Interview

“Look out for companies aspiring to dominate niche businesses”

Ambit Capital’s head of research, Nitin Bhasin, on what separates a handful of Indian companies from the also-ran

Soumik Kar

Hermann Simon, well-known German author and co-founder of Simon-Kucher & Partners, in his 2010 book, Hidden Champions of the 21st Century, has identified not so well-known companies across the globe but which are among the top three players in their respective industries on the global stage. These companies managed to achieve this feat through sharp focus, smart diversification and well-planned market entries across geographies. Ambit Capital, the Mumbai-based independent brokerage house, contextualised the book to identify emerging global champions in the Indian context by using the qualities Simon identified in his book. Nitin Bhasin, head of research at Ambit, who co-authored the report with Nikhil Mathur, besides Anupam Gupta of Aavan Research, shares the idea behind the report and why investors needs to keep an eye on these in-their-own-right giants. Excerpts from an interview:

What led Ambit to adopt Hermann Simon’s book into a research report?
For the past seven years, Ambit has been adapting works of various thinkers into its research. For instance, the accounting thematic report that we come out with was influenced by a book on cash flow accounting by Howard Schilit. Another example is Jim Collins’ Good to Great that inspired us to write notes on ‘great’ Indian companies. Similarly, The Outsiders, which Warren Buffett has spoken quite highly of, inspired us to work on our report titled, Unusual Billionaires. We came across Hidden Champions of the Twenty-First Century little less than a year back. Here was someone talking about small companies becoming champions in their niche businesses. They did so either by increasing their market share globally or by acquiring companies. These companies also chose to diversify, but not into completely unrelated businesses. Simon profiled several small manufacturing companies in his book. Most of these companies focus on a niche product and serve their customers in a manner that differentiates them from the rest.

How did you adapt the book to the Indian context?
Simon’s focus was on manufacturing companies and not service-oriented companies. The companies we have identified in our report might not be exactl

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