Contact us:Penn Schoen Berland, South Asia
603, Unitech CyberPark,
Sector 39, Gurgaon
Haryana, India
www.psbresearch.in
Ashwani Singla,
Managing Director
& Chief Executive
M: +98 1107 5843
Shefali Khanna,
Director, Marketing
M: +971 111 8615
Winning Strategies for Financial Competitiveness
Thanks to our partners
©Penn, schoen & berland associates, llc.©Penn, schoen & berland associates, llc.
8-10
yrs
Yea
rs o
f w
ork
exp
erie
nce
10-1
5 yr
sab
ove
15 y
rs
Objective
• TohelpcompaniesbecomerelevantandcompellingtoFinancialInfluentials
Contact us:
Penn Schoen Berland, South Asia
603, Unitech CyberPark
Sector 39, Gurgaon
Haryana, India
www.psbresearch.in
Thanks to our partners:
Ashwani Singla,
Managing Director
& Chief Executive
M: +98 1107 5843
Shefali Khanna,
Director, Marketing
M: +971 111 8615
Competitiveness drivers
of the financial markets
2012
Thanks to our partners:
Methodology
• AnonlinesurveyconductedbetweenAugust8-30,2012inMumbai
• PSB’sproprietaryC3(C-Cube)frameworkwasusedfordrawinginsights
2
Why & How Of The Poll
Strategic Investors(PEFunds/IBankers)
35
Financial Investors(MF/PortfolioManagers)
42
Endorsers(BrokerageHouses/CRAs)
24
8-10
yrs
Yea
rs o
f w
ork
exp
erie
nce
10-1
5 yr
sab
ove
15 y
rs
The analysis of our online survey among 101
financial Bizfluentials from Equity Research
Houses, Private Equity Funds, Investment
Banks, Mutual Funds, and Portfolio Management
Companies with a minimum experience of 8
Aimstobetterunderstandtheinternalandexternalfactorsthat
drivevaluation&financialcompetitiveness.
years in the financial world and commanding
an influence of $10 billion supports a positive
sentiment toward the economy, with more than
75%offinancialplayersbelievingthatthemarketis
headedintherightdirection.
*Disclaimer: The information contained within is the property of Penn Schoen Berland & Associates. No part of this document may be copied or reproduced without the written consent of Penn Schoen Berland & Associates. Failure to do so may invite legal action as appropriate.
Penn Schoen Berland’s survey among Financial InfluentialsTM
101N =
©Penn, schoen & berland associates, llc.
Understanding the forces that drive winning strategies
The key questions that businesses need to understand for financial competitiveness are
Competitiveness is best described in thewords ofCharlesDarwin,
whosaid,“Inthestruggleforsurvival,thefittestwinoutattheexpense
of their rivalsbecause theysucceed inadapting themselvesbest to
theirenvironment.”
Eveninthemarketplace,it’snotthestrongestwhowin,butonesmost
responsiveandadaptabletochange.Today,forbusinessleadersand
CXOs,it isaconstantstruggletoadapttoafast-changingbusiness
environment.It’snotjustaboutmakingtherightchoicesforthemselves
butforalltheirstakeholders–employees,businesspartners,clients,
customers,policymakers,shareholdersandinvestors.
1. How do financial investors choose the right business to invest in?
2. How can one understand these choices?
3. What does one need to do in order to gain a competitive edge?
Ashwani Singla, ManagingDirector&ChiefExecutive,
PennSchoenBerland,SouthAsia
Wetrytofindthemainfactorsthatwilldrivestrategiestomakecompaniesmorerelevantandcompelling
totheirinvestors.
3
Contact us:
Penn Schoen Berland, South Asia
603, Unitech CyberPark
Sector 39, Gurgaon
Haryana, India
www.psbresearch.in
Thanks to our partners:
Ashwani Singla,
Managing Director
& Chief Executive
M: +98 1107 5843
Shefali Khanna,
Director, Marketing
M: +971 111 8615
Competitiveness drivers
of the financial markets
2012
Thanks to our partners:
The Investment Climate Relies On Three Critical Questions
How are we feeling about the economy?
Investors and endorsers feel positive about the direction of Indian economy.
Priva
te E
quity
I Ban
k
Portfo
lio M
anag
emen
tM
utua
l Fun
d
Brok
erag
e H
ouse
Cred
it Rat
ing A
genc
y
Priva
te E
quity
I Ban
k
Portfo
lio M
anag
emen
tM
utua
l Fun
d
Brok
erag
e H
ouse
Cred
it Rat
ing A
genc
y
Priva
te E
quity
StrategicInvestor
I Ban
k
Portfo
lio M
anag
emen
tM
utua
l Fun
d
Brok
erag
e H
ouse
Cred
it Rat
ing A
genc
y
Endorser
Strategic Investor
FinancialInvestor
EndorserStrategic Investor
FinancialInvestor
FinancialInvestor
Endorser
90%
91%
79%
53%
75%
80%
Evenastheeconomyslowsdown, investorsand
endorsers feel that India’s economy will remain
resilient,irrespectiveofthepolicyissues.Four-fifth
of theBizfluentialswhoparticipated inoursurvey
saidthattheybelievetheIndianeconomyisonthe
righttrack.
74% of strategic investors believe that Indian
economyisintherightdirection,83%offinancial
investorsand79%ofendorsersalsofeelpositively
aboutthedirectionoftheeconomy.
