Is Infosys the next HLL

As a student of business history, as someone who took a shot at being a strategist and a novice investor I find this line of thought interesting…. Bear with me while I try to articulate what I am thinking….

HLL (now HUL) was (is?) a dream company to many bright minds in India, it launched dreams – the beauty secret of film stars, one which made dark south Indian men chase their fairness dreams, brightness to our clothes – gave us Rin Brightness, Lalithaji, Liril girl and set a generation of women to dream… A generation of marketers were born, a slew of products unleashed – one senior executive once told me – in the early 80’s there were 4 good schools which churned out good managers – IIM – A, B, C and HLL.. It has given Indian Industry many CEO’s, many more middle managers who will lead Indian Industry in the years to come…. To borrow a line, it went where no marketer went, deep into the Indian hinterland... back in 1980 when fads like “Bottom of Pyramid” were still not around; they unleashed campaigns in rural India, with bullock carts peddling messages of hygiene, cleanliness and Lifebuoy…

It was a darling of the investors, gave fantastic returns, it was one of those blue chip stocks people held… I cant find any number on the holding, but it gave returns for a long time and was a staple of most portfolios…

Infosys, the company born out of the Indian middle class dream, the success story of Indian economic liberalization, the company which made ‘global delivery model’ , ‘flat world’ well recognized words, while it did not spawn the IT industry it’s the most recognized child of the industry. It made millionaires out of middle class families and gave a wealth creation a chance to gain respectability in our hypocritical society..

It too was a darling of the investors, every quarter results of Infy sets the market tone, it was the stock which is keenly tracked by the FIIs , opened the NASDAQ with a bell from mysore… its languishing now, for a year, IT has not driven markets, returns have not kept track… will it follow HLLs footsteps?

Mr. Market ( to borrow Ben Graham’s reference to the stock market) is fickle, runs behind momentum, flavours of the season ( infrastructure, real estate now ) are what excites it, but these two companies need to succeed… they are refreshing oasis of professional management established, led, managed companies in family driven companies in India. I have nothing against family managed firms, I work with them, but the rise, flourish and continued existence of professional companies is what will keep the dream of middle class professionals like me…