Harsh Piramal: Transforming Morarjee Textiles into intl MNC

Harsh Piramal is the man behind the textile and auto components businesses of the Ashok Piramal Group. He was born into one of India’s oldest business families but that’s not his claim to fame. His effort, endeavour and mission is to double the businesses he is spearheading every two years.

He is 34 years old and Executive Vice Chairman of Morarjee Textiles & PMP Auto. He decided to make his Matrubhoomi his Karmabhoomi. Sounds like patriotism but that is what seems to have driven him back home. As one of the heir of the Ashok Piramal Group, perhaps Harsh didn’t have much of a choice. After an MBA in Finance & Strategy from the London Business School, Harsh joined as the COO of Nicholas Piramal’s Allied Pharma business. In 2004, he took over Morarjee Textiles and spun it towards garment manufacturing.

Harsh continues to seek new opportunities and is on an accelerated growth path taking his textile company from manufacturing to retail. Even the auto business, PMP Components, that offers a wide range of products, is in gear. With an impressive client list that includes Tata Motors, Mahindra & Mahindra, Bajaj Auto, Ashok Leyland and Hindustan Motors, PMP today is the single supplier of oil pressure switches with a 70% share of the domestic market.

“I think there is a great future for that business. Traditionally, the business has been small. It is actually quite an old business. We started in early 1980, but somehow it didn’t get the attention in all these intervening years. But now there is great hope and a great plan.

From textiles to auto; it is a different ballgame. But this Young Turk who also happens to be a national level Polo player has managed a successful strike rate. Harsh is looking at widening into newer markets through acquisitions. Making the Ashok Piramal Group a worldclass MNC in the near future is his goal.

“The objective clearly in both the textile garment side and the auto component side is to be a multibillion dollar, multinational company,” he stated.

Excerpts from CNBC-TV18’s exclusive interview with Harsh Piramal:

Q: Was it patriotism that got you back saying, “I want to do something for my country.”

A: Absolutely country was also a part of that. In 1999, there were a lot of nationalist feeling with the nuclear test and Kargil, etc. It was also about wanting to do something for the family business but I think the country has got quite a lot to do with that.

Q: What is it about textiles, auto components and engineering that interests you so much?

A: About textiles, it is a little bit sentimental also because Morarjee Textiles is one of the oldest textile companies and the oldest existing textile company in India. It’s also the family’s oldest company and was purchased by my great-grandfather in 1934.

Q: What was that like to move from pharma and to move textile and hardcore manufacturing?

A: I used to spend majority of a month at our manufacturing plant in Nagpur or be in Bangalore initially. You have to learn the business so that you can converse with the team, who are professionals in this field.

Q: Give us a sense of the changes that you made when you joined.

A: One thing that we did was that we have significantly changed our product portfolio. We have moved to higher-end fabrics. We have got out of the commodity, stand fabrics and moved to higher count business. It is obviously higher margin but also gives a niche in the Indian market and the global market for that matter. We also set up an office for our fabrics company and in Milan (Italy). So, today our designing, etc is driven from there.

I remember people were slightly sceptical about that. But once you show them the benefit and that it’s a good change and is going to benefit the company and going to benefit them, I think people get around it.

Q: Where do you actually see the textile business headed over the next 12-18 months? What is your long-term strategy for it?

A: We have to make the fabric business profitable following the appreciation of the rupee and move to higher-end products over the next 12-18 months. The long-term vision is to move into value-added textiles for e.g. technical textiles. Our DNA is very much like a niche player, high price company and even our people are very used to the fact that we don’t sell on price; we sell on quality and on design.

Q: I believe you have set yourself an aggressive turnover target?

A: That is right. In five years, we want to be about Rs 1,000-1,500 crore in this business. Today, we are about Rs 120 crore.

Q: Give us the contours of this five-year plan, from Rs 120 to Rs 1,000 crore?

A: A lot of it is going to be acquisition-based. We have acquired a wiping systems company in Hungary. We will be looking at acquisitions in the US as and when they come along and are tracking companies.

Q: What is the size of deals that you would look at?

A: Given our size today, a company between USD 20-50 million would be a good size for us. But if a bigger acquisition comes along, I would be quite keen to look at even bigger size acquisitions as it helps to grow faster.

Q: What markets would you be focusing on at this point?

A: For wiping systems, the growth market is India. We already have a base in Europe and besides these we have just set up a sourcing office in China.

Q: You can’t do auto components and not talk about China?

A: Absolutely. Look at their auto component market. Their auto component sales are about six-seven times the number of units that India does every year. So, you certainly cannot ignore China as a market.

Q: Is there anytime for polo now or is that in the past?

A: I still try and take time for polo on the weekends. Sometimes it does become difficult with all the travelling. But I personally believe that it’s very important to have something outside work. Even if you can devote limited time to it, it’s better than devoting no time to it. So, polo and football are my two passions.