The Indian Railways Turnaround Story Continues*

Details

Case Code : CLBS094
Publication date : 2009
Subject : Business Strategy
Industry : -
Length : 03 Pages
Price : Rs. 100

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Key words:

Indian Railways, turnaround, leadership, management, public sector undertaking, PSU, freight, Oil and Natural Gas Corporation, ONGC, accounting

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* This caselet is intended for use only in class discussions.
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Abstract:

The dramatic turnaround of the Indian Railways (IR) continued through 2007 with IR registering total earnings of Rs. 444.7 billion between April and November 2007. IR was in deep financial trouble in the 1990s. However, IR achieved a turnaround from a loss-making entity into a profitable one after Laloo Prasad Yadav (Yadav) became the Minister of Railways in May 2004. While some analysts attributed the turnaround to Yadav leadership qualities and good management, others felt that IR was still to come out of the red fully and the turnaround was in part due to accounting ingenuity rather than good management.

Introduction The Indian Railways (IR), the world's largest rail network under a single management, registered total earnings of approximately Rs. 444.72 billion for the period April-November 2007. This represented a growth of 12.11 percent compared to the same period in 2006. Analysts felt the figures showed that the dramatic turnaround story of the IR continued. IR was in deep financial trouble in the 1990s. Its fund balances had touched a low of Rs. 1.49 billion in FY 1999-2000. IR cited many reasons for its bad performance including the leadership of the then Railway Minister, Nitish Kumar.

Some analysts attributed the dramatic turnaround to the leadership qualities of Laloo Prasad Yadav (Yadav) who became the Minister of Railways in May 2004...

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