Business Today-PwC study identifies India Inc's Best CEOs

The Best CEO Survey, which has been conducted since 2012, has evolved over time to capture the nuances of such organisational and individual transformations through quantitative and qualitative metrics. It starts off with the performance of CEOs over the previous three fiscals - 2018/19, 2017/18 and 2016/17 - on growth in total income, profit before interest and tax (PBIT) and total shareholder returns (TSR) (for financial services players, profit before tax is considered, instead of PBIT). An eminent jury then overlays the qualitative aspects to the shortlist to identify the winners.

As a result, the winners of the BT-PwC Best CEO Awards are the most outstanding performers from India Inc.

Mukesh Ambani
At the headquarters of Reliance Industries (RIL) in downtown Mumbai's Maker Chambers IV, the four 'Mantras of Excellence' that Chairman Mukesh Ambani learnt from his father Dhirubhai Ambani have been encompassed in a golden frame: Think big. Challenge conventional wisdom. Think differently. Think long term. The first mantra is a concise account of Ambani's strategy.

RIL has invested Rs 3.5 lakh crore in its digital broadband venture - Reliance Jio - since 2010 and emerged as the country's second-largest network in terms of mobile subscribers within three years of starting operations. Jio also has the highest margin in the telecommunications industry because of latest technologies and brand-new infrastructure that it created. It has shaken up India's telecom industry and incumbents Vodafone Idea and Bharti Airtel are struggling to catch up. RIL has invested a total of Rs 5.4 lakh crore in the last five years and the present capital expenditure cycle has ended for the company.

Besides the investment in Reliance Jio, the parent group invested Rs 1 lakh crore in expanding the petrochemicals business by constructing the world's largest refinery off-gas cracker (ROGC) and its downstream units and a paraxylene plant. The group has also invested heavily in Reliance Retail's geographical expansion and product addition. The retail giant is building partnership networks with millions of small merchants and kirana shops.

During the last fiscal, it opened 3,000 new stores - that's more than eight new stores every day. Through its omnichannel strategy, Reliance Retail is now effectively countering the onslaught of e-commerce giants Amazon and Walmart-owned Flipkart. That these strategies have paid off is evident in RIL's profit which increased 13.1 per cent to Rs 39,588 crore in FY19 on revenues of Rs 6,22,809 crore, up 44.6 per cent.

Ayukawa has been selected as the Best CEO in the large companies category, classified as those with turnover of between Rs 50,000 crore and Rs 1,00,000 crore, making him a winner for the fourth year in a row.

Under 64-year-old Kenichi Ayukawa, Maruti Suzuki India is in such a strong position that it is difficult to recollect the dire straits it was in when he had taken over as CEO more than six years ago. Following two years of labour unrest at its Manesar factory, the company's hold on the market had loosened, with market share falling to less than 40 per cent. For the first time in decades, competitors felt the company could be beaten at its own game, on its home turf. Ayukawa was able to effect a complete reversal in the company's fortunes. By the end of 2018/19, Maruti's market share had climbed over 51 per cent, the highest in a financial year since 2000/01.

There are many reasons for Maruti's success in India but one area where Ayukawa's leadership has been a defining factor is changing the perception of the company from a maker of budget cars to a more premium brand. It wasn't easy.

New products have helped too, especially Vitara Brezza, Maruti's maiden compact SUV, and Baleno, its first premium hatchback. In spite of all the success in the last six years, Ayukawa is not taking anything for granted.

Bhaskar Bhat
Director, The Titan company (Best Overall Medium)

Under Baskar Bhat, Titan changed into a larger lifestyle company with presence in watches, jewellery, eye-wear and fragrances. He has also taken lifestyle to the masses. The business environment in the last one year has been especially tough, and Titan, like most consumer companies, has been hit. Its business slowed down in the first quarter of FY20 after close to 20 per cent growth in FY19. In the second quarter of FY20, the company posted revenue growth of 0.6 per cent. It has reduced growth expectation in the second half of FY20 from 20 per cent to 13 per cent.

The one big lesson that Bhat and his team at Titan have learnt from the ongoing slowdown, he says, is agility. "We learnt to listen to what is happening in the market and at the same time anticipate. When consumption slowed down, we introduced an attractive exchange policy at Tanishq which ensured that consumers kept visiting our stores. We made our loyalty programme more attractive. So, we built in agility to respond to the market conditions," he explains.

Bhat has set a tall task for his successor, C.K. Venkataraman, the new MD of Titan. His vision is to make Titan a Rs 52,000 crore-entity by 2023. In September this year, Bhat hung up his boots as the MD after being with the company for 33 years. Ask any employee about what they would never forget about Bhat, and the most spontaneous response would be his humility.

