Innholdsfortegnelse for October 23, 2016 i Business Today

The Indian pharmaceutical industry has spawned many fascinating stories of entrepreneurs, who started out with limited or no resources but went on to build multinational operations and highly profitable companies, seizing opportunities in India and abroad as they came along. Two of the more fascinating stories are those of Ranbaxy Laboratories, and Dilip Shanghvi’s Sun Pharmaceuticals. Over the past two years, the two stories have become intertwined after Shanghvi took over Ranbaxy in 2014 from Daiichi Sankyo, which had bought it from the Singh brothers – Malvinder and Shivinder – in 2008. But to start with, Ranbaxy was the much older and more prominent name in the pharmaceutical industry, and until about a decade ago, it was also the bigger and more profitable of the two. Ranbaxy was started in…

12 MARK TO MARKETING WHAT: Marketing Led Commerce in the Digital Age WHEN: 12 October, Bengaluru WHAT TO LOOK FOR: The webinar organised by CII will discuss technology trends shaping digital marketing and have insights around how best to design key performance indicators in marketing and track return on investment. 13 GREEN STEPS WHAT: Smart Cities Conference 2016 WHEN: 13 October, Lucknow WHAT TO LOOK FOR: The conference aims to create awareness and encourage decision makers from the government, industry and the citizenry to integrate services and measures that will reduce environmental footprint of cities, increase their appeal, and safeguard quality of life without any adverse effects on the efficiency of utilities. 13 MANUFACTURING CONNECT WHAT: CII WR Digitizing India Summit 2016 WHEN: 13 October, Hyderabad WHAT TO LOOK FOR:…

So Sorry Facebook’s Vice President of advertising and global operations, David Fischer, posted an apology on the social networking site after an international newspaper reported that the company had overestimated the average time users spent watching videos on its platform. Earlier, Facebook had also put up a blog post explaining the error on its Advertiser Help Center. According to Fischer and Facebook, the miscalculation happened as the metric only counted videos that were seen for three or more seconds, not taking into account shorter views. “The metric should have reflected the total time spent watching a video divided by the total number of people who played the video. But it didn’t,” Fischer said in his post. The incident comes as a huge embarrassment to Facebook as it had been talking…

THE NEW TAXATION LAW, INTRODUCED ON APRIL 1, SEEMS TO HAVE MADE DIVIDEND DISTRIBUTION ‘TAX-UNFRIENDLY’ Share buybacks have been around for several years and are not a recent phenomenon. Companies have taken this route in the past as an efficient way to increase the value of their shares. There are several benefits of a buyback. By reducing the number of shares in the market, the earnings per share (EPS) get a boost. When a company buys its stock, the cash assets on its balance sheets reduce. This increases the RoE (return on equity). Shareholders who sell their stocks in the repurchase programme earn the market value plus a premium (if offered). The residual value for the remaining shareholders also goes up. Of course, it helps to up the promoter’s stake…

They can venture fearlessly into areas where human beings dare not tread. After the earthquake-cum-tsunami hit Japan’s Fukushima nuclear plant in March 2011, it was not people but a robot developed by Toshiba that went into the radiation-suffused nuclear core to try and cut the nuclear fuel rods into pieces and thereby limit the damage. (It is another matter that the attempt failed and the robot was damaged in the process.) Closer home, the Defence Research and Development Organisation has developed a battery-operated, remote-controlled robot on wheels named Daksh, which is used by bomb disposal units in areas considered too dangerous for Army, police or para military force personnel to physically enter. Indeed, robotics is making rapid strides across the world, including India, being used in manufacturing, services and even…

Nice shirt.” You’re pleased. “Hey, thanks.” “Looks comfortable…” he says, handing over his business card. And waits for you to reciprocate. You ask for his phone instead. He is nonplussed. You tap it on the left cuff of your shirt, and hand back the phone. Your business card is on his phone screen. He looks up in surprise. “It is also very smart,” you say in explanation. His surprise doesn’t go away. This is, of course, an imaginary conversation, but one that would well be playing out in meeting rooms, where people sport a new smart shirt brought out by Arrow. The shirt’s left cuff has an NFC tag, and combined with an app on the smartphone, enables others with NFC-enabled smartphones to receive a host of information from you,…

Manuel suggests that the US should include China in military cooperation efforts in Asia and beyond This Brave New World – India, China and the United States By Anja Manuel Simon & Schuster PAGES: 349 PRICE: 699 In the midst of the rabble-rousing speeches of the contestants in the United States Presidential elections, although essentially focused on domestic issues, the role and impact of the rise of China and India have also quietly come to the fore. The specific policies that the newly elected administration should follow towards these rising Asian countries are also being discussed by the Republican and Democratic Parties. Mainstream American ideas such as the 19th century isolationism, Cold War offshore balancing or the recent engagement and economic interdependencies are being reviewed extensively in these electoral debates.…

