Search results

In April 2012, JPMorgan Chase & Company was struggling with large losses that had the potential to damage the reputation of the company, of its Chairman, Jamie Dimon, and of its Chief Investment Officer, Ina Drew. The losses arose from large credit derivative trades in the London office that Dimon described as “bad strategy … badly executed … poorly monitored”.

This case helps students to analyze non-financial and financial aspects of a company and observe quantitative and qualitative aspects of decisions and decide whether to invest or not and give suggestions to sell, buy or hold stocks. The case is expected to help the students understand and analyze the following points: the overall performance of the company and industry, how fundamental and technical analysis is applied to reach investment decisions, the areas where Jet Airways occupies the top position compared to peer group (competitor analysis), the company’s financial position and valuation with the help of tools and techniques and suggestions and observations to shareholders whether to buy/sell or hold shares.

This case can be used for MBA (Finance) students on equity research and valuation. Students are introduced to the fundamental procedures of equity research and analysis – evaluating sector desirability, financial modeling, equity valuation methods. To enhance research skills, students are required to acquire basic knowledge on macro and micro economic indicators. This case helps students to analyze non financial and financial aspects of a company and observe quantitative and qualitative aspects of decisions and decide whether to invest or not and give suggestions to sell, buy or hold stocks.

Mr Rahul, a consultant in Karvey brokerage house was about to leave the office on the evening of March 24, 2015 when the phone rang. It was Mr Srirag, one of his clients and close friends who was passionate about investing in shares. Mr Rahul with his two decades of experience in monitoring and advising various investment plans has been continuously advising Srirag on different investments in shares. Srirag said “Rahul! You know that I bought many shares in Jet Airways. While studying the annual reports of Jet Airways 2014-2015 about its business profits and losses, I came across a January to March, 2013 business quarter analysis report that wrote about Jet Airways facing a net loss of 4.95 billion rupees due to over debt burden and interest costs. It also stated that the company sold a 24 per cent stake in 2013 to Etihad for 332$ million which is an Abu Dhabi based airline. The news said that the deal would help the company overcome financial challenges, raise cash, cut costs and gain access to the global flight network. I am worried about whether this deal would allow the company to continue its operations from India or not. I am also concerned about the downfall of Kingfisher, a major setback in the aviation industry in India that owes 8,000 crores to its employees, banks, airports, oil companies. I am worried that either my investment in Jet Airways might bring huge losses or the partnership with Etihad airways would result in the reduction of costs and due to joint sales efforts, sharing resources and network integration thereby leading to a valuable share price. Since your guidance has helped in many issues, I would like to know the present condition and future prospectus prevailing in Jet Airways”. With a lot of ambiguity in his mind, he asked Rahul to recommend if he should hold or sell the shares in Jet Airways.

The case is expected to help the students understand and analyze the following points: the overall performance of the company and industry, how fundamental and technical analysis is applied to reach investment decisions, the areas where Jet Airways occupies the top position compared to peer group (Competitor analysis), the company’s financial position and valuation with the help of tools and techniques and suggestions and observations to shareholders on whether to buy/sell or hold shares.

The link to the following videos to be sent to participants in advance to help them prepare for the class. www.youtube.com/watch?v=_3XJXTmILyk, Equity Research Presentation: Coca-Cola, www.youtube.com/watch?v=n5pEK_2uItg Write Equity Research Report, format, process, www.youtube.com/watch?v=mMLJccgiSTk Equity Valuation and Analysis-Part I.

CSS 1: Accounting and Finance.

The purpose of this paper is to illustrate how a well-performing company can turn into a loss-making company on account of adverse industry cycle and poor management of risks in the business. The importance of factors like optimal level of leveraging, the ability of the management to deal with external and internal risks, and importance of corporate governance in the process of credit appraisal is understood from this case.

The case relates to the credit appraisal by the banks of a prominent steel company in India. The company, Bhushan Steel Limited, was doing very well. The banks lent aggressively to the company, based on their credit appraisal. However, the company soon turned insolvent on account of poor assessment of risks and deteriorating external factors. While this case may be analysed and studied through the eyes of both the Management and the lenders, the focus is currently on the latter. In a real-world scenario, the challenge for the lender is to sieve through the financial as well as non-financial data and make a valid conclusion on the level of credit worthiness of the borrowing company. This includes the topics of operational efficiency and synergies, commodity price cycles, external credit ratings, operating and financial leverage, regulatory risks and corporate governance.

Post graduate business management programmes – Finance specialisation.

Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 1: Accounting and Finance

The learning outcomes of this study are to gain an understanding of the banking regulations and their impact on banking performance, to understand the intermediation role of banks by channelizing depositors’ savings and providing loans to borrowers, to explain an impact of a recent regulatory change in the Indian banking that directly impacts their financial performance, to critically evaluate the different financial ratios to analyze the performance of a bank and to build a DuPont analysis framework for banks.

