In the seconds, the minutes, and the hours could lie the next source of competitive advantage for your company. Even as rivals try to differentiate themselves on cost, on quality, on scale, on service, your company can make time its cutting edge. For, only to the swiftest shall go to the race for getting the first opportunity to delight the customer. Bt presents the CEO's guide to competing on time for the 21st century.

A BT--CMIE Research Project

They are the golden glow of corporate India. The winners of the tournament to distinguish the knights from the foot-soldiers, the performers from the failures, the fleet-footed from the laggards. A.k.a. the BT-500. Welcome to the Class Of 97, which is as much a product of gyrating bourses and punishing investors as it is of individual performances. And in 1996-97, more the former than the latter. But amidst the joyous notes of the trumpets heralding the 500 most valuable companies in corporate India, there is a discordant note that must be patiently heard too. For, the value league has been devalued by an investor extremely sensitive to the convulsions of coalition politics. And she certainly voted for uncertainty.

Stockmarket India had absolutely nothing to scream about. The market capitalisation of the 5,840 companies listed on the Bombay Stock Exchange (BSE) fell 17.69 per cent, from Rs 5,18,824 crore to Rs 4,27,016 crore, between April 1, 1996, and March 31, 1997. And the BT-500 fell by 3.78 per cent, from Rs 2,58,643.36 crore to Rs 2,48,862.30 crore. The BSE Sensitivity Index (Sensex)--the barometer of corporate health--hardly moved between April 1, 1996, and March 31, 1997, showing a marginal fall of 50 points, from 3,410 to 3,360.

But statistics mask the market's sensitivity to political uncertainty in the country. Two governments fell within a span of one year: the 13-day Atal Behari Vajpayee Administration, and the 11-month H.D. Deve Gowda Administration. The liquidity crunch, the high cost of capital, and the disappointing half-yearly corporate results only heightened the bearish sentiment. It was Budget 97, which recommended massive reductions in corporate and personal income taxes, that fired up the dispirited bulls. The Sensex reached a peak of 4,029.56 within a week of Union Finance Minister P. Chidambaram's speech--up from 3,652 on the eve of the Budget. However, all gains were frittered away when the Deve Gowda Government fell. The Sensex fell too.

Although the market had caved in quite a few times during 1996-97, it had crossed the 4,000-mark at least twice--on June 14, 1996, and March 3, 1997--thanks to large purchases made by foreign institutional investors. Given the see-sawing of the market, a valuation based on a single date, i.e., March 31, 1997--when the Sensex dipped to 3,360--would not have reflected the true value of the BT-500. It would have only captured the sentiment of the day--not the mood of the year. Prospectively, March 31, 1997, was an aberration. For, foreign fund managers pushed the Sensex to over 4,400 on July 9, 1997. The market is gradually being perceived as a long-term investment opportunity, not a short-term game of speculation.

The Market And Value

Against this backdrop of effervescence, the notion of market value redefined itself. So far, market capitalisation--the number of shares outstanding multiplied by the share price--has been successfully employed to rate corporates. Since market value reflects the capacity of a business to create and capture value, it is the best-available yardstick to evaluate companies. Financials provide only a uni-dimensional view of the performance of corporates today. Market value, on the other hand, provides a composite view of the future. After all, market value is the aggregation of the opinions of market experts, company and sector analysts, and investors. But a single day's market value does not always give a fair indication of corporate value. It provides only a snapshot, not a tracking shot that covers the entire year.

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