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Contrarian in industry: Maharaja Mills does it again

19
Jun '09
Rajasthan based Maharaja Shree Umaid Mills Ltd , a composite textile mill belonging to 1940s was covered by our argus-eyed Fibre2fashion team during the previous quarter for its superlative financial performance. The Company has come out with magnificent financial performance during the year. We did an interview with Mr Govind Sharda, 42 years, the whole time Director and the CFO of the Company and Mr Yogesh Bangur, 25 years, President (Corporate Affairs and Strategy), younger scion of the promoter Mr LN Bangur. The performance of the company becomes remarkable in view of change of guard during the most critical economic downturn of recent times. Mr Sharda has replaced a life-timer at the Company.

Mr Govind, a Chartered Accountant and Mr Yogesh, with his masters from Warvick echo different perspective for the textile industry and management approach. And the duo has reasons to cheer. One of the oldest composite textile mills of the country has turned around its own strength that remained untapped. And the twosome are roaring though didn't divulge any specific target. Excerpts from an interview:

F2F: Looking back on the year gone, fiscal year 2008-2009 has really been a tough year for industry. Isn't it, Mr Sharda? However, going through the year-ended financial result, surprisingly it didn't seem so with your company! Retrospecting bygone financial year, what was the most crucial decision taken by your company on financial front?
Mr Govind Sharda: What differentiates us is the contrarian approach coupled with the ability to visualise the near future market pattern with reasonable accuracy. With the turmoil in the US and EU economy, the fallout in India was just a matter of time. Visualising it, the Company changed its product mix to generate the volume demand. Advance booking of orders contrary to market belief that prices will rise (and it didn't, in retrospect) helped us ensure the sales volume at right price. We had regular order flow through out the year and the plant was run at 100% operating efficiency that helped us keep the costs in check. Ensuring the sales volume while keeping the costs in check are the sure shot mantras of success during the tough business cycles, we strongly believe. Flexibility in approach and a financial focus on business outcome helped us a lot.

F2F: This year topline compared to FY08 shows growth by 16%. What all would you tick as factors resulting this growth?
Mr Govind Sharda: While the economy signals negative growth, flexibility of the product range was needed. Outcome was focus on mass products with thinner margins but thicker volumes. One needs to be at the right market. Our domestic centric market strategy for decades was a boon. We reduced the export that offered volatile demand to couple the volatile forex behaviour. It was cutting risks during the testing times that helped us grow.

To further strengthen the ties with the customers,our personal numbers are always available for hearing them on 24 x 7. Continuous customer feedback has provided a great insight in planning things before others could imagine.


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