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Kasturi & Sons Ltd (KSL), publisher of one of the largest English dailies in the country - The Hindu, The Hindu Business Line and other publications, is facing pressure on the top-line and the bottom line. The company reported around 94% drop in profit to Rs 4 crore in 2013-14.
According to sources in the company, factors which affected the financial performance of the company was the launch of the Tamil daily, competition and general slowdown in advertisement revenues.
Implementation of the wage board recommendations will further impact the company. Insiders say, this could cost KSL around Rs 40 crore every year.
KSL's profit dropped to around Rs 4 crore in 2013-14, from around Rs 85 crore in 2012-13. It may be noted, the year 2008 was the best for KSL, when it reported a profit of around Rs 230 crore.
As far as the advertisement revenue is concerned, it currently stands at around Rs 1,000 crore. Company sources said "inability to increase advertisement rate due to competition and general market sentiment are the two major reasons" for the dip in profit.
Against this background, the task before the new Managing Director and Chief Executive Officer Rajiv C Lochan is enormous, says a senior KSL Board member.
N Murali, Co-Chairman, of KSL agrees and adds that the task for the new MD is how to position the newspaper in the digital era and more importantly how to drive the revenues.
"In this digital age, the Indian press, and specifically The Hindu newspaper group, faces radically new types of challenges and opportunities," said N Ram, chairman of KSL.
"Relevant editorial content that continually engages a variety of readers and editorial practices need to go hand in hand with a smart business strategy that thinks two steps ahead, " he added.
As far as business is concerned, while Murali agreed that company's profit got hit, he refused to comment on any specific numbers.
Profile of New MD
Rajiv Lochan is currently a Trustee of IKP Trust. He graduated from IIT, Madras and has advanced degrees from the Massachusetts Institute of Technology and Columbia Business School.
Lochan was a partner with McKinsey & Company and location manager of McKinsey's practice in Chennai.
His focus in McKinsey was to help leaders and leadership teams drive performance and cultural transformation of their organisations. In addition, he focused on the social sector, primarily rural economic development and financial inclusion.
It may be noted, McKinsey was appointed by KSL to draw a strategy for the group. The global consulting firm way back summited a report, under the project Kamadhenu, in 2011. Loachan was also part of the McKinsey team then.
One of the key recommendations in the report was to diversify into education and online classifieds.