91% of portfolio managers, 79% of brokerage
housesand75%ofBizfluentialsworkingformutual
fundssawtheIndianeconomymovingintheright
direction despite all the clutter, making financial
investors and endorsers amuchmore optimistic
groupthanstrategicinvestors.
Among thekeyconcerns raisedbystrategicand
financial investors and endorsers, were scams,
poorgovernanceandtardypolicyimplementation.
1
©Penn, schoen & berland associates, llc.
24 months
36 months
Up to +5%
+5% to +10%
+10% to +15%
More than +15%
-5%
-5% to -10%
10% to -15%
More than -15%
09
46
26
11
04
03
00
01
Growth No.
Up to +5%
+5% to +10%
+10% to +15%
More than +15%
-5%
-5% to -10%
10% to -15%
More than -15%
03
21
49
20
01
02
02
02
Growth No.
Contact us:
Penn Schoen Berland, South Asia
603, Unitech CyberPark
Sector 39, Gurgaon
Haryana, India
www.psbresearch.in
Thanks to our partners:
Ashwani Singla,
Managing Director
& Chief Executive
M: +98 1107 5843
Shefali Khanna,
Director, Marketing
M: +971 111 8615
Competitiveness drivers
of the financial markets
2012
Thanks to our partners:
6
Accordingtoourstudy,themarketoutlookremains
positive in the 12-36 month horizon. Aligned to
this,istheinvestors’preferredinvestmenthorizon
of1-5years,evenasscamsandpoorgovernance
continuetobetopofmindconcerns.
51% of the participants believed that the stock
marketwouldwitness a ~5%growth over a 12-
36months window, while only 2% said that the
marketswouldseea15%jumpover12months.
One-fifthoftheBizfluentialssurveyedfeelthatthis
mighthappen,butoverthenext36months.
Will the market lookup in the near future?
12 months
Markets to move up in 12-36 months Despite theoptimismabout theeconomy, itwas
clearthatwhenitcametostockpicks,mostwould
studybothpasttrackrecordandcloselyviewthe
futurepotentialofacompanybeforeinvesting.
7outof10participantssaidthattheybelieved in
balancebetweenpastandthefuturebeforetaking
acall.However,20%werewillingtopayapremium
on the perceived future of a company and 13%
said theystill relyentirelyonpast trackrecordas
perceivedinthepublic.
Up to +5%
+5% to +10%
+10% to +15%
More than +15%
-5%
-5% to -10%
10% to -15%
More than -15%
51
15
15
02
11
04
02
00
Growth No.
2
©Penn, schoen & berland associates, llc.
Infrastructure
Real Estate
Banking, Financial Services and Insurance
Energy & Resources – Oil & Gas / Power / Electricity
Telecommunication Infrastructure
Technology & IT services
Steel/Metals/Alloys
Telecommunication Services
Auto
Capital Goods/Engineering
Pharma/Biotech
Consumer Processed Goods
Media & Entertainment
Travel & Hospitality
Infrastructure Related
Education
Aviation
Previous Decade Next Decade
1 Real Estate
2 Infrastructure
3 Energy & Resources – Oil & Gas / Power / Electricity
4 Banking, Financial Services and Insurance
Pharma/Biotech
6 Telecommunication Infrastructure
7 Technology & IT services
8 Steel/Metals/Alloys
9 Telecommunication Services
10 Auto
11 Infrastructure Related
12 Capital Goods/Engineering
13 Consumer Processed Goods
14 Travel & Hospitality
15 Education
16 Media & Entertainment
17 Aviation
5
Pharamaceuticals made the largest leap up the
ranks as the next big influencer set to make a huge
impact on the market. While Bizfluentials ranked it
11th most important sector in the last decade, this
year Pharma is among the Top 5 sectors that will
play a major role in the next ten years.
Infrastructure, Real Estate, BFSI, and Energy
shaped the last decade and will continue to be the
key sectors for growth over the next. High Tech,
ICTS, Capital Goods will remain among the Top 10
influential sectors.
Which are the Sectors that willdrive the Market?
Pharmaceuticals all set to emerge as the next big influencer
3
Contact us:
Penn Schoen Berland, South Asia
603, Unitech CyberPark
Sector 39, Gurgaon
Haryana, India
www.psbresearch.in
Thanks to our partners:
Ashwani Singla,
Managing Director
& Chief Executive
M: +98 1107 5843
Shefali Khanna,
Director, Marketing
M: +971 111 8615
Competitiveness drivers
of the financial markets
2012
Thanks to our partners:
7
Top sectors by Investors
Strategic Investors Financial Investors Endosers
1 Real Estate
2 BFSI
3 Infrastructure
4 Energy & Resources
5 Pharma & Biotechnology
1 Real Estate
2 Infrastructure
3 Pharma & Biotechnology
4 Energy & Resources
5 BFSI
1 Energy & Resources
2 Infrastructure
3 Real Estate
4 Pharma & Biotechnology
5 Technology & IT
©Penn, schoen & berland associates, llc.