It was celebration time. At a power packed gathering of women professionals and entrepreneurs at the ITC Grand Central in Mumbai on September 22, Business Today released its coveted list of 30 Most Powerful Women in business. The award session started in the afternoon with one of the youngest ministers in the BJP-led National Democratic Alliance government, Smriti Zubin Irani, Minister of Textiles, walking in all smiles, escorted by India Today’s Group Editorial Director (Publishing) Raj Chengappa and Business Today’s Editor Prosenjit Datta. After giving away the awards and releasing the special issue of BT, Irani in her keynote address asserted that recognising and nurturing female talent will be the game changer in the coming years. “Continuous mentoring and nurturing is needed to encourage women to leadership positions,” said Irani.…

Pradeep Singh, 42, lives in Ghaziabad near Delhi. He is a marketing professional. His wife, Rupashree Mitra, 41, is also working. They have two daughters, aged 12 and 9. Their combined monthly salary is Rs 2.05 lakh. Here is what they need to do to fulfil their life goals, which include a comfortable life after retirement. RISK PLANNING Contingency fund: The couple is advised to build a contingency fund equal to at least three months’ expenses. They have a fixed deposit of Rs 3 lakh. They are advised to use the first three months’ surplus to build the fund. The money saved should be invested in an ultra short term fund. It should not to be used for any other purpose. The key to success is discipline. Life Insurance: Singh…

BPCL: BPCL stands out for its superior return on equity (RoE). It trades at 9.4 times 2017/18 estimated earnings per share of (EPS) of Rs 63 and 1.9 times 2017/18 book value (adjusted for investments). HPCL: While refining margins will remain cyclical, marketing profitability will be stable, led by retail pricing power. HPCL is a structural play with higher earnings predictability and increase in profitability leading to higher RoEs. Our sum-of-the-parts fair value stands at Rs 497 based on 2017/18 EV/EBITDA of five times for refining and 7.5 times for marketing. On 2017/18 expected numbers, HPCL is trading at 8.6 times standalone EPS of Rs 47 and seven times consolidated EPS of Rs 58. IOC: IOC is now a structural investment play with higher earnings predictability and increase in profitability…

A Big Salute to the Role Models of 2016 This refers to your special edition on women in business (The Most Powerful Women in Business, October 9). You have appropriately highlighted the achievements of the select 30, who have reached glorious heights. They have risen to the top against all odds. You are reminded of the lines coined by William Congreve, an English playwright and poet: “Heaven has no rage like love to hatred turned, nor hell a fury like a woman scorned.” These women were initially not given their due place and respect, but later proved their mettle to reach their exalted positions. Right from the start of their lives, women are asked to play multiple roles in their lives. I believe women are far superior to men because…

In March, Welspun India, the country’s largest home textile exporter, became only the third manufacturer to be awarded the Egyptian Cotton Gold Seal certification by Cotton Egypt Association (CEA), after Canada-based Cambridge Towels and Mundo Textil of Portugal. Five months later, on August 20, the B.K. Goenkacontrolled company ceded the advantage only to be ridiculed before the international community for allegedly compromising with the quality of its Egyptian cotton towels and bed sheets. Target Corp, the US-based second largest discount retailer, which contributed $90 million, or 10 per cent of Welspun’s total revenues, cancelled a two-year contract with the Indian company, alleging mislabelling of 750,000 sheets and pillow cases. Target, in fact, went a step further to call back products sold under the Fieldcrest label and offered refunds to customers.…

Tip of the Iceberg By Suveen K. Sinha Price: 599 Amid questions about the start-up party nearing its end, it is time to remember India’s start-up warriors. This is the story of their remarkable journeys. Some found their destination. Some did not. The Unusual Billionaires By Saurabh Mukherjea Penguin Price: 499 The Rise and Fall of Nations By Ruchir Sharma Penguin UK Price: 799 IIMA - Day to Day Economics By Satish Y. Deodhar Random House India Price: 299 Who Moved My Interest Rate By Duvvuri Subbarao Penguin Books Limited Price: 699 Shoe Dog By Phil Knight Simon & Schuster Price: 599 *Top books by sales for September 12 - 25, 2016; Includes only books released after Jan 1, 2015; Information provided by amazon.in…

The first leg of the LLOYD Business Today Pro-Am of Champions teed off at the picturesque Panchkula Golf Club, Panchkula, on Saturday, September 24, 2016. Set along the banks of the river Ghaggar, the golf course is spread over 135 acres. The cool winds from the mountains added to the ambience of the course. The golf course has been designed as a championship 18 Hole Golf Course and provides enough challenges both to the pros and to the weekend golfer. Played on the Stableford format with Double Peoria handicap, the warm afternoon witnessed some great golfing action with players vying for both individual as well as team prizes. The winning team would don the mantle of ‘Chandigarh Cheetahs’. The winning team comprising Amit Singh Rathore (Aakansh Hospitality), Sandeep Sandhu (Team…

