Paranjpe bought HUL back on the growth track

In April 2008, Paranjpe became youngest CEO of HUL at 44 just when global economy was slumping

Back in April 2008, as the global economy was about to go through a severe global financial crisis, Nitin Paranjpe became the youngest CEO of Hindustan Unilever at the age 44. Paranjpe, who will now become President, Home Care, of the parent company Unilever Inc, took over the reigns of a FMCG major that was struggling with growth. 

Revenues were tapering at just 7% per annum till FY 2007 (preceeding four years), while net profit declined in the same period, which was unknown for the company. The challenge for Paranjpe was to get HUL back on the offensive, revamp its business model and get the company back on the growth path. 

 

Paranjpe did exactly that. He single handedly resurrected the behemoth's dominant position in the Indian consumer space.

He renewed the focus on driving profitable growth, streamlined its product categories and drove the company's distribution channels further into rural areas. 

In his five years at the helm, HUL's turnover and net profits have increased at 16 and 17% respectively compounded. HUL's market valuation has increased three-fold from about Rs 50,000 crore to about Rs 1,43,000 crore. 

Paranjpe joined the company as management trainee in 1987, and worked as an area sales manager in detergents and various other positions. In 2000, he moved to Unilever London, and was involved in the review of organisation structure. He was appointed the executive director for home and personal care in 2006. 

To increase HUL's growth rates, Paranjpe streamlined product categories and focused on a smaller but more profitable portfolio of brands. Under his leadership, soaps and detergents grew by 89%, while personal products increased by 93% in the last five years. 

However, Paranjpe has struggled with penetration in the foods business even as it was among the company's key focus areas for growth. Growth of the foods division increased by just 55% in the same period. 
 

But his tenure also saw the biggest buyback of a company's shares. Despite a slowdown in the economy, the company's rising growth rates increased parent Unilever's confidence as they announced a $5 billion open offer at a substantially higher price than the Indian market. The street believed that its promoters were more confident about the Indian business' growth prospects as they wanted to increase their stake up to 75%. 
 

Paranjpe also increased the distribution strength of HUL. Ten of HUL's brands are Rs 1000 crore brands.