IIPM News Broadcast: August 2010

Saturday, August 28, 2010

IIPM Students Live - Industry visit to Coca Cola manufacturing plant - IIPM Chandigarh

It was quite a refreshing morning on 1st and 2nd of July 2010 for the students of IIPM Chandigarh [PGP/SS/2010-12, UGP/SS/2010-13 Sem 1 and PGP/FW/2009-11/T3] - It was an Industrial visit to Coca Cola manufacturing plant. The student batch comprising of 120 (SS batch), 50 (FW batch) MBA and 20 BBA students had a great time. They had a chance to witness the entire manufacturing process in detail, starting from preparing the mixture, rinsing of bottles and packaging until the final stage when these bottles are ready for distribution. Overall it was an enriching experience for all the students

Friday, August 27, 2010

IIPM Focus - Visit to Infosys Campus - IIPM Bhubaneshwar

The students of IIPM Bhubaneshwar were taken for an industrial visit to Bhubaneshwar DC of Infosys Technologies on 7th of August 2010.

The visit started with a Corporate Presentation of Infosys. After that some senior project managers oriented the students about various business verticals of Infosys vis-à-vis the opportunities and the risk factors. Just before lunch time, students were taken for a campus visit and they were really impressed by the stunning modern state-of-the-art infrastructure of INFY. The visit concluded with an entrepreneurial skills test, where students were divided into groups and given a task to prepare business plan for a new IT company. Thanks to IIPM’s special focus towards entrepreneurship in its course curriculum, INFY staff were overwhelmed by the response of the students.

Overall the visit was very inspiring for the students and as well served as a good assessment of their aspirations for upcoming corporate life.

Thursday, August 26, 2010

IIPM 4Ps Business & Marketing - Nutrivita PRESENTS 100 MARKETING BRAINS THAT MOVE AND SHAKE INDIA

Chander Mohan Sethi

Chairman & Managing Director, Reckitt Benckiser, India

Dettol has remained an iconic brand and is a brand that all Indians have grown up with. Its success lies in the fact that we Indians have continuously stood by our commitment and offered the best in germ protection through its various product offerings. It makes me immensely proud of the fact that Dettol is truly one of the most trusted brands amongst Indian households. I am confident that with this support, Dettol will continue to grow in its endeavour to protect Indians and their families.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
“We will change your outlook” - The Sunday Indian on B-SCHOOL RANKING SCAMSTERS EXPOSED! A must read...
The Sunday Indian:-
B-SCHOOL RANKING SCAMSTERS EXPOSED!
For Exclusive Footage by Sunday Indian Click Here

Outlook Magazine's B School Ranking Scam Exposed
Business Standard Exposes the Outlook Magazine Money Editor
Don't trust the Indian Media!

IIPM enters into media education
IIPM makes record 10,000 placements in five years
TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here
Pioneer Exposes the fraud called Mahesh Sharma and Mahesh Peri of Career 360 and Barbel Schwertfeger of mba-channel.com
IIPM: An intriguing story of growth and envy
Prof Arindam Chaudhuri of IIPM on MF HUSAIN‎

Wednesday, August 25, 2010

IIPM 4Ps Business & Marketing - Nutrivita PRESENTS 100 MARKETING BRAINS THAT MOVE AND SHAKE INDIA

Deepti Dang

Head – Marketing (Commercial & SMB, Personal Systems Group), HP India

In my Marketing career, I have spent close to 6 years with HP so far, holding countrywide responsibility for the marketing strategy, planning and programmes for commercial desktops, notebooks and workstations for all commercial and SMB customers. And as clichéd as it sounds, but all marketing campaigns that have been planned and implemented by keeping the customer at the helm have been a huge success. The key is to engage with the customer. Some successful campaigns that stand out in my mind are: (a) The Computer is Personal Again (meant for individuals), (b) Business is Personal Again (for enterprise customers), and (c) some experiential marketing campaigns like HP EliteBook series (innovative launch at a gym), EliteBook kiosk (experience zone for the frequent flyer), Corporate road shows (initiatives such as ‘Can you challenge the notebook’) and ‘ Campus on the move.