Nirmal Minda
Chairman, UNO Minda Group (Best Overall Emerging)

Nirmal Minda is BT's Best CEO in the small companies category (those with a turnover of Rs 1,000-10,000 crore).

In his free time, 62-year-old Nirmal Minda, Chairman and Managing Director of UNO Minda Group, one of India's leading automobile component makers, loves to play cards with family and friends. The game of hearts, diamonds, clubs and spades throws up countless permutations and combinations. Luck plays a role in deciding the winner. So does risk taking.

In business, though, Minda does not leave anything to chance, and has built an empire that tops Rs 8,000 crore revenue by taking a series of calculated risks, making UNO Minda an outperformer in a sector that is facing its worst downturn ever.

The group's flagship company, Minda Industries, has increased its turnover at an average of 13 per cent per year over the last three years with a corresponding 22.3 per cent annual growth in net profit during the period. The domestic passenger and two-wheeler industry, to which it supplies components, has grown revenue and profit at 6.6 per cent and 8.9 per cent CAGR, respectively, for the last three years.

Siddhartha Lal
Managing Director, Eicher Motors (Auto & Ancillaries)

Barring banking and financial services companies, Eicher is one of the best performing companies on our list, and Lal is the jury's pick for the Best CEO in the automobile sector.

As far as taking bold decisions as a strategic ploy for businesses go, Siddhartha Lal's call to divest 13 group businesses, including the profitable tractors unit, to revive a struggling Royal Enfield almost 15 years ago, was as inspirational as they come. The overhaul at Enfield, by streamlining costs, bringing in new technology, making the bikes more reliable and user-friendly and overhauling the dealer, service and supply network has been a stupendous success. Today, the company sells in a month more than double what it sold in an entire year in 2005. Having produced over 800,000 motorcycles in 2018/19, Enfield was by far the world's biggest middle weight (classified as those with engines bigger than 250cc and smaller than 750cc) mobike maker.

Uday Kotak
Managing Director, Kotak Mahindra Bank (Banking)

The all round performance of Kotak Mahindra bank has pole vaulted its founder to becoming the Best CEO in Banking in the eighth edition of Business Today's Best CEO study.

Uday Kotak has a simple piece of advice for his team for the next phase of the Rs 4 lakh crore market cap Kotak Groups journey into the future. "I am putting this as a modest request to the future team. Let's work on producing returns for shareholders," says Kotak, the 60-year-old Managing Director and CEO of Kotak Mahindra Bank. Kotak simply expects the 60,000-member Kotak family to deliver the returns that the group has given in the last three-and-a-half decades. The group has given average compounded returns of 40 per cent since its journey began in the 80s. So, if an investor had put in Rs 1 lakh in young Kotak's dream way back in 1985, the investment would be worth Rs 2,500 crore today. That is no small achievement for a first generation entrepreneur whose joint family (with 60 people) was into commodity trading.

Kotak started the business as a small financial services outfit and later converted it into a bank in 2003. Rana Kapoor's Yes Bank was the only entity that secured a banking licence from the Reserve Bank of India (RBI) in the 2000-10 decade.

In the last five years, Kotak Mahindra Bank has recorded 25 per cent-plus CAGR in consolidated net interest income at Rs 14,748 crore, in net profit at Rs 7,204 crore, in total assets at Rs 3.95 lakh crore and in loans and advances at Rs 2.43 lakh crore in 2018/19.

Anil Rai Gupta
Managing Director, Havells (Consumer Durables)

Havells is the standout performer in the consumer durables category and Gupta is the jury's pick for the Best CEO in the sector.

Anil Rai Gupta was the only one from the family to have joined the business after the demise of his father, Qimat Rai Gupta, the Founder and Chairman of Havells in November 2014. People expected that Anil would start changing everything. However, the company grew with more than 8000 direct dealers and a network of over 1,00,000 retail outlets across the country, keeping the culture of the organisation unchanged. The revenue nearly doubled to over Rs 10,000 crore (2018/19), logging a CAGR of 16 per cent in five years.

The company has ventured into many new categories such as air purifiers, water heaters, and even grooming kits. The high-profile acquisition of Lloyd in early 2017 gave it a foothold in the bigger consumer durables business.

In the last three years, despite the disruptions the Indian economy has faced due to demonetisation and GST, Havells has chugged along without fuss. In this period, it has grown even faster, logging 23 per cent CAGR in turnover and 16 per cent in net profit.