C3
Visibility
Distinctiveness
Consistency
Authenticity
Market Performance
Financial Performance
Talent Development
Competitiveness
Customer Citizenship
Employee Citizenship
Business Practices& Ethics
Corporate Responsibility
Transparency & Governance
Communication
Capability
CharacterContact us:
Penn Schoen Berland, South Asia
603, Unitech CyberPark
Sector 39, Gurgaon
Haryana, India
www.psbresearch.in
Thanks to our partners:
Ashwani Singla,
Managing Director
& Chief Executive
M: +98 1107 5843
Shefali Khanna,
Director, Marketing
M: +971 111 8615
Competitiveness drivers
of the financial markets
2012
Thanks to our partners:
10
To identify what drives competitivenessThe C3 framework is used to strategically manage corporate image, also
referred to as corporate reputation or corporate equity. This dynamic
framework helps board members and CEOs decode and monitor the
stakeholdersthathavemaximumimpactonthecompany’s image. Ithelps
decisionmakersfocusonwhatthecompanyneedstodo&sayinorderto
persuadestakeholderstotakeactionthatgivescompaniescompetitiveedge.
TheC3frameworklooksatthree‘Dimensions’ofcorporateequity:
Character,Capability&Communication.EachoftheseDimensionscomprises
of‘Attributes’thatdefineacompany’sequityandeachAttributehasasetof
‘StrategicActions’thatimpactitsequity.C3notonlyestablishesthecorrelation
betweentheseactionsandthemostimportantstakeholderexpectations,it
alsobenchmarksacompany’s relativestandingvis-a-vis itspeers, thereby
providingacleardirectiononwhatitneedstodoinordertostandapartfrom
itscompetitors.
WehaveusedtheC3frameworktogenerateinsightsintowhatthefinancial
influentialsconsiderbeforetheyinvestormakearecommendationtoinvest.
Gold Standard of Corporate Equity
©Penn, schoen & berland associates, llc.
Competitiveness is driven by fundamentals
Financial competitiveness is about focussing on the right fundamentals and getting the fundamentals right
Traditionally, fundamental financial analysis is aboutdetermining the valueof a stockby lookingat the
variables thataredirectly related to thecompany,makingstock-relatedandfinancialparametersmore
importantforhedgingrisksthanasacrucialdifferentiator.
Theunderlyingmessagefromthefinancialinfluentialswhoparticipatedinoursurveydefinedwhatfinancial
competitivenessmeansfortoday’sbusinesses.
• ThefundamentalCapabilityofthecompanyintermsofitsmanagementteam,businesspractices,
andfinancialstability
• ThefundamentalCharacterofacompanyintermsofitscorporatevisionforthefuture,transparency
onbusinessassociates,employeesandgovernance
• ThefundamentalCommunicationofitsclearvisionforthefutureandhowsuccessfullythecompany
communicatesitscharacterandcapabilitytoitsstakeholders
Often, in looking at theminutiae, thebigger picture consistingmacro-economic factors and company
imageinthemindsofstakeholderscanbeoverlooked.Severalfactorsimpactvalue,butBizfluentialsfeel
thatit’stheexternalfactorsthatexertmostinfluenceoncompanyequity.
Contact us:
Penn Schoen Berland, South Asia
603, Unitech CyberPark
Sector 39, Gurgaon
Haryana, India
www.psbresearch.in
Thanks to our partners:
Ashwani Singla,
Managing Director
& Chief Executive
M: +98 1107 5843
Shefali Khanna,
Director, Marketing
M: +971 111 8615
Competitiveness drivers
of the financial markets
2012
Thanks to our partners:
11
Market Performance (Capability)
Corporate Image(Character & Communication)
External Risks (Macroeconomic Factors)
Financial Performance (Capability )
1
2
3
4
Efficientuseofresourcesandmacroeconomicfactorstopthelistforleadersinthefinancialworld,butthey
mustalsobecarefulaboutwhatdrivesinvestors.Oursurveyshowedacleardistinctionwithinpreferences
ofdifferentkindsofinvestorswithintheTop5drivers.
Top factors for Financial Competitiveness Factors
©Penn, schoen & berland associates, llc.
1 Market performance Create competitiveness to gain a winning edge.
Among the various drivers that affect Market
Performance, strategic investors focus on global
competitiveness and market share while financial
investorsvalueacapablemanagementteamhigher
thanendorsers,wholookatthefuturepotentialofthe
businessasakeyvaluationparameter.
