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Honouring excellence

A power-packed jury brainstormed for over an hour to select the winners

Business Standard 

The time to recognise the scriptwriters of the India story was near-perfect. On a day the rallied past the 18,000 mark, a power-packed jury comprising six of India Inc’s leading decision-makers met in mid-February in Mumbai to select the winners of Business Standard’s annual awards for corporate excellence.

The jury members made the selection process look easy and took just over an hour to arrive at their decisions. 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 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.

While Chairman chaired the meeting, the other members were Chairman Kumar Mangalam Birla, L&T Finance Chairman Y M Deosthalee, MD Noshir Kaka, Ernst & Young Country Managing Partner and MD & CEO P M Murty, who was last year’s CEO of the Year.

It was obvious all the Jury members had already done a detailed analysis of the numbers which brought out many that had taken swift corrective action to turn the slowdown into an opportunity. The overall consensus was that it was a consumer story all the way — over 90 per cent of the that had 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.

In their initial discussions, the Jury decided the effort should be to go beyond the numbers as intangibles such as corporate governance, best practices in human resources and environment consciousness were important.

Just to make the task of the Jury easier, the preliminary sorting exercise was done by the Business Standard Research Bureau on the basis of data provided by Capitaline. The idea was to shortlist those firms that had posted a top line and bottom line growth of over 20 per cent compounded in each of the three years between 2007-08 and 2009-10. Other financial criteria, including returns on net worth and capital employed, were applied to arrive at the shortlist.

Intense discussions took place on which firm faced tough competition even from multinationals but managed to carve out 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 would be able to keep up the good work even in difficult times. The Jury discussed briefly several stories of businesses that were truly differentiated.

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 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, has a 50 per cent share of the organised pizza market and 70 per cent of the pizza home delivery segment in India. It has seen robust sales and net profit growth at a CAGR of 42 per cent and 110 per cent, respectively.

First Published: Tue, March 20 2012. 00:49 IST