The students of SIMSREE had the opportunity of interacting with Mr. Rajeev Thakkar, CIO and Director, PPFAS (Parag Parikh Financial Advisory Services Ltd.) Mutual Funds, in a Corporate Connect session, organised by the Corporate Relations Committee, at his office on 5th October, 2018. The session, which was fairly interactive and beneficial to the students, delved mainly in the subject of value investing, while shedding some light on several factors to look out for while making investments, while simultaneously explaining the work done at PPFAS, which revolved primarily around value investing.
What is value investing? It is an investment strategy which involves the selection of certain stocks, that trade for values that are less than their intrinsic values. The reason for choosing such stocks is the belief that they have been undervalued by the market.
A few of the factors that Mr. Rajeev revealed, to look out for, while investing in a company were:
- Leadership competence
- Management efficiency
- Debt-equity ratio
- Leveraging multiple
- Intrinsic value
Among the aforementioned factors, special focus was given on the management of the firm, and its intrinsic value. Mr. Rajeev ascertained that the stock market was a function heavily reliant on the market sentiment and advised to look beyond the myths or obstacles that usually cloud an investor’s judgement. For this reason, calculation of the intrinsic value plays an instrumental part while carrying out any value investment. The aspect of management efficiency was also drawn, which primarily involved determining the nature of the management, through their relationships with investors and customers.
Mr. Rajeev gave his insights on the current investment scenario in our country, and what could be done differently for us to boost ourselves globally. He also narrated a few of his personal learnings from the late Parag Parikh, Founder, PPFAS, while encouraging the students to actively participate in investing, based on their own research and intuition.
Much of life for most of us is spent dealing with the gaps between what we want and what we get. We want actions, challenges and growth opportunities to explore our competence and effectiveness. Many people find growth opportunities and challenges in the workplace but those who cannot will simply search for special challenges and achievements elsewhere, like losing weight, making the perfect omelette or seeking adventure.
The drive for growth and mastery is powerful but curiously bounded. We take up projects that are exciting, demanding, filled with achievements and occasional failure too. We choose challenges that are difficult enough to perplex and test our powers yet not so tough that we are likely to face severe failure and frequent problems. The late psychologist Nicholas Hobbs called it the level of ‘Just Manageable Difficulty’. The term translates into tasks we can complete by using an average about 80% of our capacity. If you love tennis and try to play a serious match against a four-year-old, you will quickly become bored. It’s too easy. You’ll win every point. In contrast, if you play a professional tennis player like Roger Federer or Serena Williams, you will quickly lose motivation because the match is too difficult.
Now consider playing tennis against someone who is your equal. As the game progresses, you win a few points and you lose a few. You have a good chance of winning, but only if you really try. Your focus narrows, distractions fade away, and you find yourself fully invested in the task at hand.
Working on things that demand most but not all of our total capacity leaves something in reserve for meeting special demands. Pushing beyond that level for long periods is likely to make us feel stressed and anxious and falling below for long stretches can leave us feeling bored and under challenged. But most of the times we try to arrange things so we are neither pushed to the limits nor coasting.
When we succeed in meeting some goals. We replace them with other, more challenging ones but when we fall we lower our sight somewhere. After a loss or failure we usually change some aspects of our goal structure to make success more feasible the next time. But there is a hitch as people can become psychologically trapped by their own success since they race up to keep up with the rising expectation bred by each new achievement.
On 18th August 2018, the Indian currency, Rupee witnessed the historic intra-day low of 70.40 before closing at a life time low of 70.15 per dollar. Aggravating the situation, on 27th August it hit a record closing low of 70.16.
Before we deep dive into “why the Indian Rupee is depreciating, what are its impacts & measures to control it”; knowing “Rupee depreciation & who fixes the value of Rupee” is vital.
When Rupee becomes less valuable compared to U.S. Dollar, it is called as Rupee depreciation. It simply means that, more Rupee is required per dollar. In other words, buying dollar becomes costlier.
