Stronger From the Slowdown

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STRONGER FROM THE SLOWDOWN

HCL TECHNOLOGIES – Adding Processing Power

The Numbers

2010-11 2013-14 Gain % (CAGR)

Revenues (Rs.cr) 16,034 32,918 27.1

Net Profit (Rs.cr) 1,710 6,371 55.3

Operating Margin (%) 20.5 26.3 -

The Margin Boosters

1) Surge in $100mn customers from 1 to 6 and $50mn customers from 5 to 16

2) Buyout of Axon beating Infosys with $658mn deal leveraging growth in business consulting

3)

Growth of IMS unit from $196mn to $1bn account accounting to 30% of total revenues

4) Increase in sales and marketing expenses from $386mn to $662mn helped win deals

5) Replaced IBM as British pharma major AstraZeneca’s outsourcing partner

6) Employee utilization improved from 75% three years ago to 84.5% in the last four quarters

7) Reduced voice work in BPO from 45% to 30% and exited low-end service like customer care;

BPO business turned profitable in 2012-13

MARUTI SUZUKI – Carving Out New Roads

The Numbers2010-11 2013-14 Gain % (CAGR)

Revenues (Rs.cr) 37,040 43,700 5.7

Net Profit (Rs.cr) 2,288 2,783 6.8


The Margin Boosters

1) Reached 94,000 of India’s 6,40,000 villages in 2013-14; and plans to double this in 2014-15

2) Surge in rural sales from 4% of total sales in 2007-08 to 30%, targeting villages with purchase

power and farming prosperity

3)

Merged Suzuki Powertrain, a diesel engines supplying company, led 2.4% increase in margin4) Managed to save more than Rs.350cr through suggestions from employees

5) Given the rupee weakening against foreign currencies, it has reduced reliance on import

content from 27% of net sales in 2008-09 to 16% in 2013-14

6) Despite difficult negotiations with shareholders over the ownership of a new plant, share

price is up 122% in last two years

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BRITANNIA – Raw and Material

The Numbers

2010-11 2013-14 Gain % (CAGR)

Revenues (Rs.cr) 4,609 6,913 14.5

Net Profit (Rs.cr) 134 395 43.4


The Margin Boosters

1) Raw material costs fell from 65% of revenues in 2011-12 to 60.5%; operating margin

improved from 4.8% to 8.9%, its highest in eight years

2) Stable wheat prices and declining sugar prices, which account for one-third of its raw

material and packaging costs, helped increase in margins

3) New Managing Director, Varun Berry, has reorganised reporting structures to speed up

decision making, sharpen product focus, strengthen the front end and cut costs

4)

Reduced product offerings in the number of SKUs by about 30% to 220; split SKUs between

two sales executives serving one retail outlet in urban India

5) Scaled up rural presence by growing outlets at the rate of 6% to 7% a year

6) Executed about 350 projects to cut costs in manufacturing and supply chain

FIRSTSOURCE SOLUTIONS – Crisis to Confidence

The Numbers

2011-12 2013-14 Gain % (CAGR)

Revenues (Rs.cr) 2,255 3,106 11.3Net Profit (Rs.cr) 62 193 46


The Margin Boosters

1) Sanjiv Goenka pumped in Rs.275cr to the back-office services provider in December 2012

and took over as Chairman to help bail out the company from its outstanding convertible

bonds issued worth about Rs.1,400cr

2) Stock has appreciated over 300% in the last two years with good clients, sound delivery

record and generating cash every quarter

3)

Adopted three pronged strategy to reduce costs, lower interest burden and exit unviablecontracts

4) Move out from contracts which could not be renegotiated at betters rates; grow business

with top customers where profit margins were higher

5) Due to these efforts, in 2013-14, revenue grew 10%, net profit grew 31% primarily boosted

by reduction in interest costs

6) Has been repaying $11.25mn every quarter, and thus far repaid $45mn of long-term debt

7) Undertook a ‘facilities rationalisation exercise’ – consolidating centres, and evaluating

various parameters such as space utilisation helped it save $10mn

8) Shutdown two centres as it exited unprofitable domestic contracts; posted higher profits in

2013-14 with 4,200 fewer people on its rolls

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Stronger From the Slowdown