 "Dilip Shanghvi")
Looking to connect: Mukesh Ambani
The year 2016 will see Mukesh Ambani's return to the telecom sector, with RIL's ambitious fourth-generation mobile services under the Reliance Jio brand. The group's telecom strategy has been pieced together over five years; Ambani wants the service to be nearly flawless. His rivals call it a tall target in a consumer business, but any teething trouble could cost the company dear, especially with the kind of subscriber base Ambani has in mind.
Within a year of launch, Reliance Jio is targeting 100 million subscribers. And, if high-end data sharks have to be lured away from other telcos, Jio cannot afford to offer anything less than the best experience. Credit Suisse, which has done a beta test of Jio's network, says the network coverage is on a par with incumbents, even in shopping malls, office buildings, market places and train stations. Even at high speeds, the call quality is good.
While commercial launch of Reliance Jio's 4G services, likely in March-April this year, will be a big event, the 2016-17 financial year will be a critical one for the entire group, with its capital expenditure cycle coming to an end and benefits starting to flow in.
- 2016 will mark Ambani's return to the telecom sector
- With RIL's capex cycle ending, benefits will flow in from FY17
Mukesh Ambani, Chairman & MD, RIL
Pawan Munjal
For Pawan Munjal, chairman, MD & CEO of Hero MotoCorp, a challenging year has just come to a close. His company, the market leader in two-wheelers, faced pressure from slowing rural demand (owing to deficient monsoon) leading to sales decline. Profitability, however, improved due to benign raw material prices and efficiency measures.
Munjal also suffered a personal loss in 2015, with the demise of his father B M Munjal, founder of the Hero group. The senior Munjal had passed on the baton to his son, who had been steering the firm as its MD & CEO since 2001. That was a year when the company (then Hero Honda) became the largest two-wheeler manufacturer globally. B M Munjal had relinquished his role as chairman and become chairman emeritus in June 2015. And, Pawan had become the chairman, MD & CEO.
After Hero and Honda split in 2010, Munjal's firm now gets the bulk of its sales from motorcycles and controls a small part of the scooters segment, where former partner Honda is the undisputed leader. This is a situation that Munjal would want to address in 2016.
In September, Hero launched two new scooters which helped increase its share from 13 per cent at the start of the year to 18 per cent. Unlike motorcycles, the scooter market remains unaffected by rural uncertainties; it grew at a double-digit rate in 2015. Munjal will keep an eye on the sky next monsoon, as a normal rainfall will boost demand for motorcycles.
- Munjal will look to raise Hero's share of the scooter market
- A good monsoon will help revive rural motorcycle demand
Pawan Munjal, Chairman, MD & CEO, Hero Motocorp
Zarin Daruwala, a veteran of 26 years with ICICI Bank, is in an unenviable position as India head-designate of Standard Chartered. Not many would want to take the challenge of reviving India's oldest foreign bank, considering the mess it is in.
In India, where it is present for 157 years, the bank is battling a huge asset-quality problem. It has the highest bad debt level among major foreign banks. Globally, it is firing people; and there have been job cuts in China and India, too. Its India operations have a large exposure to the infrastructure and metals sectors; there could be some default. In the six months ended June 2015, the bank's India business reported a pre-tax loss of $276 million, against a profit of $395 million a year earlier.
The boat may not be sinking, but it is surely rocking; boarding it might mean going down with it. But those who know Daruwala say her risk appetite is phenomenal. Some say it is a calculated risk - from this point, there could only be an upward move. The balance sheet size of Standard Chartered is roughly equivalent to Daruwala's own portfolio at ICICI Bank. As president of wholesale banking, she managed $23 billion of loans, roughly $3 billion more than her new bank's book.
- Reviving Standard Chartered is seen as a big challenge
- But some say it could only move up from here
Zarin Daruwala, India Head-designate, Standard Chartered
A marathon ahead: N Chandrasekaran
Natarajan Chandrasekaran, CEO & MD of Tata Consultancy Services (TCS), is a marathoner. Chandra, as he is fondly called, has run both full and half marathons in many cities across the world. These, he says, add to his focus and rigour. His professional focus and rigour have given his company steady results over time, though there have been some signs of fatigue of late as TCS has missed revenue estimates. For the company, as well as Chandra, now 52, the year 2016 will be crucial, determining whether or not the Tata group firm will retain its supremacy in its segment.
TCS' nearest domestic rival, Infosys, which had taken a back seat for a while due to various factors, is now seen bringing back its aggression under a new management. Industry observers believe, with steady financial performance, the company might already have regained the capabilities for which it was considered an industry bellwether earlier.
So, even as TCS protects its own turf in major markets, industry watchers will weigh its performance against Infosys' going forward. The Bengaluru-headquartered Infosys has already won the battle at a psychological level, by resuming its practice of kick-starting the earnings season with its report; it did so in the September quarter, after taking a break for two quarters.
- Will TCS be able to continue growing ahead of Nasscom estimates?
- Can it hold its margin profile at its current level?
N Chandrasekaran, MD & CEO, Tata Consultancy Services
Fortune, they say, favours the brave. Sunil Mittal, the founder of Bharti Airtel, India's largest and the world's third-largest mobile company, lacks neither fortune nor bravery. In the New Year, Mittal will need both for confronting his biggest rival - Mukesh Ambani-led Reliance Jio Infocomm.
After more than a decade, Ambani and Mittal are clashing in India's cut-throat wireless market. Only this time the stakes are higher; the battle for share of the data market is not going to be a cakewalk. With Ambani looking to wean away Bharti's high-spending customers, Mittal will have to keep up with his service quality and price.
The 58-year-old Mittal has never shied away from battles. In fact, the very foundation of his telecom empire was built on his exit from a business in 1983, when the government banned import of gensets. As an entrepreneur, Mittal has always put his money where his beliefs are.
