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Think beyond. Stay ahead.September 28, 2013 | 40www.outlookbusiness.com
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Contents
28 September 2013 / Outlook BUSINESS
Volume 8, Issue 20, September 28, 2013 | Released on stands on September 14, 2013
38COVER STORY
LEADING FROM THE FRONT
48 Lupin: The country’s second-largest drug maker is looking at new specialty categories to keep the momentum going
66 Amara Raja: India’s second-largest automotive battery player is focusing on the replacement market to counter the downturn
56 Dabur: The 129-year-old company is banking on strong rural reach back home and overseas presence as growth levers
22
FMCG, CONSUMER DURABLES, PHARMA AND IT ARE THE SECTORS THAT HAVE DONE WELL OVER THE PAST FIVE YEARS
www.outlookbusiness.com
Editor: N MahalakshmiDeputy Editors: Meenakshi Radhakrishnan-Swami,Rajesh Padmashali, V Keshavdev
FEATURESAssociate Editors: Kandula Subramaniam,Kripa Mahalingam, Krishna Gopalan, Vikas KumarSpecial Correspondent: Shabana Hussain Correspondents: Himanshu Kakkar, Sneha Shankar
COPY DESKSenior Sub-Editor: Mahithi PillaySub-Editor: Adit MathaiTrainee Sub-Editor: Aditi Saxena
ARTDeputy Design Editor: Manish Marwah Senior Designer: Kishore Das
PHOTOPhoto Editor: Soumik KarChief Photographer: Bhupinder SinghPrincipal Photographer: RA ChandrooSenior Photographers: Tushar Mane, Vishal Koul Photo Researcher: Raman PruthiConsultant: Rashmi Shinde
EDITORIAL CHAIRMAN: VINOD MEHTA
BUSINESS OFFICEPresident: Indranil RoyCFO: Vinodkumar Panicker
ADVERTISEMENTVice President: Pankaj JayaswalSenior General Manager: Uma Srinivasan (Chennai)General Manager: Kabir Khattar (Corporate)Head Brand and Marketing: Shrutika DewanAssistant General Manager: Sushil K Menon (Bengaluru)Regional Managers: Prashanth Nair (West),Shipra Mohan Sinha (North)Senior Manager: Tusharkanti Ghosh (West)Manager: P S SudharshanAssociate Managers: Manisha Rawat, Geetika Lalwani
CIRCULATIONNational Head: L Arokia Raj (Circulation)General Manager: BS Johar (Subs)Assistant General Managers: Anindya Banerjee (West),G Ramesh (South)Zonal Sales Manager: Vinod Kumar (North)Manager: Vinod JoshiDeputy Manager: Shekhar Suvarna
PRODUCTION Chief Manager: Shashank DixitSenior Managers: Deshraj Jaswal, Shekhar Pandey
ACCOUNTSSenior General Manager (F&A): Satish RaghavanManager: Diwan Singh Bisht
ADMINISTRATIONAssistant General Manager: Rajendra Kurup
MENTOR: MAHESHWER PERI
HEAD OFFICEAB-10, Safdarjung Enclave, New Delhi 110029;Tel: (011) 33505500; Fax: (011) 26191420Customer Care: (011) 33505533, 33505536, 33505537, 33505562, 33505653, 33505667, 33505607Fax: (011) 26191420Mumbai: (022) 33545000, Fax: (022) 33545100; Kolkata: (033) 33545400, Fax: (033) 22823593, Chennai: (044) 33506300, Fax: (044) 28582250,Bengaluru: (080) 33236100, Fax: (080) 25582810; Hyde rabad: (040) 23371144, 23375776, Fax: (040) 23375676Printed and published by Maheshwer Peri on behalf of Outlook Publishing (India) Pvt. Ltd. Editor: N Mahalakshmi. Printed at Print House India Pvt. Ltd., R-847/2.T.T.C MIDC, Rabale, Navi Mumbai- 400 701 and published from AB-10 Safdarjung Enclave, New Delhi 110029Published for 15-28 September, 2013Total number of pages: 130 + cover
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28 September 2013 / Outlook BUSINESS
COVER DESIGN: MANISH MARWAHCOVER PHOTOGRAPHS: SOUMIK KAR (COVER 2); VISHAL KOUL (COVER 3); A PRABHAKAR RAO (COVER 4)
C’est la vie
124 The pursuit of happiness: Why career banker Meera Sanyal has called it quits and is plunging into the world of politics
126 Hardbound: ItzCash Card’s Naveen Surya reviews Against the Gods: The Remarkable Story of Risk by Peter Bernstein
130 The good life: Slowdown blues have failed to dent luxury sales in big cities across India
132 High fi ve: Tirthankar Patnaik of Religare Capital on fi ve ways to cut out noise from the market
123
124
REGULARS
26 Imagenation: How the state-owned Chennai airport, after a #2,000-crore makeover, is now getting ready for privatisation
