P. B. Balaji joined Hindustan Unilever Limited (HUL) as a management trainee in May 1993. Since then, he worked in numerous roles in finance, supply chain and procurement. Today, as HUL’s chief financial officer and V-P Finance for South Asia, he handles all the financial aspects of a €5-billion consumer goods company that serves the needs of 25 per cent of the world’s population.
Balaji, who took over as CFO in July 2014, says that HUL Finance has focused on three key areas under his leadership. These include delivering superlative performance by partnering the business to drive competitiveness – a move that resulted in strong volume growths under challenging market conditions. The portfolio was reshaped by disposing non-core businesses and HUL made its first acquisition in 15 years by acquiring Indulekha, an ayurvedic hair oil brand.
“These moves helped the business deliver consistent, profitable, competitive growth and have been well received by the markets. Notably, HUL is the only FMCG Company to have consistently improved its operating margins for the last 18 quarters,” Balaji says.
Balaji also ensured that HUL Finance seized the changes in the regulatory arena by taking proactive steps.
“Dedicated teams were put in place to implement GST by focusing on compliance and value creation while working closely with industry bodies to shape the narrative on GST,” he says, adding that HUL was ready for IndAS, the Indian Accounting Standards, by the middle of last year and was the first company to take the analyst community through its implications.
The consistent efforts have brought awards and acclaim.
HUL was recognised as the Top Treasury team in Asia (Adam Smith Award) as the and Best Investor Relations team across Asia (Institutional Investor).
HUL continues to remain the No. 1 employer of choice for the fifth year in a row, Balaji says.
When asked to comment on the challenges facing CFOs in this sector, Balaji proffers his simple mantra.
“The finance teams need to be consumer-centric and partner the business to drive performance while excelling in their stewardship role,” he says. Additionally, finance professionals need to work closely with the business to create and execute strategy and drive performance, he adds.
In the past few years, HUL’s CSR initiatives include providing safe drinking water to rural communities, encouraging hand washing behavior change amongst the masses, beginning the Domex Toilet Academy and setting up a free mobile medical service camp called Sanjivani. All these initiatives have been received extremely positively.
Juries have strongly felt that such initiatives, including Project Shakti, which has financially empowered over 70,000 Shakti Ammas, or the Fair & Lovely Foundation, which granted scholarships of Rs 1 crore to 200 deserving girl students, could not become successful unless backed by a committed chief financial officer. They have said that the CFO’s role in a large multinational like HUL must be commended.
HUL may have announced a decline in standalone net profit for the third quarter of 2015-2016 but India’s leading FMCG company believes that keeping the focus on innovation and market development will help drive volumes competitively and improve operating margins.
In the first such move in India, HUL also plans to transfer the Rs 2,187 crore in its general reserves to its profit and loss account to be distributed among shareholders pending requisite approvals.
Balaji, who enjoys reading, music and cricket, meanwhile, remains clear on his leadership purpose: To “passionately drive creative solutions that make a real difference to real people”.
ashish.sinha@businessworld.in; @ashish_BW
BW Reporters
Ashish Sinha is an experienced business journalist who has covered FMCG, auto, infrastructure, tourism, telecom among several other beats. Ashish has keen interest in the regulatory scenario impacting different sectors. He writes on aviation, railways, post and telegraph, infrastructure, defence, media & entertainment, among a wide variety of other subjects.
