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Emami has seen astute financial risk management thanks to its stress on maintaining high liquidity through regular cash flows
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It would not be an exaggeration to call Naresh H. Bhansali a super achiever. For the third year in a row, Bhansali, who doubles up as the CEO and CFO of cosmetic maker Emami, and has more than two decades of experience in the field of finance and accounting, has been adjudged the Best CFO by the YES BANK-BW Businessworld CFO Awards.
Bhansali was adjudged the Overall Champion CFO and and also won the Best CFO Award for Consistent Liquidity Management in the mid-cap segment at the YES Bank-BW Businessworld CFO Awards for 2015-16. He was again picked up for the Best CFO Award for Sustained Wealth Creation (Medium) by the jury members of the YES Bank-BW Businessworld CFO Awards for 2016-17. And now, the jury for the YES Bank-BW Businessworld CFO Awards 2018 has once again adjudged Bhansali as the Best CFO in the ‘Healthy Balance Sheet Management (Medium Corporate)’ category.
During his 26-year stint with Emami — Bhansali joined the company in May 1992 as a management trainee with the accounts department of Himani (which subsequently became Emami) — the company has grown from 21 depots and three factories to 32 depots, eight factories with four regional sales offices as well as an an overseas unit with a market presence in over 60 countries with subsidiaries in Bangladesh, Egypt, Australia, the UAE and the UK. During the same period, the company’s turnover has gone up from Rs 18 crore to Rs 2,529 crore as on 31 March 2017.
Bhansali has been playing a significant role in management of financial risk. The company is maintaining high liquidity through cash flow on a continuous basis. Payment to all creditors including banks and financial institutions are made on time, he says. “Today Emami is almost debt free in spite of costly acquisitions,” he adds.
Bhansali, along with the leadership team at Emami, was instrumental in acquiring a controlling stake of 68.9 per cent in Zandu for Rs 713 crore. The acquisition was a sizeable one for Emami at that time, recalls Bhansali. Emami’s own market capitalisation at the time was only Rs 1,200 crore. “Fund raising was also a challenge in 2008 due to the financial meltdown as banks were unable to keep their commitments. After the Zandu acquisition, the debt-equity ratio increased from 0.45 in 2007-08 to 1.49 in 2008-09,” he says.
Under Bhansali’s leadership, Emami has become a preferred investment proxy of the FMCG industry with an ayurvedic niche. The company has maintained a CAGR of 15 per cent in its revenue over the last five-six years, and emerged as one of the fastest growing Indian FMCG companies, says Bhansali.
The company has also created enormous wealth for its shareholders. For the initial investors of Emami, who invested Rs 1,000 for 100 shares, which eventually became Rs 4,000 after the rights issue, their investment is now worth ore than Rs 8 crore, according to the company. It is a fact that the Emami shares that were offered at Rs 70 in the public issue in March 2005 appreciated more than 40 times at the close of 2015-16. The company scrip has delivered returns of over nine times to QIP investors of 2009.