DSIJ Interview With Hiranand Savlani CFO , Astral Poly Technik Ltd

"Introduction of new products will be key growth drivers"

Hiranand Savlani CFO , Astral Poly Technik Ltd 

What are your three strategic priorities as a CFO

My first priority is right allocation of capital so we can generate minimum 20% ROC. My second priority is to improve the working capital cycle so that we have additional working capital available for growth. My third priority is to keep the company's leverage low (not zero) to maximise return on equity (ROE) with low risk as debt cost is very low for us compared to the return on investment we generate today (20% plus ROC).

How is digitisation influencing your operations?

Scaling the business is not possible beyond a point without digitisation. Hence, we are also spending money on digitisation and high-tech software which can give us accurate and real-time data and MIS like SAP. Further, we are also doing digitisation down the channel level so that every distributor should get required information at the fingertip in his office. We aim to do the business on an auto pilot mode in future.

What are the key risks Indian economy is facing?

India is passing through a transformation phase from an unorganised economy to an organised economy, which will present lot of challenges, but at the same time, players like Astral will get lot of benefits as our industry also has 40% unorganised players.

GST is another game-changer for the industry as now it will be a common tax for all the players and all short-cut routes will be closed over a period of time.

Most of the organisation are facing challenges in working capital management due to liquidity issues in the market. Companies that are disciplined in managing their working capital will be the beneficiaries in the current market scenario.

What are the key growth drivers/ levers of your company?

Astral always believe in innovation, hence introduction of new products will be the key growth drivers in the coming years.

Astral is also eyeing on taking market share in new geography and, as a part of that strategy, we have put up plants in West/South/North and next year we will start plant in East India. This will help the company to have a pan-India distribution network. This will reduce lot of logistic cost for the company and will help in margin improvement. Due to transformation of the economy from an unorganised economy to an organised economy, we are definitely going to take a reasonable market share due to our pan-India production facilities and pan-India distribution Network.

A right inorganic opportunity which can leverage brand Astral and its distribution network will always be an added opportunity for growth.

What skill-sets are a must to be a successful CFO of a company?

Deep understanding of the business through formal/informal relationship with all the departmental heads within the company will help you to understand the practical challenges of business at every department level. This will help you to take the right decision under various circumstances. Further, to have an open mindset to adopt change at different stages of growth, be it systems, technology, volatility, people. CFO has to remain open for all situations of changing circumstances.

What is the most challenging aspect of being a CFO?

Adopting a quick change under different circumstances (internal/external) and managing all the stakeholder’s expectations.

How has the role of a CFO evolved over the years ?

A complete 360* degree change. Now managing the volatility to legal compliance to innovative ways of funding locally as well as overseas, investor relationship, playing leadership role in technological change, and so on. It's continuous activity and challenges.

What is the growth outlook for your company?

In this challenging times, it is difficult to give an exact number, but I am confident we will be growing much faster rate than the industry average. Our history of the last 20 years is also a witness to the same.