Tuesday, August 24, 2010

Nutrivita PRESENTS 100 MARKETING BRAINS THAT MOVE AND SHAKE INDIA

Subhajit Sen

Executive VP (Marketing), Consumer Healthcare, GSK

The highlight of Subhajit Sen’s career as Executive VP, Marketing at GSK has been the launch of Foodles in the instant noodles category under the Horlicks brand. Apart from this, this star in the GSK world also led the launch and marketing of the Breathe Easy nasal and snore relief strips which have been imported from UK, the first of its kind mass market product in India. Most prominent in the children’s segment was the launch of the Horlicks bar and Junior Horlicks Biscuits which have become an instant rage with kids and Subhajit has declared to capture 4-5% of the domestic biscuit segment in the next three to four years. Thus, Sen continues to cross newer milestones every few months with GSK.

Monday, August 23, 2010

Nutrivita PRESENTS 100 MARKETING BRAINS THAT MOVE AND SHAKE INDIA

Harkirat Singh

MD, Woodland Shoes

At Woodlands, we have always approached a pro-environment strategy and you can see that even our logo is green in colour reflecting our point of view in regards to the same. Recently we thought of taking this environmental concern even to our customers and for that we started to have saplings in our shops that the customers can buy for nominal prices to either plant in their homes or to gift to their friends. This was carried out in pilot for now and we have received a phenomenal response, and we are planning to take it to all our stores across the country.

This initiative is very close to my heart and is my most memorable marketing moment.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
“We will change your outlook” - The Sunday Indian on B-SCHOOL RANKING SCAMSTERS EXPOSED! A must read...
The Sunday Indian:-
B-SCHOOL RANKING SCAMSTERS EXPOSED!
For Exclusive Footage by Sunday Indian Click Here

Outlook Magazine's B School Ranking Scam Exposed
Business Standard Exposes the Outlook Magazine Money Editor
Don't trust the Indian Media!

IIPM enters into media education
IIPM makes record 10,000 placements in five years
TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here
Pioneer Exposes the fraud called Mahesh Sharma and Mahesh Peri of Career 360 and Barbel Schwertfeger of mba-channel.com
IIPM: An intriguing story of growth and envy
Prof Arindam Chaudhuri of IIPM on MF HUSAIN‎

Friday, August 20, 2010

DON’T MISS THE ONLINE HOLIDAY SEEKERS...

Internet has already become a key game changer and the mobile is the next in line. It is important for the sector to understand the dynamics of these emerging mediums

During the next few months, another phenomenon, mobile technology, will take centre stage for the global travel and tourism industry, providing India with further opportunity to make great gains. With a base of over 380 million mobile subscribers, the use of the mobile phone as another channel for researching and purchasing travel, both during and before trips, will greatly change industry dynamics.

It is also essential that travel & tourism providers keep their eye on consumer travel trends across the world, helping to ensure there is constant access to new information about destinations and that this is presented across all multimedia formats. Travellers are craving to learn more about their destination of choice and seek this information through their preferred sources; be it through the press, video, social networks or general search. By optimising content and ensuring this is well connected to sales channels, travel businesses can expect a higher level of traffic that can result in increased bookings.

With the Internet becoming a leading factor, it is essential to fully understand its capacity and limitations. As the Internet grows, it still remains a world of its own, broken into many, often niche, segments and markets, often behaving differently than predicted or expected. So it is essential that hoteliers know who their customers are and how to best reach them. It is important to not forget the long-term. Implementing new technologies will save time and make product distribution & management easier; providing availability across multiple channels; allowing time to seek new opportunities by addressing consumer trends through information and mobile technologies.

Thursday, August 19, 2010

WHAT’S BUZZING THE BUZZ?!

Be it handycams, mobile phones, laptops or the latest hot wheels, all of them created enough waves in the Indian market in the last fortnight.

