Showing posts with label RIL. Show all posts
Showing posts with label RIL. Show all posts

Monday, March 18, 2013

Mastering all Laws of High-Speed Motion?

Maruti’s Adoption of a New Three-Pronged Strategy fuelled its Topline Growth in FY2009-10. Can it Manage a Repeat this Year?

It was meant to be a huge loss for Maruti. The month: February 2010. The event: phasing-out of the Maruti 800 – the original people’s car of India – from 13 top cities across India, as the newly applied BS4 emission norms disallowed the company from selling the vehicle in those cities. The news made headlines, threatening to damage Maruti’s topline to a great extent. But it turned out be only an emotional loss for the company. The 800 meant no more than a trophy, a symbol that Maruti had “once” become the #1 in the domestic circuit. It still is. Most critically, the Indo-Jap has other cards to bet on. Actually, Aces.

The 20-year-old JV between Maruti and Suzuki, has never failed to spring sweet surprises. Launches like the SX4, the Swift, the Ritz et al, have taken handsomely to the roads. In fact, the carmaker, for delivering “just what the Indian consumer desires” has never failed to make it to the top of the recall list. Result: Maruti’s financial scorecard has always read pretty. Even for FY2009-10, in terms of absolute increase in revenues, amongst all Indian companies, Maruti features at #3 (after RIL & Tata Motors), with a y-o-y increase of Rs.86.45 million (growth of 42.27%). So what bet paid off to produce the numbers for it?

Maruti began FY2009-10, with a three-pronged plan. It started focussing on the rural market, tied-up with PSUs and appointed resident local marketing executives in tier III & small towns. For instance, the company launched an offering in the A2 segment called the ‘A-star’, which was originally meant to be sold primarily in Uttar Pradesh.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

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Tuesday, February 5, 2013

INDIA INC.: Q3 PERFORMANCE

A 34% rise in India Inc.’s Q3 profit may bring smiles to many, but it’s nothing more than a statistical jugglery of an ultra-low base founded in the third quarter of FY2009. Though things have started looking better, India Inc. still has miles to before they can really celebrate by Deepak Ranjan Patra

More than a real performance, the truth behind the superb bottom-line showdown in the third quarter is the statistical jugglery of base-effect. Low-base in the third quarter of the last fiscal, which was also the worst quarter during the current slowdown due to the turmoil in the financial industry caused by the sub-prime crisis and followed by collapse of giants like Lehman Brothers, is the particular reason that made India Inc. look bigger and better in Q3 this year. However, going by a quarter-on-quarter (q-o-q) analysis, net profit of the 467 companies mentioned above show a negligible growth of just 1.72% over the previous quarter. The only consolation for corporate India is the fact that it managed to break the q-o-q downward trend it had been witnessing since the first quarter of the current fiscal.

But then, not all is well with whatever small growth India Inc. managed in the last quarter over the second quarter. Apart from Tata Steel, TCS and NTPC, no other company among the top 10 profit makers has witnessed a bottom-line growth of over 5%. Worse than that, profit after tax for three of them have gone down in Q3 over Q2 (including a 40% fall by the country’s largest public sector units- ONGC. SBI and Wipro are the other two) and two of them have grown less than 1%, stating that big brothers among the Indian companies have failed to deliver; leaving it to the small and medium companies with smaller base to do the job. Even the numero uno in the country in term of profits, Reliance Industries, (RIL) too has shown a hairline rise of merely 4%.

However, a report card revival in the small and mid-cap companies is probably the biggest fact to be cheered about in corporate India’s results for the last quarter. Despite their low-base, one should not take away the credit from companies like Hindustan Copper, AIA Engineering, Areva T&D and Panacea Biotec et al, which have seen their bottom-line growing by over 100% in the last quarter on a quarter-on-quarter basis. Not to mention that the small and mid-cap companies have also got a strong back from big investors like the Foreign Institutional Investors (FIIs). As per a study conducted by CNI Research on small and mid-cap companies, FIIs increased their stake in as many as 322 companies in the last quarter. In 259 of those companies, the FII’s raised their stake by up to 2%.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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