DSIJ Interview With V R Jain CFO, Himachal Futuristic Communications Ltd.

"CFO wears many hats and plays a pivot role in all strategic decision making"

V R Jain CFO, Himachal Futuristic Communications Ltd. 




CFO Profile 

Mr. V R Jain is Chartered Accountant and Company Secretary. He is an Honours Graduate in Commerce and was awarded Gold Medal by University of Jodhpur. He has rich experience of more than three decades in the field of Financial Management, Business Support, Financial Planning & Analysis and Controls & Compliances and worked with reputed Groups prior to joining Himachal Futuristic Communications Ltd (HFCL).

He is associated with HFCL since 1994. As Chief Financial Officer he is responsible for Financial Strategy & Planning, Fund Management, Internal Control Systems & Compliances, Performance Reporting and contributing as business partner to run the business efficiently and effectively.

Mr. Jain has also vast experience in fund raising for expansion and existing businesses through debt & equity. He has got skills to manage working capital requirements, policy formulations, implementation of IT Solutions & Systems aligned to the business requirements with success. He is core team member of the organization and is actively involved in key strategic decisions. 

What are your top three strategic priorities as a CFO?

HFCL is on a growth trajectory for the past couple of years and in order to ensure sustainability and maintain the growth momentum we have put robust strategy in place.

Maintaining continuous sustainable growth in a volatile and changing environment across the Globe coupled with regulatory & transformational changes, is a challenge and an opportunity. As a CFO, my three strategic priorities are:

i. To implement efficient financial risk management and cost control measures;
ii. To improve the operational efficiencies and effective working capital management;
iii. To strictly adhere to the statutory compliances and Corporate Governance.

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

There has been a complete transformation in the role that a CFO has to play in the present scenario. CFO's role is completely different, broader and more complex than it used to be two decades ago. There has been a complete shift from more static type responsibilities to a less defined role. Today's CFO wears many hats and plays a pivot role in all strategic decision making percolating all across the company.

The Managing Director and Boards increasingly want CFOs to not only deliver the basic finance functions but also partner in shaping the company's strategic plans. CFOs have to now watch for potential opportunities across all corners and manage the risks as well. CFOs now help transform the company's products and markets, capitalize and plan for future growth, create and improve decision- making around key investments. At the same time, Boards have their own expectations concerning corporate governance, risk management, protecting the company's reputation and compliance and regulatory matters, among others.

What is growth outlook for your company?

I believe that the company is going to continue with sustainable growth. We have an order book of INR 10,300 cr spread across all the verticals and includes better margin O&M orders, which provide visibility for coming two years. O&M orders are to be executed over a period of 5-7 years. In addition, 

I believe that the company is going to continue with sustainable growth. We have an order book of INR 10,300 cr spread across all the verticals and includes better margin O&M orders, which provide visibility for coming two years. 

we have good pipeline of bids / orders in progress. There are / will be opportunities from Bharat Net projects, FTTH, 5G, IOT , Railways Signalling & Communications , Defence Equipment under Make in India Program , Security and Surveillance projects for Border Security Management , Perimeter Security for strategic installations etc Further, acquisition of Raddef, a technology company and other R&D initiatives empowers us to introduce new innovative and indigenously developed products to cater upcoming opportunities in all the business verticals.

How is digitisation and technology influencing your company's operations?

In the present scenario, business evolves around digitisation and technology. Technology is influencing us in every aspect of the business. We are extensively implementing technology which has significantly helped us to manage the exponential growth during recent past and improved our efficiency, processes and controls. We leverage on the latest technology to harness the available data in a more meaningful manner and concentrate on analytics rather than routines.

"Indicators such as growth in manufacturing and capital goods, index of industrial production and auto sales are showing softening of economic activities. However, despite these challenges, it is an opportune moment to take bold steps to reform the financial sector, the real and social infrastructure, remove bottlenecks in different segments and unleash the economy for significant growth in the years to come. Low inflation, income support to farmers and accommodating monetary policy should aid economic activity in the years ahead"

"Telecom is at the cusp of new infrastructure wave which will support the telecom business. Policy towards robust digital communication infrastructure will need huge telecom infrastructure development."

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

Key growth drivers of the company include its existing portfolio of products and solutions, promising new business verticals of railways and defence, development of new products like Wi-Fi network products, UBRs, Electronic fuses etc. Telecom is at the cusp of new infrastructure wave which will support the telecom business. Policy towards robust digital communication infrastructure will need huge telecom infrastructure development. Networks shall become denser and deeper with aggressive 4G and FTTH roll-out along with 5G on the anvil. Government plans huge spend on modernising the railways telecom & signalling and also promote ' Make in India' for defence equipment, which present promising opportunities for the company in defence and railways.

What are the key risks facing Indian economy in your view?

Even though, India is a fast emerging economy in the world, there are certain features which put pressure on the desired growth of the economy. India's 25% population continue to be below poverty line and 47% of the working population is engaged in the agriculture sector, which contributes only 17% of the GDP. In the recent past, the country's unemployment rate is also growing. Possible slowdown in global economy, transformational phase post demonetisation and indirect tax reforms, Brexit-related uncertainty and uncertainty of monetary policy in the developed world, especially in the US, remain key risk factors. In addition, any sharp rise in crude oil prices would put pressure on the growth, as these can adversely impact inflation and fiscal & current account deficits. Indicators such as growth in manufacturing and capital goods, index of industrial production and auto sales are showing softening of economic activities. However, despite these challenges, it is an opportune moment to take bold steps to reform the financial sector, the real and social infrastructure, remove bottlenecks in different segments and unleash the economy for significant growth in the years to come. Low inflation, income support to farmers and accommodating monetary policy should aid economic activity in the years ahead.

What are the key challenges to growth faced by your company?

I believe maintaining the continued growth momentum with decent margins is the key challenge, but the growth drivers as mentioned above, along with the robust strategy in place, shall adequately address any such challenges.

What is the single most challenging aspect of being a CFO?

Being responsible to the Managing Director, Board of Directors, Regulators, shareholders, Lenders and all other stakeholders, CFO needs to deliver on varied expectations and keep himself completely aligned with the company's strategy and ensure sustainable growth and returns for all.