Fujifilm J30:

Sweet Memories: Fujifilm, one of the world’s largest camera makers has come out with a latest compact camera which is affordable and easy to use. With only 20 mm thin, and available in black and silver colours, the product has a double coated laminate which gives it a glossy and varnished look. It has 12 mega pixel sensor, 2.7” LCD screen and 3x optical zoom.

TECHNICAL SPECIFICATIONS:

12 Mega-Pixel
3x Optical Zoom
2.7” LCD screen
Price: Rs. 8,499

Meridian F80

A Trendy Doodad: Sound Of Music has launched one of the worlds most advanced and trendy compact audio systems –“Meridian F 80”in India. This product has been developed by Meridian Audio in collaboration with Ferrari. This trendy and stylish gadget brings together the features of CD/DVD player, AM/FM/DAB radio, alarm clock and an optional iPod dock. It comes with an 80 watt 2.1 stereo system and a subwoofer.

TECHNICAL SPECIFICATIONS:

DSP Technology
80 Watt 2.1 Stereo System
Price: Rs. 200,000

Wednesday, August 18, 2010

CAN YOU HEAR ME?

As many as 16 players vying for the attention of consumers in a market, how can anyone get noticed? Ask Indian telecom service providers and they will tell you how…

Thus, in such a scenario the biggest fear in the mind of the marketing honchos is how to avoid getting commoditised in this market and to continue to maintain their individuality despite the onslaught of competition. As all brands, be it new or the established ones, are in rat race to get more subscribers in the world’s most competitive telecom market, experts believe that it would be the brand which is perceived as the most innovative and transparent that will manage to bag the maximum number of consumers in its kitty.

For instance, Tata DOCOMO, which launched its services in the market in early 2009, introduced the concept of pay per second for the first time in India. However, soon other players too started offering this to their customers. But for the end customer, the instant brand recall whenever one talks about per second billing still continues to be Tata DOCOMO, which enforces the fact that though it’s difficult to make a distinctive mark in this market, but once you are able to make the same, it remains etched forever in the minds of subscribers.

Vodafone too was troubled with this industry problem of offering a sustainable differentiating factor for their brand in the summer of 2009 and their miracle solution for this came in the form of famous Zoozoo campaign. The thought process that went in was that, “While the brand had a wide array of never-talked about products and services in the pipeline, not many out of that long tail seemed sustainable as differentiators for an extended period of time. The challenge was in finding a way to make that differentiation sustainable, so as to stay in the consumers’ consideration set. Parallely, a perfect media opportunity was upon us in the form of Season 2 of the Indian Premier League cricket extravaganza…”, Rajiv Rao, NCD, Ogilvy India (agency that handles Vodafone account), tells 4Ps B&M. What more? The campaign not only did wonders for the brand on a mass level, but also went out to win the Gold Effie for this campaign. In fact, Vodafone has already come out with merchandising created around these creatures to match the mass hysteria that followed!

Tuesday, August 17, 2010

WHAT’S BUZZING THE BUZZ?!

Be it handycams, mobile phones, laptops or the latest hot wheels, all of them created enough waves in the Indian market in the last fortnight.

MSI LAPTOP CR620

TECHNICAL SPECIFICATION:
• Intel Core i5 Dual Processor
• Intel Calpella Platform
• Price: Rs.38,000 onwards

WORK IN STYLE!: MSI has launched its high-tech and fashionable Classic series of note books for young professionals. The note book features the latest Intel Core i5 dual processor, a high resolution 3D display and LED lights with a rich look backed up by the much-popular Windows7 operating system.

FUJIFILM REAL 3D CAMERA

TECHNICAL SPECIFICATIONS:
• Two lenses with Two CCD Censors

3x 3D OPTICAL ZOOM

Real Photo Processor 3D

2.8 inch 3D/2D LCD

THE NEW DIMENSION: The latest additions from Fujifilm in the Camera range consist of two high resolution lenses and two censors which help in flawlessly layering together two images to generate a 3D image. It has a RP (Real Photo) Processor to determine various shooting conditions such as focus, brightness and tonality. It also has a 2.8-inch monitor featuring Fujifilm’s own LCD panel.

Monday, August 16, 2010

Can Shera add shine to Brand India?

