Private investment will pick up from next fiscal: Godrej

Special Correspondent, The Hindu, 20 August 2016

Private investment, which has been slow until now, will pick up from next year when all sectors, especially agro-based and agri-businesses, should do well, Godrej Group Chairman Adi Godrej said.

"We are having a good monsoon after two bad monsoons and if a sensible rate is fixed for GST then the economy will really get a boost from next fiscal. From this quarter onwards, I see signs of increased consumer offtake which will become more conspicuous in next few quarters, especially with the Pay Commission effect, consumer spend will pick up," he said.

"Companies with agri-business like us as well as those in real estate, will pick up from next financial year," Mr. Godrej said. The diversified group has business across multiple sectors with backward and forward integration, having heritage brands in its portfolio.

Perhaps three of the group's best-known companies are Godrej Consumer Products Ltd, Godrej & Boyce Mfg Ltd and Godrej Properties Ltd. On the group's investment plans he said: "Group business is not very capital-intensive, so investment was not in a very restrictive situation."

Inorganic growth

Mr. Godrej said that the company was "giving a strong emphasis on inorganic growth" and was looking to acquire in the consumer business, personal care and household goods space. The geographies under scanner were Asia, Africa and South America. The acquisitions would be mainly in the personal and household care segments.

He said the current global conditions presented a right opportunity to acquire.

"Because of the global situation being a little dull, you can acquire (a) company at a little lower (price) than in the past," he added. Indications are that the group's inorganic growth may be through Godrej Consumer Products Ltd (GCPL) - which is into personal and household care - and the unlisted Godrej Agrovet which is into animal feed and agri-business.

Reiterating the group's plan to increase turnover ten-fold in 10 years, he said that this has suffered a setback due to the slow-down and "needs to be made up." This would be through organic mostly but also through the inorganic route.