时间:2022-07-20 04:58:06

Was Friedrich Nietzsche right?

A trawl through corporate performances is not known to trigger philosophical ruminations, but that is what happens as you study companies that flirted with disaster and lived to tell the tale. Affirming Nietzsche’s theory, that which did not kill them made them stronger.

That is what happened to the country’s two biggest carmakers at the start of this century. There were losses, fall in market share, and doubt. Doubt in the minds of those outside as well as those who held the reins.

It took an insane amount of cost cutting, a brave bet on new vehicles, and audacious forays into new areas that saved the two companies. And look where they are: still two of the country’s biggest car makers.

But these are well-documented stories. As are the turnaround tales of ICICI Bank, which was on the mat after Lehman Brothers collapsed, Essar Steel, which has not looked back since lenders agreed to restructure its debt, and Wipro, which has bounced back enough to prompt a cover story in BT in February.

What we do in the 19 pages that follow is look at stories which are not yet part of folklore. What’s more, the narrators of these stories are people who steered the turnarounds (now you know what that headline is doing on the cover).

At a time like this, when good news is scarce, we do hope that their tribe will grow. Maybe some day we will ask S.D. Shibulal to tell us how he revived Infosys’s fortunes. And it may look improbable now but, who knows, one day a Mallya could be talking about how Kingfisher Airlines flew again.

For, as Nietzsche said, “When you look into an abyss, the abyss also looks into you.”



Ours is a war-time industry. We live by fighting for market share every morning. The battleground changed radically in early 2000 with the entry of many new Asian players, but we did not respond to the new war conditions swiftly enough. These were competitors we were unfamiliar with both here and globally.

I joined this company in early 2005 and realised that morale was low due to the losses being incurred. It is not uncommon in such situations to find people intent on doing good running at cross-purposes. That leads to counter productive situations – not unlike what is happening in our economy.

I realised that morale was the first thing that needed to be addressed. Get everyone on the same page and boost morale to create a winning team. My team needed to know that it was not wrong in its thinking, but the company had to pull together towards a common goal.

I had to weed out irrelevant distraction such as how many categories our competitors were operating in. I had to focus on our strengths: our people, who were excellent, and our ability to focus on product innovation. We needed to operate almost like specialists, to offer a wide choice to consumers.

We continue to remain focused on home appliances and are a leading player in refrigerators, washing machines, microwaves and air conditioners. We have entered the water solutions market and also offer high-end kitchen solutions. Our target consumer is the woman. She is an evolved shopper and we realise that money is made in the finer details of innovation.

The company, as everyone knows, has turned around and has the best profitability margins in the industry. I believe that you take only one degree turns in war situations as you need to minimise your exposure and risk. Larger turns can happen during peace-time operations.




In the mid-1990s, with a capacity of just 2.6 million tonnes, India Cements risked becoming an also-ran. That set us thinking and we decided to become a large regional player in the South. Between 1997 and 1998 we acquired Visaka Cements and Cement Corporation of India’s Yerraguntla unit (both in Andhra Pradesh) through competitive bidding. In June 1998 we took over Raasi Cements (also in AP) through a hostile acquisition. Simultaneously, we also set up a new plant at Dalavoi, Tamil Nadu. In less than two years, our capacity had catapulted to nine million tonnes. The acquisitions cost us `1,600 crore and were predominantly funded by debt.

What we did not anticipate was the rush by other cement companies in the region to set up capacities when the government withdrew all sales tax-related incentives. Without these incentives no cement plant was viable at the cement prices prevailing then. Capacity as much as 40 per cent of demand was added. Naturally, this sent prices crashing. At one point a truckload of sand cost more than a truckload of cement in parts of AP. We began to incur losses and our ability to service the`1,750 crore debt in our books suffered.