Prasoon Joshi,
I>Executive Chairman, McCann Worldgroup – India & Regional CD, APAC, McCann Erickson

BRAND INDIA WILL SHINE!

I have been brought on-board of CWG 2010 as a creative advisor, along with Javed Akhtar and Shyam Benegal. I am helping the government in conceptualising the presentation of the games ceremony in front of the international audience. As per the contract, I cannot divulge many details about what we are doing, but broadly, we are assisting the government on the opening and closing ceremonies of the games. I understand that holding an event of this mammoth scale is not easy in India because of many reasons, so the CWG is being done as a part of a bigger exercise. A lot of money is being spent, as it opens gates to a lot of opportunities in almost every sector, including advertising and marketing. I also believe that image is the last thing to be worked out as far as the event is concerned, as India in itself is a brand. So honestly speaking, there is no question whether brand India will shine in the CWG or not [it will!], because I have full faith in the Indian government and its efforts.
Neha Saraiya & Angshuman Paul

Saturday, August 14, 2010

“Funding is the major roadblock!”

He sold his well set up business in 2007, that made him once the market leader and decided to venture into a sector that was only talked about and not explored. Today with Indosolar, he is the largest manufacturer of solar photovoltaic cells in India, ahead of firms like Moserbaer and Tata BP Solar. Set to hit the market with his maiden public issue, Hulas Rahul Gupta, MD, Indosolar, discusses his future plans to B&E’s Deepak Ranjan Patra

B&E: Efficiency of the cells is a major factor when it comes to judging quality of the cells. Do you also value efficiency while moving ahead with scale?
HRG: A lot! The efficiency level that we maintain is one of the best. Certainly, the efficiency curve has moved dramatically in the recent times. Before two or three years, it was around 12% to 14%. But in the past 18 months or so, the average efficiency level has moved up to 15-17%. We have bought a line, which was contracted guranteed 15.9%, now we are averaging 16.2% and have a roadmap for 16.5%.

B&E: Indian climatic conditions are more suitable for power generation compared with Germany and Spain. But these countries produce around 70% of the world’s total solar power production of around 10 GW, India produces only 400 MW. Why is India lagging behind? Any specific reason for the same?
HRG: Solar production in India is really negligible compared with global production. One of the major reasons in those countries is the tarriff system that they are operating with. It attracts entrprenuers to jump into the business. But India has just recently introduced that enabling policy under the Jawaharlal Nehru National Solar Mission.

B&E: Do you think that the Jawaharlal Nehru National Solar Mission can actually give a boost to the solar power production in India?
HRG: Yes, of course. Funding is the only roadblock. If it can be taken care of, then we might soon see the sector growing in leaps and bounds.

B&E: You are mainly an export-oriented revenue model. Do you think that the success of the National Solar Mission may change your revenue composition?
HRG: Of course. At the moment, about 90% of our revenue comes from exports and 10% from domestic level. But with the National Solar Mission has begun, we hope it may go for a substantial change to 50-50 by 2011-2012.

B&E: Do you think the competition in the solar power sector will intensify in the near future?
HRG: Well, I don’t thinks so. I belive domestic as well as global demand is strong enough. The market is large and in many promising countries like the US, India and China, the demand is yet to enter to the mainstream.

B&E: You are part of a value chain. In the future, would you like to consider the options for any sort of vertical integration? What is your long-term plan?
HRG: Well, first we are looking at optimising our cell-making capacity. The real roadmap for us is to first grow up to a GW capacity within the next 4-5 years. We have to stay prepared for the global cost benchmarks of China and Taiwan, and for that, we definitely need scale.

Friday, August 13, 2010

Hayward’s wayward BP ways?

B&E’s Steven Philip Warner talks to various global oil & climate experts from the likes of Goldman Sachs, Credit Suisse, Standard & Poor’s, Argus Research, JBC Energy & Varda Group to find out what awaits BP’s fate? Will BP, which as recently as two months back was the second most valued oil major in the world, disappear?

