BS Annual Awards: High-powered jury selects India Inc's best seven

Leading decision makers met virtually to pick the outstanding achievers

With a market capitalisation of Rs 2.32 trillion, Asian Paints is the country’s leading manufacturer of paints and controls over half the decorative paints market in India. It has remained the leader for decades despite stiff competition from local and foreign players. And a key reason for its success is the control it has over the trade network and a top-class management.

Much of the credit for the success of Asian Paints goes to its former CEO, KBS Anand, who retired from the company after a four-decade long career half way into FY21. Under his leadership, Asian Paints remained nimble-footed, churned its portfolio, and pushed products that could help dealers exhaust stocks quickly. This is important, as paints is a relatively low-margin business, yielding 3-4 per cent for the retail trade.

HCL Technologies, a home-grown IT sector powerhouse, made its mark across the world — thanks to a focus on innovation and building capabilities both internally and through inorganic acquisitions. With a presence in the products and services space, the company has grown its revenues by 14 per cent over the last three years; it recently crossed the $10 billion mark in revenues.

Revenue growth has been consistently high due to successful execution of the differentiated “Mode 1-2-3” strategy it introduced in 2016. While Mode 1 relates to traditional businesses such as application and infrastructure services, Mode 2 refers to new technologies, including digital, and Mode 3 is its products and platforms business.

Outstanding achievements like those of Anand and HCL Technologies 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, and a top legal eagle meets virtually to decide the winners of the Business Standard awards for corporate excellence for 2020. This however didn’t have any impact on the intense discussions on the merits of each of the candidates.

The high-profile seven-member jury was chaired by the Aditya Birla Group Chairman Kumar Mangalam Birla and included JSW Group Chairman Sajjan Jindal, KKR India Chairman Sanjay Nayar, EY India Chairman Rajiv Memani, McKinsey & Company Senior Partner Noshir Kaka, Cyril Amarchand Mangaldas Managing Partner Cyril Shroff, and Bain Capital Private Equity Chairman Amit Chandra.

As jury chairman, Birla started the deliberations by asking the jury members to disclose conflicts of interest, if any, with the shortlisted candidates. The jury was earlier provided with a long list of names based on the financial data for the year ended March 31, 2020, compiled by the Business Standard Research Bureau, to help them pick the award winners in seven categories.

Corporate governance, contribution to society, scale, sustainability, leadership, and innovation were the buzzwords that figured prominently during the jury deliberations. Birla set the tone of the meeting by stating upfront that apart from the financial data, due weight should be given to strong ethical attributes in addition to a long-term business vision in a year that saw extraordinary challenges.

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

The CEO of the Year award went to Anand for his sterling contribution to what Asian Paints is today. “He had an outstanding career in Asian Paints over several years and took the company to a different league despite all the challenges,” Jindal said on the jury’s choice.

On selecting HCL Technologies as the Company of the Year, Shroff said it has had a spectacular achievement in the last year in repositioning itself in the industry.

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.

“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 Gujarat Gas for the Star PSU of the Year award; Whirlpool of India was the Star MNC, while Alkyl Amines Chemicals was chosen for the Star SME award. Freshworks won the Startup of the Year award. 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.

The jury also discussed several outstanding individuals who have left a deep and lasting impact on India’s corporate history, but was unanimous in its choice on L&T Group Chairman A M Naik as winner of the Lifetime Achievement award.

“It’s very appropriate that Naik has been given the Lifetime Achievement award. He has always led from the front and his contribution to the country and to L&T is outstanding,” said Birla.

The jury recognised that Naik, 78, is a trailblazer not only in the world of business but also as a philanthropist.

From a company controlled by financial institutions with a lethargic work culture, Naik transformed L&T into an aggressive private sector company with a beady-eyed focus on shareholder returns. While a large chunk of L&T’s stake is still held by institutions, employees now own a 14 per cent stake in the company and that has been entirely Naik’s doing. Today L&T’s market valuation is worth Rs 2.14 trillion — thanks to Naik and his zeal to take L&T to greater heights.

On the Startup of the Year award, the jury was split between Freshworks and another contender — both considered pathbreakers in their respective segments. The preference of jury members to look for unique business models and not only the unicorn status was the clincher. “Freshworks is an amazing company. With the help of technology, it has changed the industry,” Kaka said.

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, the jury zeroed in on Gujarat Gas. “PSUs contribute a lot to nation-building and the economy at large. The company has done very well in city gas distribution in various cities. The consistency of their growth tilted the scales in their favour,” Nayar said.

For the Star MNC award, the jury debated a few listed entities, and debated whether unlisted companies should be added to the short list. But lack of relevant financial data on unlisted entities turned out to be a hurdle in the selection process. The jury finally selected Whirlpool of India based on its rising sales and profits. “Whirlpool has been in India for the last 30 years and has done very well in the very competitive environment. The company has consistently delivered very good financial results,” said Memani.

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 Alkyl Amines Chemicals, a Mumbai-based chemical company, which reported sales of Rs 992 crore and profit of Rs 215 crore in FY20. “The company has reported very consistent growth over the last three years. It has given outstanding returns to its shareholders,” said Chandra.

Birla summed up the jury process saying, “The analytical rigours at the Business Standard jury meeting have always been among the best. This year was no exception. I am glad we chose companies and individuals who have outperformed peers consistently for many years.”