Business Standard Annual Awards 2019: High-powered jury selects best seven

Leading decision-makers choose outstanding achievers of India Inc

With a market value of Rs 1.13 trillion, Titan Company has emerged the most valued firm in Tata Group after Tata Consultancy Services. Starting its journey as a retail watch chain, Titan Company is today India’s biggest jewellery brand, with rising sales and profits. In the past three years, its net sales grew at a compound annual growth rate of 20.6 per cent, while its net profit rose at an annualised rate of 27.7 per cent during the period. 

The credit for this transformation at Titan goes to its former managing director (MD) Bhaskar Bhat, who retired from the company in October 2019 after leading it for nearly 17 years. When he took over the reins in 2002, the company was struggling with unsustainably high levels of debt, sagging sales, and poor profitability. His strategy to reboot the business paid off; its cash flow from operations rose sharply. The stock market soon rewarded the company with sky-high valuations.

Despite a sluggish economy, in a span of less than three years, Larsen & Toubro’s (L&T’s) order book has crossed the Rs 3-trillion mark. As India’s biggest construction company, L&T has decimated all competition — it outperformed 2018-19 (FY19) revenue guidance with 18 per cent growth. Net profit grew nearly 21 per cent in a year of muted private investments. The cherry on the cake was the acquisition of Mindtree, as the company aims to increase its presence in the Indian software sector. 

Outstanding achievements like those of Bhaskar Bhat and L&T can hardly go unnoticed when a distinguished jury comprising the heads of two leading conglomerates, leaders of two private equity funds, two global marquee management consultancy organisations, a leading social impact investor, and a top legal eagle meets in Mumbai on February 6 to decide the winners of the Business Standard awards for corporate excellence for 2019. 

The high-profile eight-member jury was chaired by Aditya Birla Group Chairman Kumar Mangalam Birla, JSW Group Chairman Sajjan Jindal, KKR India Chief Executive Officer Sanjay Nayar, EY India Chairman Rajiv Memani, Omidyar Network India MD Roopa Kudva, McKinsey & Company Senior Partner Noshir Kaka, Cyril Amarchand Mangaldas Managing Partner Cyril Shroff, and Bain Capital Private Equity India Chairman Amit Chandra.

As jury chairman, Birla started the deliberations by asking the jury members to disclose conflicts, if any, with the shortlisted candidates, and two of them recused themselves from deliberations in relevant categories. The jury was earlier provided with a long list of names based on the financial data for year ended March 2019, compiled by the Business Standard Research Bureau, to name CEO of the Year as well as achievers in other categories — public sector undertakings (PSUs), multinational firms, and small and medium enterprises (SMEs) from the listed space.

Corporate governance, contribution to society, scale, sustainability, leadership, and innovation were the buzzwords that figured prominently during the jury deliberations.  Apart from the financial data, high standards of corporate governance followed by companies should be kept in mind while selecting the winners, said Birla.

Jindal, who won the Business Standard award in 2017, was of the opinion that a company’s all-round growth should be kept in mind to select the winner and not just growth in market capitalisation. 

Apart from the financial data, high standards of corporate governance followed by firms should be kept in mind while selecting the winners, said Birla.

Jindal, who won the award in 2017, was of the opinion that a company’s all-round growth should be kept in mind to select the winner and not just growth in market capitalisation. Kaka, who joined the meeting via videoconferencing from Tokyo, gave key inputs on every company from a global perspective.

McKinsey & Co Senior Partner Noshir Kaka | Photos: Kamlesh Pednekar

The CEO of the Year award goes to Bhat as he made Titan Company the second biggest in the Tata Group. “He was leading from the front. He made Titan what it is today,” Shroff said on the jury’s choice.

All jury members agreed that while financial ratios were important for making the first cut, equal importance had to be given to individuals who focused on innovation and built institutions when challenges in the external environment were severe due to flagging consumer demand — especially in the second half of FY19. Besides statistics from listed firms, the jury discussed qualitative aspects affecting companies, industry, and the business environment. 

“The jury deliberated for some time to choose the winners of the year. It was a hard decision, considering there were so many good companies on the list. The statistics provided by Business Standard showed outstanding financial performance of all the shortlisted companies in recent times,” said Birla.

