J&J's Shetty: India on his mind

It is rare to find an Indian heading the operations part of a global pharma major unlike say in Information Technology. Dr Ajit Shetty is an exception. Originally from Mangalore, Karnataka, Shetty was elevated as Corporate VP (Worldwide Operations) of the $50.5 billion (Rs 2,27,250 crore) Johnson & Johnson (J&J) in January 2007; he will continue to be Managing Director of Janssen Pharmaceutica (the pharma wing of J&J, the other two being medical devices and consumer products) is one such rarity. On his first visit to India after his elevation was announced, Shetty was gung-ho on Big Pharma's ability to continue coming up with cures for mankind's ailments. "While there have been some setbacks to the existing model of drug discovery, the system still works with a few tweaks. We at J&J are excited about our product pipeline for the near future."

However, Shetty doesn't appear that upbeat about J&J India which contributes an estimated $150 million (Rs 675 crore), or less than 1 per cent to the parent's global revenues. He says that unless the government sufficiently incentivises pharma companies, several of them will choose not to bring their latest products. "Better IP protection and the ability to price so that R&D investments can be recouped are some of the issues which the government needs to address," he adds.

What Shetty is bullish about is Indian talent for research & development (R&D). Janssen Pharma currently has a small 20-plus member R&D team, which is set to be expanded. "Our intention is to tap the skill-set base available (in India) at an affordable price for our global R&D efforts. So we will step up our manpower here in this regard. We will also partner with Indian companies wherever it makes sense to both of us. Already we outsource some work including some clinical trials to companies here," adds Shetty.

-Venkatesha Babu

Land Of Plenty
How much is Indiabulls Real Estate really worth?

In the last line trading sessions of 2006, the stock price of Indiabulls Financial Services zoomed by 31 per cent to Rs 700. The surge had little to do with punters in a partying mood but was linked with the company's decision to de-merge its real estate business. For every one share held in the flagship, investors will get one share of Indiabulls Real Estate Company. These investors would surely be licking their chops, after witnessing the heady northward movements of real estate scrips, some of them which got listed in 2006 at astounding premiums of close to 600 per cent.

What makes Indiabulls Real Estate more attractive is the valuations being bandied about for its six real estate projects. Mumbai-based consultancy Knight Frank, for instance, has estimated the value of these ventures-including their development potential-at a mind-boggling Rs 21,570 crore, of which Indiabulls Real Estate's stake is put at Rs 15,130 crore. The firm has valued the stock of Indiabulls Real Estate at Rs 796.2 per share. However, analysts have different opinions that have lowered the share price by 47-55 per cent to Knight Franks' value at around Rs 423-430 per share.

However, not everyone's as bullish. Says Gaurav Pathak, a research analyst at brokerage firm Edelweiss: "Unlike Knight Frank, we have not accounted higher realisation from the SEZ projects of Indiabulls." Edelweiss has pegged the value of Indiabulls Real Estate at a relatively sober Rs 8,300 crore, 55 per cent lower than Knight Frank's valuation. Merrill Lynch too has been cautious, arriving at a valuation that's at a 47 per cent discount to that of Knight Frank. The huge gap in valuations can be attributed to the differing risk perceptions of Indiabulls' plans for special economic zones (SEZs). Merrill Lynch has fixed a value of Rs 3,300 crore for Indiabulls' SEZ ventures, as compared to Knight Frank's aggressive Rs 9,420 crore. If Knight Frank's valuations are realistic, investors stand to make a neat killing the day the demerged real estate stock lists.

-Mahesh Nayak

Search And Research
Yahoo to set up a lab in India focussing on next-gen tech.

Yahoo's Raghavan

Why would an internet search engine-cum-web directory that aims at eyeball aggregation be interested in hiring economists, ethnographers, cognitive psychologists and sociologists? The answer from Prabhakar Raghavan, head of Yahoo research worldwide, is that current search technology is very primitive and there is a long way to go. "For instance, on Yahoo alone there are some 3.5 billion pages used by 500 million people who access it. Four billion e-mails are exchanged generating 12 terabytes of data every day. While all this is impressive, people are not interested in search results, they are more interested whether they can get their job done by using the Net. There is a lot of scope to improve the search experience and that is where our efforts are concentrated."

Yahoo Research is focussing on five areas, including search, Machine learning, microeconomics, design and community systems. Yahoo, which already has a product development centre, is looking to set up a pure research lab in India. Its product development centre plays a key role in its worldwide operations, through offerings like Yahoo Answers, and currently employs around 700 people.

The new Yahoo India research lab will work on next-generation technologies and it is in this context the company would be hiring people from different backgrounds. Ethnographers and psychologists will, for instance, help the company understand online communities and social search.

-Venkatesha Babu