The announcement came after the firms board meeting which also took up the earnings for the April-June quarter, which disappointed the markets. The companys net profit at R1,019 crore was down 23.4% from the R1,331 crore reported in the same quarter last fiscal, while net sales grew at a slower pace of 7% to R6,687 crore against last years R6,250 crore.
The elevation of Paranjpe to a global role is similar to that of his predecessors Harish Manwani and Vindi Banga had moved from executive positions at HUL to global positions in Unilever.
Mehta, who will replace Paranjpe, is currently the chairman of North Africa and Middle East (NAME). He will also be responsible for the South Asia cluster which includes India, Pakistan, Sri Lanka, Bangladesh and Nepal.
Announcing the changes, Harish Manwani, chairman, HUL, said, The changes reflect our strong commitment towards leadership development. We appreciate the significant contribution that Nitin made to the business in India and his leadership in driving the growth agenda.
According to Manwani, Mehta is a fitting successor for Paranjpe with his experience of leading businesses across developing and emerging markets. I am confident that he will further build on the growth momentum and drive the companys agenda of competitive, consistent, profitable and responsible growth, he said.
The 50-year-old Paranjpe joined the HUL board in 2007 and was appointed as MD and CEO in April 2008, taking over from Douglas Baillie. The highlight of Paranjpes stint as the India head was to bring the bruised FMCG major back to shape and on to a growth path.
Among his key strategies was to make all key officials from across departments accounts, production and human resources to go out and meet consumers in villages. Paranjpe himself did the same and analysts said that the learning brought good dividends to the company.
Mehta, 53, joined Unilever in October 1992 and has led several Unilever businesses across South Asia, Southeast Asia and West Asia. He was appointed chairman and managing director of Unilever Bangladesh in 2002. In 2007, he was appointed as chairman and CEO of Unilever Philippines. He took up his current responsibilities as the chairman of Unilever NAME in 2008. During his current tenure as chairman of Unilever NAME, the business achieved significant success, accelerating both growth and profitability. Importantly, he has been instrumental in building leadership talent and substantially strengthening organisational capabilities.
Mehta, who is a commerce graduate and a chartered accountant, worked for Union Carbide India before joining Unilever.
HUL, which makes popular consumer brands like skin fairness cream Fair and Lovely, Clinic Plus shampoo, Dove soap and Lipton tea, has been unable to lift sales volumes substantially for the last five quarters despite offering discounts coupled with aggressive advertising, and sees the next few quarters challenging. "We are seeing a slowdown in market growth in both volume and value terms, and over the next two to three quarters these challenges will continue," chief financial officer R Sridhar said.
Waning consumer demand saw sales at the personal care segment growing just 2%, while its food business grew 5%.
Analysts said that the company faces difficult choices. It is faced with a slowing economy leading to lower salary increases, which is affecting demand. As it offers discounts and indulges in higher promotional expenditure without commensurately increasing prices, margins gets squeezed.
However, parent Unilever is bullish on the India story as it has pumped in $5 billion to raise its stake in HUL through one of the biggest share buyback offer.
On Friday, the HUL share closed 3.38% down on the BSE at Rs 663.30.