We defaulted and lenders began harassing us. Such was the condition that we had to curtail production due to lack of working capital. We sold Vishnu Cements, which we acquired along with Raasi Cements, hoping it would ease pressure. But that was not enough. We realised we were in a hole and opted for a corporate debt restructuring(CDR) scheme, which came into effect from January 2003. The CDR bought us time to focus on operations. We shed manpower(about 1,000 employees), cut production costs, sold our ships and some land.

Extraordinary situations demand extraordinary measures. So, in September 2005, we made an audacious move, coming out with a Global Depository Receipts issue while still in the CDR scheme. Many warned us that it was an unwise thing to do. Investors would not even look at a company that had defaulted on its debt obligations, they warned. But we went ahead and raised `477 crore, which was used to pay off some debt. That was the turning point. Soon cement prices began to improve and this accelerated our revival. In the following years, we raised more funds from the market to fund our growth plans. Today our capacity stands at 15.5 million tonnes and we have expanded to North India as well.

The crisis that set us back by a few years taught me one thing – never expand in a fractured market using debt. When you have no control over prices, your ability to service debt will be impaired.




Thestart of the new millennium, the year 2000, brought new challenges for Dabur. Industry overall witnessed a downturn, with demand hitting a new low, but the fast-moving consumer goods(FMCG) industry was somewhat insulated from the crisis and reported good growth. For Dabur, however, those were trying times.

A decade into liberalisation, the FMCG industry saw competition intensify, with deep-pocketed multinational companies (MNCS) trying every trick in the book to capture market share. The demand for consumer products was rising. But Dabur – despite strong brand recall and trust – was having trouble cashing in. That is when we decided to go for a course correction and implement measures that not only changed how people saw Dabur, but also put the company firmly on the growth track.

A thorough check of our business was undertaken, and the core group decided on a multipronged growth strategy. As the first step, we decided to outsource non-core businesses like IT, and to concentrate on making quality consumer products. Simultaneously, we decided to refurbish our product portfolio and enter several emerging and sunrise categories such as skin care, packaged fruit juice and toothpaste.

The packaging of our entire portfolio was refurbished to put it in sync with the needs and aspirations of the 21st century consumer. In addition, we drew up a rapid expansion plan which also included taking the inorganic route to grow business. We recognised – much ahead of the competition – that rural India would become a key growth driver. A blueprint was chalked out to target this consumer class and widen our distribution footprint in the hinterland, a move that is paying dividends even today.

While launching new products and upgrading packaging to remain contemporary, I felt it was also time to expand our horizons and took on the MNCS on their home turf and in overseas markets. This was a big game-changer for Dabur. Before 2000, Dabur’s overseas business was limited to exporting a limited number of products for the Indian diaspora in select markets. We felt there was a larger market beyond the diaspora. If we had to reach those consumers, we would have to be based close to their homes. The small overseas business we had established earlier had given us a good understanding of the consumers in these markets. So we set out to create products specifically for them.

As a first step, we decided to establish a manufacturing facility abroad, rather than ship products from India, as that would make us more nimble in addressing the changing needs of consumers, and provide us a leaner and quicker supply chain. This decision paid off –our products soon became favourites with Arab consumers, and our international business became a strong growth engine for the company, helping it tide over the recession, when it hit the domestic market.

After targeting the West Asian market, we expanded our overseas business further by venturing into sub-Saharan Africa and nearby markets like Turkey. Today, our overseas business accounts for nearly 30 per cent of consolidated turnover. Another measure of our international success is that our premium skin and hair care brand, Vatika, is probably the only Indian FMCG brand to report equal turnover from both Indian and overseas sales. Today, Dabur is viewed by consumers and investors as a true Indian multinational.

The author is CEO, Dabur India



In the late 1990s, Thermax had got used to what the late Sumantra Ghoshal called “satisfactory underperformance”. In turning it around, the most difficult and yet the most important move was to change the mindset and the culture of the company. We had to move away from our comfort zone, stop blaming external circumstances for poor performance, and assume full responsibility.

The immediate trigger for the change was an anonymous letter I received from a shareholder blaming me for my inaction. I had thought that poor performance mainly affected me and my family, the majority shareholders. Suddenly, I realised that as a public limited company we had to protect the interests of the 40-odd per cent shareholders who had placed their faith in Thermax.

