It appears to be the season of high profile exits. First, RBI Governor Raghuram Rajan called it quits over the weekend.
It appears to be the season of high profile exits. First, RBI Governor Raghuram Rajan called it quits over the weekend. Two days later, chief executive Nikesh Arora announced his departure from SoftBank after chairman Masayoshi Son decided not to hang up his boots for the next 5-10 years. Then comes Yogesh (Yogi) Chander Deveshwar’s decision to move to a non-executive role in ITC next March.
YC Deveshwar’s is a hard act to follow. He has been the longest-serving chairman of ITC—since January 1996. The only other chairman of a non-family-owned corporate to come anywhere close is L&T’s AM Naik who has been in the saddle since 2003. When Deveshwar took charge as chief executive and chairman of the board of the then tobacco to hotels major—from KL Chugh—the Rs 5,100 crore company was facing the might of British American Tobacco which wanted a 51% controlling stake. He managed to stave off the threat. The other problem related to the arrest of former chairmen Chugh and JN Sapru over issues relating to alleged FERA violations.
Over the two decades that he was in charge of ITC—he has been an ITC employee since 1968, barring between 1991 and 1994 when he was the chairman of Air India—the company has crossed many bridges. In FY16, the company’s gross revenues had increased ten-fold from when Deveshwar took over in FY96 to Rs 51,582 crore; profit after tax had risen 37 times from a mere Rs 261 crore to Rs 9,845 crore; market capitalisation rose 47 times from Rs 5,571 crore to Rs 2,64,000 crore as of end-March 2016.
Much of that was due to the diversification that Deveshwar managed at ITC. Today, the operations of ITC encompass FMCG, hotels, paper boards and speciality paper, packaging, agri-business (including e-Choupal), IT and lifestyle retail. Tobacco accounts for just 43% of net revenues in FY16, down from 90% in FY01 and 70% in FY11. Yet he ensured that ITC remained the leader in cigarette business despite the entry of a host of MNCs.
Thanks to the diversification, he has built some well-known brands—from ITC Hotels to Wills Lifestyle fashion, Aashirvaad Atta, Sunfeast ready-to-eat food products and Classmate notebooks. He leaves at a time when across the world cigarette companies are looking to reinvent themselves. All said, Deveshwar has laid a strong foundation for ITC. All that the new chief executive needs to do is expand non-tobacco options. And for the next three years, he can tap into the wealth of knowledge of the new non-executive chairman.