BIZ’ SCOPE - Empowering You!

(A weekly newsletter for IPE’ans)

Hyderabad | Vol 1 | Issue 5 ipe.bizscope@gmail.com Thursday 12 August 2010 | IPE Hyd | Price: ` 8.00

The Power of Ideas: How they made their first million? to be deep in the R&D phase, and such info isn't readily available just
Phonewala Who Didn't Hang Up yet.
It's been a net gain for Jasjit Sawhney one that was nine long years in the PS:: Courier's dead, but that doesn't mean Microsoft's done with
making. After riding the technology boom and bust, Net4India, the tablets—Mary Jo Foley's digging for more info on Menlo, a Microsoft
dialup Internet service company he originally founded, is finally back in project to replace Windows CE (inside Windows Phone) with a mobile
the game in a new avatar. version of Windows NT, like for tablets. But wait, why would Microsoft
Jasjit Sawhney (Founder, Net4India) want to replace the perfectly good Windows CE that's inside of
Began his career as a trader in the Windows Mobile, Windows Phone 7, Zune and lots more, with
London Stock Exchange after Windows NT, the core of its desktop Windows OS’s? MJF is pretty sure
graduating in law from the University of Menlo is all about Microsoft's future strategy in mobile, and the iPad
London. might provide some clues as to the direction, in a perverse way.
Worked as a consultant to
London based O-net, an Internet service Alumni Corner: Srirama Murty Duppala,
provider –a stint which prepared him Jr. Fundamental Analyst, TransGraph Consulting
for starting his own business. Hi IPE’ans,
Grabbed the opportunity created I am very happy to hear that you people
by the Indian internet services market working on Alumni corner, it is my
opening up in 1998 with the privilege to share my views on my
government easing regulations for private Internet service providers. experience with college. Coming to the
Made a cautious start and when companies were investing Rs 15 main topic, IPE taught me a lot from day
crore on infrastructure and Rs 50 crore on marketing, he invested Rs 1.5 one, one nice thing I have to share with you,
crore, taking his family's assistance for the same. that is none other than T.N.R class(IPE has
The returns came pouring in with Sawhney making his first the luxury of having faculty like him). SIP
million in the first year itself. Net4 India clocked profits of Rs 94 lakh is the major learning opportunity in any one
on a revenue of Rs 6.1 crore, and by 2000 the company had expanded its Management career, where one can gain
operations to six major cities. extreme knowledge in the respected area. It
Net4India managed to survive the tech meltdown which put boosts the confidence level in front of recruiter, it happened to me.
many major players in the ISP space out of business using a mix of cost • Required Skills for Commodity Analyst
cutting and streamlining operations. • MS-Office (Excel in Excel, Ms-power point, Word)
Realizing that web hosting and dial-up services alone did not • Statistical tools (Regression, Correlation, and Time series
make a sustainable business. The focus shifted to broadband services analysis)
and IP telephony. • Understating in Macro and Micro Economics
The following year the company crossed the Rs 100 crore mark • Drafting skills
with a majority share coming from web services. • Analytical skills (understanding relation among different
In 2005, when the .in domain registration opened up, Net4India variables)
became a registrar and registered 50,000 domains growing by 39% with
• Understating about Financial and commodity derivatives and
a turnover of Rs 137 crore. With a sizeable brand presence in western
trading knowledge.
India, Shah says he plans to open a factory near Bangalore soon to All the Best
address the southern market and aims to close 2008-09 with a turnover
of Rs 480 crore.
Comics Strips:
GadgetTrivia: Microsoft Menlo Is Actually a Prototype
Mobile Phone OS
Microsoft's Menlo prototype,
previously believed to be a
Windows tablet in the wake of
Courier's untimely demise, is
actually a prototype mobile
device and OS, complete with 3-
axis accelerometer and a digital
pressure barometer. Yes, a
barometer.
The detective work on
this device has been all Mary Jo
Folye over at ZDNet, and what's
she found since we first learned
of Menlo earlier this year is this:
Menlo is a prototype mobile device with a capacitive touch screen (4.1ǁ
diagonal, 800×480) running Microsoft Windows Embedded CE 6.0 R2
which incorporates a Bosch BMA150 3-axis accelerometer and Bosch
BMP085 digital pressure sensor (barometer).
Running on top of the Menlo platform is a new Microsoft
Research Silver light application codenamed "Greenfield," which is a
sensor-centric program allowing users to retrace their footsteps when
seeking to find their cars. And a little of that: Menlo won't be its own
phone, a la the failed Kin. It will instead be a new operating system that
will run on a series of processors. As to the "when" question this appears

