The Tata Groups outgoing chief Mr Ratan Tata must be regarded as a true visionary. He has not let the torch handed by Late J R D Tata diminish in any way and weathered many a storm with far more comfort and ease than most. I recall a time when he was named the successor to JRD by JRD himself , he was given first stint in a very small company of the group i e Nelco . The younger Tata showed his mettle very well. I also recall having praised him right then and had an idea that the great many developments are in store for the group . I would have to compliment myself for the same as his strides in the business history of India would find hardly any parallels , even it maybe said that world history of business development will have to rate him high in the order.
The time since he has held the reigns of the group have not been any ordinary times. The developments since 1991 had trappings of the kind that the Indian businessmen had been too worried and likes of Rahul Bajaj went to such length as to suggest to govt to go back to old days of protectionism . It is another matter that sons Rahul broke free of fathers conservatism and have delivered but a ten year long period was washed off for the Bajaj group. Ratan Tata kept his cool , brought a great empire like business house out of its slumber. I must say honesty of purpose rather than preserving the wealth of the group was at the core of his thinking. We all know that some of the business houses who did not believe in some kind of honest policy guiding the businesses have even been wiped out and others haven’t maintained their status at the level then held.
It is eight months from now when Ratan Tata would stop worrying about business as its head but he has given his vision to 500 of his top executives to get ready for $500 billion turnover of the group over next eight years. This really is a tall order against the present turn over of $100 billion. When world scenario is so rapidly changing this is an extra-ordinary burden for Cyrus Mistry. Even if he fails to achieve this goal , his performance should be judged by the forthrightness of the policies that he pursues rather than by what is countable in dollar terms. The scale of ambition can be seen from this that Walmart which is at top of Fortune 500 list clocks a turnover of just $421 billion and is not in to manufacturing so much.
The top three of Tata companies bring in 72% revenue. The CARG (compounded annual rate of growth) for the group in past has been 20% since the time Ratan Tata took over and the same rate may well see it achieve the target in next eight years. This is easily said than done for you don’t have room for growth available as a matter of right, the creation of room is not the task of individuals as groups or persons.
Now I come to the point where our Netas fail us. Tata group could grow because it could look outside India . I may surely say there would not have been a desire of this kind had our polity been of different kind. The rules of doing business have to be fair for the right people to show performance. The rules being changed at the whims or not thoughtfully made in the first place with compromising people in authority and endless queues in the corridors of courts do make a person of impeccable disposition but with burning desire to take things forward even by looking at play-grounds outside.
The divided attention of Tatas and like of him has made the nation grow slower and keep it away from its dream of becoming an economy touching at least the shoulder height of its giant neighbor. We have to keep growing till we have provided reasonable enough to our lowest 300 million and hence the govt has to look into the aspects of deterring rules and policies. It is said that honesty is the best policy and nothing but honesty has be the plank of policy making. the supreme court has been telling it in judgements after judgements and CAG is reporting matters year after year which have just been the cases of lack of honest approach and not of poor understanding or implementation. We have the wherewithal but miss the character.
By what you read above, let me explain to you that India Inc will be able to achieve CARG in terms of revenue of not less than 15% as has been the case in last five years. In this light the markets will have to be firmer , some of you may be thinking that why harp so much on bullish tune . In fact it is just that the down side is minimal in my understanding and the room has been created for the companies to grow and hence the natural outcome is higher market advices. The dampener would come only when the promoters would be out in the ring with promises and with demand for your savings . That is just not happening just now and therefore nothing to worry overly about anything.
The Nifty did manage to improve further today and close above 5320 which is quite respectable against low of 4600 in Dec 2012.