The 129-year old Godrej Industries Group (GIG), a storied name in India Inc, is undergoing a leadership transition. 45-year-old Pirojsha Godrej, chairman designate, GIG, will take over the reins of the conglomerate this August, marking not just a generational shift, but a shift in strategy, vision and purpose.
The group also unveiled a brand refresh on Wednesday to reflect the change in thinking. In a one-on-one interaction with Viveat Susan Pinto, Godrej spells out his priorities for the diversified conglomerate. Excerpts:
1) What is the roadmap for GIG now that you will be at the helm of the group?
We aim to create a Rs 5 lakh crore market capitalisation group in 5 years. This will be nearly a 3x growth over five years to FY31. We’d like to have two of the three unlisted businesses within the group to be listed in this timeframe.
We’d also like to compound sales at the group level by at least 15% per year, compound earnings per share (EPS) by at least 20% per year, and have each individual business generate a return on equity of at least 18%. If we achieve these objectives, I believe we can become a Rs 5 lakh crore group in five years.
2) Will you consider investing in new areas beyond your existing businesses as part of the Rs 5-lakh crore m-cap agenda?
There are a lot of new adjacencies and areas within the six businesses in which we operate. Those are areas that we will certainly look at as we go ahead. Our priority will be to fully unlock the potential of our six existing businesses. At a group level though, we will stay focused on the six businesses we are present in.
This includes consumer products, properties, agrovet, chemicals, financial services and Godrej Ventures. In the past, we have spread ourselves thin across businesses. Going forward, the focus is on depth, not breadth. These six verticals themselves can deliver the aspiration we’ve set for ourselves over the next five years.
3) How are you future-proofing the group amid global uncertainty and disruption?
Three things—strengthening the brand, maintaining robust balance sheets, and staying agile. Downcycles often create opportunities, and we want to be in a position to capitalise on them. Staying financially resilient will be key amid the global uncertainty and turmoil. We are clear about that.
4) Will acquisitions play a key role in your growth strategy as it has for the group in the past?
It depends on the business. Consumer products has historically seen acquisitions and will likely continue to do so. In real estate, especially through Godrej Properties, acquisitions are typically land-led rather than company buyouts. Overall, most of our growth will remain organic, acquisitions will be selective and will depend on where it fits into the scheme of things for that particular business.
5) Which businesses could see stock market listings going forward? And what is the mandate of Godrej Ventures within the group?
Financial services is a clear candidate from a listing perspective. It’s a large and growing sector. Our brand gives us an edge in both attracting customers and raising capital. We’ve grown to about Rs 27,000 crore in AUM and are targeting Rs 1 lakh crore over the next five years.
Chemicals could also be considered from a listing standpoint, though some groundwork is needed before it can be ready for the same.
As far as Godrej Ventures is concerned, it currently operates across three areas—office development with institutional capital, a modern film studio project that is coming up near the new international airport in Navi Mumbai, and a managed office space business that we’re just entering.
6) How do you view joint ventures and global partnerships which has shaped the group over the years?
We’ve had partnerships in the past with companies like General Electric, Sara Lee and Procter & Gamble. But if you ask me the way forward, we prefer owning and controlling the value chain. That gives us better control over operations and how we want to take our businesses into the future.
7) What role does AI and the new economy play in your strategy?
We want all our businesses to be digital- and AI-first. It’s about improving customer experience and driving efficiency. In financial services especially, we’re building without legacy tech constraints.