The case serves as a primer on banking regulations in India and provides insights into banking performance. Banking regulations play an important role in maintaining financial stability, specifically in emerging economies like India. The protagonist of the case is Salil Kumar who presented his internship project to the review committee of Stock Investment Company on April 16, 2021. However, he had to rework and present his final project within seven days on the basis of the feedback received from the committee. Kumar faced the dilemma of bringing together a comparative study across two banks, namely, Industrial Credit and Investment Corporation of India (ICICI Bank) and State Bank of India (SBI) and building a DuPont framework covering the different aspects of banking performance. The case exemplifies the intricate regulatory landscape in India within which banks operate and highlights the recent alterations introduced by the Reserve Bank of India. For instance, the framework for dealing with domestic systemically important banks (D-SIBs) was introduced in 2014 and subsequently adopted in August 2015. The D-SIB framework provides inherent guarantee to large banks such as ICICI Bank and SBI. This ensures government backup in the event of any failure, thereby securing financial stability. The case study is suitable for banking and financial accounting courses taught in postgraduate management programs. Once the case is studied, the students are expected to understand the basics of banking, regulations, impact of regulations on banking performance and financial measures.

The case provides valuable insights into the intricate dynamics of the banking industry, offering a critical perspective for analysis. A well-structured teaching note would serve as a valuable tool for instructors, allowing them to facilitate engaging classroom discussions and effectively guide students toward achieving the desired teaching objectives.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

The learning outcomes of this paper is as follows: to understand and analyze the turnaround model of Pearce and Robbins (1993); to familiarize with parameters and actions in the Prompt Corrective Action (PCA) framework of Reserve Bank of India (RBI); to comprehend the probable situation warranting turnaround; to identify the key ratios which signal the financial health of a bank; and to understand the applicability of the turnaround model in bank’s revival.

The case explores various challenges faced by Mr Prashant Kumar during the turnaround process of Yes bank. The youngest bank started its operation in 2004, and in the first six years of operations, Yes bank registered a compound annual growth rate of 100% on the balance sheet, becoming the fourth-largest private sector bank in the country. However, the irony is that this shine and glitter was a short-lived phenomenon and after the regulatory inspection of 2016, Yes bank collapsed like a house of cards. This case has incorporated the three major phases of Yes bank i.e. the rise, the fall and the revival. The turnaround process led by Mr Kumar was explained using the turnaround model given by Pearce and Robbins (1993) and the PCA framework of the RBI. The conditions which warranted the need for the turnaround in Yes bank and the factors responsible for the same are discussed. The multiple challenges faced by Mr Kumar and the strategic responses adopted by him were incorporated in great detail. What were the outcomes of those strategic choices? Should he continue with similar approaches? Was he successful in stabilizing the bank which was broken from the core? What next if stability is achieved? How Mr Kumar should lift Yes bank to the recovery zone? And most importantly, will Mr Kumar be able to change the poor public image of Yes bank? The reflections of all the above questions are narrated with the actions of Mr Kumar.

The case is intended to be taught in the class of strategic management for postgraduate-, master- or executive-level participants of business administration. As the case is focused on a banking organization, it also can be taught in banking class.

Teaching Notes are available for educators only.

CSS 1: Accounting and Finance.

In early 2008, IndusInd Bank (A), which had been faring poorly for several years, decided to bring on board a team led by Romesh Sobti, then managing director of ABN Amro Bank in India. The case outlines the challenges faced by the new team in attempting to turn around the bank. Students are invited to think through a turnaround plan for the bank.

The learning outcomes are as follows: to analyze the multidimensional and complex crises, and market stature of a company that was a market and industry leader in a developing country; to evaluate and interpret the outcomes of decisions pertaining declining profits, outstanding receivables, branding, marketing and radical reforms to overcome the challenges of sustainable growth, customers and employees’ loyalty, market stature and leadership crises; and to design strategic solutions for sustaining its leadership position and combating severe challenges.

The purpose of this paper is to ponder upon various crises that Pakistan State Oil (PSO) was facing, so that learners can critically analyze, assess and design strategic solutions for it. PSO was the state-run market leader in the petroleum industry. The company had been struggling to combat multiple types of turmoil at a time. Its huge fund of receivables was blocked in circular debt that caused the company budget constraints and deficits. Due to a government policy shift, the demand for its furnace oil substantially reduced and profits plummeted. The countless internal and external crises posed severe menace to its competitive position vis-a-vis its rivals. This qualitative case study garners data from eight interviews from senior managers in the petroleum industry and adds content analysis technique to acquire pertinent data from renowned media sources and subsequent analysis. The drastic crises left PSO with dearth of funds and declining profitability. Consequently, due to limited marketing budget, creativity of its marketing team for devising effective marketing programs to raise market share was compromised. PSO underwent the issues of brand sustainability, sustainable growth, customers and employees’ loyalty, and market stature to financial and leadership crises. However, despite limitations, it still enjoyed a market leadership position among its rivals in the industry by occupying more than half of the chunk of market in the petroleum industry. This is a unique case study of a state-owned giant company facing multidimensional menaces. It offers tremendous learning opportunities for students who can devise creative strategic solutions and link theories and models with practice.