GlobalCompetitiveness
Leading Market Share
Capable & dynamicmanagement team
Reliable and of high quality products
Ability to balance both short term
and long term goals
Track record of resolving customer issues quickly and
efficiently
Is a trend setter
Introduces new products & services
ahead of others
Leading brand/s in portfolio
Fierce but fair competitor
Loyal Customer
base
Unique/Niche business
Inorganic growth
Edge
Critical
Important
Create Differentiation for a winning Edge
Lead the Market Establishes highcorporate governance
standards
Shows a clear vision of the future of the company and the industry
Protect theinterestof minority
shareholders
Fair & progressive employer
Makes full disclosures, especially when things go wrong
Generally in the news for right reasons
Claims always backed by proof
Invests in Local Communities
Invest in building safe & healthy work environment
Lower than industry average attrition rates
Generally not controversial
Disassociate shareholder interest from management
Company leadership is visible at important public platforms
Ability to Manage Risks & Build a Clean Imagesis Rewarded by the Market
Build a strong Character
Makes full disclosures, especially when things
go wrong
Shows a clear vision of the future of the
company and the industry
Generally in thenews for right reasons
Generally not controversial
Claims always backed by proof
Company leadership is visible at important public platforms
StrengthenCommunication
Leverage External Opportunities &Mitigate External Risks to Stay Ahead
PoliticalStability GDP
growth rate
Interest Rates
Inflation Currency Exchange Rate
AgriculturalProduction
ForeignInvestment
Indirect Taxation
Crude oilimport bill
Fiscal Deficit
Index of Industrial Production
Current Account Balance
Direct Taxation
Global Market Scenario
Foreign Exchange Reserves
Manage Risk Better
Demonstrate Ability to Protect Investor Wealth
Extent of Shares pledged
Categorisation (large cap, mid-cap)
High DIIsownership
High price/volume volatility
Free float
Group (A, B, T/T, Z)
Average trading volumes
High FIIs ownership
Strengthen investorcon�dence
Maintain Healthy Financials to Command Value
Earnings per share (EPS)
Debt Equity Ratio
Financial Stability
Future Earnings
Book Value per share
Cash Reserves
Consistently better RoC, RoNW
Ability to raise capital at low cost
Quality of Balance Sheet
Extent of shares pledged
Categorisation (large cap/ mid cap)
High Dll Ownership
Consistent revenue and profit growth
above inflation rate
Average Trading Volumes
High Price/ Volume volatility
Dividend / Bonus track recordHigh Fll
Ownership
Group (A,B, T/T, Z)
Free Float
StrengthenFinancial health
Edge
Critical
Important
Edge
Importance
Good to have
Most Critical
High Importance
Good to know
Edge
Importance
Good to have
Edge
Critical
Important
Focus on governance and tranperancy is rewarded by the market
GlobalCompetitiveness
Leading Market Share
Capable & dynamicmanagement team
Reliable and of high quality products
Ability to balance both short term
and long term goals
Track record of resolving customer issues quickly and
efficiently
Is a trend setter
Introduces new products & services
ahead of others
Leading brand/s in portfolio
Fierce but fair competitor
Loyal Customer
base
Unique/Niche business
Inorganic growth
Edge
Critical
Important
Create Differentiation for a winning Edge
Lead the Market Establishes highcorporate governance
standards
Shows a clear vision of the future of the company and the industry
Protect theinterestof minority
shareholders
Fair & progressive employer
Makes full disclosures, especially when things go wrong
Generally in the news for right reasons
Claims always backed by proof
Invests in Local Communities
Invest in building safe & healthy work environment
Lower than industry average attrition rates
Generally not controversial
Disassociate shareholder interest from management
Company leadership is visible at important public platforms
Ability to Manage Risks & Build a Clean Imagesis Rewarded by the Market
Build a strong Character
Makes full disclosures, especially when things
go wrong
Shows a clear vision of the future of the
company and the industry
Generally in thenews for right reasons
Generally not controversial
Claims always backed by proof
Company leadership is visible at important public platforms
StrengthenCommunication
Leverage External Opportunities &Mitigate External Risks to Stay Ahead
PoliticalStability GDP
growth rate
Interest Rates
Inflation Currency Exchange Rate
AgriculturalProduction
ForeignInvestment
Indirect Taxation
Crude oilimport bill
Fiscal Deficit
Index of Industrial Production
Current Account Balance
Direct Taxation
Global Market Scenario
Foreign Exchange Reserves
Manage Risk Better
Demonstrate Ability to Protect Investor Wealth
Extent of Shares pledged
Categorisation (large cap, mid-cap)
High DIIsownership
High price/volume volatility
Free float
Group (A, B, T/T, Z)
Average trading volumes
High FIIs ownership
Strengthen investorcon�dence
Maintain Healthy Financials to Command Value
Earnings per share (EPS)
Debt Equity Ratio
Financial Stability
Future Earnings
Book Value per share
Cash Reserves
Consistently better RoC, RoNW
Ability to raise capital at low cost
Quality of Balance Sheet
Extent of shares pledged
Categorisation (large cap/ mid cap)
High Dll Ownership
Consistent revenue and profit growth
above inflation rate
Average Trading Volumes
High Price/ Volume volatility
Dividend / Bonus track recordHigh Fll
Ownership
Group (A,B, T/T, Z)
Free Float
StrengthenFinancial health
Edge
Critical
Important
Edge
Importance
Good to have
Most Critical
High Importance
Good to know
Edge
Importance
Good to have
Edge
Critical
Important
Focus on governance and tranperancy is rewarded by the market
2 Corporate Image
Strategic investors are looking for a clear vision
forthefutureandexpectfulldisclosuresfromthe
company, even during difficult times. Strategic
investorsalsocareaboutthelargerroleplayedby
thecompany,beitinestablishinghighgovernance
standardsorcorporatesocialresponsibility.
Financial investors, with their lesser interest
in business drivers, prefer to rely on capable
management teams,positivenewscoverageand
financialindicators,suchasdebt-equityratio,cash
reservesandearningsper share.Beingcloser to
marketmovements,financialinvestorsalsorelyon
market indicators likeshareprice/volumevolatility
andsharegroup.
Endorserslookforthemanagement’sabilitytohold
views that are not just determinedby customers
and shareholders – their expectations revolving
around a balance of long and short term goals,
transparency and disassociated shareholder
interestfromthatofmanagement.
The ability to manage risks and build a clean image is rewarded by the market. So, focus on governance and engage with stakeholders to build the right image.