Example: One dollar costed for Rs. 49.45 in 2012 and as on 27th August 2018 it costs more. i.e. Rs. 70.16.
Who fixes the value of Rupee?
Most of the people think that either Indian government or RBI fixes the value of Indian Rupee. But in reality currency market decides its value. The Supply & Demand of Indian Rupee in the global currency market decides its value. If the demand of Indian Rupee is less relative to its supply, it will depreciate & if the demand is high relative to its supply, it will appreciate.
For example: Say, India is going through inflation phase (High prices of goods & services). To lower the prices, suppose RBI increase the interest rates (It is the amount charged to borrower by lender). As interest rates are high, people will be less keen to take loan to buy goods & services. Rather, they will be depositing more money into banks to get more interest returns. This will attract foreign investors to deposit their money into Indian banks. That means the demand for Rupee will increase & hence Rupee will appreciate. This type of system is called as Floating Rate System.
India has adopted “Managed Floating Rate System” to minimise the extreme fluctuations in the exchange rate of Rupee. That means if there is a sudden inflow or outflow of money, RBI will use its policies to maintain the steady exchange rate.
Reasons for Rupee depreciation:
In the recent past, number of events has reduced the demand of Indian Rupee in the currency market which led to the Rupee depreciation. Some of these events are:
Fall in currencies of emerging market peers:
The crisis such as Eurozone crisis, Turkish crisis has depreciated their respective currencies Euro & Lira. This has created an atmosphere of doubt and sowed the seeds of negativity in the minds of the investors. As a result, investors find it safer to invest in Dollar rather than any other currency or assets. Due to which demand of Dollar has increased tremendously leading to further increase of its price. As Dollar became more valuable its value in Rupee has gone up leading to depreciation of Rupee.
US-China Trade War:
Imposing 25% duties on about $34 Billion in Chinese machinery, electronics & high tech equipment including computer hard drives, LEDs on July 6, 2018, started the US- China trade war. This in turn resulted Indian Rupee to depreciate due to outflow of money from India which has been discussed in detail further. Due to higher import duties, Chinese manufacturers have increased the cost of selling products which has led to inflation in U.S leading to inflation striking a six-year high to fight inflation, U.S. Federal Reserve has increased the interest rates twice in this year due to higher interest rates investors are willing to deposit more money into banks, in order to earn more income. So, foreign investors has been pulling out money from Indian market & putting it into U.S. market which has reduced the demand of Indian rupee leading to its depreciation.
Impacts on Indian Economy:
Imports have become costlier:
As the value of Rupee has increased to 70.16, more rupee has to be paid to buy the same imports which could have been bought cheaper earlier.
Example: As on 28th August 2018, Oil (WTI) Price Per 1 Gallon is 1.21 USD. If this rate was same 1 year earlier when USD/INR was 63.80, we would have costed 77.198 Rs (1.21*63.80) Per Gallon. But as on 28th August 2018, it cost 84.89 Rs(1.21*70.16) Per Gallon. That means for the same amount of Oil India needs to pay more Rupees when currency depreciates.
Exports have become cheaper:
Due to plunge in Rupee price, exporters get more money per dollar.
The rise in Current Account Deficit (CAD):
A deficit on the current account means that the value of imports is greater than the value of exports. India’s CAD in 2017-18 was $48.7 billion. That means we are spending more on imports than we get from exports. This in turn reducing forex reserve we have which is leading India to ask for more dollars from foreign markets which in turns increasing dollars demand and hence depreciating Rupee value further.
The rise in fiscal deficit:
Fiscal deficit occurs when government’s expenses become more than its incomes. On March 2017, India’s external debt was placed at US$ 471.9 billion. Due to Rupee depreciation, the government will have to pay a higher amount (in rupees), to repay its debt (in dollars). This has increased the expenses & hence fiscal deficit.
The rise in Inflation:
Rising import prices along with rising crude oil prices will increase the retail fuel prices. This will have cascade impact (as fuel is required to transport goods & services) on every industry in turn increasing prices of goods & services. It will lead to inflation. According to RBI, for every 5% fall in Rupee, retail inflation will increase by 20 basis points.