The year 2016 will be crucial for Mittal, because of a head-on battle between his Airtel and Ambani's Jio.
Mittal managed to get the first-mover advantage by launching 4G services across 300 towns ahead of his rival, but his company is still in the process of scaling up infra. Despite the massive investment Ambani has made in his telecom venture, Mittal's biggest advantage will be his deep understanding of the Indian telecom consumer.
- 2016 will see a head-on battle between Mittal's Airtel and Ambani's Jio
- Jio will look to wean away Bharti Airtel's data customers
Sunil Mittal, Chairman & Group CEO, Bharti Enterprises
Dilip Shanghvi
Acquiring Ranbaxy in a $4-billion deal has been Dilip Shanghvi's boldest move yet. The acquisition has so far not given him the desired result, but the year 2016 promises to be a better one for Sun Pharma and its 60-year-old managing director.
The US Food and Drugs Administration's recent approval to launch of the generic version of anti-cancer drug Gleevec is a positive for Sun Pharma. The firm will have a 180-day exclusivity in the market following the drug's launch in February; it is expected to drive earnings for the company in the near term.
Shanghvi's strategy of focusing on complex generics and specialty products is also expected to reap dividends. Even in its early days, Sun Pharma focused on specialty and chronic therapies. Now, it has identified dermatology and ophthalmology, among others, as new growth areas. In September, Sun acquired InSite Vision, a US-based eye-care firm, as part of its new strategy.
The key challenge for Shanghvi will be driving synergies from Ranbaxy's integration with Sun and completing the remediation measures at manufacturing plants under the US FDA scanner.
Apart from leading Sun Pharma, Shanghvi is also expected to prepare the ground for rollout of a payments bank in partnership with Telenor. Shanghvi had, in his personal capacity, secured an in-principle approval for this.
- Driving synergies from Ranbaxy's integration with Sun a challenge
- Shanghvi will also prepare the ground to roll out a payments bank
Dilip Shanghvi, MD, Sun Pharma
In the New Year, all eyes will be on Nestle India CMD Suresh Narayanan. The ban on Maggi has been lifted and Nestle, the country's largest food company by revenue, has gone on to relaunch the brand, but its troubles with the government and apex food regulator are far from over.
The government has signalled it will put up a strong defence against the company in the Supreme Court, to prevent its Rs 640-crore class-action suit, the country's first, from falling flat. The Supreme Court had recently stayed proceedings after Nestle questioned the consumer court's jurisdiction to hear the matter when the Bombay High Court had already pronounced a verdict. The company also got a relief on additional tests that would be carried out on Maggi samples, as the reports of these will be given to the Supreme Court, and not the consumer court.
Narayanan, who took over as MD on August 1, and chairman on October 29, was hoping to resurrect Maggi in a "memorable way". That has come a cropper, with only one variant currently available, and supplies remaining patchy.
Much of this is because of an uncertainty over how safe Maggi really is. Nestle says the question about Maggi being safe has been settled by the Bombay High Court. The Food Safety & Standard Authority of India differs; it says the samples for re-tests came from the company itself. The government says that consumers have been affected in all this.
Narayanan, considered Nestle's go-to man, has his hands full in the New Year.
- There's still an uncertainty over Maggi's safety
- Narayanan will look to revive Maggi in 2016
Suresh NaRayanan, CMD, Nestle India
Sachin Bansal, co-founder & CEO of e-commerce major Flipkart, is tipped to face competition from the big boys of India Inc in 2016. Though Flipkart, founded in 2007, has had the first-mover advantage, the big players like the Tatas, Ambanis and Birlas have the cash and wherewithal to take on the start-ups, which are running on foreign venture capital firms' money.
That Flipkart is yet to make profits will make the challenge tougher for Bansal. Keeping that in mind, the company has been building its war chest.
Bansal's company, which started as an online bookstore and went on to become a multi-category marketplace, has raised $3.2 billion from 19 investors in 12 rounds of funding so far. The investors include Accel Partners, Naspers, Tiger Global and Steadview Capital. Its latest funding of $700 million valued Flipkart at $15.2 billion.
Often referred to as the poster boy of e-commerce, Sachin Bansal, along with the other co-founder Binny Bansal (not related to each other) recently made it to the Forbes Billionaires list, with a net worth of $1.3 billion each. While they are at the top of the heap in India's e-commerce universe, global majors Amazon and Alibaba are keeping Flipkart on its toes. And, the scale of competition is sure to change with the likes of Tatas and Reliance entering the online fray.
- Big players of India Inc set to make online foray
- Flipkart, yet to make profits, is building its war chest
Sachin Bansal, Founder & CEO, Flipkart
Aiming to reach India's unbanked sections, Paytm founder Vijay Shekhar Sharma has already set up a network for his payments bank.
The man from Aligarh who went to Delhi College of Engineering at the age of 15, is likely to be among the first to roll out a payments bank. For One97, which owns Paytm, this will be the biggest gamble, as it entails an investment of over Rs 1,500 crore.
In five years, Sharma has transformed his 'humble' mobile wallet into a $4-billion-dollar firm and roped in investors like Alibaba, Tata group chairman emeritus Ratan Tata, SAIF Partners, Sapphire Venture and Silicon Valley Bank. He has already signed a slew of MoUs with the government, which will help his payments bank reach rural areas and operate from common service centres.
There's a lot on Sharma's plate, as he also plans to venture into travel and start hotel, air and rail ticket bookings, with firms like Goibibo. He also plans to enter the budget accommodation market with those like OYO Rooms.
- Sharma will start a payments bank in 2016
- He also plans to enter travel & bookings market
Vijay Shekhar Sharma, founder & CEO, Paytm
