Till recently, not many people had heard of Satluj Jal Vidyut Nigam. Then the government announced that the company would a candidate for divestment in the coming months and now everyone is suddenly interested in knowing more about Satluj Jal Vidyut Nigam.
With the government preparing for another round of divestment, a fresh new set of public sector undertakings (PSUs) are preparing to capture the limelight. They’re not the big ticket ‘navratnas’ like ONGC, SAIL and GAIL which the public has come to recognise. Instead, they are hitherto unknown companies and nobody is quite sure what they do. The companies picked by the Government for divestment are all set to become familiar names for investors in the months to come.
Meanwhile, Corporate Dossier decided to pre-empt matters by taking a close look at six little-known PSUs that have executed remarkable turnarounds in recent years.
EDCIL
Under Banerjee’s leadership, EDCIL’s turnover has grown from just Rs 25 crore to over Rs 54 crore and its grading by the Department of Public Enterprises has moved up from ‘fair’ to ‘excellent’. In educational projects, typically, the gestation is long but Banerjee seems to be happy with the 10-16% margins her business bears.
Also, she has sketched out high-value areas for her company, quality certification and school accreditation, technical audit for institutional construction, IT education, educational fairs and online testing facilities. Categorised as a ‘Mini Ratna’ by the government, EDCIL provides placement to international students from over 30 countries and sends expert faculty to more than 15 countries.
Today, 65% of the work comes from the government and the remaining 35% from the private sector. Banerjee wants a 50:50 ratio. “I want to get more private and international clients. I’d like to add more professionals and specialists to add value to our client base,” she says.
Heavy Engineering Corporation
People do move from the public to the private sector, but Pillai’s reverse swing from the Sanmar Group in Chennai to HEC at nearly one-tenth the annual remuneration was an eye-opener.
Pillai takes pride in the fact that for the first time in the company’s 50-year-history, it has booked a profit for three consecutive years. The turnover per employee has improved from Rs 4.41 lakh in 2004-05 to Rs 15.73 lakh today.
In 2007-08, sales spiked to Rs 413 crore from Rs 297 crore in the previous year. And in 2008-09, the sales have touched Rs 454 crore with a profit of Rs 18 crore against a targeted profit of only Rs 6 crore. In 1958, the company was created to serve the steel and coal sectors. But Pillai chose a strategic shift. “I want HEC to serve strategic sectors like defence, space and the nuclear.”
In other words, he realised it was time to de-commoditise the company, away from market fluctuations, toward the sweet spot of exclusivity. In line with the new thinking, HEC has developed a very special material for nuclear-grade steel and also supplied the heaviest (810 tonnes) launchpad for India’s space mission.
WAPCOS
At times, a name change can have profound implications. Until 2003, WAPCOS used to be Water & Power Consultancy Services Ltd. That year, the success rate of proposals dipped and the company’s turnover slipped from Rs 45 crore to Rs 42 crore.
Today, the diversified space accounts for 25% of WAPCOS’ business. And though 50% of its revenue comes from turnkey projects, RK Gupta, CMD of WAPCOS, wants to focus on pure-play consulting since turnkeys are typically bogged by long gestation.
Now in the corner room, Gupta is confident of achieving a turnover of Rs 325 crore this financial year and taking the leap beyond the Rs 500-crore mark next fiscal, amid fierce competition from the likes of Tata Consultancy Services, Tahal Engineering, Matt McDonald, Feedback Ventures and RITES.
Gupta should know for he has worked directly with four CMDs in his 20 years at WAPCOS. Having said that, over the last month, there has been a significant shift in the management style of the company. Gupta now works from the Gurgaon office, closer to the 400-odd workforce, instead of the more centrally-located registered office at KG Marg in Delhi. “It’s a more inclusive management system,” he says.
Bharat Pumps & Compressors Ltd
When Abhay Kumar Jain took up the reins of Chairman-cum-Managing Director (CMD) four years ago, Bharat Pumps & Compressors Ltd (BPCL) was down and out. He inherited a net loss of Rs 10.86 crore, a demotivated workforce with wages frozen since 1992, run-down machinery, and more.
Three months into his new job, Jain clocked a turnover of Rs 37 crore for the company through process re-engineering and customer orientation. This translated into BPCL bagging “very good” orders from the subsequent year. Capacity utilisation increased from 26% in 2005-06 to 78% today.
Spurred by diversification to high-pressure and CNG cylinders, the demand from clients such as Oil India, ONGC, Mittal Group and Reliance have peaked. This year, the company has bagged its first overseas export order from Iran for the supply of compressors worth Rs 45 crore.
In 2008-09, BPCL clocked Rs 236 crore, a figure that Jain wants to better by about Rs 50 crore this financial year. Will he get there? Going by Jain’s just-in-time interventions, it certainly looks par for the course.
Projects & Development India Ltd
When the 52-year-old RG Rajan arrived on the scene as CMD of the Rs 73 crore Projects & Development India Ltd (PDIL), the company clearly needed to refine itself. There were about 1,000 people on the rolls and the books showed patchy progress.
Apart from rationalising the workforce to 600, Rajan ensured the churn rate fell below 1%. Within 12 months of taking charge, Rajan directed 20 of his departmental heads to draw up a corporate plan. The refineries started taking notice and the company received fresh orders from IOC, OBGC, CPCL and HPCL.
For the first time in its 31-year history, PDIL paid dividend to the government to the tune of Rs 1.75 crore in 2007-08 and Rs 3.46 crore in 2008-09.
Rajan put the foreign contracts to good use as bait for recruitment. “People got the opportunity to go abroad on deputation, always a major lure,” he says. Alongside, the recommendations of the government pay commission kicked in and salaries improved to such an extent that the overall economic downturn proved to be a blessing in disguise. Last fiscal, for 35 positions, the company received 16,000 applications.
Rajan has been on a hiring spree over the last three years, picking up 200 people, mostly engineers. Beating the recession and turning the corner, PDIL bagged the prestigious Scope Award from Prime Minister Manmohan Singh earlier this month.
Hospital Services Consultancy Corporation
With a turnover of Rs 32.73 crore for 2008-09, HSCC offers single window project management services, from concept to commissioning, setting up hospitals, medical colleges, diagnostic centres, research facilities, clinical facilities and manages procurement of high value medical equipment. On the consulting side, it offers expertise on how to manage large-scale medical infrastructure. The company has moved up the PSU rating order from ‘good’ in 2004-05 to ‘excellent’.
Sharma joined HSCC in 2006 and was with infrastructure major RITES prior to his new assignment. For him, the driving force remains the pool of toppers the organisation maintains. He personally checks his people power every three months. “We are careful we don’t get overstaffed. I carry out a manpower review with regard to the business scale and the skills available to us every three months, we go to the market to hire and create a panel for skills that are in short supply (like architects and structural engineers) for large and complex structures,” he says.
Impressive was the number of desktops in Sharma’s office, too many to take in at one glance. “I brought in e-culture to the organisation,” he says with a certain pride. That explains the lack of PA’s and secretaries in the building, so typical of a government or public sector undertaking. Sharma knows the value of self-reliance. Along with empowering his workforce, he’s following autonomy to the ‘T’.
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