Thursday, December 27, 2012
8 Indians among world's best performing CEOs
IANS - WASHINGTON 26th December 2012 11:31 AM
Eight Indian CEOs have made it to Harvard Business Review's (HBR) list of 100 best performing global chief executives headed for the last 17 years by the late Steve Jobs of Apple.
ITC chairman Y C Deveshwar, ranked seventh overall (Rank 7), was first among the Indian CEOs. Under his leadership, ITC saw its value increase by $45 billion.
He was followed by former ONGC's late chairman and managing director Subir Raha (Rank 13). During Raha's May 2001-2006 tenure, ONGC's market capitalisation increased more than 10 times.
Reliance Industries chairman Mukesh Ambani (Rank 28), was ranked third among Indians. Under his leadership, Reliance Industries has grown to become India's second-largest Indian company by turnover.
Larsen & Toubro chairman and managing Director A M Naik (Rank 32), came next. Under Naik's leadership, the company has expanded its horizons beyond domestic frontiers, positioning itself to become a true international player.
Former Bharat Heavy Electricals CMD A K Puri (Rank 38) is ranked fifth among the Indians. He is followed by Bharti Airtel chairman, Sunil Bharti Mittal (Rank 65).
Jindal Steel & Power CEO Naveen Jindal (Rank 87) is ranked seventh among Indians. He is followed by Former SAIL chairman, V S Jain (Rank 89).
On an average, these CEOs have delivered a total shareholder return of 1,385 per cent during their tenures and increased their firms' market value by $40.2 billion (adjusted for inflation, dividends, share repurchases, and share issues).
Jobs of Apple, who has been the best-performing CEO over the past 17 years was number 1 on HBR 2010 list as well. From 1997 to 2011, Apple's market value increased by $359 billion, and its shareholder return experienced average compound annual growth of 35 percent.
Jeff Bezos of Amazon.com has now climbed to the number 2 spot, up from number 7 in HBR 2010 list. Under his leadership, the company delivered industry-adjusted shareholder returns of 12,266 percent and saw its value increase by $111 billion.
The highest-ranked woman on the list is Meg Whitman, currently the CEO of beleaguered HP, whose performance as the CEO of eBay from 1998 to 2008 earned her the number 9 spot.
My Sachin Tendulkar Story
Chetan Narula Dec 27, 2012 at 07:56am IST
Studying engineering and business administration couldn't satiate his mind and in 2007, Chetan Narula found his calling as a sportswriter/journalist. Since then he was written on cricket, F1 and football at various avenues not only in India but also in USA and UK. He also worked as cricket commentator (voice) at ESPN for their mobile and web platforms, doing over a hundred matches. High points of his career include witnessing history at Wankhede Stadium (Mumbai) when India lifted the ODI World Cup and his first book, Skipper: A Definitive Account of India's Greatest Captains, which hits bookstores in July 2011. His Twitter feed is here.
The year was 1992. A young boy and his even younger brother were playing in their room while parents left for office. The maid, a cricket fanatic, promptly switched on the television. India were playing Pakistan in an ODI World Cup. Hearing her cheers, the boy peeped across and saw an infantile batsman at work. The seven-year-old never went back to play with his brother, spending the day watching his first ever cricket match.
That World Cup inspired a scrapbook collection. It was a fad among his schoolmates. How could he not have one? And a cricket bat with the 'Power' logo - that was a must-buy. But this was just the beginning of a fascination. On this particular November night, that batsman showed he could bowl as well. The kid was at a wedding function for his parents had forced him along. They couldn't stop him from standing at the local kirana store from across the hall, from watching that last over. Love seldom happens at age nine. Even so he wasn't the only one afflicted. The whole country went bonkers, he realised much later. The year was 1993.
His father was strict. 'No cable TV until you are in eleventh standard', he decreed. The boy couldn't do anything, but follow commentary on All India Radio and read in newspapers. The few matches on Doordarshan were a boon, for he could watch him bat in all the possible glory. He had started opening now, was all the kid understood. Then, the year was 1996. Cricket came to town, in all its pomp and splendour, and no parent could enforce boundaries anymore.
Kenya and Zimbabwe were shown their place. Australia were smacked, Sri Lanka too. But these two teams couldn't be beaten, especially the latter, especially that night in Kolkata. The batsman was still quite young in comparison to his peers. Yet he carried the hopes of a billion people, the kid was told by his cricket-mad uncle. Why alone? He couldn't answer that question, no one could.
The year was 1998. Australia were a glutton for punishment and Doordarshan started a new channel to showcase their misery, DD Sports. They were thumped in every nook and corner of the country. Their next beating happened in Sharjah. His schoolmates yelled out before morning prayers. 'They are calling it the Desert Storm', said one, imitating his shots, trying to. 'He said Australia could lose in the final, that too on his birthday', said another, also trying to imitate his shots. The teenager, meanwhile, cursed his ill-luck. He pestered his parents to take him to grandma's place, for he could watch the final on cable TV there. Then, on the way, he prayed for an encore. Lightning did strike twice.