I was convinced that our management was out of its depth and needed outside help. My senior executives resisted the idea. Most men find it difficult to seek help because I think it comes in the way of their ‘macho image’. The board decided to hire a consulting company.

Our turnaround focused on divesting non-core businesses. We restructured into six core businesses in the areas of energy and environment. By downsizing and improving our operational efficiency, we were able to bring down our employee cost from 16 per cent of turnover to less than 7.5 per cent, on a larger sales base. We also brought in a performance culture.

We reconstituted our board to bring in more independent directors. The promoter members stepped down from executive positions, and operational aspects were left to a nonfamily professional team led by the managing director.

After achieving a financial turnaround, we set an ambitious growth target. This programme – since then achieved by my successor and team– was based on operational excellence, a streamlined organisational structure, and rekindling innovation in a disciplined and systematic manner.



Ours is a company with a rich heritage of more than 150 years of engineering transformation in India. Greaves has demonstrated perseverance, resilience and the ability to respond to a crisis. One such situation was at the turn of this century, when the business was not in the best of shape. More than half its peak net worth during the four preceding years had been eroded. Interest outgo stood at an all-time high. High production and manpower costs had reduced competitiveness. The company had symptoms of potential sickness. Greaves incurred a loss of `92.61 crore in the financial year 2000/01, which was extended for 18 months.

To overcome the situation, the management decided on a two-pronged restructuring exercise, in terms of business and finance. The business restructuring exercise, which ran through the critical period of 2000 to 2004, had a two-fold objective. The first was to focus on core businesses and exit from non-core ventures (such as the tie-up with SAME Group for tractors and engines), and suspend lossmaking units such as Rajasthan Polymers & Resins Ltd and eventually sell them off. The company also sought to liquidate overseas subsidiaries, rationalise them and divest its stake in companies such as Piaggio Vehicles Pvt Ltd. The second part of the objective was to reduce operating expenses.

Financial restructuring was undertaken during the same period. It resulted in enhanced cash flow and a stronger balance sheet. This included monetising a major portion of its shareholding in Crompton Greaves, the sale of surplus real estate, commercial property and non-core investments, and most importantly switching from the strategy of stock push to demand pull. All this reduced receivables by 44 per cent.

In other words, Greaves strengthened profitability through strategic initiatives that were carried out across the organisation. The focus was on engines and applications, and the infrastructure segment where our expertise lay.

Migration from manual systems to automation led to increased efficiency at lower cost. It also enabled us to adopt modern manufacturing practices such as Lean, Total Quality Management and Total Productive Maintenance, which increased productivity. We invested in R&D to meet stringent emission norms, and explored development of futuristic products.

The results of this major exercise were seen in the next few years. In 2003/04, the operating profit or EBIDTA was `87.47 crore and profit after tax was `21.73 crore. The interest outgo declined 17.53 per cent, compared to 2002/03.

This transformation was not confined merely to numbers. The way we did business changed. The exercise addressed myriad challenges such as cost reduction, increasing efficiency and improving margins, but all of this could be simplified into one single word: focus. Today Crompton Greaves has transformed itself into a leading`1,800 crore, multi-product engineering company. This is largely due to our increased focus.

Greaves has embarked on a journey of profitability and sustained growth. It is eyeing product portfolio expansion and new customer acquisition. The lessons learnt helped it withstand the economic crisis of 2008.

The author is MD & CEO, Greaves Cotton



The slowdown in demand in India came out of the trillion-dollar meltdown in the US and Europe. It gathered momentum over two quarters, with the health scare in Mumbai and Pune, the stock market crash, the Telangana protests in Hyderabad, and then 26/11 in Mumbai. All these shocks came one after the other. IT, exports and banking were hit the worst. Our like-for-like sales growth turned negative in the second half of financial year 2009, and continued to remain so till April-June in financial year 2010.