Graduate (MBA), MS, PhD (management and administrative sciences); Suitable for teaching in chapters: Anywhere but ideally near the middle or end of the above courses.

Teaching notes are available for educators only.

CCS 11: Strategy.

The learning outcomes are as follows: identify the challenges and opportunities in an ecommerce start-up B; understand the issues of operational sustainability of ecommerce start-up; evaluate the sustainability of hyperlocal models to ecommerce start up; and implement innovative solutions to address the issues of e-business models.

It was the cold winter evening of December 2016 when Puja, a cofounder of freshfruggies, an e-commerce start-up company, made up her mind after meeting her cofounders of reviving the Venture “freshfruggies” as a Hyperlocal Fruits and Vegetables Delivery Company in a non-metro town of Jalandhar in Punjab province of India. She contemplated the poor performance of the company in the past which prepared her for the better planning and execution of operational sustainability of freshfruggies. Puja took the critical decision of revival as she planned to develop the right business strategy for ensuring continuity. freshfruggies had been experiencing constant losses since its inception, and the issues of its sustainability needed attention. It was a dream project for all the co-founders who started with the vision to make freshfruggies a popular ecommerce model of hyperlocal fruits and vegetables delivery in the happening city of Jalandhar. However, lack of trained manpower, weak digital marketing strategy and lack of operating efficiency emerged as major issues of operational sustainability in freshfruggies. The co-founders outlined the possible options to revive freshfruggies after deliberating upon the challenges faced. The choices were limited and time was running out along with finances. The options included either changing the business model to a hybrid retail model or to continue as an ecommerce company after sorting out demand and supply issues. There was an urgent need to take a decision in this regard.

This case focuses on undergraduate and graduate courses in entrepreneurship and operations management courses.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 3: Entrepreneurship.

Towards the end of 90s, mounting losses forced Madhya Pradesh State Road Transport Corporation (MPSRTC), the sole provider of public transport in Madhya Pradesh, to suspend their urban services. As a consequence, organized public transport services ceased to exist in Indore, the largest metropolitan city of the state of Madhya Pradesh. This void was filled by Intermediate Public Transport (IPT) consisting of minibuses, tempos and auto rickshaws. As of January 2004, 300 private minibuses, 150 tempos, and 10,000 auto rickshaws were plying as IPT, but with poor service levels. Lack of public transport was a catalyst for rapid increase in personalized vehicles, and high level of pollution and accidents. Worried over the rapid growth of personalized vehicles, and high levels of pollution and accidents in Indore, policy makers and administrators had made several attempts of reviving the public transport system in the city. In 2005, the Collector and District Magistrate of Indore decided to make another attempt of reviving the public transport. The two cases, Indore City Bus Transport Service (A) and Indore City Bus Transport Service (B) discuss the complexity involved in the planning, rolling out, and running of public transport services in Indore on a sustainable basis. Case (A) details the prevalent socio-economic condition, travel characteristics, and positions taken by various stakeholders on provisioning of public transport service in Indore as of November 2005. Case (B) discusses the challenges during the growth and operation of the services as of June 2008. Unprecedented rise in crude oil prices along with (i) increase in maintenance cost of buses, price of new buses, and bank interest and (ii) decrease/marginal increase in the fare box revenue (more people were shifting to passes) and advertisement revenue depleted the margin of the operators. The fares had not been increased since the launch of services in February 2006. It was clear that Indore City Transport Service Limited (ICTSL), the SPV created to run the transport system, would survive only if operators were able to survive. The readers have to take the position of the board of ICTSL and consider various options available to them for running the services on a sustainable basis.

On a fine afternoon in January 2015, Divakar Kaza, President, Human Resources, at Lupin Ltd., took a sip of coffee from his cup, and shared the good news he had just received, with Rituraj Sar, head of Learning & Development. Lupin had just won the ‘Outstanding Company of the Year’ Award at the CNBC-TV18 India Business Leadership Awards, 2014-15¹. The accomplishment was heartening, given that it reinforced similar recognitions in the recent past. Lupin had won the NDTV Business Leadership Award for the Indian Pharmaceutical Company of the year in 2012, backed up by the same acclaim in 2010 by Frost & Sullivan².