Documente Academic
Documente Profesional
Documente Cultură
addressing social
problems that
intersect with
businesses
Closing Remarks
This document shall be treated as confidential. It has been compiled for the exclusive, internal use by our client and is not complete without the underlying detail analyses and the oral presentation.
It may not be passed on and/or may not be made available to third parties without prior written consent from .
Ambition
Personal,
Institutional,
National
SVII 2.pptx 3
A. Understanding the
environment –
Economic, political and
social
SVII 2.pptx 4
A India’s growth story
The Indian elephant has learned how to dance – India's GDP has incre-
ased by about 7.5x since 1980, 3 times faster than global expansion
Indexed GDP growth1) [1980 – 2014, 1980 = 1 ]
GDP 1980- 1985- 1990- 1995- 2000- 2005- 2010-
Comments
8
CAGR 1985 1990 1995 2000 2005 2010 2014
India > India’s GDP growth has consistently
India 5.16 5.95 5.08 6.08 6.72 8.31 5.45 exceeded 5% over the last 35 years
7
World 2.67 3.54 2.09 3.46 3.05 2.59 2.65 > Since economic reforms of 1991,
India has achieved the following:
6
– Four-fold GDP growth
– Poverty alleviation for ~225 mn
GDP growth, x times
5
Indians
– Increase in telecom penetration
4 from 6 mn in 1991 (1% penet-
ration) to 915 mn in 2013 (73%
3 penetration)
World – Construction of 45,466 km of
2 national highways between 1991
and 2013 – four times the length of
the total Autobahn network!
1
> Growth has been achieved despite
vagaries of global markets, internal
0 strife, and politics – proof of India’s
resilience
1980 1985 1990 1995 2000 2005 2010 2014
1) All GDP numbers used for calculation are in 2010 US dollars
Source: US Department of Agriculture Economic Research service, Real GDP (2010 dollars) Historical,
available at http://www.ers.usda.gov/data-products/international-macroeconomic-data-set.aspx SVII 2.pptx 5
A India’s growth story
While its GDP growth has been much below that of China, consider-
ing the 13 year lag in reforms, the difference does not seem so stark
Comparison of GDP growth: India vs. China, 1980 to 2014 [%]
Comparison of India’s 2014 GDP with China’s
Indexed GDP growth 1) [1980 – 2014,1980 = 1 ] 2001 GDP, accounting for 13-year lag 1) [USD m] Comments
25 > China’s GDP has not dipped
below 8% in the 6-year periods
6.12% 2,371 between 1980 and 2014
20
GDP growth, x times
GDP split – India vs. China [2014] Sectoral split in India's GDP Comments
7% 4% 2% > Financing and business services were
9% 14% Agriculture 12% the fastest growing categories in the
20% Indian services sector in 1980, while
9% growth in Industry, mining and
28%
2% manufacturing remained stagnant
26% Industry 9%
43% 15% > Transport, storage and communication
3%
9%
15%
services were the main drivers of
3% growth in the services sector in 2000,
15% while growth in Industry and
manufacturing remained stagnant
> In 2014, export of software services
60% Services 60% was the largest contributer to India's
48% 50%
services sector, whereas Telecom and
39%
software together drive India's global
brand image in services
> India's export of financial services too
witnessed a high growth of 34.4% in
China India 1980 2000 2014 2013-14
Allied services Mining & Quarrying
Agriculture Manufacturing
1) Share to total GDP at constant 2004-05 prices
Other Industry Services
Source: Planning commission database, ADB Economics working paper "The service sector in India", June 2013 SVII 2.pptx 7
A India’s growth story
60
40,000
50
30,000 32,522
40
30 20,000
20 11,771
10,000 7,539
10 3,618
661 1,030 1,906
0 0
1980 1985 1990 1995 2000 2005 2010 2015 1981 1991 2002 2012
1) PDI = Personal Disposable Income
India's import and export intensity has also consistently grown over
the last 35 years, comparable with China during the last 5 years
Import/Export Share [1980 – 2014, % GDP]
% of GDP
50
45
40
35
30
25
20
15
10
5
0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
China, import Germany, import India, import China, export Germany, export India, export
FDI as well as FII flows have grown significantly since 1991, with a
cumulative inbound FDI /FII of nearly USD 0.5 trillion since 1993
India FDI & FII inflow [1993 – 2014, USD bn]
USD bn1) FDI inflows by country & Sector, cumulative 2000-20152)
60 Services
Mauritius
55 36.0% 17.0%
Singapore
50 13.0%
Others 45.0% 10.0% Construction
45
9.0% UK
40 6.0% 5.0% 7.0%
23.0% 7.0% Telecommunications
4.0% 6.0%
35 Others Japan Computer hardware & software
6.0% 5.0%
30 Drugs & Pharma
USA Netherlands Chemicals 3) Automobile
25
20
15
10
5
0
(5)1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
(10)
FDI inflow in India FII inflow in India 4)
1) USD billion at current prices and current exchange rates 2) For period Apr 2000 to Jan 2015 3) Except fertilizers 4) INR/USD exchange rate = 60 has been used
Source: Department of Industrial Policy & Promotion, UNCTAD, SEBI SVII 2.pptx 11
A India’s growth story
After two challenging years1), the Indian economy now shows signs