“You need to go to jail, Hayward!” These were the loud words heard moments before the publicly accused CEO of BP, Tony Hayward, began his validations before the US Congress’ Energy and Commerce Subcommittee on Oversight and Investigations in Washington on June 18, 2010. The heckler was a woman, with black tar smeared all over her hands and face. She was angered at the BP Chief for the oil spill at the company’s Macondo project deepwater rig in the Gulf of Mexico – the very reason which caused BP’s shareholders to lose $93.4 billion in just 59 days, also considered the most ignominious retreat by any non-banking & financial stock within a span of two months! The cynic was hurriedly removed from the room. Given a chance, many say BP’s shareholders would have done the same to Hayward.

But Hayward didn’t budge during the seven hour-long humiliation session, during which, the beleaguered executive was found to be at his diplomatic best, making his way clean around all the queries. [He used lines like “I don’t know”, “I am not comfortable answering...” and “I was not in the decision making process” about 70 times during the session!] Quite a contrast to the manner in which the four CEOs of Exxon, Conoco Phillips, Shell and Chevron unanimously agreed to the Congress in the same meeting that the prime reason for the BP disaster was the company’s failure to implement industry best practices during the Macondo operation. BP used six centralisers, while Halliburton (BP’s cement contractor), had advised it to use 21 to prevent proper and safe channelling during the cement process. BP also did not test the cement, which gave way under the high water pressure, 5000 feet below the surface. The engineers ignored the need to circulate gas-bearing muds out of the well and to secure the wellhead with a lockdown sleeve before allowing pressure on the seal from below. In short – it opted for lower costs over safety. But Hayward was not broken.

The US Congress members however left home satisfied. They had made up their minds before they walked in. No matter what Hayward replied, they were prepared to leave with much the same opinion. The BP chief was placed there to act out a soliloquy on a ‘high-gentry’ stage, where the script was designed to humiliate the might of a British company, which two months back was the second-most valued oil company in the world with an Mcap of $188.32 billion (only behind Exxon, the most valued in the world today)! Hayward on the other hand had reasons for much discomfort.

Thursday, August 12, 2010

Time to stop the rabble rousing Mr. Cameron!

Why the deficit control measures given by UK Prime Minister David Cameron suspiciously point to his lack of understanding of economics

Ronald Reagan, the 40th American President once avowed in the context of rising US deficit, “I’m not worried about the deficit. It is big enough to take care of itself.” The relevance of this statement lay hidden in a clearly less than astute understanding of deficit economics that Reagan had (something that led to the term ‘Reaganomics’ becoming common sarcastic usage), which had its basis on the key points of reducing marginal income tax rates, regulation, money supply and unfortunately government spending too. While reducing the former two was considered pro-growth, for the rest, it was considered suicidal for economic growth. Fortunately for the erstwhile Hollywood actor, the baby boomers in US ensured that the nation had years of consecutive growth, with or without his policies.

On June 22, 2010, when David Cameron, UK Prime Minister, presented the UK budget through Chancellor George Osborne, it seemed an unbelievable replica of Reaganomics – capital gains taxes not raised for basic rate taxpayers, personal income tax allowances increased by £1000 to £7475, higher rate taxpayers’ income tax rates unchanged but capital gains tax increased to 28%, and corporation taxes cut too. The logic being forwarded by Cameron and Osborne is that by 2015, the budget deficit – which is currently at 11.5% of UK’s GDP – will be “in balance” by 2015. Yes, part of what he’s saying seems brilliant – especially the tax movements (leave the illogic of not increasing the higher tax payers’ rates).

Even during his campaigning days for the UK Prime Ministerial elections, Cameron used the deficit card and it worked successfully. After winning, Cameron has tried hard to continue holding the placard, as he indicated in a speech on June 7, 2010, “The most urgent issue facing Britain today is our massive deficit and our growing debt.” In that speech, Cameron kept harping on the fact that while UK currently pays around £35 billion annually as interest payments, the amount was expected to go up to £70 billion annually in the next five years – something that he wanted to control urgently.

Wednesday, August 11, 2010

What do you see Rahul Gandhi as?

