Private equity player Advent International on Monday announced the appointment of Pratik Pota as the CEO and MD of its portfolio company Eureka Forbes. In a statement to the media, Advent International said Pota will lead Eureka Forbes as the Managing Director and CEO and would have to transform the company and take it to the next level of growth.
“Pota will lead the management team to continue scaling the business, solidifying Eureka Forbes’ market leadership position, and delivering innovative products for a growing customer base. He will join Eureka Forbes on August 16, 2022,” said the PE major.
Advent International acquired a majority stake in Eureka Forbes in September last year. The company, founded in 1982 by Shapoorji Pallonji Group, is known for its flagship brands Aquaguard and Eureka Forbes in the water purifier and vacuum cleaning product segments. The company claims to have a customer base of over 20 million.
With Pota at the helm, Advent International will now be stepping on the growth pedal. Here is all you need to know about the new CEO and what he brings to the table at Eureka Forbes.
Who is Pratika Pota?
Pratika Pota, in a professional career spanning about 29 years, has worked in various roles at several consumer goods companies, including Hindustan Unilever, Bharti Airtel, and PepsiCo. He started his career as a sales manager with Hindustan Unilever in 1993. Pota’s most impressive stint, however, was with Jubilant FoodWorks, where he was CEO for about five years.
Pota was credited with significantly improving Jubilant’s performance after he took over the reins in 2017. His contribution to the company can be gauged by the fact that his departure from Jubilant FoodWorks, the master franchisee of Domino’s in India, was not taken well by the markets and the company’s stock tumbled as much as 14 percent the day after the announcement. Several global brokerages downgraded the stock after Pota’s resignation.
What were his contributions at Jubilant FoodWorks?
Pota had joined Jubilant FoodWorks at a time when the company was going through a rough patch.
“Jubilant FoodWorks went through a tough phase over FY13-17. Rapid store expansions led to cannibalisation and deteriorated profitability metrics. Aggressive product price hikes along with deterioration in product quality impacted the franchise. These factors along with acute cost pressure resulted in margin contraction from 19 percent in FY12 to 10 percent by FY17,” said a note by Jefferies.
Pota took several initiatives that improved the growth and performance of the business. He introduced concepts such as ‘everyday affordability’ at Domino’s Pizza, under which the company offered 20-40 percent discounts to consumers most days of the week instead of earlier promotional offers such as ‘buy-one-get-one on Wednesdays’, which boosted store throughput. Jeffries terms this initiative a “game-changer”.
Pota also invested in product upgrades with new crusts, liberal amounts of cheese, other toppings, imported sauces, and visibly-pleasing packaging. He relaunched pizzas with these superior offerings at the same price points across the country and closed down over 100 underperforming stores of Dunkin’ Donuts between FY17 and FY20.
This resulted in a sharp recovery — the better store economics had a trickle-down effect on profitability. Ebitda (earnings before interest, tax, depreciation and amortisation) margins expanded from 10 percent in FY17 to 17 percent by FY19. Ebitda hence more than doubled in two years, said a note by Jeffries.
According to Motilal Oswal Securities, since April 2017 the Jubilant FoodWorks stock has returned a 40.1 percent compound annual growth rate versus 12.3 percent and 10 percent for the Nifty50 and Nifty India Consumption indices, respectively.
What does he bring to the table at Eureka Forbes?
Pota was also the brain behind Jubilant FoodWorks’ technological transformation, which helped it stand strong in the face of stiff competition from food aggregators such as Zomato and Swiggy. He oversaw the launch of several innovations such as late-night delivery, delivery on trains, and expansion into newer cuisines/brands, while also stepping into newer formats like cloud kitchens and kitchen-in-kitchens.
His background in tapping technology to better target consumers will come in handy as he takes over the helm at consumers durables company Eureka Forbes and steers it towards the growth path.
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