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Sanjiv Mehta: Focus Is On The Bigger Picture
HUL neither gets hugely euphoric with a great quarter nor massively dismayed with a modest one. This keeps it on its toes
Photo Credit : Umesh Goswami
FMCG behemoth Hindustan Unilever (HUL) CEO and managing director Sanjiv Mehta is BW Businessworld’s most valuable CEO second year in a row. He has been leading Unilever companies, in different parts of the world, for the last 15 years.
On his watch, HUL has entered BSE’s list of most valuable companies by market capitalisation in April. With a market-cap of Rs 3.06 trillion, HUL stands fifth on the list, ahead of HDFC, which has a market-cap Rs 3.03 trillion. HUL is now 6 per cent short of surpassing FMCG giant ITC that boasts of a staggering market-cap of Rs 3.24 trillion as per BSE data.
Last month, HUL outperformed the market by gaining 9 per cent on expectations of strong volume growth in the fourth quarter of 2018. “We expect HUL to record a volume growth of around 5-6 per cent YoY on a base of 4 per cent reported in Q4FY17 (volumes grew at 11 per cent YoY in Q3FY17 on a base of negative 4 per cent). Volume growth is likely to be stronger on the back of improving sentiment and preference towards HUL products such as Lever Ayush, etc.; wholesale trade and CSD (canteen stores department) channel rebalancing; and MT (modern trade) and cash-and-carry channel continuing its good run,” said brokerage firm Edelweiss Securities in a recent report.
According to Mehta, HUL doesn’t run its business for a quarter unlike what analysts deduce. “We don’t get hugely euphoric with a great quarter or massively dismayed with a modest one. It is important to ensure that the long-term strategic agenda of the business does not get derailed with short-term imperatives. For instance, in the last two years, when the times were relatively tough and markets were subdued, we did not cut back our expenditure on market development or in building capabilities because we believe it is important for the future of our business,” said Mehta in an interview with BW last year.
But what makes him a commendable CEO, is his stand on competition. His view on Patanjali, the greatest disrupter in the FMCG space, is, “ A good competitor is good for HUL. Despite all the competition, local, international, in the last five years, our delta turnover has been more than Rs 12,000 crore. This is more than the absolute turnover of most of the competitors. India is not a zero sum game. So while we look at our competitor very closely, our obsession is always with consumers”.
Mehta is making huge investments in terms of data, analytics, artificial intelligence, as well as in its culture to ward off competition from Patanjali Ayurved across the whole value chain.“About two years back, we started collaboration platforms called the ‘Unilever Foundry’ and the ‘Content Day’. Through the Foundry, we build and cultivate strategic partners for the future. These are mostly small startups who get an opportunity to work with large organisations such as ours. We get access to disruptive technology and they get access to our scale and our business acumen.”