Another World Cup came around and an India Today Special was bought. In it, a senior journalist named Peter Roebuck explained that particular batsman's greatest shot yet. A straight elevated drive down the ground for six - a first lesson in cricket nuance. There were other things to bother about though. His father passed away and he didn't play against Zimbabwe, who won. He returned to play against Kenya, and conjured up a century batting at number four. The gaze at the sky was long and hard, it pierced hearts, old and young.
Even so the teenager, who played gully cricket only with an MRF-stickered bat, thought he needs to open the batting against Australia in the Super Six stage. His father predicted a cheap dismissal and a loss for India. It came true - a four-ball duck to Glenn McGrath. Oh well! The remote was flung in anger and it broke. The TV escaped the impact. The boy didn't escape his father's thumping. The year was 1999.
Diwali that year was sweet though. The TV was in his parents' room and they locked it to make the brothers study whilst they were away, or atleast hoped to. That particular day, India were playing New Zealand in an ODI in Hyderabad. As his mother got ready, an innocent crime was committed. The younger one was asked to keep watch, while he stole the duplicate keys. They were caught in the evening, though it was worth it. He made 186 that day, not out!
The years passed. Boards, entrance exams and college life came up. Never mind that it was miles away from home, travelling from college to home on weekends to watch cricket was the norm. There was a cable connection at home, none at college. Another World Cup meant attendance went for a toss. The reward was wholesome. He played the greatest ODI innings ever. He hit the greatest six, and, the greatest cover drive punch and follow-through ever in the history of limited-overs cricket. Pakistan lost, again. Stockpiles of firecrackers vanished in seconds that night. Then, in his last teen year, he ran like a kid possessed, from door to door, asking if anyone had any more crackers stashed up. The year was 2003.
Life brought up more routine, college, exams, family drama, MBA. In a parallel world, routine brought runs, statistics and records, almost all of them. It also brought debate. He is selfish, not a match-winner. There were arguments, with his uncle over dinner, with friends in the canteen and with strangers on internet forums. An engineer, he learned everything about tennis elbow. A glorious hundred in Rawalpindi went waste. That glorious catch at the boundary in Lahore did not. A World Cup dream was shattered. Tears were shed, both in an obscure hostel in Pune and the dressing room in Port-of-Spain. The year was 2007.
Work beckoned. It meant a new life as an adult. It also meant a mature batsman stepped to resurrect himself on the field, amid comparisons with elephants in small silent dressing rooms. CB Series flashed past, 163* in Christchurch and 175 in Hyderabad came about. It pointed to something gargantuan. Gwalior, a first ODI double hundred. The year was 2010. Firecrackers were passé. Half a bottle of Absolut vodka was toasted to God that night.
All these imprints etched by a bat! Yet, the search for that one moment to cherish was still on. 'I was there', that moment. It came. They came, in fact. The year was 2011. The young adult was there when the 48th hundred came up at Chinnaswamy. He was there at Nagpur, when a rousing delivery from Dale Steyn was dispatched to square leg for six, en-route to the 49th. He was there at Mohali when Pakistan lost again. He was there at Mumbai when they carried him on their shoulders. He was there when his name was chanted outside the Wankhede, all over Marine Drive. He chanted too, arm-in-arm with complete strangers, till 6am.
The year is 2012. 100th hundred, yet debate simmers still, with uncles, friends and strangers. Then it stops, on a cold Sunday morning. 'No more in Blue', he says. The heart skips a beat, brain goes numb. Voice chokes. 'He plays Tests still', says the mind, almost an after-thought. If only to make the world of a twenty-eight-year-old carry on.
This is my story. Perhaps this is your story too. It was written by Sachin Tendulkar.
Indian Aviation Market Growth And Market Share
PIB : Gov India :27 Dec 2012
Indian Aviation Industry has been in buzz since the Kingfisher saga. The industry is currently in turmoil as fuel prices are high and government intervention in FDI (in Aviation).
Because of festive season Indian airlines witnessed more passengers in November 2012.
A recent press release by Indian Aviation Ministry states that 4.65 lakh more passengers traveled by airways compared to previous month.
The total domestic passengers carried by the scheduled domestic airlines in the month of October 2012 were 45.55 lakh. This shows that 4.65 lakh more passengers traveled in the month of November 2012 compared to October 2012.
Air India – 10.38 lakh, Jet Airways –9.17 lakh, Jet Lite – 3.45 lakh, IndiGo – 13.69 lakh, Spice Jet – 9.78 lakh, Go Air – 3.73 lakh, Mantra- 0.003 lakh.