It was a great test of the industry and its fundamentals. Retail thrives in a growing economy, when incomes are on the rise and consumers have great hopes about the future. When consumer sentiment turns negative due to job losses or a drop in income, spending is either skipped or postponed. When spending is postponed, retail is impacted, especially the clothing and accessory categories. This directly results in a drop in like-for-like sales, impacting profitability and growth. The retail sector saw the death of several players in this period, and a number of others had to re-strategise their formats and balance sheets.

It was a great time for learning. Our board challenged us to create a recessionproof model that could face slowdowns. One of our chief learnings from the slowdown was to never compromise on customer experience. Customers should continue to get your best service and merchandise. Only then will they continue to shop with you. Quite unlike what most companies do in such times, we repositioned our brand and launched a new logo.

When a slowdowns hits, everyone is affected. You require the support of everyone in the ecosystem, whether you are running at a profit or a loss. Everyone understands that running a business is like running a marathon and not a 100 metre sprint. So, during the 2008 slowdown, senior associates accepted salary cuts, others waived increments and suppliers chipped in with extra credit.

We also learnt that it is essential to evaluate businesses. Businesses/formats/stores that are never going to be profitable need to be closed. Postponing this can only cause more harm. In some cases the customer may not be ready, or your scale may not support profitability. So, closing the business without any emotional baggage is a prudent decision to sustain the overall business. We closed down Arcelia and Brio, two new formats, at that time. We right-sized a few stores, including our department stores in Bandra (Mumbai) and MGF Saket (Delhi). And our manpower costs were trimmed by around 12 per cent.

Even finance ministers can’t predict what will happen to the economy. So, get full control on controllables, as uncontrollables are not in your hand. Every business has certain fixed variable costs. Some of the costs and factors impacting business are never going to be in the control of a company. For example, economic growth, oil prices or stock indices are not in the control of any single company. There is no point in sweating when these factors become negative. Identifying the controllable costs, such as energy and employees, and gaining full control over them helps the business focus its energies on the right metrics. We were able to cut power consumption costs by more than 25 per cent over a 15-month period.

Another important thing during the slowdown is to communicate. When the sky starts falling, everybody notices it. But if one communicates steps that are being taken and the rationale behind them to everyone, fear gets converted into target-oriented objectives. We communicated issues very clearly across the organisation and had all our stakeholders rallying behind us completely.

The author is MD, Shoppers Stop



The apology, a half-page advertisement by Jain Irrigation Systems in The Economic Times, on November 26, 1997, began thus: “I’m sad that for the first time since our inception, we’ve fared badly. We ventured into ‘unknown’ areas like finance, IT and granite at the cost of our core business… We have lost money but more importantly, we’ve lost some of our reputation. I feel it’s my duty to account for, to own up, to admit my misjudgements, to apologise.’ Not many in the management team agreed with my decision to apologise but nevertheless I went ahead to cleanse my conscience.

The 1990s offered new-found opportunities, and being a dream merchant, I could not resist the temptation of taking advantage of them to become a large conglomerate. Between 1992 and 1994 we acquired an IT company, took a granite quarry on lease, ventured into merchant banking and even bought an advertising agency. These diversifications happened along with forward/backward integration projects for our existing operations. By March 1997, we were trying to manage 11 different projects involving an investment of `400 crore – almost equal to the company’s size then. About `250 crore was raised by way of debt.

All the diversifications were conceived on instinct and in the euphoria that surrounded the economy then. But the organisation lacked management bandwidth. The investments turned bad, leading to diversion of working capital, which hurt our core businesses. We posted losses. The share prices, which had touched `365 (on a face value of `10) in February 1994, crashed to a low `8 in October 2000. Lenders hauled us to court and a few even sought our liquidation. We were struggling to breathe.

In early 2001, Aqua International Partners, a water-specific boutique fund, offered to invest in the company. There was a catch: we had to give the fund a controlling stake. We grappled with the unenviable question: who should survive, the promoter or the company? We decided to cede control, and in August 2002, the fund invested `183 crore and took a 49.4 per cent stake in the company. The promoters’ stake dropped from 73 per cent to less than 37 per cent and two family members had to vacate the Board.