The jury selected L&T as Company of the Year, while Indraprastha Gas won Star PSU of the Year award. Nestlé won Star MNC of the Year award. Vinati Organics was declared Star SME of the Year. Grocery delivery player Bigbasket was chosen Start-Up of the Year.  

Several names came up for discussion for these coveted awards. But what tilted the scales in favour of the winners was the confidence of the jury in their business models. “In a year like this, we looked for a company which contributed hugely to the economy, building of the firm and contributed to jobs and export earnings. No company stands out better than L&T,” said Nayar.

The jury discussed several outstanding individuals who have left a deep and lasting impact on India’s corporate history, but quickly decided on software major Wipro’s Founder Chairman Azim Premji as winner of the Lifetime Achievement award. 

“Wipro has been a huge success story. The sheer impact Premji has made through his philanthropy was a huge factor which also worked in his favour. That he is well known for very high standards of governance was a big plus. Premji was head and shoulders above other contenders in the lifetime category,” said Birla.  

The jury recognised that Premji, 74, is a trailblazer not only in the world of business but also as a philanthropist. Under him, Wipro has grown steadily, eschewing the typical brashness that marks much of the software business around the world. The market value of Wipro as on February is around Rs 1.39 trillion — making it one of the most valued companies in India.

Premji’s grit and ability to look adversity in the eye is evident in his personal life, too. He had to drop out of Stanford in 1966 to take on the mantle of the family’s cooking oil business after his father passed away. Thirty years later, he returned to his alma mater to complete his degree. As a philanthropist, Premji stands tall among his peers. He transferred $125 million worth of Wipro shares in 2001 to a trust to fund education in India. This donation is the largest of its kind to date in India. 

Nine years later, Premji donated about $2 billion of Wipro shares to the trust. In February 2013, he transferred an additional 12 per cent stake in the company, worth $2.2 billion then, to the trust. The foundation now holds about 18 per cent of Wipro’s shares. In 2019, with almost $7.6 billion as fresh donation, Premji has become the world’s largest contributor to charity of the year. He also raised his total lifetime charity to $21 billion in 2019.   

On Start-up of the Year award, the jury was split between Bigbasket and another contender — both considered pathbreakers in their respective segments. The preference of the jury was for innovative use of tech and making consumers’ lives easier. “There was overwhelming support to select Bigbasket. The main considerations for giving the award was first, it has become India’s largest online grocery seller in the past eight years, and second, innovation from the firm such as 2-hour delivery, private label products, etc,” said Kudva.

On the selection of Star PSU, the jury felt the candidate should show outstanding financial metrics, apart from facing competition from the private sector. After a discussion on several companies, including a long debate on Gujarat State Petronet, the jury zeroed in on Indraprastha Gas, as its sales grew by 27 per cent and profit was up 17 per cent last year. “Indraprastha is the largest city gas company in India. It has done well on consumer connect. It has got four new licences and bought companies. This has expanded its footprint in other cities. Its focus on gas is important from a climate perspective,” said Memani after the jury meeting.

For Star MNC award, the jury debated a few listed entities, but zeroed in on Nestlé soon after. From a crisis five years ago, the firm has come a long way — clawing its market share back. In the past three years, its top line has grown at an annual clip of 11 per cent, while net profit has grown at an average of 42 per cent per annum. “It was clear choice. It was not only performance but how the firm bounced back from the Maggi crisis. It stood out among its peers,” said Shroff.

When the jury came to the SME space, the discussion was on the challenges faced by SMEs due to a dawdling economy. The jury finally picked Vinati Organics, a Mumbai-based chemical company, which saw its FY19 sales rising by 52 per cent and net profit rising by 96 per cent in the same year. “To see a company which has had such a consistent financial track record in the past three years is truly spectacular — given the economic situation India was in,” said Chandra. 

Shroff summed up the jury process saying, “The analytical rigours at the jury meeting are always among the highest. This year, the names we chose are a mix of known organisations that have outperformed peers consistently for many years. My compliments to these champions of India Inc.”