Taking The Long Road

India's largest developer and operator of surface transportation and infrastructure projects, IL&FS Transportation Networks (ITNL), has had a smooth ride in the past four years. Thanks to the Centre’s thrust on infrastructure, new road projects and acquisitions.

“The policy decision to award about 7,300 lane km a year has helped our growth. Among them, a major project we had won was a 9-km tunnel in Kashmir, which would contribute Rs 3,000 crore over a four-year period,” says K. Ramchand, MD of ITNL.

Its acquisition of Spain’s Elsamex, with road maintenance projects across Europe, the Americas and Asia, for €50 million in 2008, also helped its growth. This got a further boost from acquiring a 49 per cent stake for $150 million in China’s Chongqing Expressway Group in 2011. “The Chinese business now contributes about Rs 400 crore a year and overall overseas revenues are about Rs 1,500 crore a year,” says Ramchand.

“We forecast a strong revenue, and a CAGR of 15 per cent over FY11-15,” says Ankush Mahajan of equity research firm KRChoksey.
— P.B. Jayakumar




A Mirror To The Future
Motherson Sumi Systems (MSSL), with a Q4 growth of 175 per cent in FY12 over the same period in FY11, exemplifies its chairman V.C. Sehgal’s talk that simple works.

The auto component manufacturer made Rs 14,776.6 crore in net sales in 2011-12 — a growth of 64.29 per cent vis-à-vis sales of Rs 2,595.64 crore in 2008-09. This growth has been mainly driven by its acquisition of its partner of 13 years, UK-based rear-view mirror business Visiocorp, in 2008-09. The €25-million deal gave MSSL access to Visiocorp’s high-end clientele, including BMW, Daimler and Volkswagen, with a reach across Europe, America, Australia and Asia. One of the earliest firms to sense a shift towards a market that was more global than local, MSSL targeted growth outside India. From more than 80 per cent of its sales going to Maruti in 1998, today German carmakers account for over 65 per cent of MSSL’s sales, and 76 per cent of the firm’s business comes from abroad.

Currently, MSSL’s business is spread across 25 countries. But success hasn’t changed the firm’s underlying principle of keeping things simple. “Our strategy has been to give the customer what he demands,” says Sehgal. “Carmakers want global solutions at a time when the norm is variations on fewer platforms. The product line mirrors this, hence the growth,” he adds.
— Swati Garg




All That Glitters...
A rise in the global demand for Indian handcrafted gold jewellery, coupled with an appreciation in gold prices ensured that Shree Ganesh Jewellers went from a company with a topline of under Rs 3,000 crore to one with sales of over Rs 10,000 crore in under four years.

Expanding on Shree Ganesh’s growth, Nilesh Parekh, chairman, says: “At a time when the domestic market was flooded with gold retailers, we focused elsewhere, especially on the Middle East to grow,” says Parekh. To tap into this market, Parekh appointed 25 super distributors around five years ago in West Asia.

In 2008, the company got $20 million from Credit Suisse in funding. In addition to its Manikanchan Special Economic Zone unit in Kolkata, another factory has been put up at Domjur, near Kolkata, with a domestic focus. “It makes sense for them to enter big retail now, because there is a shift towards branded jewellery,” says Pinakiranjan Mishra, partner and national leader, retail, E&Y.

— Swati Garg

(This story was published in BW | Businessworld Issue Dated 20-05-2013)