The scion of the Nehru-Gandhi dynasty is credited with turning around the party's image in the Hindi heartland and making it more youth-centric. Equally at ease in a Dalit hamlet in Uttar Pradesh as well as a reputed Delhi college, the Congress' Prince charming has surely left a lasting impression on the minds of his countrymen as is evident from this poll.

He should be made the PM 53

He should Manage The Party 13

Can't say 12

He should be made the CM of My State 10

Cabinet Minister 7

He is given undue importance 3

He already has more responsibilities 2

Tuesday, August 10, 2010

Dementia, me? Fat chance!

At peace with that ponch? You could be slowly ‘inching’ towards dementia!

You could thump it and mock it by calling it a pot belly, or you could be all lovey-dovey and address it with all due respect as ‘love handles’, but my friend, if you really are in love with yourself, I’m afraid you’re not handling it (life) that well. In a recent research it was observed that belly fat or visceral fat can be instrumental in an individual developing dementia in later stages of one’s life. Visceral fat, which is not routinely given as much importance, clinically produces more inflammation than fat found in other areas of the body. Inflammation plays a key role in triggering heart diseases and is a host to other chronic diseases as well. The point of contention is the overall ‘distribution’ of fat and not obesity in general. It has also been observed that people whose bodies are apple-shaped instead of being pear-shaped are more prone to heart attacks and strokes. Dementia is a clinical condition, which occurs in old-age due to treatable or untreatable causes and it mainly involves cognitive impairment, speech language disturbance and motor skills impairment etc. Basically, the memory and sensitivity of the patient is compromised. Certain treatable causes for dementia could be transmitted through various viral infections in HIV patients. Many cancers such as lung and brain cancer could release certain such chemicals in the blood stream which may cause dementia. Also end stage liver and kidney disorders could lead to dementia.

“Out of all dementias, ‘Vascular’ dementia is the most common, and the most common cause of dementia is stroke. In case if someone suffers a stroke or multiple strokes then the portions of the brain which get damaged may lead to dementia. Other than obesity, diabetes and hypertension, the metabolic syndrome is given a lot of importance these days. Also a focus on the waste-hip ratio is very important. The waste-hip ratio differs in Asians and Europeans. If this ratio is abnormal, it would signify that the visceral fat (unhealthy abdominal fat) is more, which damages the arteries and increases the chances of a stroke by five to six times if coupled with diabetes and hypertension. Although a patient might not have a history of stroke, he could still suffer from dementia at a certain stage. Like in the case of treatable (preventive) causes such as hypothyroid, epilepsy, alcoholics or any accidents in which there might have been a brain haemorrhage, one might suffer from dementia. There isn’t a specific medication for dementia as such because in dementia the cause is treated to the extent possible,” says Dr. Mrinal Bhargava, General Physician (Resident Neurology). Dementia not only affects those who are too lazy to lose weight, but those who are fit as a fiddle may also suffer from a deadly neurodegenerative disease like dementia; like in the case of boxers. Due to repeated concussions they develop ‘Chronic traumatic encephalopathy’. It is also said that famous boxers and athletes such as Bobby Chacon and Jerry Quarry had suffered from this disease.

Being reduced to the state of a vegetable and being dependant on others for everything is not living but merely existing. The least one can do for oneself is to take control of those love handles, otherwise they could leave you with no control over your life.

Ravi Inder Singh

Monday, August 09, 2010

Water Woes Intensify

When it was predicted about a decade back that the next World War would be fought for control of water, sceptics dismissed it as a mere hyperbole. Now, with killings over water being reported from across the country, the spectre of the past is becoming a scary reality. The team of anil sharma, raju kumar and nishant bhadreshwar take stock of the situation

The scenario in the state capital Jaipur is no better, where water is being supplied once in a day, and that too only for an hour. “To add to our woes, we have heard that the government is planning to make it once in 48 hours. How would we live,” says Ashok Kumar Sharma, a resident of the walled city area.