GlobalCompetitiveness
Leading Market Share
Capable & dynamicmanagement team
Reliable and of high quality products
Ability to balance both short term
and long term goals
Track record of resolving customer issues quickly and
efficiently
Is a trend setter
Introduces new products & services
ahead of others
Leading brand/s in portfolio
Fierce but fair competitor
Loyal Customer
base
Unique/Niche business
Inorganic growth
Edge
Critical
Important
Create Differentiation for a winning Edge
Lead the Market Establishes highcorporate governance
standards
Shows a clear vision of the future of the company and the industry
Protect theinterestof minority
shareholders
Fair & progressive employer
Makes full disclosures, especially when things go wrong
Generally in the news for right reasons
Claims always backed by proof
Invests in Local Communities
Invest in building safe & healthy work environment
Lower than industry average attrition rates
Generally not controversial
Disassociate shareholder interest from management
Company leadership is visible at important public platforms
Ability to Manage Risks & Build a Clean Imagesis Rewarded by the Market
Build a strong Character
Makes full disclosures, especially when things
go wrong
Shows a clear vision of the future of the
company and the industry
Generally in thenews for right reasons
Generally not controversial
Claims always backed by proof
Company leadership is visible at important public platforms
StrengthenCommunication
Leverage External Opportunities &Mitigate External Risks to Stay Ahead
PoliticalStability GDP
growth rate
Interest Rates
Inflation Currency Exchange Rate
AgriculturalProduction
ForeignInvestment
Indirect Taxation
Crude oilimport bill
Fiscal Deficit
Index of Industrial Production
Current Account Balance
Direct Taxation
Global Market Scenario
Foreign Exchange Reserves
Manage Risk Better
Demonstrate Ability to Protect Investor Wealth
Extent of Shares pledged
Categorisation (large cap, mid-cap)
High DIIsownership
High price/volume volatility
Free float
Group (A, B, T/T, Z)
Average trading volumes
High FIIs ownership
Strengthen investorcon�dence
Maintain Healthy Financials to Command Value
Earnings per share (EPS)
Debt Equity Ratio
Financial Stability
Future Earnings
Book Value per share
Cash Reserves
Consistently better RoC, RoNW
Ability to raise capital at low cost
Quality of Balance Sheet
Extent of shares pledged
Categorisation (large cap/ mid cap)
High Dll Ownership
Consistent revenue and profit growth
above inflation rate
Average Trading Volumes
High Price/ Volume volatility
Dividend / Bonus track recordHigh Fll
Ownership
Group (A,B, T/T, Z)
Free Float
StrengthenFinancial health
Edge
Critical
Important
Edge
Importance
Good to have
Most Critical
High Importance
Good to know
Edge
Importance
Good to have
Edge
Critical
Important
Focus on governance and tranperancy is rewarded by the market
GlobalCompetitiveness
Leading Market Share
Capable & dynamicmanagement team
Reliable and of high quality products
Ability to balance both short term
and long term goals
Track record of resolving customer issues quickly and
efficiently
Is a trend setter
Introduces new products & services
ahead of others
Leading brand/s in portfolio
Fierce but fair competitor
Loyal Customer
base
Unique/Niche business
Inorganic growth
Edge
Critical
Important
Create Differentiation for a winning Edge
Lead the Market Establishes highcorporate governance
standards
Shows a clear vision of the future of the company and the industry
Protect theinterestof minority
shareholders
Fair & progressive employer
Makes full disclosures, especially when things go wrong
Generally in the news for right reasons
Claims always backed by proof
Invests in Local Communities
Invest in building safe & healthy work environment
Lower than industry average attrition rates
Generally not controversial
Disassociate shareholder interest from management
Company leadership is visible at important public platforms
Ability to Manage Risks & Build a Clean Imagesis Rewarded by the Market
Build a strong Character
Makes full disclosures, especially when things
go wrong
Shows a clear vision of the future of the
company and the industry
Generally in thenews for right reasons
Generally not controversial
Claims always backed by proof
Company leadership is visible at important public platforms
StrengthenCommunication
Leverage External Opportunities &Mitigate External Risks to Stay Ahead
PoliticalStability GDP
growth rate
Interest Rates
Inflation Currency Exchange Rate
AgriculturalProduction
ForeignInvestment
Indirect Taxation
Crude oilimport bill
Fiscal Deficit
Index of Industrial Production
Current Account Balance
Direct Taxation
Global Market Scenario
Foreign Exchange Reserves
Manage Risk Better
Demonstrate Ability to Protect Investor Wealth
Extent of Shares pledged
Categorisation (large cap, mid-cap)
High DIIsownership
High price/volume volatility
Free float
Group (A, B, T/T, Z)
Average trading volumes
High FIIs ownership
Strengthen investorcon�dence
Maintain Healthy Financials to Command Value
Earnings per share (EPS)
Debt Equity Ratio
Financial Stability
Future Earnings
Book Value per share
Cash Reserves
Consistently better RoC, RoNW
Ability to raise capital at low cost
Quality of Balance Sheet
Extent of shares pledged
Categorisation (large cap/ mid cap)
High Dll Ownership
Consistent revenue and profit growth
above inflation rate
Average Trading Volumes
High Price/ Volume volatility
Dividend / Bonus track recordHigh Fll
Ownership
Group (A,B, T/T, Z)
Free Float
StrengthenFinancial health
Edge
Critical
Important
Edge
Importance
Good to have
Most Critical
High Importance
Good to know
Edge
Importance
Good to have
Edge
Critical
Important
Focus on governance and tranperancy is rewarded by the market
Contact us:
Penn Schoen Berland, South Asia
603, Unitech CyberPark
Sector 39, Gurgaon
Haryana, India
www.psbresearch.in
Thanks to our partners:
Ashwani Singla,
Managing Director
& Chief Executive
M: +98 1107 5843
Shefali Khanna,
Director, Marketing
M: +971 111 8615
Competitiveness drivers
of the financial markets
2012
Thanks to our partners:
14
©Penn, schoen & berland associates, llc.
