What next? That’s the question on top of the mind once you see business after business ride the ladder of corporate success from being small, robust firms – sometimes struggling, sometimes faltering – into medium-sized and then large, very large corporations. Bharti Airtel was there barely 15-16 years ago. It is now India’s largest telecom firm. Sun Pharma, the largest pharma major by far today, was another one. India’s corporate landscape is dotted with many such climbers.
Business Today chronicles the emergence and rise of such companies through two annual projects – the Fastest-growing Emerging Companies (the issue you are reading) featuring companies between Rs500-1,000 crore and India’s Best SMEs (later this fiscal) involving companies from Rs1 crore to Rs500 crore. And, of course, the country’s biggest firms are capped in the annual BT 500 ranking.
This year’s Fastest-growing Emerging Companies study is vital because companies not just endured natural business and economy-related shocks and turbulences, including oil price volatility, rise in global commodity prices and the Brexit shock through the last fiscal, but also unnatural disruptions such as ‘demonetisation’ which directly impacted the fortunes of emerging companies. Demonetisation, in particular, sucked cash out of the economy and debilitated businesses and supply chains, sales, distribution and retail chains like never before, the effects of which lingered on for more than a quarter. The jury’s still out on what demonetisation achieved. Our sample of 115 companies shortlisted for the exercise saw their total income in fiscal 2017 growing 12.7 per cent, while profits increased 16 per cent over the previous year.
But the real gainer was the spirit of entrepreneurship. The winners of this year’s study panning across manufacturing, services and agriculture showed no sign of slowing down. They provide a fascinating cross-section of what goes right – or wrong – in the twists and turns of the corporate world. The stories we have put together capture how entrepreneurs struggle with challenges and how they overcome those with sheer grit, pluck and, of course, some luck.
Hyderabad-based NCL Industries, for instance, emerged from a near-death experience – through a corporate debt restructuring (CDR) in 2013 as the cement industry slumped during the slowdown and NCL was saddled with a debt burden of Rs100 crore and plants running at 40 per cent capacity. (Read Cementing Its Future on page 74.)
Toll collection and road maintenance firm MEP Infrastructure Developers, owned by the Mhaiskar family, entered road construction to ride over its overdependence on one stream of business. It is reaping the benefits of government’s Rs4 lakh crore infrastructure push this fiscal. In the past 18 months, it has bagged six road projects worth Rs3,900 crore across Gujarat and Maharashtra.
Or take the case of the reclusive Sat Narain Gupta of Bharat Rasayan, which owes its rapid growth to identifying and launching generic versions of fast-selling agro-chemicals that are going off-patent well before competition sets in. Gupta’s heady cocktail of affordable generic pesticides, insecticides, herbicides and fungicides has even forced MNCs to procure products from Bharat Rasayan.
Another unknown face H.C. Garg’s Panipat-based rice exporter GRM Overseas will probably be the first among this year’s winners to breach the Rs1,000-crore mark and move to the next level as it is on the verge of a major global breakthrough. With its first overseas subsidiary set-up in the UK and rice supply contracts from Walmart-owned ASDA and TJ Morris and plans to enter the US market, the debt-free company has already quadrupled its April-June 2017 revenue to Rs335 crore from just Rs85 crore in April-June 2016. The promoter family is beginning to dream of the billion-dollar club.
Then, there’s the contrarian in Anita Arjundas, Managing Director of Mahindra Lifespace Developers, who is in no hurry to race to the billion-dollar mark. In fact, she prevented her firm from the suicidal land-grabbing that nearly every major real estate firm went into by diverting funds from project investors into land parcels during the boom of 2005-2009. That restraint worked. Today, while most of those realty developers are stuck with unfinished projects and massive land parcels across the country, Mahindra Lifespace sits on a cash pile of Rs300 crore.
Hyderabad-based V. Ramesh, of Nile Limited, could easily claim he ‘pivoted’ long before the term became fashionable for companies that change their line of business as a going concern, thanks to the Internet era. Seventeen years ago, he sold his equipment glass-lining business to enter the lead recycling business. He couldn’t have asked for a better home-run as the business he began by accident has turned out to be a huge money-spinner. That gave the Navabharat Industrial Linings and Equipment Limited its new name ‘Nile Limited’. Ramesh thrives on long-standing relationships with major customers, vendors and suppliers and takes enormous pride in his innovative streak.
If you are employed in Gujarat, you ought to be in a state of nirvana if you are not an entrepreneur on the side. Entrepreneurship is as infectious in the state as viral fever is during the monsoons. Varanasi-born Dhirendra Singh was a happy-go-lucky government employee posted at Vadodara, when the Gujarati entrepreneurial streak captured him. He set up Manpasand Beverages, put together his family funds and launched a fruit juice ‘Mango Sip’ initially in UP. Today, it’s a national brand.
Those and other such tales of triumph of entrepreneurship make up this year’s Fastest-growing Emerging Companies list.