The time to recognise the scriptwriters of the India story was perfect. On a day the Sensex rallied past the 18,000 mark, a power-packed jury comprising six of India Inc’s leading decision-makers selected the winners of Business Standard’s annual awards for corporate excellence.
The jury made the selection process look easy and took just over an hour to arrive at decisions based on a shortlist prepared by the Business Standard Research Bureau. That was remarkable, considering they had to pore over reams of data and select not only the CEO of the Year, but also achievers in other categories: public sector undertakings, multinational companies and small and medium enterprises. The pleasant surprises thrown up by the data and their discussions prompted the jury to opt for a Company of the Year category for the third year in a row.
The consensus was it was a consumer story all the way — over 90 per cent of companies that made it to the initial shortlist were in consumer-facing businesses. “The data proved once again that India’s consumer story is intact,” said ICICI Bank and Infosys Chairman K V Kamath, head of the jury.
The awards will be given away in Mumbai next month.
The unanimous choice for CEO of the Year was Rajiv Bajaj, MD & CEO of Bajaj Auto, for the way he has made the “elephant dance”, as a jury member put it. Apart from the scale of operations (sales grew 35 per cent in the last financial year, 11 percentage points faster than industry growth), what impressed the jury was the 45-year-old Bajaj’s proven track record in building brands and his ability to take profitability to a new league. Bajaj Auto was easily the most profitable two-wheeler manufacturer in India, with net profit touching nearly Rs 3,500 crore in 2010-11 at a three-year compounded annual growth rate of 66 per cent. Operating margins have been in the 20 per cent region for five quarters now, despite high input costs.
While Bajaj was the chosen one for the CEO award, the jury then decided to consider Aditya Birla Group Chairman Kumar Mangalam Birla’s point that there was a need to go beyond financials and consider a Company of the Year award. The only name that came up was the Nasdaq-listed Cognizant Technology Solutions, a company that has been adding more incremental business than India’s top three software exporters.
Though Cognizant, headed by CEO Francisco D’Souza, is not listed in India and BS awards have traditionally considered only listed companies, the jury decided to make an exception. For, Cognizant has most of its operations in India and 95 per cent of its workforce is based here.
The award that took the least time to be decided was the Star MNC of the year and everyone agreed the best part of Nestle was its ability to localise brands — Maggi, for example. India’s largest food company, headed by CMD Antonio Helio Waszyk, has also put in a stellar performance on numbers.
While net sales have been going up nearly 20 per cent year-on-year, profit growth has been over 25 per cent.
The Star PSU of the Year was the country’s largest iron ore producer, NMDC Ltd. Reason: the company has been able to successfully reposition itself from what it was in the past. Apart from decent financial numbers, the company has mechanised fast — it has three fully mechanised mines — and has ventured into newer areas of steel production and coal mining.
Moving on to the SME space, the jury discussed several names, but Jubilant FoodWorks, founded by the Bhartia brothers, Shyam S Bhartia (Chairman) and Hari S Bhartia (Co-chairman), was the chosen one. Jubilant, which runs the Domino’s Pizza chain, is valued by the market as much as the NYSE-listed Domino’s Pizza Inc, which owns the eponymous brand. The company, which has 50 per cent share in the organised pizza market and 70 per cent in the pizza home delivery segment in India, has seen robust sales and net profit growth at a CAGR of 42 per cent and 110 per cent, respectively.
The initial shortlist of companies was done by choosing firms that had posted top line and bottom line growth of over 20 per cent compounded in each of the three years between 2008-09 and 2010-11. Other financial criteria, including returns on net worth and capital employed, were also applied.
Intense discussions took place among jury members on which firm faced tough competition even from multinationals but managed to carve a niche for itself, which contender managed to use its capital efficiently and turn in good returns on net worth, which of these managements had a robust business model, which of these players did not compromise on ethics, which one responded quickly when the tide turned, which one always pursued high standards of governance, and which of them positioned themselves for the future so that they could keep up the good work even in difficult times.
