LAST YEAR, OUR survey of Asian corporates revealed that analysts were more impressed by Hong Kong companies than any others. The region’s economic problems in 2002 didn’t stop it taking five number-one rankings. This year’s survey was very different: Indian companies came top in 10 of the general and sector categories.
A wide range of different views were expressed in our survey of 136 Asian analysts. This meant that some of the scores by winning companies were quite low. However, not only have Indian companies taken 10 of the categories this year, their lead over everyone else is compelling. Hong Kong, Singaporean, Malaysian and Chinese companies have all taken four categories apiece, but India is the favourite of analysts in Asia by some margin.
One Indian company, IT services and consulting firm Infosys Technologies, stands out. It is perceived as the company with the most convincing strategy, most transparency, most accessible management and best treatment of minority shareholders. It was also voted the best IT/software house and the best Indian corporate.
“Infosys has been following a smart business model focusing on predictability, sustainability, profitability and de-risking. It has been able to grow overseas business volumes by about 40% despite a very turbulent technology spending environment globally,” says Tejas Doshi, head of research at Sushil Finance Consultants in India.
Overall, Infosys is credited with having managed the technology slowdown well, making astute investments in sales and marketing, keeping tight controls on costs, turning in consistent financial results and accurately spotting and focusing on growth opportunities. Analysts repeatedly cite its strength in corporate governance. It has, they say, excellent accounting standards, transparency, good communication with investors and strong management.
It has long brought much of its revenue from outside India but the feeling expressed by analysts is that Infosys is increasingly making its mark far beyond Asia. “Infosys, with its long-term planning, has placed India on the global map,” says another analyst. “Its strategy of producing in a low-cost market like India and selling in high-value markets such as the US has certainly reaped dividends.
Fast growth and foreign interest Indian companies and the country as a whole have certainly had a stellar year. India’s economy is the fastest growing in the world after China’s. GDP growth is predicted to be 7% by the end of the year, and foreign investors have poured more than $5 billion into the country in 2003, compared with $740 million in 2002. Some 80% of the $5 billion has gone into Indian stocks and the Bombay Stock Exchange is up more than 50% on the year. Add this to the fact that the rupee has appreciated, domestic consumption is growing rapidly and corporate restructuring is still on the up and it’s not much of a surprise that Indian corporates have been given the chance to shine.
But respondents to the poll are far from indiscriminate in their praise of Indian companies. Management at HCL Technologies has left survey respondents unimpressed. One analyst thinks there are problems with corporate governance at the company, while another says that it has not been able to come to terms with the overall slowdown and that its M&A strategy has yet to show results.
Indian companies now have to prove that they can sustain the momentum, capitalize on the country’s growth prospects and hold off competition from Asian neighbours for another year.
