KOLKATA: The Godrej Group is focusing on the inorganic growth route and feels it is a good time to go for more acquisitions, Chairman Adi Godrej said here.
“We are putting a lot of emphasis on inorganic growth route. We acquired few businesses last year in agro and consumer segments. Our growth through inorganic route will be good over the next few years,” said Godrej.
“Inorganic growth would be made mainly through acquisitions. Globally things are not doing well; you can acquire businesses at a lower cost than normal,” he told reporters here.
The group was looking to acquire businesses mainly in the developing world — Asia, Africa, and South America — and at acquisition in the consumer product segment, mainly in personal and household products, he said.
Godrej said businesses have been growing but growth was lower in the last couple of years due to bad monsoon.
The group has in place ’10/10′ growth strategy, which means grow 10 times of present size in 10 years’ time, he said.
“Due to slow growth in the last couple of years, we have fallen back a little. We hope to make up on that.”
The company is looking at a 26 percent compound annual growth rate.
“We don’t think we can have such a growth in an organic way only; some of it will have to be inorganic. A rough estimate suggests about 15 percent growth would come from the organic way and 10 percent by inorganic route,” he said.
A little pick-up in the overall consumer growth has been noticed from this quarter, “but we need to see whether it will continue and how it will continue,” Godrej said.
“I expect the consumer demand will continue in future if GST (Goods and Services Tax) is rolled out in April at a sensible rate.”
Under GST regime, Indian economy would do well and growth could touch a double-digit figure, he said.
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Source: Economic Times