We used the money to retire debt and bolster our working capital needs. We exited non-core businesses. By 2005, the company had revived and its share price was at `160. The fund chose to exit. Today we are a `3,800 crore company, the largest globally in mango processing and tissue culture, and second largest in drip irrigation. The share price is hovering around `80 (on a face value of `2 per share).

Diversifying into unknown areas without required management bandwidth and eyeing disproportionate growth using debt is not sustainable. That was the lesson of a lifetime for me.




The transformation of CESC, responsible for Kolkata’s power supply, into one of India’s best-run power utilities, is a remarkable story of a company reinventing itself. By 1989, when the Goenka association with CESC began, Calcutta, as it was known then, had earned the dubious distinction of being India’s “load shedding city”. Domestic and industrial consumers lived without power for 10 hours a day, and the problem was aggravated by power theft. There had been no worthwhile addition to CESC’s generating capacity, a large part of which was half a century old. The lacklustre balance sheet provided no joy to investors. And the state government refused to revise tariffs or delayed revisions. Meanwhile, fuel and operational costs continued to rise.

Over the years, the state government passed the increasing cost burden to CESC’s industrial consumers, which meant an alarming rise in cross-subsidies. The government had different and conflicting interests. Its electricity board supplied CESC, competed with it, and also played the role of the tariff regulator. This led to disallowance of CESC’s legitimate tariff claims, almost forcing its business to become non-viable.

CESC had no other option but to take legal recourse. This route was time consuming and the company also had to face government-appointed committees to examine issues relating to fuel surcharge. By 1999, the West Bengal Electricity Regulatory Commission was constituted. It had judicial powers to determine tariffs. But even after the notification of the commission, there was no tariff revision for two years. Costs remained unrecovered and for the first time in its history, CESC went into the red – the company’s net worth was wiped out.

In a landmark judgment in October 2002, the Supreme Court upheld the claims made by CESC. With this, the utility eventually came back from the brink. In the meantime, the company set up a 500 MW (two units of 250 MW each) generating plant at Budge Budge. A third unit was added in 2010.

Today, Budge Budge is one of India’s most efficient thermal power plants. The overall combined availability of CESC’s power plants was about 95 per cent in 2011/12 and the three generating stations are among the top 10 in the country. Transmission and distribution losses are now among the lowest. By the end of 2011/12, there was no load shedding in Kolkata for want of supply despite the substantial rise in peak demand.

CESC, which had a debt equity ratio of 5.4:1 a decade ago, has improved its position remarkably and the ratio now stands at 0.6. The company added 100,000 new customers last year and the average time taken to provide new connections has come down to 18 days from 28. It is now ready to add generating capacity, invest in improving distribution efficiency and increase the overall quality of its services.

The author is Chairman, RP-SG Group, & Vice Chairman, CESC



Star launched in India in 1992. The STAR Plus that you see today was born out of the changing media landscape in India. In the early years, STAR was unable to provide any localised programming because of an agreement with Subhash Chandra’s Zee TV. The agreement was a big roadblock as it prevented STAR Plus from becoming a Hindi channel. [Both channels were beamed into India through the AsiaSat transponder, owned by Chandra’s Asia Today, in which STAR had a stake. Their contract stated that STAR would concentrate on providing only English content.] We tried dubbed Hindi programming but realised it was not the solution. Around 1996, the relationship between STAR and Zee soured, and in 1999 the ties between the two companies ended completely (Chandra bought out STAR’s stake in AsiaSat). This marked the advent of STAR Plus as a 24-hour Hindi channel.

The management initially chose to go down a certain path, acquiring Doordarshan’s library of programmes and having reruns on STAR Plus. But the audiences were so different that the programmes did not gel with the channel, though they did lift STAR Plus’s performance slightly.

