Narayan murthy is back - everybody needs a hero

I am a big fan of family run business ... When the values of the company are owned by the promoters ....  Somehow the promoters are best placed to ensure maximum ownership.  BUT it is very important that when business moves to the next generation ... The generation is equally capable to lead. 

Somehow Infosys was always promoted as a professionally managed / run company and as per an understanding ...none of the children of the founders will work in the company ...perhaps so that their is no eyebrows raised and talent alone determines success.  However - I believe it had no meaning if it was decided that the CEO post will be in succession for the founder - CAPABLE or not.  Definitely Shibulal  found the task challenging and is not cut out for it.  BUT this structure is no less superior to a family run business.  So why the rule of KIDS not working in INFY anyways???

From my experience in looking at equity markets have definitely found family run business like - Jagran Prakashan, DB corp, Havells , TTK prestige, Page industries , ZEE entertainment , Dish tv have done well.  However, one may argue that when companies are small they are family run and once u are big ...one needs to give way to professionals and family should step aside.  BUT is this a good thing ??? Mixed opinion.

Employee / companies needs heros and they are more likely to come from the founding members or promoter family ....as they have earned years of respect in building the brand/ company.  While - Bharti Airtel and WIPRO are finding means to give space to the promoter kids ...It is actually not a bad thing. So is the return of Narayan murthy and his son at INFY. 

While- I have read people raising eyebrows that what happened to the professionalism and the rules laid down by the promoters.  Well Rules are to be broken and most of the times rules lose significance with time .

The Street is going to watch Narayan murthy and his kid closely and the onus is on them to perform. BUT I think they have already won as INFY has got it's hero back.... Time to get to work ...and yes " under promise and over deliver ".

( may be the promise is high this time already ... But I am betting on my hero ) 

Fed official - “Devaluing a currency is like peeing in bed. It feels good at first, but pretty soon it becomes a real mess.”

Infosys q4 results - does it need tuition on Art of managing expectations ?

Infosys from being the most predictable company has now taken the pole position in being the most unpredictable. 2 qtrs of 20% movements ... What transpired?

How can a company /mgmt which is unable to communicate clearly to investors about business outlook and performance - be doing the right things with its clients in a service industry?

OR

Should one argue that the company has been consistent and it was the analysts cum investor community which fell into the Trap of Greed and fear. While last time I vocally went in support of analysts saying that they are victims of mgmt guidance - Did they become over exuberant - looking at only the silver lining ...when the picture painted was ominous?

While - analysts and company both messed it up royally - this is the time for shrewd investors to bet against momentum.

Recently was very positively surprised by ZEEL mgmt to correct - analyst expectations - something INFY can learn from. ZEEL while has had a weak past of CG ...atleast the promoters are Cognizant of the permanent impact on surprising the street negatively and the need of managing expectations.

Personally - I prefer companies like Infosys - were they give opportunity for the level headed to swim against the tide and avoid the noise .... Creating opportunities for smart investors. They add FUN to An analyst life and in situations created by INFY only experience of understanding market participants behaviour matter.

Also - had the current leadership not been founders of the company - should they not be FIRED.

MY Earlier note -

Infosys q3 results - something is definitely wrong...very very wrong.

Infosys q3 results were greeted by e Big Bang by the street with the stock surging close to 17% ... That's a record for any NIFTY stock. But this movement raises many many questions ... How can a company which is covered by maximum analysts ...more than 70 in last count ...get it so wrong and be so significantly surprised. This raises questions more on the companies ability and intent ... Less on the analysts intellect. I being an analyst and have spent considerable time in analysing analyst behaviour can appreciate why the analysts got it wrong .... SIMPLE : company recent performance has been poor. After years of consistently beating its own guidance ... The company had faltered in the last few quarters. Past track record of INFY had been consistently meeting or beating its own guidance and common analyst practise was to forecast 2-5% above company guidance. This was in complete sync with Narayan murthy business maxim - to retain trust of investors, it is better to under promise and over deliver.

Infosys started a culture of giving out qtrly guidance ... Because NRM felt that investors should be aware of as much as data as the company was aware of. Also, NRM clear belief - when in doubt, disclose. So what transpired in this quarter was a miracle - Infosys after having unable to meet the guidance in the last few quarters had faced a lot of investor wrath... As investors believed that the company had lost its touch. Also, this believe was further supported by the mgmt who ... Kept guiding for inability to meet numbers again during the quarter. This led to MUTED expectations and lower multiples. However, the results were totally different.... Results were strong on all counts.. High volume growth and rate increase.

So why did the mgmt give a wrong impression of business condition/performance ?
Did this action create value for share holders or destroyed value ?

With the disclosure of being an analyst - I strongly argue the case for An analyst not being at fault ...as it is always better to be conservative and one should rarely make forecasts against mgmt guidance. In this case ... Had it been any other company ... doubts would have been raised if the company did this deliberately for the interests of few. People would have studied if - any esops were given recently of a low strike price.

While - I maintain my TRUST in believing in the value system of INFOSYS ... I believe their are valid questions of what went wrong with investor communication.

DREAMing

Watched ARGO - Oscar winning movie.
Really awed by Ben affleck....first as an actor and then realising the direction.

Two key learnings:
How do u put your life in the the line of duty .... When u r assured no recognition at all. At times confirmed defamation if things don't go as planned.

