a brilliant exhibition of a wide variety of objects, from sculpture to inscriptions, coins and paintings. The exhibition, on till June 30, is spread over nine sections – Shared Beginnings, First Cities, Empire, State and Faith, Picturing the Divine, Indian Ocean Traders, Court Cultures, Quest for Freedom and Time Unbound. Watches It’s a Keeper PRANAV SABOO runs the largest luxury…

PETER VAN DEURSEN CEO, Cargill (Asia-Pacific) Q. The biggest challenge you faced in your career A. Going to another country to build a business or restructure it or turn it around is tough. I had to move to the US from the Netherlands and then went back to Europe and then moved to Turkey and everything was new. If I look back on all these 28 years I have been working, the biggest challenge has been that first move. Q. Your best teacher in business A. The biggest teacher is your experience, what you gain when you get out of your comfort zone and teach yourself how to survive. In such situations, you either swim or sink. You are always comfortable in your home zone, but the moment you are…

On May 8, the US announced a unilateral pull-out from a three-year-old nuclear deal with Iran. The fallout was instant - a sudden spurt in crude oil prices and the dollar appreciated against other currencies. Trump had a clear message for all that have strategic or trade relations with Iran: Ignore the US line at one’s own peril. It also has serious implications for India that goes much beyond the $12.5 billion bilateral trade engagement it has with that country. True, as the third largest crude oil source after the UAE and Saudi Arabia, Iran has an important role in keeping our import bill, and hence current account deficit, under check. But the relationship with Iran is not just about oil. India is the development partner of Iran’s only deep sea Chabahar…

India is one of the fastest growing economies in the world. Yet it remains a ‘lower-middle-income’ country and continues to lag on key social development indices. How can India accelerate its socioeconomic transformation? It can be done through the widespread use of exponential technologies such as artificial intelligence (AI). Other countries have done this successfully in the past. In 1960, Japan’s per capita was 16 per cent of the U.S. per capita, but within a few decades, it became an equal by using advanced technologies to lead the global automotive sector. Similarly, South Korea leveraged the latest technologies to come up with advanced products at a reasonable cost. Today, China is embracing digital and AI-based technologies to enhance its competitive edge. All three nations have moved faster up the Global…

MEDIUM COMPANIES/RAJESH EXPORTS THE 53-YEAR-OLD billionaire chairman of Rajesh Exports, Rajesh Mehta, sits in a small window-less office on the Kumara Krupa road in Bangalore, drives a Toyota Innova and never flies business class. Putting away the two feature phones lying on his desk, he says, the acquisition of Switzerland-based Valcambi in 2015, the world’s largest gold refining and gold processor firm, has been central to the company’s growth. “It has a refining capacity of 1,800 tonnes per annum, which is double the consumption of India. This acquisition gave us lot of strategic advantage and propelled us to be one among the only three private sector Fortune 500 companies from India,” Mehta says. In 2016/17, the company’s consolidated revenue crossed ₹2,40,000 crore, up from ₹45,000 crore before the integration. The…

IPO/ICO DECISION MAKING Centralised, with the CEO and the board involved in the day-to-day running of the business Decentralised, give the investor a material decision-making position in the ICO project PROCESS One-time sale with multiple intermediaries involved in the process of determining conditions, pricing, etc Fewer intermediaries. Usually just a white paper provided OWNERSHIP Gives investor owner-ship of the company, based on the number of shares acquired Gives the investor rights, not necessarily ownership, over a particular project FINANCIAL DATA Released as per the rules of the exchange on which the IPO takes place Released by way of the blockchain or as outlined within the white paper and agreement with the investors TIMELINE Open for just a few days, single opportunity to buy Open for longer, from a few weeks…

Tech-enabled renting has potential in even in the rural economy. Companies such as Trringo, a Mahindra and Mahindra company based out of Bangalore, Gurgaon-based FarMart – which won BT’s Coolest Start-up award last year, and Hyderaba’s Farmringg are also renting farm equipment to farmers in rural India. “This is a new concept for the rural market. It is helping farmers meet all their mechanisation needs on a single platform,” says Atindriya Bose, CEO, Trringo. Trringo claims to have completed more than 1,25,000 hours of rental operations in across 1,100 villages in just over a year of operation while Farmart has got around 5,000 customers and over 300 machinery owners on its platform.…

THE MANY VIDEO conferencing software tools we have at our disposal barely cut it when it comes to meaningful meetings. True, they get the job done; but they’re disembodied and artificial with the technology very much getting in the way of natural interaction even as it enables it. Researchers at Queen’s University in Canada have come up with a Star Trek-like solution that could change the way people in different locations communicate. TeleHuman 2, the result of work by a team led by Roel Vertegaal, Professor of Human-Computer Interaction at the Queen’s University School of Computing, lets people meet in life-size 3D holograms. It has long been understood that human beings don’t just interact with words but communicate with their entire bodies, emitting a symphony of nonverbal messages that they…