Rajeev Jain
Managing Director, Bajaj Finance Ltd (Financial Services)

In 2008, when Rahul Bajaj decided to go the whole hog in non-banking financial services (NBFCs), he roped in the former CEO of Citibank India, Nanoo Pamnani, also his relative, and his younger son Sanjiv Bajaj. The first job of Pamnani and Sanjiv Bajaj was to find a spirited chief executive officer (CEO) for Bajaj Finance (BFL). They rounded in on a quintessential banker after meeting 30-odd executives - Rajeev Jain, who fits into every aspect of BFL's business and, after a decade or so of explosive growth, is transforming the non-banking financial Service (NBFC) business into data and artificial intelligence (AI)-driven lender.

BFL's journey has been stunning, to say the least. In just 10 years of operations, it has found a place in the BSE Sensex (the list of India's 30 major companies). Its stock has delivered huge returns - Rs 1 lakh invested in March 2009 would have become Rs 8 crore in November. Its market value stood at Rs 2.4 lakh crore as on December 4. The holding company, Bajaj Finserv, which also has two insurance companies under it, had a market value of Rs 1.44 lakh crore. BFL had assets under management (AUM) of Rs 1,35,533 crore as on September 2019. The AUM rose 41 per cent in 2018/19. Consolidated income grew 45 per cent to Rs 18,502 crore while net profit rose 60 per cent to Rs 3,995 crore. Net interest income went up by 46 per cent to Rs 11,878 crore. As on March 31, 2019, standalone capital adequacy was 20.66 per cent, well above the Reserve Bank of India norms. 

Suresh Narayanan
Chairman, Nestle India Ltd (FMCG)

In the second quarter of FY20, Nestle India was a clear outlier in consumer goods. While peers such as Hindustan Unilever, Britannia and others reported a tepid single-digit growth in revenues, Nestle grew revenues by 10.5 per cent and profits by 33.5 per cent.

The company has come a long way from the Maggi crisis days. The Chairman and MD, Suresh Narayanan, sounds spiritual when he says, "The Maggi crisis reinforced my belief that if you do good karma, good karma happens to you. Numerous instances during the course of the crisis would show that there was a superior hand ensuring that we found the strength to come out of it." He says the goodwill the brand had generated over decades helped it the most then.

Maggi Noodles was unceremoniously ousted from the market in May 2015 when an official of the Food Safety and Drug Administration UP declared that it contained monosodium glutamate (a taste enhancer, better known as ajinomoto) beyond accepted levels. Brand Maggi was virtually dead for six months and the crisis pushed down Nestle India's 2015 revenue to Rs 8,175 crore from Rs 9,855 crore in 2014. The net profit dipped by 53 per cent. Five out of its eight manufacturing facilities had to be shut down. Narayanan was hastily brought in as Chairman and MD in July to save the then 104-year-old company from the crisis which threatened its very existence. The 59-year-old played not just the role of a saviour and pulled Nestle India out of the crisis but also ensured that the company emerged as one of the top valuable consumer goods companies. The Rs 12,000 crore company's share prices have trebled in the last four years.

CP Gurnani
CEO, Tech Mahindra (IT & ITeS)

In April 2009, when the Mahindra group made headlines for acquiring the fraud-hit IT giant Satyam Computer Services, Anand Mahindra famously said, "I don't believe this is a sinking ship; no longer. This may not be a racing craft yet, but it is our task to make it one." The group chairman entrusted C.P. Gurnani (CP among his peers) with the arduous task. A decade later, Anand Mahindra is not telling us anything about the craft or its seaworthiness but thinks Gurnani is best placed to drive the company's growth. "I particularly admire his people skills, energy levels and unflinching customer focus. These qualities will help CP as he propels Tech Mahindra into the digital age, helping shape a sustainable digital world for all of us," he says.

The enormity of the task is reflected in Gurnani's daily schedule. He is up at five in the morning, travels 200 days a year to meet customers and partners and never fails to connect with his people. For a man who knows the families, hobbies and eating habits of more than 2,000 employees, it is only natural to give greater weightage to people-related matters during most of his conversation with Business Today. But the savvy leader is also candid when asked where the business is headed and ties it to the new-age digital transformation. "In the last three years, we have more than doubled our share of digital revenue - from 18 per cent to 40 per cent - and we aim to cross the 50 per cent mark in the next two to three years."

According to some analysts, what also stands out about the company's performance under Gurnani's watch (especially in the past three years, which we have considered for the Best Performing CEO Award) is its attempt to broadbase revenues beyond telecom.

