Thursday, November 13, 2008

Opportunity in adversity

Staying afloat
In a time when most are feeling the tremors of the global financial meltdown, there are a handful of Indian sectors that are still staying afloat. “If you look at sectors like insurance, healthcare, engineering, you will notice that they are still growing in volumes and value,” notes Ajay Soni, business leader - talent and organisation consulting, Hewitt.

What perhaps is keeping sectors like insurance afloat is the consumer mindset and attitudes. “Unlike developed economies like the USA, savings is in our DNA. In tough times we save even more for the future,” explains N.S. Kannan, executive director, ICICI Prudential Life Insurance.
Industry experts are optimistic and are expecting the private life insurance industry to grow at a 30 per cent rate by FY ’09. “Since core of life insurance is long term savings and protection, these times with sensex crashing will not affect investors’ decisions,” Kannan reasons. “Customer focuses on long term objective and invests over a time period,” he adds. ICICI Prudential has reportedly witnessed 31 per cent growth in its new businesses and 90 per cent growth through renewal premium business in the last six months. “We’ve expanded phenomenally in the last 18-24 months and our bulk expansion has been in the last 6-8 months,” says Kannan.

In fact, from a branch network of 580 offices in FY’07, I-Pru now has 2,055 branches across the country. “We continue to recruit managers and advisory manpower for these new branches that we’ve set up,” Kannan adds.

Sectors galore
Insurance sector is playing an interesting role in the current downmarket scenario. The life insurance industry has pumped in a huge amount in the equity markets. “Firms like ours and other life insurers have been net buyers even in such volatile times," informs Kannan.

Then, there’s healthcare which is also reportedly doing better than most other sectors. “The global financial turmoil has not brought about any major upheavals in the biotech arena,” says Chirag Mehta, head, strategic planning and development, Intas Biopharmaceuticals. Intas Biopharmaceuticals has seen a 100 per cent growth in the FY '07-'08 and is expecting the same for the current fiscal year. “We are on track to achieve this. Our performance this year and in the remaining quarters would be in line with our expectations,” Mehta points out. “We do not see any major business plan change for the near future,” he adds.

This perhaps also implies no major change in the hiring strategy. “We have added over 15 per cent to our manpower base during the last quarter and the trend for the subsequent quarter would remain unchanged,” confirms Dr. Kashmira Pagdiwalla, director, HR operations, Intas Biopharmaceuticals. Elaborating on the areas of healthcare where major hiring is happening, Dr. Pagdiwalla says, “The talent need is growing in the areas of research, manufacturing, marketing and corporate roles.” Of course, these are sectors that aren’t connected to the meltdown. However, even the services sector which has been adversely hit by the recession has pockets of growth. “In the services sector, Telecom is adding to the customer base and reporting continual growth,” Soni points out. One such example is Airtel which has grown at a 30 per cent rate from the last quarter.The way ahead

Soni, like other industry watchers, believes that the way forward is to set the house in order and use this time to create a strong DNA of managing organisation. “This time offers an option of looking at long-term and not just quarterly performances,” asserts Soni. “Forward looking organisations would build themselves for the long term,” he adds.

To put it simply, it’s an opportunity for managers to reflect on their business strategies and plan for contingencies.

Ref: Times Ascent

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