30 View: Robyn Benincasa, author of How Winning Works, on why great leadership is all about team spirit
34 Graphically speaking: The domestic biscuits market is making a distinct shift away from the staple glucose segment76 ICICI Prudential Mutual Fund
chief investment offi cer S Naren on the role of market cycles in driving outperformance
86 UTI Mutual Fund CIO Anoop Bhaskar believes a jittery market is relying too much on large caps
98 IDFC Mutual Fund CIO Kenneth Andrade on why it’s all about survival of the fi ttest
108 Detailed listing of the top 100 companies that beat the Sensex over the past fi ve years
26
28 September 2013 / Outlook BUSINESS
| IMAGENATION |
Photo by RA Chandroo
If the state-run Airports Authority of India (AAI) has its way, Chennai airport will be on its way to a makeover by January 2014. The AAI in September announced its decision to privatise six Indian airports — Chennai, Kolkata, Lucknow, Guwahati, Jaipur and Ahmedabad — and has asked developers to send in requests for qualifi cation by mid-October and place bids by December 18, a deadline many have decried as being insuffi cient for the level of planning required. But the privatisation move for Chennai has raised a stink since the Chennai airport was recently refurbished (quite shoddily at that) by the AAI at a #2,000-crore cost to taxpayers. If all goes as per plan, the airport will get a new domestic terminal, parallel taxi track, multi-level car park and a connection to the upcoming Metro rail, at an estimated #1,200 crore. The government’s decision to hand over the airport, which handles 13.5 million passengers annually, to private hands has not gone unopposed, though it remains to be seen which developers will be able to rush their bids in.
The great southern trick
27
Outlook BUSINESS / 28 September 2013
28 September 2013 / Outlook BUSINESS
Category size (# ’00 crore)
Biscuits is the largest category in processed foods
CY10 CY11 CY12
149 177 212
How the
The days when mornings began with the humble glucose biscuit being dipped in chai are long gone. That cheaply available biscuit has now been replaced with fancy cream-fi lled and cookie versions, as the #15,000-crore domestic biscuits industry opts for pushing ‘premium’ products. Conse-
quently, sales of glucose biscuits declined 4.5% over CY10-12. Change in consum-er tastes and soaring disposable incomes are two big drivers cited for the growth of the premium category, which comprises biscuits priced in the #125-150 per kg range. Analysts expect the industry to grow by 14-15% annually, while they peg the growth rate for premium biscuits much higher at 20%. The momentum of this segment has also helped expand margins, despite the higher input costs involved in the production of premium biscuits. Still, India’s annual per capita biscuit con-sumption is a mere 2 kg, compared with the hearty 6.8 kg in the UK and 7.2 kg in the US. In other words, there is enough and more room for players to grow.
GLUCOSE BISCUITS ARE NOW PASSÉ. INSTEAD, PREMIUM CATEGORIES ARE SEEING ALL THE ACTION
PHOTO: VISHAL KOUL
34
Source: Industry, MOSL
| GRAPHICALLY SPEAKING |
Source: Euromonitor International, Angel Research
Britannia for now leads the pack in terms of market shareIn %
GSK Consumer (Horlicks)
Others
Britannia35
Surya Food & Agro (Priyagold)
2
Parle33
Cadbury India (Oreo)
1
ITC (Sunfeast)12
1
16
Source: IBMA *FY13 data as on 30 September 2012
...realisations have been increasing steadily...
...as glucose segment loses steam and premium categories gain ground
Though growth in the biscuits market has largely been stagnant...
(# per tonne)
Volume growth (%)
Annual growth rate (%)
13
FY04 FY09FY05 FY10FY06 FY11FY07 FY12FY08 FY13*
14 1413
1416
14
11 119
21.8
5.55.5
-1.5
CY10
7,299
CY11
8,062
CY12
8,889
Source: Industry, MOSL
Glucose
Cream Cookies
Outlook BUSINESS / 28 September 2013
cookie crumbles
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