Best CFO Awards 2016-17 | When Money Smells Sweet

It will not be an exaggeration to call Naresh Bhansali a super achiever. As the CEO, Finance, Strategy and Business Development of Emami, Bhansali is also a Financial Conduct Authority with more than two decades of rich experience in the field of finance and accounting. He was awarded the ‘Overall Champion CFO’ and the ‘Best CFO Award for Consistent Liquidity Management’ in the mid-cap segment at the YES Bank-BW Businessworld CFO Awards 2015-16. Therefore, it is not a surprise that Bhansali has yet again bagged the award for Best CFO, Sustained Wealth Creation (Medium) by the jury members.

Bhansali is a 25-year veteran with Emami. He joined the company in May 1992 as a management trainee with the accounts department of Himani (which subsequently became Emami). At that time, the company had 21 depots and three factories and a turnover of Rs 18 crore. As on 31 March 2016, Emami has a turnover of Rs 2,624 crore. Also, today the company is spread across four regional sales offices, 32 depots, eight factories and an overseas unit with a market presence in over 60 countries with subsidiaries in Bangladesh, Egypt, Australia, the UAE and the UK.

Bhansali has been playing a significant role in management of financial risk. The company is maintaining high liquidity through cash flow on a continuous basis. Payment to all creditors including banks and financial institutions are made on time, he says. “Today Emami is almost debt free in spite of costly acquisitions,” he adds.

In 2008, Emami with an investment of Rs 713 crore acquired a controlling stake of 68.9 per cent in Zandu. The acquisition was a sizeable one for Emami because at the time of acquisition, its own market capitalisation was only Rs 1,200 crore. “Fund raising was also a challenge in 2008 due to the financial meltdown when banks were unable to keep up to its commitments. Post Zandu acquisition, the debt-equity ratio increased from 0.45 in 2007-08 to 1.49 in 2008-09,” he says.

Creating Wealth
Under Bhansali’s leadership, Emami has become a preferred investment proxy of the FMCG industry with an ayurvedic niche. The company has maintained a CAGR of 15 per cent in its revenue over the last five years. In doing so, it emerged as one of the fastest growing Indian FMCG companies, says Bhansali. The initial investors of Emami, who invested Rs 1,000 for 100 shares, which eventually became Rs 4,000 after the rights issue, are now proud owners of Emami shares worth over Rs 7.8 crore, the company says. It is a fact that the Emami shares that were offered at Rs 70 in the public issue in March 2005, appreciated over 40 times at the close of 2015-16. The company scrip has delivered returns of over nine times to QIP investors of 2009.

Under the able leadership of Bhansali, within first full year of operation post acquisition, the Ebidta of Zandu business increased from Rs 22 crore to Rs 70 crore. During the Kesh King acquisition in 2015, with a modest debt equity ratio of 0.04 against a net worth of Rs 123,064 lakh, as on 31 March, 2015, the company had adequate borrowing room to drive organic and acquisition initiatives that led the company to make the largest acquisition of (Kesh King) worth Rs 1,684 crore in the personal care sector in India during June 2015.