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BW Businessworld

Marico: Making A Mark

Saugata’s focus on reinvention has fuelled Marico’s rapid growth and led to an ever-expanding range of brands

Photo Credit : Subhabrata Das

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If there’s one word that defines Saugata Gupta, the 48-year-old managing director of Marico, it’s dynamism.

The soft-spoken Gupta, poised to begin his third year as Marico’s chief, believes that one must reinvent every three to five years, keep investing in one’s capabilities and shun complacency and arrogance. This, he says, is a must for if you don’t invest in capability and try to grow at a fast pace, things will not work out as planned.

The mantra has worked well for Marico.

Over the past five years as the Indian economy grappled to get widespread growth and bigger FMCG rivals struggled, Marico posted a compounded annual growth rate of 15 per cent in profit and 18 per cent in turnover. Over the past decade, income from operations rose five times to Rs 5,733 crore in 2015, and profit after tax rose six and a half times to Rs 574 crore.

The company’s rapid growth and an ever-expanding range of brands has got the thumbs up from investors.

From a base of 100 in 2002, shares have surged past 5,600 compared with the rise of the FMCG index to 800. The company, about a third owned by global funds, remains an investor darling and has returned a 24 per cent average each year since listing two decades back.

Gupta, who joined the company in 2004 as the head of marketing, became the chief executive officer of the India business in 2007, and was appointed managing director two years back, is credited with leading the company’s remarkable growth.

The Next Level
His recent achievements include identification of five sources of transformation — driving innovation, go to market, IT analytics, talent and culture, and value management - to help the company retain its top position among peers.

The son of a government official and an IIT and IIM alumnus, Gupta credits Marico founder Harsh Mariwala for providing a solid base for growth.

“My job is to take Marico to the next level and ensure the founder’s spirit of entrepreneurship, speed, agility, culture of empowerment and meritocracy,’’ he said.

A key part of that strategy includes improving the track record of new product innovation by getting into the premium segment of a range of hair care solutions and maintaining the leadership position in the oils and oats segments.

“Saugata is very sharp and incisive. He has a good grip on the business; a rare combination of strength in both strategy and execution. He is someone who constantly raises the bar on himself, his team and the overall business,” Mariwala says.

Gupta focused on focus, implementation, reapplication and excellence (or FIRE) as key words when he succeeded Mariwala two years back. The main achievements of this strategy were transforming the company from one dominated by oils to one that was synonymous with hair nourishment, wellness and the youth.

The success of his performance was amplified with shares rising 116 per cent from April 2014 to December 2015 even as the FMCG index at BSE rose just 13 per cent. The heavyweights in the index include ITC and HUL.

Focusing On Talent
Gupta believes that a critical element for any company to succeed is getting the right talent and leadership.

“If you don’t have the right talent and leadership, growth won’t happen whatever you may try,” he says. “To understand the reasons for failure you need to understand why you are succeeding. One must learn from failure — what gets you here will not take you to the next level,” he says.

This is how Gupta has created a working ecosystem of people who can be an inspiration and a source of learning for each other.

But as he progresses to the future, he hasn’t forgotten his past. He fondly remembers, among others, his experience at ICICI Prudential life insurance and working under Shikha Sharma.

“My stint at ICICI was very valuable as learning; it was aggressive, fast-paced and cutting edge … (learning) that I applied while driving changes (at Marico),” he says.

Bigger challenges may lie ahead but Gupta believes that reinvention will stand him and Marico in good stead.

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