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Nisaba, or Nisa as she is called within the group, has been overseeing the corporate strategy at Godrej Industries and was the executive director of GCPL.
She has been a key figure, driving innovations and helping the 120-year-old Godrej Group's flagship fast moving consumer goods business leapfrog from being a strong home grown player to a emerging market giant. Now, Nisaba Godrej, the 39-year-old daughter of Godrej Group patriarch Adi Godrej will be taking over from her father as the head of Godrej Consumer Products Ltd (GCPL).
Its a move that will mark a major milestone for the Godrej Group that has interests across consumer goods, appliances, real estate and agri products among others. On May 10, 2017, Godrej announced the succession of Nisaba as the executive chairman of GCPL. Godrej, himself, would now become chairman emeritus of GCPL.
The group has been planning the succession at various companies for some time now. So this wasn't really a big surprise for the market, although formal timelines about the transition had never been announced.
Adi Godrej turned 75 in April. In February, this year, he elevated younger son Pirojsha 35, who was until then the managing director of Godrej Properties as the executive chairman of the company, which is one of the country's largest real estate firm.
Nisaba, or Nisa as she is called within the group, has been overseeing the corporate strategy at Godrej Industries and was the executive director of GCPL.
"The foundations of GCPL are extremely strong. This is an opportune time to transition to a new chairperson, who will lead the company in its next phase of growth," said Godrej.
Nisaba has a BSc degree from the Wharton School at the University of Pennsylvania, USA and an MBA from Harvard University. She joined GCPL in 2007. Until then a largely homegrown company, she was key behind initiating and leading Project Leapfrog to accelerate domestic growth through innovation and consolidation and expand the company in major emerging markets globally.
In the last decade, the company has not only consolidated its leadership in India in key categories like household insecticides (brands Hit and Goodknight) and hair colours, it also made several major acquisitions overseas. Its empire now stretches from Indonesia, where it acquired the Megasari Group in 2010, to Darling Group in Africa, Soft and Gentle in the UK and Argencos and Issue in Latin America.
GCPL's market capitalisation has jumped twenty-fold to Rs 60,000 crore from Rs 3,000 in the last ten years. For the year-ended March 2017, the company reported a consolidated net profit of Rs 1,304 crore. Its total consolidated revenue stood at Rs 9,609 crore in 2016-17, of which international business accounted for almost half.
"I feel very confident that Nisa will be an outstanding executive chairperson. Over the last decade, I have worked closely with her and seen her deliver tremendous results. She is an inspiring leader who will always uphold our values," said the senior Godrej, who continues to be the chairman of the Godrej Group.
Apart from her key role at GCPL, Nisaba has also overseen human resources functions at Godrej Industries and Associate Companies (GILAC) and spearheaded the group's 'Good & Green agenda,' to drive inclusive and sustainable growth. GILAC consists of all the business that fall under the Adi Godrej's chairmanship.
“Under Nisaba’s leadership, GCPL has developed a very strong, engaged and ambitious team. She has also institutionalised design driven thinking and directly leads product development,” the company said in a statement.
She was also responsible for the successful turnaround of Godrej Agrovet Ltd and for the creation of the group strategy function, according to the statement.
"I promise to serve all GCPL’s stakeholders whole heartedly and assure them that the values our chairman has taught us, combined with his disciplined, results driven, and humble approach, will always be the core of our DNA," Nisaba said.
“She has been closely involved in senior leadership talent at GCPL and will also continue to focus on innovation and marketing. Now, as executive chairman she will be more involved in several other functions too,” said a senior company executive.
GCPL is looking to make inroads into newer categories and further push inorganic growth. Nisaba has been actively involved in several of these decisions over the last few years, said people in the know.
The company has long focused on a three-by-three (3X3) strategy, focus on three regions – Asia, Africa and Latin America - and in three categories – hair care, household insecticides and personal wash. It has now indicated that going ahead, the strategy could very well emerge as 4X3 strategy, with air care (air fragrances) emerging as a new focus area, according to analysts who attended the company's analyst meet held after the leadership changes were announced.
“Air care at 7 per cent of sales, was the fourth largest category for the company in FY2017, behind hair care (31 per cent), household insecticides (30 per cent) and personal wash (17 per cent). The company believes that it has gained the number one spot in the Indian air care market even as the Nielsen data is yet to reflect the same,” said Rohit Chordia, analyst at Kotak Institutional Equities Research.
This strategy of targeting newer growth levers is also being pursued in other markets by the company. For instance, GCPL is looking at makeups in Latin America and wet hair products in Africa.
Acquisitions, which have played a key role at GCPL in expanding overseas, will also be continued to be pursued, now with a sharper focus.
“Inorganic growth continues to remain an important part of the company’s growth strategy,” said Kotak's Chordia.
Now, Omar Momin, who was heading Africa business as well as mergers and acquisitions (M&A) thus far, will hand over Africa leadership responsibility to the current Indonesia business head Naveen Gupta to focus solely on M&A and other strategic plans.
Another analyst who attended the analyst meet said that Nisaba underlined the need to build a strong team ready for future growth with a strong focus on developing new products and improving existing ones.
A strong product focus will indeed be key for the new chairperson given that competition in several of its categories has been intensifying over the recent years and companies have been quick to replicate its products.
“There is lot of competition posing challenges in core categories of GCPL and it is only going to increase. This will have to be dealt with. For instance, in household insecticides, former GCPL MD has also launched own range of products,” pointed Kaustubh Pawaskar, analyst at brokerage Sharekhan, where he closely tracks the FMCG sector.
Pawaskar also remains concerned on its foreign currency denominated debt, in the backdrop of currency volatility. The company's debt to equity ratio stood at 0.64 at the end of last fiscal year.
Close to half of GCPL's revenue is driven by overseas businesses and fluctuating currency is hurting reported growth in many markets that GCPL operates in and it will also have on impact on the group's foreign currency denominated debt. For instance, while its Africa business grew 22 per cent year-on-year in constant currency terms, reported growth was just 9 per cent. In Latin America, it degrew 4 per cent even as its constant currency growth stood at 19 per cent.
Across Godrej Group, companies have been successfully run by a mix of family members and professional managers. Analysts see a smooth changeover at GCPL too, considering that Nisaba had already been playing a key role in the company. As chairperson she will be working more closely with Vivek Gambhir, who will continue as the managing director and CEO.
Nisaba is the second of three children of Adi Godrej and late Parmeshwar Godrej. She is married to Kalpesh Mehta, who runs a real estate business and has a son named Zoran.
Her elder sister Tanya Dubash, 48, too has been actively involved in the group's businesses. Apart from being executive director and chief brand officer of the Godrej Group, Tanya is also the chairperson of the gourmet retail chain Godrej Nature's Basket and is also a director on the boards of several group companies like Godrej Industries, GCPL and Godrej Agrovet.
Nisaba's younger brother Pirojsha led the $100 million initial public offering of Godrej Properties in 2010 when he was the executive director of the company. He was appointed MD and CEO of Godrej Properties in 2012 and was elevated as the executive chairman this year.