Market share of domestic airlines in the month of November 2012:
Low cost airline IndiGo has the highest market share followed by Air India and Spice Jet.
Tata Nano among top 10 best-selling cars of 2012
Amrit Raj : Mint :Wed, Dec 26 2012. 11 40 PM IST
In the 11 months ended November, sales of the Nano rose 18% to 74,545 units from the year-earlier period
New Delhi: It’s the kind of farewell gift that’ll please Ratan Tata, who steps down as chairman of Tata Sons Ltd on 28 December: TataMotors’ Nano is one of India’s 10 best-selling cars in 2012, edging out such former worthies as its stablemate Indigo and Hyundai’sSantro.
In the 11 months ended November, sales of the Nano rose 18% to 74,545 units from the year-earlier period, and that too in a declining market for petrol cars on account of the huge price difference between that fuel and diesel.
Indeed sales of top-selling petrol models such as Maruti Suzuki India Ltd’s Alto and WagonR, and Hyundai Motor India Ltd’s i10 declined in the 11 months. And the contribution of diesel cars to total car sales has increased significantly from 28% in 2010 to 58% in 2012, according to industry lobby Society of Indian Automobile Manufacturers (Siam). That means almost six out of every 10 cars sold run on diesel, which is subsidized by the government.
The relative success of the Nano, which runs on petrol, comes after it was all but written off, with experts questioning its safety after at least six known instances of the car catching fire. The repositioning of the Nano in late 2011 paid off, said a Tata Motors executive who asked not to be identified.
Apart from focusing the marketing at women and young people, Tata Motors also began offering a new colour—orange—that’s become very popular, this executive said. The idea was “to change the perception that it’s a poor man’s car”, this person said. The company is also preparing a diesel version of the car to take advantage of the price differential.
It is unlikely that December sales will change the pecking order—car sales are usually muted this month with most customers putting off purchases till the following year—a 2013 car is “newer” than a 2012 model—and manufacturers using the opportunity to shut plants for maintenance.
Interestingly, in a year that saw it roiled by labour trouble, Maruti Suzuki dominated the charts, occupying the top four positions, albeit with lower sales for some models. The launch of the new Alto doesn’t seem to have done much for the fortunes of India’s most popular car, with its sales declining 9.28% in the first 11 months of 2012.
In the first 11 months of the year, customers bought 1.87 million cars compared with 1.78 million in 2011. Out of the cars sold this year in these 11 months, the top 10 accounted for 63%. Indian customers can choose from 21 car makers and around 120 models.
According to Mahantesh Sabarad, senior vice-president (equity research) at Fortune Equity Brokers (India) Ltd, the Alto continues to be popular among car buyers 12 years after it was first launched.
“Alto has topped the sales chart in seven of these 12 years. Its low price backed by an enormous distribution network (more than 800 cities) has contributed to its success,” he said. “(But) this year has been different for the Alto as it suffered its first drop in domestic sales in four years due to the ongoing slump in automobile sales in the country, contributed in part by a weakening economy and rising petrol prices relative to diesel.”
The sales chart is dominated by small cars, with the Swift DZire being the only sedan.
Expectedly, models with diesel versions did well in 2012. Maruti’s Swift and Swift DZire, which have diesel versions, saw sales rise 52% and 56.31%, respectively, over last year and were placed second and third on the chart.
“These models also gained in sales from the pent-up demand that formed in 2011 due to a series of strikes/unrest affecting production at Manesar, the plant where they are made,” Sabarad said.
The rise in demand for diesel cars affected the country’s second largest car maker Hyundai, forcing its Santro off the top 10. Sales of its i10 model declined 30% in the 11 months, pushing it to No. 5 (from No. 3 last year).
“In the early part of this financial year, the dieselization trend was strong and there was a decline in the demand of petrol cars by 15%,” said Rakesh Srivastava, vice-president (sales and marketing) at Hyundai India. “We have also witnessed many launches in this segment resulting in market expansion.”
Sales of the i10 have revived since August, Srivastava said. They rose from 6,300 units in August to 9,782 in November.
According to Fortune’s Sabarad, sales of the Santro and i10 may have been cannibalized by Hyundai’s new small car, the Eon, which was launched last October. “The launch of the Eon has not raised overall sales of Hyundai,” he said.
Hyundai’s Srivastava disagreed. “Even after 14 years, the Santro continues to be extremely popular with Indian customers,” he said.
Hyundai sold 45,612 Santros, 91,515 i10s and 85,729 Eon’s in the 11 months to November, down 34.54% and 29.85%, and up 309.69%, respectively.
That the revamp of the Nano marketing focus was successful is evident in the buyer profile. According to Tata Motors, women account for almost one-fifth of Nano buyers in the metros, and 42% of all buyers are under the age of 35.