When I took over as the CEO around 2000, we realised that we needed to change the rules of the game. We needed to be up there with Zee. We were driven by the belief that if Zee could do it, we could too. We only needed to think it through, make the right investments and get the right programming.

Whilst in this process, we came across Who Wants to be a Millionaire, which was a big hit across Europe. However, we could not run it as an English show as we were now a 24-hour Hindi channel. But, the same show in Hindi? To be honest we were not sure if it would work until we put it on air as Kaun Banega Crorepati (KBC), with Amitabh Bachchan as the host. The show was received well and delivered good results. It was a combination of good programming, a big Bollywood star, right scheduling and good telecast timing. To achieve all this we had to take a major decision: to pull out our cash cow, the 9 p.m. English news produced by NDTV, and replacing it with KBC. It was a big gamble and it paid off well.

The key lesson we learnt was that viewers, not programmers, had to be central to the programming strategy. Another lesson was that we had to provide content to viewers in Hindi and other regional languages – being only an English language broadcaster was not good enough. The same learning was used when launching STAR News, after the split with NDTV. We pulled out a successful news show and replaced it with something untested before on Indian television. The strategy worked.

We challenged orthodoxy, took big risks, made shows like KBC with a big host, big prize money and great production values along with few other soaps. And we attracted viewers.




T wo hundred and forty million metres of cotton fabric, eight million pieces of garments, 10 international apparel brands, and Megamart, the value retail chain. All these are Arvind Ltd today. Arvind’s financial performance over the last four years is the tale of a transformation. Since 2008, revenue has grown at a compound annual growth rate (CAGR) of 17 per cent to `4,925 crore (in fiscal year 2012), earnings before interest, taxes, depreciation and amortisation (EBITDA) has grown at a CAGR of 15 per cent to `602 crore.

This transformation is the result of a strategic roadmap we prepared four years ago. It visualised a fourpronged strategy: create a portfolio of diversified businesses, develop a strong business to consumer business model (B2C), expand the share of domestic revenue in the total pie, and achieve growth without using incremental debt.

In 1997, Arvind undertook a major expansion plan. We were setting up a `1,000 crore complex in Gujarat. We borrowed money against the project but it took time to be commissioned and become profitable. There were overruns due to depreciation of the rupee, denim entering a downward cycle and flooding in the area where the complex was being built. This led to an accumulated loss of over `500 crore. To turn Arvind profitable again, the debt of `2,700 crore was restructured. The key learning from this experience was to not leverage the balance sheet. If things no one can plan for happen suddenly, there will be financial problems.

What also contributed to Arvind’s return to profitability was that denim had started to come out of its downward cycle. Denim has been the largest business for us for years. It is a lucrative business, but cyclical in nature. As a part of the de-risking strategy, we decided to grow non-denim businesses. We restructured our shirting fabric, khaki fabric and knits business.

Although textile earns higher margins, it is also a capital intensive business. The brands and retail business offers high growth, but relatively low margins. It also requires lower capital. We decided in future, the brands and retail business would be a major growth driver. Here we again adopted a four-pronged strategy: launch new brands to fill market segment opportunities, expand distribution reach, extend successful brands to newer categories and rapidly roll out the Megamart hub-and-spoke model. Thus, the brands and retail business has been growing at a CAGR of 25 per cent since 2008. We also have a strong portfolio of international brands, including Arrow, US Polo, Izod, GANTT, Tommy Hilfiger, and Elle.

We also created a B2C vertical, Arvind Stores, to retail fabrics in India. Today, the share of B2C sales is almost 40 per cent against less than 20 per cent four years ago. Monetisation of surplus land helped in reducing our financial leverage. So far, we have realised cash flows of `255 crore.

Today, Arvind is well poised to seize the huge opportunities before the Indian textile industry.

The author is Chairman and Managing Director, Arvind Ltd



The financial year 2008/09 was marked by the advent of a worldwide economic recession in tandem with a liquidity and credit crisis. This spilled into 2009/10 and slowed the growth momentum.