I guess ... This is a big learning for corporate life. Day in and day out most professional decision are formed on what's in it for me. Will I be praised, recommended and promoted for this? Will it lead to my career enhancement? While, the biggest joy in life is to make people smile .... This as an end gets quantified mostly in terms of financial gains.

Gita Saar - KARAM kar Fal Ki icchcha mat kar. ( the only Gita Saar I remember and however SOCIALIST it sounds ...has far more and many interpretations).


DREAM BIG and keep dreaming

I still believe the AMERICANS are the best story tellers. Remember a talk titled on TED by Shekar Kapoor - We are the stories we tell ourselves. America is a great nation ...because it can tell great stories and one can do that when we only have a culture of promoting dreams. The only 2 great stories I remember of india are Ramayana and Mahabharata .... Undoubtedly we were great then.

Until - we are so hung up on being in the rat race for schools, education, degrees & jobs....
With a billion+ pop ...we suck at Sports ./ Olympics. Because sports don't make a traditional living. Wish what the parents of Sachin, PT Usha, Anand , kapil .... Had to tell their kids? Cricket , Bhangra , chess is OK..but see that u score well in maths. AR Rahman ....do Well in English. We seriously need to DREAM, celebrate failure , take risks and Failure should not be a taboo.. It should be learning path to success.

Also, why do we have an age for everything. We must have the least divergence in marriage age.... 18-30 period. Every youngster has to start earning his income to support a family and be prepared for marriage. Bollywood is the bet example ....where dreams are not victims of society determined rights for marriage, secure income. Bollywood has given us GE dream of amitabh bachchan ...he was told he was too tall and his voice very coarse. Shahrukh from another actor in TV series FAUJI is the superstar.

DREAM..... DREAM BIG.... World will criticise you and then celebrate with you ( no intermediate points) ..... Celebrate journey ... Not the goal

TATA log by Harish Bhat (Tata insider) - book thoughts ...

I took this book... Because I am always intrigued by the Tata group .... It's an iconic brand and commands respect like no other. Tata group upholds above all a belief of sincerity towards the consumer.

Foreword states Ratan Tata speech - Think Big. lead. never follow. ( inspiring ).

This book has a few stories about we're TATA group exhibited character ...and How.
4ps which makes TATA a 150 yr old strong brand and can be called the TATA way are - pioneer, principled, purposive and perfect.

Quote JRD Tata - ' I have often come to the conclusion that if we were like other groups, we would be twice as big as we are today. What we have sacrificed is a 100 per cent growth, but we wouldn't want it any other way.'

I had personally been negative on TATA for their lacklustre performance vis a vis reliance. BUT today I can say for sure that the comparison is very stupid.

Book is a collection of few stories...which characterises the Tata log

First story - TATA indica
Story of pioneering .... We're how RATAN Tata gave a clarion call for Indian own car ...and set to go about it. After some initial hiccups in product ... The product has done well.

My thoughts : don't agree at all. Why this need of do it urself? And anyways is Tata indica around.... It might no longer be the preferred taxi as well. The only reason it did well for was it was on diesel and best suited for the economy minded taxi business. TATA motors cars ... SUMO yes for it's size helps the large Indian family ... The remaining Tata estate , safari more an extension of the commercial vehicle business. Also, Tata nano is a disaster at best. Tata motors is today largely about jaguar and land rover...and that's the best thing they did. So what's great about indica and nano... Good attempts ...but sorry. So much for pioneering.....

Tata chemicals - nice work on saving the shark whale. Never knew about it

SCIP - second career for intelligent people ...targeted at women... Awesome ideation.

Tata finance ... Nobody is infallible. Hats off to the way Tata managed to come out unscathed. The recent telecom scam was another example. It requires very strong value system to not bend with the system. If any company deserved to be in airlines is TATA but for the bribe seeking politicians. Tata sons owned up all misdeeds of Tata finance and ensured no consumer was hurt. Today , the norm is that bankers are party to the crime. How can our banking system tolerate - Deccan chronicle, mahua tv and zoom developers. Not naming infra companies and kingfisher ... as they are more of operational failures.

Tanishq - Pioneer and Perseverance

Silly fact : Titan began as a ownership with Tamil Nadu govt ...
Silly fact 2 : tanishq name is ta - ( Tata and Tamil Nadu) + Nisha meaning jewellery. Another meaning tan - body , ishq - love.
Actually tanishq was name inspired by the name of a dog ...monishqa. LOL

Jewellery business... What does it take to change consumer behaviour and more so the deep rooted Indian tradition of buying gold. While after its been done it seems no rocket science.... But it requires the will of xerxes desai to get it done. Why do Indians prefer family jewellers - 22 karat gold ( fact their gold is less impure ) , black money .... And belief that showroom charge u more. I think my parents believe it completely. But I don't see anybody in my generation or the next .... Trusting family jewellers. They would prefer tanishq, TBZ, PCJ....

EKA - the super computer .... Indias first entry into supercomputers and I never knew it was pioneered by TATA and Mr. ramadorai in charge. KUDOS.

Tata steel - DEMING prize ... Only steel company outside Japan to get the rating. I think I need read more on Toyota to appreciate this quality initiative.

Tata tetley ....story of acquisition.
While ...I don't know ..if this acquisition yielded value over the long run. Looks like after the tie up with Starbucks ... But cannot agree more that it paved the way for CORUS and JLR.