Foreign education has become costlier. Foreign touring has become costlier.
Do we really need to be worried about this?
Moody’s, a credit ratings agency said that , “India is among the 5 countries which are least vulnerable to currency pressures amid strengthening of the US dollar, because of low dependence on external capital inflows”. Some of the reasons could be as follows:
In recent years, India has build-up its forex reserves which act as a buffer to mitigate external vulnerability risk. As on June 2018 India has around $410.07 billion of forex reserve. India has low dependency on foreign borrowings to fund its debt. India has managed to get funding through Equity inflows through FDI. Also Indian domestic finance market has created large savings which has lowered the dependency on external market & hence has mitigated the risk.
At present, Indian government & RBI should not worry about the Rupee depreciation but should worry about the volatility in the currency exchange rate. Stabilization of Rupee is more important. High volatility situation like Rupee being 69 one day and 71 the other day; creates Rupee more risky & fosters the negativity in the minds of the counter parties which do business with India. It becomes difficult for them to do long term business considering high volatility in the currency & also becomes difficult to track the Profits & Losses.
RBI intervention in the Forex market is the short term solution. As we have discussed, when demand of any currency increases; that currency gets costlier. Using the same principal, RBI can sell dollars from its Forex Reserves and can buy more Rupees. As demand of Rupee increases it gets strengthened.
In long run, reducing dependency on imports & improving exports is the solution.
(This article has been written by Yogesh Kurle, a first year management student at SIMSREE)
It was 31 st of July, only a second day of the induction program for the new batch. I remember, despite having a long day full of lectures and activities ahead of them, the students were very excited. After all the Director of Porsche was coming to the college to address them. The lecture was arranged by the Alumni Committee of SIMSREE. As much as everybody was fascinated by Porsche , they were even more excited for the man himself, Mr. Pawan Shetty. He is the alumnus from the batch 2002-04. They were extremely eager to hear what he had to say and to listen to his experiences at his alma mater SIMSREE.
Mr. Pawan Shetty addressed the batch in such a wonderful manner that students felt they were listening to someone who is one of them, with youthful energy and enthusiasm. Mr. Shetty shared his experiences of his time at Sydenham as a student. He spoke about why SIMSREE is better than the other top tier B-schools in India. “Sydenham offers you the freedom to do things, which you don’t have in other top B-schools like IIMs. We have a far better ‘adaptability', something you require day to day in your business.”, he said. That is why Sydenhamites perform better in business world and end up in top management positions. Sharing his experiences as a student in SIMSREE, he said that he was just like the students in front of him, nervous but excited. But he worked very hard for those two years to develop himself, participated in lots of competitions, exposed himself to lots of challenges. He advised the batch to do the same and to learn as much as they can in these two years.
Then, Mr. Shetty told how his professional life started. After his internship at Castrol while doing MBA, he was placed in Tata Motors for his executive placements. The division he worked there was of the commercial vehicles. “I was sent to Kochin”, he said, “Nobody talked Hindi there and very few knew English. So to connect with my customers better, I had to learn their language, Malayalam. I learned it in a month.” This shows the adaptability he previously mentioned and how he practiced what he preached. He told students not to run behind the packages at the start of their careers, but to choose a company where they can learn the nitty gritty of the business to ace their trade. After a few years at Tata Motors he decided to move on. He worked at Ford for a while but was not interested to go abroad to work. He then was offered a job at the Audi, but he didn’t like the offer so didn’t take it. But the people at Audi were very much impressed and then they offered him an exciting job at Lamborghini. At that time, Lamborghini had just entered the Indian market and was looking for people who could lay foundation to their business in India. Mr. Shetty was 1 st hire of Lamborghini in India! Mr. Shetty was proud to say the business in India was profitable from year 1. Now Lamborghini has many showrooms in cities like Mumbai, New Delhi, Bangalore, etc. The students were curious about how he switched from heavy commercial vehicles to luxury cars. “Selling a luxury car is not much different than selling a commercial vehicle.” he said, much to everybody’s amusement, “ You have to focus on individual customer and his dream. A truck driver may be different than an affluent Lamborghini customer, but they both have the dream to own the vehicle. I appealed to dreams of both of them.” How often do you get to hear these insights of the real world business! The students were awestruck. He also said, “The real business lies where the customer is, and you have to reach out to your customers.” He mentioned that more you talk to your customer more you are able to fill the gap between him and your product.
