Business Today

Power On

NHDC, a joint venture between NHPC and MP government, has been profitable since inception
twitter-logoDipak Mondal | Print Edition: November 17, 2019
Power On

Unlike most other government-owned companies, NHDC (earlier Narmada Hydroelectric Development Corporation) is leaner and meaner. Not only does it have relatively fewer employees (595 in all), it has been generating profit from the very first day.

NHDC, a joint venture between central government-owned NHPC (51 per cent) and MP government (49 per cent), was incorporated in August 2000 to build and run two hydropower plants - Indira Sagar (1,000 MW) and Omkareshwar (520 MW) - in the Narmada river basin. It built the two plants in less than four years, 2004 and 2007, respectively. "We have given the MP government much more in dividend than its equity investment," says Arun Kumar Mishra, Managing Director.

NHDC's expertise is in constructing and running mega hydro power projects, but since MP has little scope for more hydro power projects, it has been trying to diversify into other areas such as renewable power. It is now hoping that the MP government will allow it to explore hydel power project opportunities in other states.

Kriti Nutrients

Best FMCG & Food Company (> Rs 500 crore but < Rs 1,000 crore)

Well-oiled Business

The company has become a big player in edible oils.

By Rahul Noronha

Policy changes in the aftermath of the balance of payment crisis in 1991 mandated that a company that imported raw material would have to have an equal share of exports of any commodity. Kriti Industries, which was set up in 1982 by Shiv Singh Mehta, and manufactured pipes, imported large quantities of PVC as raw material. In 1992, Mehta zeroed in on branded edible oil as an option that would generate enough opportunity for exports and set up a plant at Dewas under Kriti Industry's newly created oil division. Twenty seven years later, Kriti Nutrients has a market share of about 13 per cent in the total edible oil market in Madhya Pradesh. Its share in branded edible oil is about 40 per cent.

"In 2018, the company invested in modern extraction processes that are compliant with international norms," says Saurabh Mehta, Executive Director, and Shiv Singh's son. Kriti Nutrients only allows packaged oil to leave its factory to prevent its oil being as sold as another brand.

Apart from oil (60 per cent of product line), Kriti Nutrients also makes soya-based protein and soya lecithin at the Dewas plant.

"In the last 20 years, the entire soybean processing sector has undergone a massive change. Many players aren't around while newer ones have come in," says the 38-year-old Mehta. "We have changed our business model in the last eight years. The idea now is to add value wherever possible," he says, adding that GST provides further opportunity to expand. "We are now focussing on extending our reach to more cities."

According to Mehta, Madhya Pradesh should consider uniform taxation. "Madhya Pradesh has mandi tax while Maharashtra doesn't. With soya consumption high in states adjacent to Maharashtra and Rajasthan, and with no tax on purchase, these states have an advantage over MP," he mentions.

Mehta feels that since India is a protein deficient country, soybean could be a solution. Therefore, more R&D in developing newer seeds and enhancing productivity is needed.

Agarwal Coal Corporation

Best Services Company (>Rs 2,500 crore)

Here to Stay

One of Indias largest coal importers scores high on most performance parameters.

By Rahul Noronha

Indore has a special place in Vinod Agarwal's heart. Back in 1965, his father brought his family to Indore after they suffered a downswing in fortunes in their hometown Rohtak. Agarwal's brother set up Agarwal Coal Corporation in 1973, which he took over. Today, the company has a turnover of Rs 7,000 crore and handles about 12 million tonnes coal. It is also one of the largest importers of coal in India.

In the initial days, the company traded in coal through Coal India and its subsidiaries. The turning point came in 2000 when coal was placed in the Open General License. The decision proved to be a game changer as industrial units close to ports benefitted. Logistics is about 40 per cent of the cost in the business.

Agarwal Coal works on an asset light model but has long-term trading tie-ups and operates through 15 ports. The company has an inventory of 1.5 million tonnes. It has a working capital surplus - a rarity - and is A-rated by CRISIL.

Is the thrust on green energy a challenge? "Coal is not going anywhere, especially in a developing country like India," says Agarwal confidently. "About 65 per cent of power comes from coal. In fact, even the planned shift to electric cars cannot be imagined without coal producing electricity for them," he adds. "Wind and solar energy don't offer the flexibility in power generation that coal does," says his son, Tapan, 24.

Vectus Industries

Best Manufacturing Company

(>Rs 500 crore but < Rs 1,000 crore)

Strong Flow

Vectus Industries plans to achieve a revenue of Rs 1,500 crore by 2023

By Manu Kaushik

Vectus Industries, a manufacturer of water storage tanks and pipes and fittings, operates in 16 states, with Madhya Pradesh and Uttar Pradesh being its largest markets. MP contributes 20 per cent to its overall revenues of Rs 750 crore. "We have three manufacturing units in MP out of a total of 13 across India. In MP, our production capacity is Rs 300 crore," says Atul Ladha, Managing Director. The company claims to be the second-largest water tank manufacturer in the country after Sintex in terms of both volumes and revenues. Ladha says they benefitted from GST implementation - it depressed demand but also enabled the company to shut eight depots and warehouses in some states. Demonetisation, however, was tough. Ladha, who started Vectus with his cousin Ashish Baheti in 2004, says, "My 99 per cent sales are B2C. After demonetisation and GST, there has been an impact on demand but we are hopeful of 15 per cent growth for the entire year," says Ladha. The economic slowdown has affected even the consumption of sanitary products. The company plans to achieve revenues of Rs 1,500 crore by 2023.

InfoBeans Technologies

Best Exporting Company

End-to-end Solutions

With acquisition of Philosophie, Indore-based InfoBeans extends its offering from product development to high-end innovation.

By Joe C. Mathew

In September 2019, Madhya Pradesh-based InfoBeans Technologies, which specialises in enterprise software development, acquired Philosophie, an innovation and design consulting US firm. This was the company's first overseas acquisition, one it had been chasing ever since it raised Rs 37 crore through a public listing on the NSE two years ago. Philosophie, which registered an annual revenue of $10 million (about Rs 70 crore), is expected to help InfoBeans touch the Rs 200 crore-turnover milestone in 2019/20. It had registered a compound annual growth rate of 29 per cent EBITA and 33 per cent PAT in the last four years from a business segment known for cut-throat competition. "We are growth hungry people. We have been aiming to double our revenues every two years. In 2014/15 our revenue was Rs 43 crore. It touched Rs 120 crore in 2018/19. With the acquisition (of Philosophie), we will touch Rs 200 crore this year," says Avinash Sethi, Co-founder and CFO of InfoBeans. The other co-founders are Siddharth Sethi and Mitesh Bohra.

"Our strategys to work with select customers with high growth potential. We go for larger enterprise accounts. We got three Fortune 500 companies as new customers last year."

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