The crisis affected Aditya Birla Nuvo’s (ABNL) profitability. We had invested over `800 crore to fund growth in the life insurance business and for the acquisition of the retail broking outfit. Expansion of stores in the Fashion and Lifestyle business also impaired profitability. Our exportoriented IT-ITeS and apparel contract manufacturing businesses were hit.

Subsequently, we reported a consolidated net loss of `436 crore in 2008/09 against a profit of `151 crore the previous year. Investments and working capital requirements strained ABNL’s standalone balance sheet, with net debt-EBITDA reaching 5.8, and gross debt touching `4,500 crore. Cash conservation was a big challenge.

To tackle the situation, we took a number of proactive costrationalisation initiatives across our businesses. Cash generation by manufacturing businesses and capital infusion of `1,000 crore by our promoters helped de-leverage the balance sheet and reduce the interest burden. These measures also ensured availability of growth capital, enabling our businesses to outperform the industry even in an extremely challenging environment.

Garments subsidiaries were merged into the company for optimisation of costs and resources and to derive synergies. Innovative structuring of debt instruments helped pare the interest outgo in our subsidiaries.

The results are evident. Today, all of our businesses are profitable and growing. Led by strong growth in renewal premium, Birla Sun Life Insurance has turned profitable. Once a capital guzzler, the financial services business has become the largest contributor to ABNL’s profitability. Today, Aditya Birla Financial Services is the fifth-largest fund manager in India, excluding banks and LIC.

The Fashion and Lifestyle and IT-ITeS businesses have turned profitable. Our manufacturing businesses continue to yield strong cash flows. Aditya Birla Minacs, the IT-ITeS arm, crossed the `2,000 crore revenue mark in 2011/12. And despite the regulatory challenges surrounding the sector, our telecom business – Idea Cellular– has been the biggest revenue share gainer in the past two years.

All our businesses are today well placed and contributing to growth. Today, ABNL is generating 50 per cent more revenue than in 2008/09. EBITDA has grown almost four times. Net profit has risen multifold. Standalone net-debt/ equity at 0.66 and net debt/EBITDA, at 3.6, are quite reasonable considering that 60 per cent of capital employed is deployed in longterm investments.

Our Chairman, Kumar Mangalam Birla, has summed up our survival instincts well: “Over the years, we have through determined and deliberate effort come to be in this position of being the ‘Last Man Standing’, almost across each of our businesses. And when we do face a downturn today, from our position of strength, the message I want to convey is that, the last man standing has the best chance at being the first man forward.”

Rakesh Jain is MD and Sushil Agarwal is Whole-time Director & CFO, Aditya Birla Nuvo



The print media is the only industry where the more you sell, the more you lose. One just has to look at its genesis in India to understand why. The industry evolved with the objective of disseminating the voice of the people during the freedom struggle. With this goal, rather than profit making, newspapers were priced at affordable levels. Jagran Prakashan Ltd, which was founded in 1942 during the Quit India Movement, was not an exception. However, the cover prices of newspapers continue to remain much lower than their cost, and even today, the more you sell, the more you lose.

Until 2005, we had been expanding the reach of Dainik Jagran across Northern and Central India and losses were inevitable. In 2005/06, we went public. This gave us some funds and allowed us to consolidate our position. Investing early in the business gave us a leading market position, which allowed us to command a good flow of advertising revenue. The time had come to reap the benefit of the investment and hard work done over 60 years.

However, the journey since has not been a cakewalk. With the increasing importance of Tier-II and Tier-III towns, competition has intensified and we face the twin threats of losing market share and talent. The global meltdown of 2008/09 and 2011/12 has compounded the industry’s woes. During this difficult phase, Jagran Prakashan has stuck to the basics, focusing on providing consumer differentiation in terms of content, offerings and innovation. At the same time we have controlled costs, motivated the team to deliver against the odds, and looked after the interests of consumers and other stakeholders. So far, this has yielded results. And I firmly believe that it will be the key to success in future.

