Confessions of a business consultant

“There are many companies that lie and fudge figures while the credit rating process is going on”

Sometimes, a company has already decided the sector it wants to enter in a particular country, but still has to show investors that this chosen sector is actually the most lucrative. So they tell us to draw out studies supporting this. If this sector, say real estate, is on seventh spot, we add unnecessary parameters to push it up the ladder. It’s all pre-decided.

Most consultants have a set way of doing a study. And it doesn’t differ from sector to sector. For example, if company A wants a study on the real estate sector of India and company B wants a study on the pharma industry in India, information such as how the Indian economy is doing, which pockets are doing well, et cetera will remain the same. Only about 10 per cent of the report will be different. Only the dressing changes.

We also grant credit ratings to companies, which push up their value. There are many companies that lie and fudge figures while the credit rating process is going on. They inflate profits. But more often than not, if a bank has approved their loans, we ignore everything and give them a good credit rating. Also, in India, credit ratings are given according to just one parameter, like sales, which is wrong. If a company reports high sales but has high expenditure as well, it may have low profits. On the other hand, if a company has low sales but low expenditure, it may still have high profits. But the credit rating will go to the one with higher sales though the small company is the better one.

This profession is extremely demanding. Most clients don’t have a clue about what they want when they approach you. It’s only after we make the first draft of the report that they actually realise what they want. Then, you have to redo everything. But money is from average to good, so that’s a plus. Also, you never get bored.

(He has been working in the industry for 7 years)

As told to Aastha Atray Banan

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