High-powered jury selects best seven
Business Standard annual awards for 2 0 1 8 Focus on scale, sustainability, leadership, and innovation
With a market capitalisation of nearly ~4 trillion, Hindustan Unilever (HUL) is miles ahead of competition. Despite formidable global and home-grown challengers — ranging from Procter & Gamble to Patanjali Ayurved — HUL has made sure its pole position is not threatened. With the acquisition of GlaxoSmithKline Consumer Healthcare in an all-stock deal valued at ~31,700 crore in December last year, HUL will increase its lead further in the health and wellness segment by a wide margin.
Vinod Dasari, managing director (MD) and chief executive officer (CEO) of Ashok Leyland and a 14-year veteran in the company (he would step down in March this year), sold more trucks and introduced new products at a time when the trucking industry was going through a rough patch after demonetisation.
Betting big on the future of India’s transport sector, Dasari transformed Ashok Leyland’s businesses into three verticals to address the cyclical challenges of the trucking business. The strategy paid off and today, Ashok Leyland’s market share has gone up from 12-14 per cent four years ago to around 25 per cent, and its net profit grew from ~134 crore in 2014-15 to ~1,760 crore in 2017-18 (FY18).
Outstanding achievements like those of HUL and Dasari can hardly go unnoticed when a distinguished jury comprising the chairman of a leading business group, heads of two private equity firms, a marquee management consultancy organisation, and a top legal eagle meet to decide the winners of the Business
Standard awards for corporate excellence for 2018. Scale, sustainability, leadership, and innovation were the buzzwords that figured prominently during the discussions in Mumbai on Tuesday when the jury, chaired by Aditya Birla group chairman Kumar Mangalam Birla, met to select the best of India Inc for FY18.
“The jury did not take much time to choose the winners of the year, though 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 the recent years,” said Birla.
The other members of the high-profile jury were: KKR India CEO Sanjay Nayar, Bain Capital Private Equity MD Amit Chandra, McKinsey Director Noshir Kaka, and Cyril Amarchand Mangaldas Managing Partner Cyril Shroff. The jury chose Dasari as the CEO of the Year for steering Ashok Leyland at a very difficult time. “He was leading from the front and was very aggressive on new products categories,” Shroff said on the jury’s choice of Dasari.
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.
Besides the financial data on listed companies, the jury discussed qualitative aspects affecting companies, industry, and the business environment. The jury selected HUL as the Company of the Year, while public sector undertaking (PSU) Power Grid Corporation of India won the Star PSU of the Year award. Honeywell Automation won the Star MNC of the Year award, and Jamna Auto was declared the Star SME of the Year.
Food delivery app Swiggy was chosen the Start-up of the Year.
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, which changed with time and rewarded shareholders.
“HUL has emerged India’s leading consumer products maker despite challenges in the industry. It has performed consistently and has rewarded both its shareholders as well as its customers with best products,” said Nayar during the discussion.
The jury deliberated several outstanding individuals who have left a deep and lasting impact on India’s corporate history, but quickly decided on Godrej Group Chairman Adi Godrej as the winner of the Lifetime Achievement award.
“Godrej was an easy choice for us, taking into account his contribution to India Inc. He is always vocal on issues facing the industry – be it his support for the goods and services tax (GST) or even smaller issues,” said Birla.
While Godrej’s impact on the world of consumer products is well-known, he has emerged India’s most authoritative voice when it comes to ethics, corporate governance best practices, and even protection of environment, the jury discussed. A go-to man for leaders of India Inc, Godrej has seen the Indian business landscape undergo significant change - from licence raj to liberalisation.
In the midst of all this, the 76-year-old chairman has not only helped the 121year-old conglomerate transition into a modern business enterprise with the highest number of women employees in India Inc, he has done so retaining some of its old-world charm.
The key has been upholding the group’s corporate governance standards - something it has been recognised for through the decades and something Godrej believes cannot be compromised at any cost.
“Godrej was a natural choice for the award by the jury. He changed the group’s profile and took businesses to new heights. He is always available to anyone who needs a helping hand,” said Nayar.
On the Start-up of the Year award, the jury did not spend much time debating. Most members agreed they were not too keen to give the award to a company that would not go the distance.
The preference was for innovative use of technology, which made lives easier for Indians. The jury finally chose Swiggy, a food delivery service that has made it easy for kids to order food on phones.
“The jury liked the fact that Swiggy has changed the game in India. The food delivery is still at a nascent stage, when compared to China’s, but Swiggy has still taken a lead in this segment,” said Kaka.
On the selection of Star PSU, the jury felt the candidate should show outstanding financial metrics, apart from facing competition effectively.
After a discussion on several companies, they zeroed in on Power Grid Corporation. “We think Power Grid has done a great job for its shareholders, as its market value has touched almost ~1 trillion, making its shareholders wealthier,” said Chandra.
For the Star MNC award, the jury debated a few listed entities, as relevant data was not available on unlisted foreign companies based in India.
After deliberation, the jury selected Honeywell Automation India, which is among the most promising industrial engineering companies in India with high growth potential. Globally, Honeywell Inc is a leader in its core operations, including building control and home comfort solutions, process solutions, mobility, and others. “Honeywell has been a steady performer year-on-year and has built on its market position in India,” said Kaka.
When the jury came to the SME (small and medium enterprise) space, the discussion was on the challenges faced by the SMEs due to demonetisation and rollout of the GST. The jury finally picked Jamna Auto Industries, a Delhi-based auto parts maker, which saw its market value grow over 30 per cent a year in the past three years on strong financial performance.
Shroff summed up the jury process, saying, “The analytical rigour at the Business Standard jury meeting is always among the highest. This year, the names we chose are a mix of known organisations that have outperformed peers consistently for many years, as also new companies that have done well in recent years but are still to be recognised. My compliments to these champions of India Inc.”
“Godrej was an easy choice for us, taking into account his contribution to India Inc. He is always vocal on issues facing the industry – be it his support for the goods and services tax or even smaller issues” KUMAR MANGALAM BIRLA Chairman, Aditya Birla Group