3 External risks
Macroeconomicfactorsremaintopofmindissues
for all players with GDP growth and regulatory
environment being most important to strategic
investors.FinancialinvestorsarefocussedonGDP
and interest rates while endorsers look at the
largerpicture,rankinginflationandfiscaldeficitas
preferredmacroeconomicparameters.
GlobalCompetitiveness
Leading Market Share
Capable & dynamicmanagement team
Reliable and of high quality products
Ability to balance both short term
and long term goals
Track record of resolving customer issues quickly and
efficiently
Is a trend setter
Introduces new products & services
ahead of others
Leading brand/s in portfolio
Fierce but fair competitor
Loyal Customer
base
Unique/Niche business
Inorganic growth
Edge
Critical
Important
Create Differentiation for a winning Edge
Lead the Market Establishes highcorporate governance
standards
Shows a clear vision of the future of the company and the industry
Protect theinterestof minority
shareholders
Fair & progressive employer
Makes full disclosures, especially when things go wrong
Generally in the news for right reasons
Claims always backed by proof
Invests in Local Communities
Invest in building safe & healthy work environment
Lower than industry average attrition rates
Generally not controversial
Disassociate shareholder interest from management
Company leadership is visible at important public platforms
Ability to Manage Risks & Build a Clean Imagesis Rewarded by the Market
Build a strong Character
Makes full disclosures, especially when things
go wrong
Shows a clear vision of the future of the
company and the industry
Generally in thenews for right reasons
Generally not controversial
Claims always backed by proof
Company leadership is visible at important public platforms
StrengthenCommunication
Leverage External Opportunities &Mitigate External Risks to Stay Ahead
PoliticalStability GDP
growth rate
Interest Rates
Inflation Currency Exchange Rate
AgriculturalProduction
ForeignInvestment
Indirect Taxation
Crude oilimport bill
Fiscal Deficit
Index of Industrial Production
Current Account Balance
Direct Taxation
Global Market Scenario
Foreign Exchange Reserves
Manage Risk Better
Demonstrate Ability to Protect Investor Wealth
Extent of Shares pledged
Categorisation (large cap, mid-cap)
High DIIsownership
High price/volume volatility
Free float
Group (A, B, T/T, Z)
Average trading volumes
High FIIs ownership
Strengthen investorcon�dence
Maintain Healthy Financials to Command Value
Earnings per share (EPS)
Debt Equity Ratio
Financial Stability
Future Earnings
Book Value per share
Cash Reserves
Consistently better RoC, RoNW
Ability to raise capital at low cost
Quality of Balance Sheet
Extent of shares pledged
Categorisation (large cap/ mid cap)
High Dll Ownership
Consistent revenue and profit growth
above inflation rate
Average Trading Volumes
High Price/ Volume volatility
Dividend / Bonus track recordHigh Fll
Ownership
Group (A,B, T/T, Z)
Free Float
StrengthenFinancial health
Edge
Critical
Important
Edge
Importance
Good to have
Most Critical
High Importance
Good to know
Edge
Importance
Good to have
Edge
Critical
Important
Focus on governance and tranperancy is rewarded by the market
GlobalCompetitiveness
Leading Market Share
Capable & dynamicmanagement team
Reliable and of high quality products
Ability to balance both short term
and long term goals
Track record of resolving customer issues quickly and
efficiently
Is a trend setter
Introduces new products & services
ahead of others
Leading brand/s in portfolio
Fierce but fair competitor
Loyal Customer
base
Unique/Niche business
Inorganic growth
Edge
Critical
Important
Create Differentiation for a winning Edge
Lead the Market Establishes highcorporate governance
standards
Shows a clear vision of the future of the company and the industry
Protect theinterestof minority
shareholders
Fair & progressive employer
Makes full disclosures, especially when things go wrong
Generally in the news for right reasons
Claims always backed by proof
Invests in Local Communities
Invest in building safe & healthy work environment
Lower than industry average attrition rates
Generally not controversial
Disassociate shareholder interest from management
Company leadership is visible at important public platforms
Ability to Manage Risks & Build a Clean Imagesis Rewarded by the Market
Build a strong Character
Makes full disclosures, especially when things
go wrong
Shows a clear vision of the future of the
company and the industry
Generally in thenews for right reasons
Generally not controversial
Claims always backed by proof
Company leadership is visible at important public platforms
StrengthenCommunication
Leverage External Opportunities &Mitigate External Risks to Stay Ahead
PoliticalStability GDP
growth rate
Interest Rates
Inflation Currency Exchange Rate
AgriculturalProduction
ForeignInvestment
Indirect Taxation
Crude oilimport bill
Fiscal Deficit
Index of Industrial Production
Current Account Balance
Direct Taxation
Global Market Scenario
Foreign Exchange Reserves
Manage Risk Better
Demonstrate Ability to Protect Investor Wealth
Extent of Shares pledged
Categorisation (large cap, mid-cap)
High DIIsownership
High price/volume volatility
Free float
Group (A, B, T/T, Z)
Average trading volumes
High FIIs ownership
Strengthen investorcon�dence
Maintain Healthy Financials to Command Value
Earnings per share (EPS)
Debt Equity Ratio
Financial Stability
Future Earnings
Book Value per share
Cash Reserves
Consistently better RoC, RoNW
Ability to raise capital at low cost
Quality of Balance Sheet
Extent of shares pledged
Categorisation (large cap/ mid cap)
High Dll Ownership
Consistent revenue and profit growth
above inflation rate
Average Trading Volumes
High Price/ Volume volatility
Dividend / Bonus track recordHigh Fll
Ownership
Group (A,B, T/T, Z)
Free Float
StrengthenFinancial health
Edge
Critical
Important
Edge
Importance
Good to have
Most Critical
High Importance
Good to know
Edge
Importance
Good to have
Edge
Critical
Important
Focus on governance and tranperancy is rewarded by the market
Contact us:
Penn Schoen Berland, South Asia
603, Unitech CyberPark
Sector 39, Gurgaon
Haryana, India
www.psbresearch.in
Thanks to our partners:
Ashwani Singla,
Managing Director
& Chief Executive
M: +98 1107 5843
Shefali Khanna,
Director, Marketing
M: +971 111 8615
Competitiveness drivers
of the financial markets
2012
Thanks to our partners:
15
Leverage external opportunities and mitigate external risks to stay ahead.