After a successful stint at Lamborghini, Mr. Shetty was given responsibility to handle the business of Porsche, where sir is the Director today. “Porsche has different business than Lamborghini, it has a wider audience and product range, and again I adapted to this new challenge.” Mr. Shetty said. He spoke about the history of Porsche, how it was started. He provided many insights about how the marketing is done for Porsche, how the company leverages the BTL techniques and the digital media marketing. “Porsche cars defy physics as well as economics! But when a customer has an experience of driving a Porsche, you know he cannot resist. It’s not just a car, It's a dream!” The Porsche today has a profitability of 17.3%, more than any other luxury car brand in the world. Mr. Shetty is now spearheading the company’s success in India.
The students were curious about many things and they kept interacting with Shetty sir. When he was asked what does one need to be successful, he said, “Be real! It’ that simple. Be who you are and have intense engagement with whatever you want to do.” He underlined the importance of having entrepreneurial outlook in your work. He emphasized upon the adaptability in your manner of work. He also told that marketing lies in observing people and figuring out what they want.
The batch was showered with these and many more valuable insights. Last but not the least, he said not to forget to have a fun! Develop a passion or a hobby and work on it, enjoy it apart from your business. “I would not be here if it was not for Sydenham.” he added expressing his gratitude towards his alma mater,” Sydenham changed me completely and I urge you to learn as much as you can from it.” The students were delighted, amazed and inspired when he said,” Sydenhamites are dynamites!” Mr. Shetty answered all of students’ queries with utmost promptness. He engaged students, showered them with knowledge, enriched them with deep insights and inspired them to follow the path of success!
We, the Alumni Committee of SIMSREE, on the behalf of all the students want to express our gratitude to Mr. Pawan Shetty for taking time from his busy schedule and coming to the college to address the new batch of 2018-20! Thank you Sir!
(This article has been written by Avadhut Mainkar, a first year management student at SIMSREE)
So you’ve officially become torn between getting a job or starting your own business….
….What to do??
I’ve seen this conundrum play out hundreds of times. Let’s see why it’s awesome(or not) to own a business:
Running your own business is super glamorized because people see all the good stuff about it…..and to be honest, there ARE a lot of good things about it:
When you’re running the show, you get to do ANYYYYTTTHING you want! Do you want your “global headquarters” (aka you with a laptop) located on a beach in Costa Rica? Cool…..go!
You get to write off a ton of stuff on your taxes. You even get to save more money by being a business owner.
You get to be your own boss, call all the shots, decided what you want (and don’t want) to do everyday. It’s 100% up to you.
Many first time entrepreneurs go through this short-lived euphoria of setting up their business and it’s exciting and fun!
This is known as the “Playing Business” Phase. It’s where you get caught up in making business cards, making overly-complex business plans, thinking of incorporating an LLC, hashing out who’s gonna be your C.T.O. and C.F.O. and Chief Whateveryouwant Officer.
And by all means, you SHOULD enjoy aspects of this!
But it also doesn’t make you ONE DOLLAR.
Soon this “Playing Business” euphoria starts to wear off, and reality starts to set in. In whatever business you go into, there’s going to be a lot more unexpected expenses and hassles than are generally reported.
It’s great working on your passion or working for yourself…..but there WILL ALWAYS be sour patches in the journey. Lots of them. The most successful people I know have one thing in common: They simply work a ton. That’s it. And if you want to be successful, that’s what you have got to do. So gear up…..And transform your dreams into reality.