Business means empowering you! Page 1

Beside Bookstand: List of books, considered to evergreen and all-
time favorites’:
Title Author
Business
48 Laws of Power, The Robert M.Greene
Art of War, The Sun Tzu
Built to last Jim Collins & Porras
Business @ the speed of light Bill Gates
Competitive Advantage Michael E.Porter
Competing for the Future G. Hammel & C.K.Prahlad
Dilbert Principle, The Scott Adams
Fifth Discipline, The Peter M.Senge
Fish Stephen C.Lundin
Future Shock Alvin Toffler
Genius James Gleick
Warm Regards, Lalita V.
Faculty - HR School & Jt. Coordinator -Exec PGDM, IPE
Event Watch: RBI, FEDAI held exhibition on foreign exchange:
Hyderabad | Friday, Aug 8 2010 IST
The Reserve Bank of India (RBI) in
collaboration with Foreign Exchange
Dealers Association of India (FEDAI) has
organized an exhibition here on Foreign
Exchange for us. The exhibition aims to
spread awareness about availability of
foreign exchange to common citizens and
enumerate the details of various foreign
exchange facilities available for residents and non-residents, rules for
foreign direct investment in India, overseas direct investment, external
commercial borrowings, etc, a release from RBI said here yesterday.
The highlight of the exhibition is an interaction on foreign exchange
matters between the audience and RBI Executive Director H R Khan
and Deputy Governor Shyamala Gopinath tomorrow.
The exhibition was inaugurated by Chief General Manager, Foreign
Exchange Department, RBI, G Jaganmohan Rao
Editors Watch: While several banks interacted with students of
management by putting up the stalls. Many IPE’ans participated and
won prizes in quiz conducted by RBI. “IPE Rocks ☺“
Basic Stock 5: What are the components of fundamental
research?
A fundamental researcher looks at the performance of a company
over a period of time as well as its future growth prospects. He might
compare this data with that of the other companies in the same sector
and measure the same against a stock market index. Most of the data
necessary for doing fundamental research comes from the quarterly and
annual reports of companies as well as from the analysis of their stock
prices. A fundamental researcher studies the following: (1) annual
reports and (2) ratios like EPS, PER etc.
What is there in an annual report?
The annual report of a company provides a wealth of information about
the company. In an annual report investors must look for the Profit &
Loss (P&L) statement and the Balance Sheet.
i. The P&L statement
The P&L statement gives you the figures relating to the
company's income, expenditure, earnings before interest, depreciation,
tax and amortization (EBIDTA), and net profit. Income, Expenditure
and Net profit are the main heads of the P&L statement.
Income: The total earnings of the company from varied sources. This
can include sales, income from dividends, interest received, profit from
asset sales, stock variation (which refers to the closing stock in
inventory) and so on. However attention should be paid to the Sales
figure, which pertains to the core business of the company.
Expenditure: The actual money spent on operational expenses (like
raw material consumed labor costs etc). The Other expenses are interest
on servicing a debt, depreciation etc.
Operating profit: (popularly referred to as EBIDTA): Deducting
Operational expenses from sales gives you the operating profit.
Business means empowering you!
Net profit: After deducting interest cost, depreciation cost and taxes
from Operating profit you get the profit after tax or the Net profit.
Sometimes one-off or non-recurring items such as the sale of land or
investments may boost a company’s net profit. Investors need to assess
whether the profit is driven by core operation and is sustainable.
ii. The Balance Sheet
The Balance Sheet gives you an insight into the assets of the company,
its existing liabilities and how its funds are utilized. It can also contain
the details of the sources of the funds (equity capital, reserves, debt etc).
How do ratios help in fundamental analysis?
Using the data from the annual report and ratios like EPS and PER, it is
possible for you to judge the financial health of a company.
i. EPS: Earnings per share—this ratio reflects how much the company is
earning per share that it has distributed. The EPS is calculated as the
total net profit divided by the total number of shares that have been
issued. For example, if a company has profits of Rs100 million and has
issued 10 million shares, its EPS is 10. The EPS is used to gauge a
company's profitability per unit of shareholder ownership.
You can use the ratio to compare two companies in the same
sector. For example, companies A and B both earn Rs100, but company
A has ten shares outstanding, while company B has 50 shares
outstanding. It means that company A has an EPS of 10 and company B
has an EPS of 2. As a general rule, a higher EPS drives up the stock
price of a company.
However the EPS should not be viewed in isolation and should
also be analyzed along with the industry average as well as the EPS of
the other companies in the same sector.
ii. PER: While the EPS looks at the profitability of a company, the PER
(i.e. the price/earnings ratio) is the market price equivalent. The PER
refers to the market price divided by the EPS. Thus in the above
example if the EPS is 10 and the market price is 50, then the PER is
50/10 = 5.
Meaning, the share of the company is trading at a multiple of 5.
This ratio is typically compared with that of the other companies in the
same sector and you get to know whether the company is on the fast
track or is a slow runner. While comparing the PERs it is better to stick
to the companies in a particular industry and not compare across
industries.
Management Guru’s: Henri Fayol
Henri Fayol (Istanbul, 29 July 1841–
Paris, 19 November 1925) was a
French mining engineer, director of
mines, and management theorist, who
developed independent of the theory
of Scientific Management, a general
theory of business administration also
known as Fayolism. He was one of the
most influential contributors to
modern concepts of management. He
has proposed that there are six primary
functions of management and 14
principles and these are the 6
functions: management, forecasting,
planning, organizing, commanding, coordinating, controlling.
Thank You Note:
We, BIZ SCOPE Team, thank all the subscribers of IPE for your
immense support on carrying forward this newsletter as a part of our
B-Plan. We also like to specially thank our MOB sir Prof Sridhar Raj,
Prof V Lalita and all the PGDM staff for giving support and
encouragement
Editorial Team: K.Karthik, Kaushik Reddy N, Ch.Kartik
Kranthi Kumar V & Karun
~~~ and the journey continues !
Page 2