4 Financial performance
Strategic investors look at financial stability and
revenuegrowth,whilefinancialinvestorsopttolook
deeperintothefinancesofthecompany,lookingfor
debt/equityratio,EPSandfutureearningpotential
ofthecompanyforvaluation.Endorsersalsovalue
EPSandfuturepotential.
Strategic investors focus on segmentation of the
companystock,whetheritisalarge-cap,mid-cap
or small-cap. They alsoworry about the number
of shares pledged by the management to feel
confidentof thecompany.The financial investors
on the other hand aremore focussed on pricing
and volatility of the stock. Endorsers meanwhile
have ranked volatility, volumes and number of
sharespledgedasthekeyfactorsthatimpacttheir
decisionmakingforstockpicking.
GlobalCompetitiveness
Leading Market Share
Capable & dynamicmanagement team
Reliable and of high quality products
Ability to balance both short term
and long term goals
Track record of resolving customer issues quickly and
efficiently
Is a trend setter
Introduces new products & services
ahead of others
Leading brand/s in portfolio
Fierce but fair competitor
Loyal Customer
base
Unique/Niche business
Inorganic growth
Edge
Critical
Important
Create Differentiation for a winning Edge
Lead the Market Establishes highcorporate governance
standards
Shows a clear vision of the future of the company and the industry
Protect theinterestof minority
shareholders
Fair & progressive employer
Makes full disclosures, especially when things go wrong
Generally in the news for right reasons
Claims always backed by proof
Invests in Local Communities
Invest in building safe & healthy work environment
Lower than industry average attrition rates
Generally not controversial
Disassociate shareholder interest from management
Company leadership is visible at important public platforms
Ability to Manage Risks & Build a Clean Imagesis Rewarded by the Market
Build a strong Character
Makes full disclosures, especially when things
go wrong
Shows a clear vision of the future of the
company and the industry
Generally in thenews for right reasons
Generally not controversial
Claims always backed by proof
Company leadership is visible at important public platforms
StrengthenCommunication
Leverage External Opportunities &Mitigate External Risks to Stay Ahead
PoliticalStability GDP
growth rate
Interest Rates
Inflation Currency Exchange Rate
AgriculturalProduction
ForeignInvestment
Indirect Taxation
Crude oilimport bill
Fiscal Deficit
Index of Industrial Production
Current Account Balance
Direct Taxation
Global Market Scenario
Foreign Exchange Reserves
Manage Risk Better
Demonstrate Ability to Protect Investor Wealth
Extent of Shares pledged
Categorisation (large cap, mid-cap)
High DIIsownership
High price/volume volatility
Free float
Group (A, B, T/T, Z)
Average trading volumes
High FIIs ownership
Strengthen investorcon�dence
Maintain Healthy Financials to Command Value
Earnings per share (EPS)
Debt Equity Ratio
Financial Stability
Future Earnings
Book Value per share
Cash Reserves
Consistently better RoC, RoNW
Ability to raise capital at low cost
Quality of Balance Sheet
Extent of shares pledged
Categorisation (large cap/ mid cap)
High Dll Ownership
Consistent revenue and profit growth
above inflation rate
Average Trading Volumes
High Price/ Volume volatility
Dividend / Bonus track recordHigh Fll
Ownership
Group (A,B, T/T, Z)
Free Float
StrengthenFinancial health
Edge
Critical
Important
Edge
Importance
Good to have
Most Critical
High Importance
Good to know
Edge
Importance
Good to have
Edge
Critical
Important
Focus on governance and tranperancy is rewarded by the market
GlobalCompetitiveness
Leading Market Share
Capable & dynamicmanagement team
Reliable and of high quality products
Ability to balance both short term
and long term goals
Track record of resolving customer issues quickly and
efficiently
Is a trend setter
Introduces new products & services
ahead of others
Leading brand/s in portfolio
Fierce but fair competitor
Loyal Customer
base
Unique/Niche business
Inorganic growth
Edge
Critical
Important
Create Differentiation for a winning Edge
Lead the Market Establishes highcorporate governance
standards
Shows a clear vision of the future of the company and the industry
Protect theinterestof minority
shareholders
Fair & progressive employer
Makes full disclosures, especially when things go wrong
Generally in the news for right reasons
Claims always backed by proof
Invests in Local Communities
Invest in building safe & healthy work environment
Lower than industry average attrition rates