Let our Gods be different, but Humanity still the same
Let our Religions be different, but Faith still the same
Let our Thoughts be different, but Love still the same
Let our Work be different, but responsibility still the same
We the Student Social Responsibility committee of SIMSREE have a vision, a vision to bring a positive social change.
The aim of Social Responsibility is not Charity – It is Upliftment
The Student Social Responsibility Committee of SIMSREE is an initiative to engage the students, community and others in continuous efforts towards doing their part in social upliftment. It aims to ensure that students while pursuing their MBA are also aware of social issues and are conscious towards their duty in creating a better society.
It ensures that students of SIMSREE shine as responsible citizens, the way they shine as sincere students. The Student Social Responsibility Committee of SIMSREE takes efforts to ensure that the students and the community come together to do their part in making a better society.
Some of the activities which we carry out are:-
Addressing Social Issues
The SSRC is associated with various NGO’s in order to carry out these activities.
Being part of the society, it is our duty to be socially aware and responsible. Society is what makes us an
We believe in shaping our society and leading it towards betterment.
We believe in a better tomorrow!
With the Student Social Responsibility Committee of SIMSREE;
Let us make this year about Love, Empathy and Social Perceptiveness.
(This article has been written by Aishwarya Sathe, a first year management student at SIMSREE)
SIMSREE’s Research and consulting Club (RECON) was delighted to conduct a classroom learning program – Case 3600 to deliver the importance of case studies for a B-school student and how to present them effectively. The interactive and thought provoking session conducted by Abhijeet Raut, a senior committee member of RECON and a winner of various case study competitions held at top B Schools(IIM Indore, SIBM, etc. ), inspired the batch to be a part of various case study competitions and differentiate themselves from others by having an edge in decoding case studies.
The session commenced by throwing light on why B-School students should learn through case studies and how do they tackle them. The motive was to make students realize that it is more about how they think, raise questions, make assumptions, areas to prioritize, solution to recommend, and confidence to present rather than arriving at the accurate solution. The session received a commendable response from the batch hence we are looking forward to conduct many more sessions of this fashion which will include a session on solving guesstimates as well.
In the coming October, our team is all geared up to conduct a flagship event, Convergence’18 – A national level case study competition, where the students will get a chance to compete with the best minds from premier institutes all over India. It will provide a platform to them to showcase their skills in front of eminent industrialists. So let us all be a part of it and make it a huge success.
Marketing is the link between a society’s material requirements and its economic patterns of response. It is the process of communicating the value of a product or service to consumers, for the purpose of selling that product or service.
The primary objective of marketing is to provide information about the product and services to the ultimate consumers. The progress of any society, and consequently the country, depends on the standard of living of the people living in that country or society. Marketing has the responsibility of creating, raising and maintaining that standard of living of the society. All of us have the ability to transform the world around us into a better place. All of us get new creative ideas every day. That is not the difficult part. But how do we give life to those ideas? How do we promote our ideas to thousands of people? That is when the difficult part comes in. And that is also when the Art of Marketing comes in!
Today, our country faces a lot of problems of social and economic unrest. Lack of employment is one of the major issues faced by the youth. In such a scenario, it is high time that we create employment opportunities for ourselves. It is in such a time that movements like Make In India become pivotal in shifting our mindset from service based to entrepreneurship. While focusing on entrepreneurship ideas, it is important for us to learn and be adept at the art of marketing our products, services and ideas. A marketer needs to understand the psychology and the needs of the people so as to address them successfully.
Marketing is not only confined to products today. It has become the part and parcel of every individual in all aspects of our life. We are pushing our limits in terms of social, political and economic growth. To bring any problem into the view of the people, we require proper marketing to understand the possible demographic and attack the problems accordingly. It is only because of marketing and media that our society is progressing towards modernized thinking.
Thus, the importance of marketing is that it has made yesterday’s luxury into today’s necessity. Thus, we need to leave the regressive thinking behind us and proceed with open arms into a future of possibilities and hope!
(This article has been written by Shweta Parihar, a first year management student at SIMSREE)