Mumbai: Nisaba Godrej, 39, will take over from her father Adi Godrej as executive chairman of Godrej Consumer Products Ltd, the company announced on Tuesday.
Adi Godrej will now be chairman emeritus, the company added in a statement to the stock exchanges.
The elevation of Nisaba Godrej (who is called Nisa within the company) was expected, although the company had not set a time-frame for this. It marks another milestone in the larger Godrej Group’s succession plan. Adi Godrej turned 75 in April. Earlier, in February, he became chairman emeritus of Godrej Properties Ltd, with son Pirojsha Godrej, 35, taking over as chairman.
Adi Godrej remains chairman of Godrej Group. His eldest daughter Tanya Dubash, 48, is executive director, Godrej Industries and also chief brand officer of Godrej Group.
Nisaba Godrej, an MBA from Harvard Business School joined Godrej Consumer Products in 2007. She is currently the Executive Director of the company.
“Nisa has been the key architect of its (GCPL’s) success and has been directly overseeing innovation”, Managing Director and CEO Vivek Gambhir said. “ She will now work very closely with the management to guide our next phase of growth.”
Analysts tracking the company say the move was expected.
“Given how active Nisaba already was in the company, the move was expected”, an analyst at an equities brokerage firm said on condition of anonymity. “But we did not have clarity on when it would happen. In that sense, the timing of the announcement was a little surprising.”
Godrej Consumer also recommended a fourth interim dividend worth Rs12 per share to be paid out by 31 May 2017. This brings the total dividend paid out for the year to Rs15 per share. GCPL also announced that it would issue bonus shares from its securities premium worth Rs1.452 crore. The shares will be issued in a 1:1 ratio to each shareholder, meaning the company will give an additional share for each held to its shareholders. A record date for this bonus issue is yet to be decided.
Godrej Consumer also announced its results for the three months ended 31 March 2017 and the full year, posting a 12.5% increase in its total consolidated revenue for the quarter to Rs2,489.49 crore. Its consolidated net profit rose from Rs124.84 crore to Rs398.91 crore year on year.
The company’s consolidated results are not strictly comparable to previous periods because it acquired US firm Strength of Nature and there were “changes in the company’s shareholding in some of the subsidiaries”, GCPL said in its stock exchange filings.
GCPL’s India business grew 10% to Rs1,326 crore in the quarter.
The company wasn’t hit as hard as some of its peers were by demonetisation, the government’s decision in November to invalidate old high value currency notes.
Since India contributes 50% of the company’s turnover the impact of demonetisation was that much lesser”, a second analyst said, asking not to be identified. “Besides, demonetisation’s impact has been short term and a lot of people have recovered from its immediate damage.”
GCPL’s international business grew 16% in net sales largely led by 47% growth in the company’s Africa business. In April 2016, GCPL acquired US hair-care firm Strength of Nature that largely sells its products including relaxers and shampoos meant for women of African descent in African and Caribbean nations.
Godrej Consumer ended the year to 31 March with revenue of Rs9,608.8 crore (a growth of 9.7% over the year ago) and a net profit of Rs1,304 crore ( 1.5 times growth).
Shares of Godrej Consumer closed 9.74% higher at Rs1,929.25 while the benchmark BSE Sensex closed 0.02% higher at 29,933.25 points.