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An unrelated diversification into telecom via Escotel, which owned licences to operate in Punjab, UP EastRajasthan and Himachal Pradesh, singed the group, which lacked the alacrity and deep pockets to match other telecom entrepreneurs. Telecom was divested later. So was its crown jewel — Escorts Heart Institute and Research Centre, with four specialty hospitals — in order to pay off creditors. As recently as last year, a merger of three group outfits earned the ire of proxy-advisory firms, who argued the move hurt minority investors.
Even as the group was coping with these challenges, rivals in the tractors business made significant moves. Its shaky financial position also limits possibilities. In the last five financial years October to SeptemberEscorts net cash generation has ranged between Rs crore and minus Rs crore. Nanda is slowly emerging as the new face of hope for Escorts. He credits his father Rajan Nanda, the chairman, and his team as the catalyst for the change that is taking place. But people at Escorts credit the junior Nanda and his willingness to delegate responsibility to a new breed of professional managers.
He empowers people to take decisions after building consensus on the targets. This will be pared further to bysays a senior company official, not wanting to be named. Receivables are down to 30 days, from 40 days; their value is down by Rs80 crore from the last half. He explains how Escorts freed up space in its Faridabad headquarters by one-third, and cut flab even while increasing capacity. While these incremental gains are welcome, Escorts needs to regain some of its lost tractor market share before analysts take the company seriously again. In the last five years, it has seen its share drop to