Yogesh Chander Deveshwar or “Yogi” Deveshwar, as he is popularly known in industry circles, is young at 64, much like the company that he runs. ITC Ltd turned 100 on August 24, 2010, but, with its many fledgling businesses, it is still young in many ways.
When he took over as ITC chairman in January 1996, Deveshwar inherited several problems, ranging from tax evasion charges to a public spat with the company’s single largest shareholder, BAT plc, to investments that went awry. Deveshwar has put all of this behind, and managed to steer the company to new heights.
“Leaders are people who have the ability to work under difficult conditions. Deveshwar is a tested case in that respect. He has seen it all and emerged taller,” an independent director associated with the company said.
In his 15-year tenure, ITC’s top line has grown by more than six times, from Rs 5,000 crore to Rs 32,854 crore, while post-tax profits zoomed from Rs 260 crore to a shade shy of Rs 5,000 crore. Unsurprisingly, therefore, Deveshwar is the chosen one to steer the company for another five years, even though his extension has been the subject of much discussion.
Apart from hotels, which the company forayed into in 1975, and paperboards (four year later), Deveshwar led a host of new initiatives — non-cigarette FMCG, agri business and information technology — that transformed a tobacco company into an FMCG major in just about 10 years.
“When ITC decided to diversify, there was a lot of boardroom pressure from its foreign shareholder, today there is none,” an official said. Nothing succeeds like success, people say.
For ITC, the last decade or so is not just a phase that can be told with numbers. It was a period of innovation led by Deveshwar, who is a visionary, colleagues believe.
The paper business is a case in point. Twelve years ago, the business was bleeding, but with the help of a clonal propagation programme, covering 100,000 hectares (or Mumbai and Pune put together), it turned around.
Deveshwar likes doing things differently. Whether it was a pioneering initiative like e-choupals or ITC’s green initiatives labelled as sustainability goals that translated into 24 per cent shareholder returns (measured in terms of increased market capatilisation and dividends), Deveshwar’s innovative and inspiring ideas were at their core.
Yet, there is room for improvement. At a press conference following the company’s last annual general meeting, Deveshwar had said that ITC’s biggest problem was that it couldn’t generate enough ideas to use its internal resources. “We can borrow Rs 16,000 crore to Rs 17,000 crore and will still have a debt equity ratio of 1:1,” he had told mediapersons.
With that kind of resources, it’s not surprising that every time ITC makes an entry into a company stock, it sparks speculation. ITC’s “treasury” operations in EIH Ltd (which runs the Oberoi chain of hotels) and Hotel Leela Venture, are well known.
ITC may or may not have had takeover designs, but it certainly was a good investment for the company. When the company started buying EIH stock, it was hovering at Rs 35 a share, taking ITC’s notional gains to around Rs 600 crore, not too long ago.
Is that all that Deveshwar wanted from EIH? Not clear, but Deveshwar has more important challenges ahead. He will have to groom a successor that will take ITC to the next level of growth.
“To groom someone who can carry on the work that he has done all these years is Deveshwar’s biggest challenge ahead. He has to ensure that the company does not miss him,” the independent director said.
The task is well-nigh impossible, colleagues believe.