Mukesh Kumar Surana
Chairman, HPCL (Oil & Gas)

On March 31, 2016, the day before Mukesh Kumar Surana took over as the Chairman and Managing Director of Hindustan Petroleum Corporation (HPCL), the Indian cricket team lost a semi-final match to West Indies in the Twenty20 World Cup. India's journey in the tournament had ended but Surana was drawing up a mid-term strategy for HPCL, naming it Twenty20. One of the aims was to get the oil refining and marketing company Maharatna status.

The criteria for Maharatna status includes a three-year record of annual net profit of over Rs 5,000 crore, net worth of Rs 15,000 crore-plus and turnover of at least Rs 25,000 crore. Among these, HPCL was lagging only in profitability, which was difficult to achieve without increasing the standalone capacity. Surana, therefore, worked towards enhancing crude processing volumes, margins and efficiencies. In the first year itself, the standalone profit of HPCL jumped by 60 per cent to Rs 6,209 crore in 2016/17 from Rs 3,862 crore the previous year. The company reported profits of over Rs 6,000 crore in the next two financial years and finally got the Maharatna tag.

Murali K Divi
Chairman, Divi's Laboratories (Pharma & Healthcare)

Murali K. Divi, Founder, Chairman and Managing Director of Hyderabad-based Divi's Laboratories, is known for his ability to spot business opportunities and for his love of chemistry. He has built a company that has carved out a space for itself in the field of custom synthesis of active pharmaceutical ingredients (APIs) and intermediates for global companies. In some cases, such as Naproxen Sodium (an anti-inflammatory drug) and Dextromethorphan (a cough suppressant), it is a dominant supplier.

These, and a combination of other factors, have helped the company weather the turbulent times that pharma companies have been facing, especially those in India - pricing pressure in markets such as the US, a move towards lower prices in India and policy uncertainty. To top it all, developments in China have created supply disruptions.

There are other elements to consider, too. Analysts often refer to the hypertension drug Valsartan, which was recalled globally because of contaminated APIs supplied from China. Divi's was a beneficiary in this case as supply disruptions from China led global pharma majors to look for other sources. So, it is not surprising that Divi's has been investing aggressively in expanding its manufacturing capacity.

IS Jha
Chairman, Power Grid Corporation (Power)

Indu Shekhar Jha, who took over as Chairman and Managing Director of Power Grid Corporation in November 2015, was responsible for executing the projects to beef up the grids and convert them into a national grid. As Jha points out, "My focus was on getting projects off the ground quickly and executing them on schedule."

When Jha took over in 2014/15, revenues of PGCIL were Rs 17,780 crore and profit after tax was Rs 4,979 crore. In 2018/19, revenues were Rs 35,618 crore and PAT Rs 9,722 crore. Jha has since moved on to become a member of the Central Electric Regulatory Commission.

During his term as the CMD of Power Grid, Jha brought about many changes in the way the public sector undertaking functioned. The first major internal change was delegating powers to senior executives and building trust among employees. The other change was getting EPC (engineering, procurement, construction) contractors on board. "After all, they do the work for us. I considered them as partners and not contractors," says Jha. He ensured on-time clearance of vendor bills, which enhanced the sense of belonging among the contractors.

Power Grid got support from the Ministry of Power and the Prime Minister's office. Initially the focus was to ensure that every village was connected. Today, work is on to ensure household electrification through the Saubhagya scheme, under which PGCIL is working in Jammu & Kashmir and 12 districts of Odisha.

BC Tripathi
CMD, GAIL India (PSU)

Bhuwan Chandra Tripathi has been involved with almost everything related to natural gas distribution in India, be it trunk pipelines or retail distribution. He also happens to be the longest serving chief of a public sector undertaking (PSU) and has worked with four ministers - Murli Deora, Jaipal Reddy, Veerappa Moily and Dharmendra Pradhan - during his 10-year tenure at the top.

Over the last three fiscals, under his stewardship, GAIL India has seen its turnover increase from Rs 49,237 crore in 2016/17 to Rs 75,126 crore in 2018/19. During the period, profits almost doubled from Rs 3,368 crore to Rs 6,025.67 crore. The gas pipeline network expanded from 11,000 route kilometres to over 13,000 route kilometres.

That is not all. Work is on to expand the Indian gas grid to 20,000 kilometres by 2022 covering the eastern region, the North-East and South India. "I have done all the ground work, awarded contracts, approved projects, brought finance, and the first stage is already done," says a pleased Tripathi. Out of 22 million tonnes of gas that India consumes, 14 million tonnes is sourced by GAIL. Of that, it sells two million tonnes in the global market. The four broad areas of operations in GAIL include expanding the gas pipeline network, gas retailing, the Assam petrochemical plant and international operations.