In a sudden announcement, the Company has announced that Mr Sudhir Sitapati has resigned and is replaced by Mr Aasif Malbari.
It has been a surprise to everyone as –
- The change is immediate. No notice period.
- Five years back when Sudhir was appointed, market had cheered and had put it’s bet on him transforming GCPL.
- Recently on May 6, 2006, the Board had greenlit his five-year extension. This was followed on August 7, 2026 (just 4 days back) by shareholders’ vote in his favor.
Based on the chain of events and the call that management had organised with analysts on the issue, these are my takeaways –
- The promoter family represented by the Executive Chairperson Nisaba Godrej was not happy with the performance since Sudhir took over.
- Parallely she was very happy with what Aasif had done for the African business over the last few years and was looking for someone to bring in same aggression and momentum in the Indian business.
Given the quick change of events, something triggered the sudden decision.
Whether it’s a good change?
- Under Sudhir’s leadership GCPL’s performance has been below average.
- Sales over the last 5 years has grown at a CAGR of 7% and profits at 3%. Stock has increased at a CAGR of 4%.
- One can argue that this is also because of volatile global environment during this period but then many can counter otherwise.
- Company is aware that Aasif is a CA and hence is looking to provide him with requisite support by extending the management structure.
- There would separately be a Indian CEO and also Global CEO who will report to Aasif.
My current opinion about the change is positive. Aasif seems like a person who will challenge the notions and bring in the much needed push.
Although market may not be happy with the abrupt change in the short term, personally I believe this change may work out well. Godrej surely has a strong brand and resources to change the game.