QUOTE “Right from the beginning we have kept a very precise focus on security” – Navin Kumar, Chairman, Goods and Services Tax Network, revealed that an eight-layered security wall has been built by Infosys to ensure data of 8 million taxpayers from across 29 states, UTs and the Central government, is protected. TAPER FADE The 20-member consortium of lenders to loss-making Essar Steel has decided to recast the 44,000-crore worth bad loans instead of taking a 50 per cent haircut by selling it to Asset Care and Reconstruction Enterprise. Private sector lenders HDFC Bank, ICICI Bank and Federal Bank have already sold their Essar Steel NPA exposure worth 2,200 crore. CENTRAL BANK TURNS DOVISH In his first interaction with senior economists, RBI Governor Urjit Patel downplayed the risk of inflation,…

Last year, when Vishal Sikka announced that Infosys would do away with its formal dress code, he made more than just his employees happy. Within 90 minutes of the announcement, Allen Solly, a Madura Fashion & Lifestyle brand known for its ‘Friday dressing’ range, got in touch with Infosys’s HR and offered a 25 per cent discount for all its employees. The prompt action got the lifestyle brand 350 store walk-ins with a meagre spend of 32,000. What brought on this quick thinking on Allen Solly's part? Social listening. Razorfish, the digital agency for Madura Fashion & Lifestyle brands, has a command centre comprising eight people that listens to conversations related to the company’s brands as well as the fashion category in general. Zafar Rais, CEO of MindShift Interactive, a…

REAPING BIG GAINS Promoters whose stake is valued at over 1,000 crore after the IPOs over the past one-and-a-half years You can’t blame them for wanting to start an airline. Vijay Sankeshwar and Anand Sankeshwar, promoters of VRL Logistics are, after all, among those who have made a fortune as a result of the success of IPOs of their companies. Last year, in April, VRL’s IPO had valued the promoter stake at 1,300 crore. On listing, the value of the stake had risen to 1,862 crore. A couple of months ago, they showed interest in starting a regional airline by diluting 2 per cent stake. The company’s shares plunged. They dropped the plan. As on September 29, their wealth stood at `1,905 crore. Every bull run leads to the emergence…

In October 2014, Sun Pharma engaged a professional agency to select the right people for overlapping positions that would arise after the Ranbaxy merger. The functional heads who were to directly report to Managing Director Dilip Shanghvi, and those one level below in hierarchy, had to undergo this exercise. Over the next two months, dozens of legacy Sun and Ranbaxy employees visited the Mumbai office of the global human resources consulting firm to undergo what was supposed to be an individual, unbiased assessment of their capabilities. The outcome had its share of controversies. Several Ranbaxy employees felt it was suited to fit Sun’s immediate requirements and priorities. While Ranbaxy employees were chosen for roles for which there was no replacement (Sun had no over-the-counter business and, hence, Ranbaxy’s consumer healthcare…

Through the two decades of fast and furious growth in both countries, much has been discussed and debated on the differences between India and China. From their own perspectives, both countries seem fully aware of their comparative strengths. In the past few years, I’ve had the opportunity to work in both, heading marketing/strategy, and I have found the complementarity of the two countries to be more interesting but less discussed. The typical off-the-cuff view of Indians who have not spent time in China has been that while the Chinese are effective at execution, creativity and entrepreneurship is only an Indian trait. Similarly, the common view on India by the Chinese is that while people are bright, there is limited ability to follow through on execution and real value takes too…

Some ideas, such as submarines, airplanes and satellites, have transformed the world. Others, such as cloning a dinosaur from their fossilised remains, have proved to be a distant dream. But at times, fantasies seep into reality. So, what if you were to live a thousand years like King Yayati from the Mahabharata? If nanotechnology scientist V.K. Tripathi is to be believed, it would soon be a reality – well, if not a thousand years, you can, at least, add a few quality years to your life. Resveratrol XAR is a wonder molecule that, according to Tripathi, can alter the genetic code and revitalise cells to ward off chronic age-related diseases. In fact, he claims to have succeeded in what big multinational pharmaceutical companies could not achieve after spending billions of…

WHEN FORD WAS LOOKING TO PROMOTE ITS NEW FIESTA it turned to Gurgaonbased Gamooz, which developed print ads with interactive digital content MUMBAI-BASED SPECTRA has developed cricketing and hand gliding experiences for brands such as Mercedes-Benz, Wonderla Amusement Park, etc. NOIDA-BASED SMARTVIZX developed an interactive walk-through for prospective clients of a large real estate player AHMEDABAD-BASED HASH MEDIA has developed a software for e-commerce players — a virtual mirror for trying out clothes SIMILARLY, MUMBAI-BASED SHOPSENSE offers online shopping but in real stores while Delhi-based Lenskart has developed a virtual trial room BANGALORE-BASED URBAN LADDER has an AR app that projects a furniture onto a real space…