The author is Chairman & Managing Director, Jagran Prakashan



In 2005/06, Idea Cellular was a regional sector reeling under pressure from a series of policy flip flops, Idea has performed consistently and set high standards of compliance and reporting.

In 2007, some companies mistakenly thought that the competitive barrier in the telecom sector was a piece of paper, a licence. In this sector you have to contend with India’s finest and the world’s most ferocious competitors in trying conditions. Every management discipline is stress tested day in and day out.

The last four years have seen us make a sustained effort to build capacity, expanding our base station count from 4,000 to 100,000 and laying 65,000 kilometres of fibre optic cable. We also started the Internet service business. In 2011, Idea acquired 3G licences for 11 circles for `5,800 crore. We have also built a massive contact centre that seats 25,000 call centre executives. We have service centres in 4,000 towns. We now contribute in excess of $1 billion to our group EBITDA, accounting for 18 per cent of the total.

Since 2005/06, we have grown six times to over `19,500 crore (2011/12) and are now a national player. In financial year 2012, Idea, now the third largest mobile operator in India, retained its position as the fastest growing for the fourth year running. We recorded 26 per cent year-on-year growth in revenue – twice the industry rate. Despite operating in extremely competitive market conditions, our revenue market share (RMS) grew 1.4 per cent year on year, consolidating Idea’s position and giving it 15 per cent RMS in a 14-player market – third highest after Bharti and Vodafone.

We have consistently stayed at the top in terms of quality of subscribers and recently entered the select club of global operators with over 100 million customers. Our ratio of active subscribers to reported subscribers is over 93 per cent, the highest, and way above the industry average of 74 per cent.

From 30,000 villages our presence has expanded to 300,000 towns and villages, through 1.5 million retailers. We made an initial public offering in 2007, which helped mobilise finances. Today, we are among the top 35 listed Indian companies. Globally, Idea is ranked among the top 10 country operators in the world, with traffic in excess of 1.4 billion minutes a day.

From finance mobilisation, nationwide network rollouts and building the country’s most extensive distribution network, to setting up responsive contact and service centres or evolved information technology processes, Idea is a transformed company.

With three million shareholders, 116 million customers, and 7,661 employees, we are confident that the company will not only tide over the current regulatory headwinds, but consolidate its position further and emerge stronger.

The author is Managing Director, Idea Cellular



We live in a world of rapid change, whether it is consumers or the environment in which we operate. In addition, companies are also facing unprecedented volatility. To succeed, businesses have to recognise that both change and volatility are the new normal, and find ways to address it.

Volatility affected us in 2008, when crude oil prices swung from a high of $140 a barrel to a low of $40. This had massive implications on pricing. In order to ensure our brands remained competitive every time and everywhere, we needed to respond with speed and agility. That meant shorter planning cycles, investment in processes and technology, and initiatives like Sunset, which promote a bias for action. Through Sunset, any unresolved actions are automatically escalated to the management at the highest levels and resolved quickly. People within the organisation feel good when they see their feedback being acted upon promptly. This is not only energising and empowering but also makes us more competitive.

The rapidly changing times put an even higher premium on an organisation’s ability to embed consumer and customer centricity in everything that it does. Towards this end, we have encouraged all our employees to spend time engaging with consumers and customers to understand their needs and address their complaints. It is this single-minded focus on the consumer that has helped our brands deliver better consumer value.

The success of an organisation is dependent on its ability to execute flawlessly. Over the last few years we have dramatically improved our ‘go to market’execution both through discontinuous expansion in our reach and by leveraging technology to improve its quality. Simultaneously, we have been ruthless on costs. We are constantly asking ourselves how we can strip out every rupee that the consumer is not willing to pay for. It is this approach to cost that has generated the “fuel” for growth and enabled us to invest in product quality and superior benefits, thereby increasing the competitiveness of our brands. These are the sorts of actions that have helped us manage challenges and emerge stronger.

The author is CEO & Managing Director, HUL

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