Jagran Prakashan Ltd.

IIPM conceptualized the grand final of Dare ‘10 — the most prestigious of international B-school student quizzes

Entry Price: Rs.86
Target Price: Rs.108
EPS: 4.8 (FY10E)
P/E: 17.9 (FY10E)
Time Duration: One year
Rationale: While slowdown in the economy and ad-spend cuts remains cause of concern for print media companies, Jagran Prakashan is expected to post steady growth (up-tick post 2HFY2010E) owing to its strong foothold in the Hindi belt (Dainik Jagran), focus on local advertising and rising colour inventory. Company’s margins are also expected to improve by 750 basis points over FY 2009-11E driven by lower newsprint costs (declined 35-40% from peak of $950), lower losses in new initiatives and higher operating leverage (as ad-rate hikes get absorbed). Further, the company’s 2QFY2010 and 3QFY2010 will register sharpest gross margin expansion due to base effect. This certainly makes Jagran Prakashan a stock to hold on.

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Source : IIPM Editorial, 2010.

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

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Don’t forget the seat belt!

Small surprise that the CEO is like a man possessed, packing in nearly 14 hours of work in a day. He starts his day early (at 5am) and after finishing his hour long exercise regimen, he gets on to work, taking only five minutes off for lunch in between. Given that the luxury car market is expected to grow even higher than the average growth of the passenger car market (around 8-10%) in India, his agenda perhaps would be to corner more market share for Mercedes. Aulbur even seems to have a plan to make reality meet his expectations. Apart from the new E-Class that Mercedes plans to roll out over the next couple of months in India, in a bid to expand its market, the company also launched the improved version of its M-Class SUV in March this year. And to hit back at rivals, Mercedes has kept the pricing of the new model almost similar to the old one, despite added features. Combined with the volume puller C-Class (that accounts for nearly 40% of Mercedes’ total sales in India), the company expects to stay on top of market developments. Hopes are particularly high with the coming festive season. If Mercedes manages to register similar sales figures (banking on the new E-class) as in last fiscal, the going will be smooth for the company.

Importantly, Aulbur is taking a leaf out of his competition’s winning strategies. Despite its late entry, BMW’s dream run in the Indian luxury car market in large parts stems from creating a large network of truly luxurious dealerships, benchmarked to BMW’s global network. An average BMW dealership in India today almost offers a similar retail experience as in Munich or Tokyo. Aulbur is moving along a similar path, with plans to open more showrooms in metros as well as in the Tier-II and III cities to “offer a better retail experience to consumers.” Along with associates, the company is now investing close to Rs.150 crore in its distribution network “to ensure that the Mercedes Benz retail experience is the best in the country,” says Aulbur. Land has already been purchased across the country to build these new showrooms. The show of muscle does not stop there. In a bid to win back its undisputed top slot in India’s luxury automobile segment, the plan is also to ramp up its Bangalore-based R&D facility significantly. The company has already announced that head count is set to go up four fold in the facility.

From new launches, retail reach, pricing controls to unabashedly adopting the winning strategies of its rivals, Aulbur is clearly leaving no room for a mess up in the Indian market. Sure, there is professional pride involved, but there’s also a personal connection. Married to Radha Srinivasan since 1997 and a self-proclaimed follower of democracy, India is second home for Aulbur. And isn’t the taste of success on your home turf always sweeter?

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).

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Sanjay Behl knew what he was letting himself in for when he took on the ceo’s mantle at big tv two months ago.

But it will take much more than a few tough rivals, nonplussed consumers and a late-mover disadvantage to dissuade Behl from the task at hand. Surbhi Chawla meets up with Ambani jr.’s key man...

The first thing that you notice when you meet Sanjay Behl, CEO, BIG TV is his height. At 6 feet plus, and fair as fair can be, his personality dwarfs the room that we sit in. Behl’s marketing charisma however has nothing remotely dwarfish about it. But we are not the first guys to discover that. Anil Ambani discovered it (much to his advantage) almost five years ago when he plucked this marketing wizard out of Nokia and made him the branding centre point of his maiden consumer facing business – RCOM. Behl’s stature within Anil Dhirubhai Ambani Group (ADAG) soared when RCOM surged ahead of its rivals in the mobile telephony segment, within striking distance of market leader Airtel. So when Arun Kumar Kapoor, the then CEO of ADAG’s Big TV (the DTH arm of ADAG) jumped ship, Ambani predictably zeroed in on Sanjay Behl to step in as CEO.

High on his success with RCOM, Behl was only too happy to tap into his experiences with the mobile telephony venture to make the DTH business a viable proposition for Ambani junior. Just two months into his new role and Behl is really making serious strategic inroads. “Our experience in enriching the mobile screens of over 80 million customers through popular, interactive and utility value-added-services makes us confident of creating similar excitement, never seen before on millions of TV screens in India,” he says, with barely unsuppressed enthusiasm.

But, Behl’s task is both easy and difficult at the same time. Easy because the DTH industry in India is still in a nascent stage with just 13 million subscribers (while there are more than 403 mobile subscribers) and with growth pegged at 18% q-o-q, there is immense space for Behl to make a play for potential consumers. But the difficulty comes from the persistent non-acceptance for DTH by the masses. A key reason for that is that consumers have not really realised the value proposition that DTH seeks to offer and so see no need for change. Big TV’s obvious late entry into the segment, where Dish TV and Tata Sky have already taken the lead, is another disadvantage.

Recite any number of difficulties and challenges ahead, but it is tough to dampen Behl’s gung-ho attitude. In fact, Behl is confident of changing perceptions about the generic nature of this industry (with pricing being the key differentiation between players till now) by creating BIG differentiations for BIG TV’s offerings. Says Behl, “Value proposition would always be the key differentiators in a customer centric entertainment market.”

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.
Management guru Arindam Chaudhuri’s latest blockbuster book, Discover The Diamond In You
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