GOOGLE GOGGLES: Pointing a mobile phone camera to an image, painting or a QR code can fetch more information, provided the information is stored in the database. It can also translate text into multiple languages BLIPPAR: Takes everyday products and transforms them into content-rich, consumer-centric interactive experiences. Pointing the camera within the app to an object yields relevant content POKEMON GO: It uses your phone’s GPS and clock settings to make different types of Pokémon appear all around you — parking lot, bus stops, signals. Your task is to aim your camera at them and capture as many as you can YELP: Available since 2009, it is a convenient way of discovering local businesses, and searching nearby shops, restaurants and services. While India is not on the list, it can…

THE ISSUE Leaders of start-ups often see strategy, the pursuit of a clearly defined path that is systematically identified in advance, as the enemy of entrepreneurship, which requires ventures to be opportunistic and quickly shift course as they learn what customers want. THE REALITY Entrepreneurs badly need strategies that articulate what their ventures will and will not do. Such boundaries are crucial for making the most of scarce resources, deciding which ideas to pursue, and evaluating experiments. But a rigid, fixed strategy is dangerous. THE SOLUTION The lean strategy process integrates the bottom-up approach of the lean start-up with the top-down orientation of strategic management. In an iterative fashion, the venture builds new capabilities and revises the original strategy in response to what it learns.…

The Bhishma Way By N. Balasubramanian PAGES: 292 PRICE: 499 Random House India Like many other books in this genre, The Bhishma Way proves that most of the situations we face in our lives, be it as businessmen, politicians or executives, have uncanny resemblances to the predicaments witnessed in the Mahabharata. Through Bhishma and his interactions with other characters, the author helps readers better understand the dilemmas of modern-day businesses and politics. Profit-making is considered a legitimate human objective and forms an integral part of four of the purushartha or goals – kama, moksha, artha and dharma. The author cites examples – such as the handling of the Union Carbide case or the Bhopal gas tragedy, as it is referred to in India; N. Srinivasan’s conflict of interest as the…

Persons of Interest Chetan Ghate, Ravindra Dholakia and Pami Dua have been appointed by the government as members of the new Monetary Policy Committee that will decide the interest rates. The committee has three other members from RBI, including Governor Urjit Patel. All the three government-nominated candidates are economists from the academic world. Ghate, who has worked with the RBI and is on the technical advisory committee that used to provide advice on interest rates to the governor, is an associate professor at the Indian Statistical Institute. Dholakia has been a faculty at IIM-A since 1985. Dholakia has also been part of various government and RBI committees including the panel that suggested the creation of a postal bank. Dua, a Director at the Delhi School of Economics since 2013, was…

That Indian urban consumers do little about securing their financial future is a well-established fact. For instance, a recent study by HDFC Life and Value Notes pegged The Indian Urban Consumer’s Financial Planning Index at 62.7 on a scale of 100, which is quite low. Just like any event — be it a family function or an office party — where leaving things unattended creates a mess, ignoring financial planning can have consequences for your future well-being and peace of mind. “What if you die tomorrow? What if you fall sick and have to spend a lot on your treatment? What if you lose your job? These things can happen to anybody,” says Vidya Bala, Head, Mutual Fund Research, FundsIndia.com. “Financial planning cushions you from these shocks and ensures that…

The aroma of a scented soap is a world away from the pungent smell of petrol and diesel. Yet, many analysts on Dalal Street are nowadays comparing oil marketing companies (OMCs) with fast moving consumer goods (FMCG) players. There are several reasons for this. FMCG companies are a favourite of stock markets due to pricing power, predictable margins, stable returns and regular dividends. OMCs, also called downstream oil companies, too, have been showing these traits of late. As the energy sector becomes more stable due to low crude oil prices globally and deregulation/reforms at home, the companies are now behaving more like stable and less like cyclical businesses. This, of course, does not mean that they do not have their peculiar risks. Government-owned OMCs — Indian Oil Corporation (IOC), Hindustan…

It is imperative to be sure that the plot one is investing in is free of all legal complications; that the seller has all the required deeds and documents in place The apartment culture has taken over the residential market in major cities of India, but people still cherish the desire to buy a plot of land and build their own home. If you intend to do so, you must gauge several aspects such as the cost of building, appreciation, financial assistance and income, carefully. Ajit Narasimhan, Category Head - Savings and Investments, BankBazaar.com, says, “Investing in real estate is almost always rewarding if you do it the right way. The key is to identify what you need out of your investment regular returns or higher appreciation over time –…