“The Tata Nano is benefitting from the introduction of the Nano 2012, exclusive dealers in the hinterland (about 150) and increasing interest among young consumers about the car,” a Tata Motors spokesperson said in an email. “But for the increase in fuel prices and high interest rates, the growth would have been better.”
Indeed, sales of the Nano have been on a declining trend again since August, but so have sales across the industry.
The damages of high fiscal deficit
Shyamal Banerjee/Mint
Rajesh Kumar: Mint Money : Wed, Dec 26 2012. 08 31 PM IST
Delay in fiscal adjustment does not reflect well on the government’s economic management abilities.
Government deficit is possibly the most dominating issue in the global financial markets these days. While the euro zone is under constant threat of falling apart because of large accumulated debt and high fiscal deficit in a number of countries, lawmakers in the US do not see eye to eye on any deficit reduction plan. As a result, the country is on the verge of witnessing forced reduction in government spending, which can lead to a recession in the US economy with global consequences and also cause significant volatility in the financial market.
The situation in India is not very different. India faces the serious threat of being downgraded to junk status if the deficit is not quickly brought under control; the government is targeting a fiscal deficit of 5.3% of the gross domestic product (GDP) in the current fiscal. But why is high deficit such a big problem?
Theoretically, there is not much agreement among economists on whether the issue of financing government expenditure by running a deficit is good or bad. Any standard text on the subject will typically take you through three schools of thoughts.
First, the Keynesian view, which favours large government expenditure through deficit financing in order to employ unused resources. Second, the Ricardian view, which basically argues that it doesn’t make a difference as consumers cut expenditure in anticipation of higher taxes that will be levied later in order to pay off the debt. Third is the neo-classical school of thought, which has been a dominating view on the subject in the way it has been approached in the recent years.
The neo-classical economists principally argue that high government expenditure has a negative impact on savings, which affects growth. A high government deficit leaves little for the private sector for investment and puts upward pressure on interest rates—also referred as crowding out.
But in an open economy, the country can always import capital to naturalize the impact of reduced saving because of higher deficit. But, again, import of foreign capital would result in appreciation of the currency, affecting exports and growth.
Interestingly, a 2003 paper, The Economic Effects of Long-Term Fiscal Discipline, written by William G. Gale and Peter R. Orszag, analyzing the situation in the US concluded that if the budget deficit increase by 1% of the GDP, the long-term interest rates go up by 50-100 basis points. But things can change quite dramatically. The US is currently running a record deficit and enjoys record low interest rates. Therefore, variables can always respond differently in different circumstances. Do not forget that the Federal Reserve is determined to keep interest rates low and the US dollar remains the unchallenged reserve currency.
The Indian scenario
The conditions in the US and India are not comparable, except for the fact that both are running “unsustainable” levels of deficit. However, the ill effects of running high deficit are far more visible in India and the need for correction is a lot more urgent here. Apart from the threat of a ratings downgrade, high fiscal deficit is the source of most of the problems that the Indian economy is facing today.
Higher deficit since FY09 and higher borrowing has resulted in lower savings and lower growth in the economy. In FY09, at the gross level, fiscal deficit jumped to about 6% of the GDP compared with 2.5% in the previous year. In absolute terms, the deficit went up by about 2.6 times and has grown significantly since then and crossed Rs.5 trillion levels in the last financial year.
Let us assume that the government deficit was contained at around Rs.2 trillion, leaving Rs.3 trillion in the banking system to lend to the productive sector. Naturally, the cost of money would have been lower and production and growth would have been higher. It is no coincidence that high growth years, up till FY08, saw lower deficit, which even declined in absolute terms.
Higher deficit, as argued by neo-classical economists, also results in decline in savings rate—the gross domestic savings has declined from the level of 36.8% of the GDP in FY08 to 32% in FY12. Inflation has also been sticky and has remained way above the comfort level, simply because of the demand push being generated by higher government expenditure. Further, higher demand is getting leaked to the outside world and is not allowing imports to adjust the way exports do in response to the shift in global trade.
As a result, in the last fiscal, the current account deficit (CAD) swelled to a record high level of $78 billion and is not expected to come down in a hurry. CAD of this magnitude poses serious financing challenges and creates enormous uncertainty on the external front. Therefore, for a country like India with so much downside risk, it is important that government finances are kept under control.
End note: Far more than the impact captured through numbers, it is the impact on the business confidence that further affects investments.
Delay in fiscal adjustment does not reflect well on the government’s economic management abilities. It also reduces the capacity of the state to lend any support to the economy in case growth slips.
Therefore, bringing down the deficit should be the top priority of the government and at no point should comfort be drawn from the fact that higher deficit is a global phenomenon. Indian conditions are different and comparisons on this subject are unwarranted.
Subscribe to:
Posts (Atom)