Generally not controversial
Disassociate shareholder interest from management
Company leadership is visible at important public platforms
Ability to Manage Risks & Build a Clean Imagesis Rewarded by the Market
Build a strong Character
Makes full disclosures, especially when things
go wrong
Shows a clear vision of the future of the
company and the industry
Generally in thenews for right reasons
Generally not controversial
Claims always backed by proof
Company leadership is visible at important public platforms
StrengthenCommunication
Leverage External Opportunities &Mitigate External Risks to Stay Ahead
PoliticalStability GDP
growth rate
Interest Rates
Inflation Currency Exchange Rate
AgriculturalProduction
ForeignInvestment
Indirect Taxation
Crude oilimport bill
Fiscal Deficit
Index of Industrial Production
Current Account Balance
Direct Taxation
Global Market Scenario
Foreign Exchange Reserves
Manage Risk Better
Demonstrate Ability to Protect Investor Wealth
Extent of Shares pledged
Categorisation (large cap, mid-cap)
High DIIsownership
High price/volume volatility
Free float
Group (A, B, T/T, Z)
Average trading volumes
High FIIs ownership
Strengthen investorcon�dence
Maintain Healthy Financials to Command Value
Earnings per share (EPS)
Debt Equity Ratio
Financial Stability
Future Earnings
Book Value per share
Cash Reserves
Consistently better RoC, RoNW
Ability to raise capital at low cost
Quality of Balance Sheet
Extent of shares pledged
Categorisation (large cap/ mid cap)
High Dll Ownership
Consistent revenue and profit growth
above inflation rate
Average Trading Volumes
High Price/ Volume volatility
Dividend / Bonus track recordHigh Fll
Ownership
Group (A,B, T/T, Z)
Free Float
StrengthenFinancial health
Edge
Critical
Important
Edge
Importance
Good to have
Most Critical
High Importance
Good to know
Edge
Importance
Good to have
Edge
Critical
Important
Focus on governance and tranperancy is rewarded by the market
Demonstrate financial acumen to attract investors
©Penn, schoen & berland associates, llc.
About Penn Schoen Berland Penn Schoen Berland (PSB) is a ‘Global Research based Strategic
CommunicationAdvisory’thatbringsthelessonslearntfromitscampaign
trails into the board room to help companies negotiate some of their
toughest corporate image& corporate affairs challenges. For over thirty
years PSB has used research to leverage unique insights about public
opinion, togiveourclientsacompetitiveedge.PSBservesFortune100
Corporations, leading Hollywood Studios and has helped elect over 30
PresidentsandPrimeMinistersaroundtheworld.
PSB,SouthAsiaofficewasestablishedearly2011inGurgaonandservesa
blue-chipclientscomprisingleadingIndiantransnationalsandMultinational
corporationsoperatingintheIndianSub-continent,SouthEastAsia&The
MiddleEast.TheSouthAsia is ledbyAshwaniSingla, formerlytheCEO
ofGenesisBurson-Marsteller (GBM)&BoardMember,Burson-Marsteller
(B-M),AsiaPacific.
PSBisapartofY&RBrandsandWPP(NASDAQ:WPPGY),Moreinformation
isavailableonwww.psbresearch.in
About PSB’s Capital Markets Communication
At PSB,we create research based business & financial communication
roadmaps that guideCEOsandCFOsof publicly traded companiesbe
financiallycompetitiveandcommandbestvalueinthemarket.Expertsat
PSBcombinefinancial&communicationacumen tomakeyour investor
relationsobjectivesmeasurableandbuildcompelling investment stories.
Whenyouworkwithus,youcanbesurethatwewillnotonlyhelpyoubetter
understandthedriversofyourvaluationbutalsoenhancetheappreciation
ofyourlongtermbusinessstrategyamongsell-sideanalysts&investors.
Contact us:
Penn Schoen Berland, South Asia
603, Unitech CyberPark
Sector 39, Gurgaon
Haryana, India
www.psbresearch.in
Thanks to our partners:
Ashwani Singla,
Managing Director
& Chief Executive
M: +98 1107 5843
Shefali Khanna,
Director, Marketing
M: +971 111 8615
Competitiveness drivers
of the financial markets
2012
Thanks to our partners:
18
Wehavealsogeneratedsectoral&investorspecificinsights.Shouldyou
wanttoknowmore,pleasecontactShefaliKhanna,Director,Marketing,
1 Focus on the right fundamentals and get them right
2 Corporate Image is a key differentiator
3 Winning hearts and minds of stakeholders is a science. Invest in it.
Conclusions
Contact us:
Penn Schoen Berland, South Asia
603, Unitech CyberPark
Sector 39, Gurgaon
Haryana, India
www.psbresearch.in
Thanks to our partners:
Ashwani Singla,
Managing Director
& Chief Executive
M: +98 1107 5843
Shefali Khanna,
Director, Marketing
M: +971 111 8615
Competitiveness drivers
of the financial markets
2012
Thanks to our partners:
17