It is not often that the legendary singer Bhimsen Joshi is talked about in corporate offices. But then, Yeshwant Moreshwar Deosthalee, CFO and Whole-time Director at Larsen & Toubro, is a music aficionado. "Singing is a hobby," he says. "I enjoy Hindustani classical and old Hindi film songs. Kishore Kumar, Hemant Kumar, Manna Dey, Rafi, and Mukesh are my favourites."
The 64-year-old L&T veteran, who is a chartered accountant and has a law degree, studied Hindustani classical music for three years. "I made a mistake by giving it up. It requires a lot of practice and passion, and I was not able to give it that kind of attention," he says.
But there's no denying Deosthalee's understanding of and interest in music. He was instrumental in L&T Infra Finance funding 'Bandish', a three-day music festival in Mumbai that gave performers of old and almost-forgotten forms of Indian music the chance to bring their art back into the limelight.
Deosthalee is the modern-day exponent of an age-old method of doing business - eliminating risk to maximise profits. "We have consciously worked at removing risk from our businesses over the last two years. And hence, despite large variations in foreign currency and commodity markets, we have managed to maintain our operating margins," says Deosthalee.
64, CFO and Member of the Board
My best practice: Decision-making is meticulously objective. I am willing to learn from anyone, including juniors
What gets my goat: Hypocrisy, a political environment in the office. I try to defuse or avoid such situations
How I unwind: Singing light classical music. I love Hindustani music
Global CFO/CEO I admire: Steve Jobs and Apple, for their ability to innovate and come back after failure
But eliminating risk is no easy job, especially at a Rs 45,000-crore behemoth. The conglomerate has a presence in engineering, construction, power, information technology, oil and gas, shipbuilding, and financial services. Infrastructure and power projects are seen driving growth in the future.
"The projects business has its own peculiarities. It is lumpy, which means that orders are spread unevenly and cash flows are not uniform. It is also risky; all the risks - be it people, foreign currency, commodity price - are on you," says Deosthalee.
"What complicates matters further is that in the projects business you cannot pad up for contingencies. Your margins are already very low - about 11 to 12 per cent - so if you provide for adversity, you'll never bag a project," he says. The trick, says the man who at one point was seen as filling the big shoes of Chairman and Managing Director A.M. Naik, is to have an institutionalised framework to manage risk. "Over the past two years, we have managed to remove risk," he says. "There is active involvement of treasury in businesses."
He adds that treasury is involved right from bidding to completion, making sure that risks arising from currency movements and commodity price fluctuations are minimised.
"You have to make assumptions while bidding for a project. At every juncture, these assumptions must be reviewed, so we hold risk review meetings at several levels in a project," he says.
Deosthalee, who is credited with L&T's forays into infrastructure project finance, general insurance and mutual funds, says infrastructure development is a top concern. "There's no comprehensive approach to building India's infrastructure. Development is happening in pockets. Everyone is looking at it from a silo perspective." Two other issues that worry him are the policy framework - the company has had to tweak quite a few of its plans on account of elections in five states and delays in environmental clearances - and the global economic environment. Even so, L&T has given a guidance of 15 to 20 per cent growth in orders for this financial year.
In the past, several musical gharanas kept their bandishes, or compositions, within the family, fearing that others would render them without sufficient understanding. By contrast, Deosthalee's mantra for steering the gigantic L&T ship is no secret. But his tightly knit, back-to-basics financial manoeuvre is paying off for sure.
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