Gone are the days when people would man pyaos to give water to the thirsty. Now, people are manning water bodies to keep the thirsty away from them. Water shortage has forced the residents of a village near Bikaner to maintain a tight vigil on the village water bodies to prevent water theft. “There is always a threat of water theft, so we have appointed watchmen to keep a vigil on our water bodies,” says Bhola Ram, a resident of Pugal village in Bikaner district.

It is feared that the availability would fall below 450 cubic metres by the year 2050. As per the international accepted norms, availability of water below 500 cubic metres is considered as absolute water scarcity.

Although the Ashok Gehlot government is trying to take steps to ease the crisis, but so far the problem persists. “We are doing whatever best we can. Supplying water through tankers and running water trains. We have decided to supply water through tankers to more than 10,000 villages during May and June,” a senior official of the water department tells B&E. “We have also decided to focus on community-based water management solutions instead of predominantly engineering-based ones,” he adds.

The situation in the neighbouring Madhya Pradesh is probably worse. Brawls over water are resulting in people eventually killing each other at many places in the state. Incidents of the killing of three people of the same family in Bhopal, two people in Indore, a person in Bilkhiriya village and a person in Devas dot the 2009 calendar.

Saturday, August 07, 2010

Let’s wait for the results, shall we?

Mahindra Satyam is now getting back on track. But the biggest issue facing them is the upcoming June declaration of true results. Can they handle that? by Amir Moin

In the last six months, the BSE IT index gained 5%. However, Mahindra Satyam’s stock slipped by 32% (Share price is still languishing at Rs.85 levels, compared to the Rs.500s seen during Raju’s time). This clearly shows that despite the IT sector showing positive signs, investors still don’t have confidence in Mahindra Satyam. That could mean short term valuation issues for Tech Mahindra, which has taken up Rs.8.75 billion to acquire Satyam Computers. “This will continue to happen since Mahindra Satyam is still undergoing restructuring. There are a lot of integration issues and therefore due to lack of transparency, investors don’t have much confidence in Mahindra Satyam. Our analysis says that once the consolidation is over, Tech Mahindra will drop the name of Satyam and merge the latter with the former,” says an industry analyst.

L&T, as was mentioned, recently sold the 4.58% stake that it once used to hold in the past. L&T did this after accusing Mahindra Satyam for not revealing critical business information. That hardly does any good for the company on the shareholders front.

Operationally, Mahindra has brought Satyam’s operations under its ‘Two-in-a-box’ framework, wherein sales and delivery functions will be combined and work on new and existing customers respectively. It is also implementing a new strategy that is aimed at aligning Satyam’s older core areas with Tech Mahindra’s focus on telecom. “Mahindra Satyam has its own set of core competencies and aligning it with Tech Mahindra’s focus on telecom will only confuse clients. So I think that is a bad idea,” says Sahni.

So where does Satyam go from here? Given the new executive leadership at the top of Satyam, can one expect that the June results would finally prove to the world that Satyam is back with a snook cocked at the critic world? Our take is clearly in the negative. The fact is that while Raju ran the company with his group of family and top management members – amply helped by PwC – the extent of fraudulent book keeping declared by him can be confirmed only after Satyam’s new auditors are able to collate and resolve the innumerable non-existent book entries shown in Satyam’s various financial sheets.

Given the past forecasts, there can be no doubt that when results are declared in June, there would be a huge stock taking session by Tech Mahindra on whether they really would wish to continue with Satyam or to simply sell it off. Imagine the phenomenal capital profit Tech Mahindra is set to gain in one year. They purchased Satyam’s stock at Rs.58 per share. At current Rs.85 prices, they’ll be set to gain an immediate 50% plus premium – great enough by any Buffett standards.

But in case Tech Mahindra goes ahead and merges with Satyam, such a valuation could get devastated. One has to realise that Tech Mahindra, by itself, has not followed a traditional IT company path. It was created to primarily service British Telecom (Tech Mahindra’s second largest shareholder holding 31% shares compared to 44% owned by Mahindras), and BT still continues to be Tech Mahindra’s largest client. So what exactly might happen in the coming months? Well, our call still remains, let’s wait for the results!

Amir Moin