of recovery – including falling inflation and declining interest rates
India – key macroeconomic indicators (1/2)
GDP growth rate2) [%] Inflation – WPI annual change2) [%]
10.9 10.8 10.4 10.3 10.0
9.0 9.4 9.7 9.5
7.1 7.7 7.7 7.5 7.6 7.3
7.8 7.5 7.9 8.6 8.8 8.9 8.2 7.8 6.7
7.7 7.5 7.0 5.0 4.8
6.1 5.8 6.1 6.9 6.1 6.6 3.9
6.0
5.3 5.5 5.3 1.6 1.4
4.5 4.8 4.4 4.8 4.7 0.5
-1.8 -2.3
-4.5
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 153) 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15 154)
India industrial production (% YoY growth rate) Bank repo rate [%]
15
10
-5 5
Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr- Apr-
08 09 10 11 12 13 14 15 08 09 10 11 12 13 14 15
1) As a result of the global economic crisis and policy paralysis of the previous government; 2) Refers to Financial Year i.e. Q1 (Apr-June), Q2 (July-Sep), Q3 (Oct-Dec) and Q4 (Jan-Mar)
3) Estimated GDP 4) Includes July and Aug. data
Source: MOSPI; RBI, IMF; Press; Economic Advisor of India; Ministry of Finance, India; DIPP; Roland Berger SVII 2.pptx 13
A India’s growth story
150 75 8
Exports Imports Trade Deficit National debt Fiscal Deficit
70 6
100
65 4
50 2
0 35 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY09 FY10 FY11 FY12 FY13 FY14 FY152)
09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 13 14 14 14 14 15
1) High FDI in Q4 2012 due to US $7.2 billion Reliance Industries-British Petroleum (BP) deal and in Q1 2012 due to investments held up in the previous year 2) Estimate
Source: Goldman Sachs BRIC Report; World Bank; Roland Berger Analysis SVII 2.pptx 16
B Innovative India Inc.
Overall, India’s top 50 companies have grown at a combined CAGR of 21% between 2005 and 2014! 1) Standalone company revenue
Source: www.moneycontrol.com, Economic Times, Roland Berger SVII 2.pptx 17
A Innovative India Inc.
Source: Competitive Advantage of Emerging Market Multinationals, Roland Berger SVII 2.pptx 18
B. India inc. at the
intersection of shared
value and profitable
growth
SVII 2.pptx 19
B Innovative India Inc.
In our belief some of the major themes in this journey evolve around;-
5. Linking economics with social progress – setting the context of business and
rooting it in overall developmental agenda for the society
SVII 2.pptx 20
B Innovative India Inc.
There are several examples that have done the above well at
multiple levels not only domestically but also internationally, across
a variety of industries
1 GE Ge has leveraged technology, innovation and a deep understanding of consumer needs to create the low cost
Medical Devices ECG machine for markets like India taking healthcare delivery to millions more in an environment where
service delivery is localised, easy, cost effective and maintainance free.
2 Godrej Consumer Godrej Consumer Products Ltd has championed science and technology to drive innovation and create
Products Ltd.: market-disruptive products; it has adapted products from its global businesses and localized them with the
FMCG help of consumer insights, local suppliers, and an innovative and dynamic R&D organization
Maruti Suzuki: With its efforts in extensive rural marketing, frugal engineering, building a profitable and efficient supplier base
3 and strong customer relationship management, Maruti Suzuki has maintained its market leadership position in
Automotive
India for 3 decades. Moreover, it has overtaken its parent in terms of valuation; it accounted for 33% of
Suzuki’s auto revenue & 55% of EBIT in FY15
4 Mahindra Rural A prime example of a successful business built on the principle of shared values via leveraging its strong
Finance: parentage, understanding of customer priorities, development of local sales force, and customized credit-
Financial Services appraisal and collection mechanisms
5 Vaatsalya: Customer focussed and asset-lite-no-frills-low-price-hub-based model focusing on a core set of specialized
Healthcare Services services, Vaatsalya's operating model can be applied in Western markets where concerns about increasing
healthcare costs are growing
Investment-lite
model Strong 4 Cost-efficient and investment-lite model:
> With a network of 15 hospitals Vaatsalya creates value by
model customer focus improving price negotiations with vendors and standardizing
operating procedures
Focus on cost- > Capital expenses for land are avoided by leasing the land;
efficiency moreover, Vaatsalya operates in semi-urban areas such as Hubli,
Bijapur etc., where rentals are low
> Investment are tailored to keep costs low. In tier II cities. Without
land cost (about 30% of the total) the company invests about INR
0.3 million for instruments etc.
Core value proposition: A for-profit chain of hospitals and clinics in India 5 HR-friendly policies: Attractive compensation structure to
which strives to provide quality healthcare in semi-urban and rural areas incentivise doctors to relocate to small cities, provision of greater
autonomy and control to doctor staff, rotation of key medical staff
1) Interactive voice response system