december 29, 2017 forbes india | 73i
f your father counts among
India’s richest men and is
an entrepreneur who has
built India’s largest auto
component maker, it is not
easy to step out of his shadow.
But Laksh Vaaman Sehgal, 35, son
of Vivek Chaand Sehgal, has done
that and more. Right from his first
venture as a leader, when he turned
around an ailing UK-based company.
Based mostly in London, Laksh
—who is a director on the board of
the family firm Motherson Sumi
Systems Ltd (MSSL)—oversees
the business of group subsidiary
Samvardhana Motherson
Automotive Systems Group. He
also spearheads research and
development initiatives at Motherson
Innovations, a company involvedin innovative and technological
solutions for the entire group.
But to understand Laksh—and
indeed the mind of his billionaire
father—one must turn back to 2009
when Laksh had joined the family
business on his return to India after
completing his master’s in finance
from Columbia University. He had
earlier, in 2003, trained at MSSL’s
partner firm Woco Group, which
makes rubber components, at Bad
Soden in Germany, and then in 2004,
in Thailand on the shop floor.
The company had just acquired
ailing UK-based firm Visiocorp,
which made rear-view mirrors for
cars, in March 2009, and the top
brass of Samvardhana Motherson
Group (SMG) had gathered in June
at the Noida headquarters for a
strategy review meeting to discuss
how to revive the fortunes of the
firm, now renamed SamvardhanaMotherson Reflectec (SMR). SMR’s
business forms part of SMG.
The UK-based company’s losses
were so sharp that they had pushed
the flagship MSSL into a loss for
the June-end quarter. SMR had
posted a loss of `22.3 crore in the
quarter ended June 2009, which
plunged MSSL into a loss of `12.88
crore (before considering minority
interests) in that period. Even in the
subsequent quarter, SMR reported
a standalone loss of `24.3 crore.
The total capital invested in SMR
at the time of acquisition was €30
million; MSSL held a 51 percent
stake in SMR while a group firm,
Samvardhana Motherson Finance
Limited, held the balance.
At the review meeting, Vivek
Chaand Sehgal, the chairmanand group co-founder, suddenly
turned to his son and said: “You
will be the new CEO of the [ailing]
company.” Laksh was just 26 then.W
hen he pointed towards
me, I actually looked back
to see if someone was
standing behind me,” Laksh recalled
while speaking to Forbes India after
the FY17 financial results of MSSL
were announced in May 2017. After
the meeting, his father had joked with
Laksh that SMR was in such a bad
shape that it couldn’t do any worse.
“It was like a motivational speech
for me; that was a good way to take
the pressure off me,” says Laksh.
Sehgal senior, being a self-made
entrepreneur, has always been
an advocate for learning business
and leadership skills on the
factory floor than in a classroom.
Making Laksh responsible forturning around a sick company at
a time when the global automobile
industry was facing one of its worst
crises in decades due to slowing
demand was his way of training
his son: A true baptism by fire.
SMR did not fare any worse and,
in fact, in less than a year, Laksh
had managed to turn around its
fortunes and navigate MSSL’s
financials into positive territory.
For the quarter ended December
2009, MSSL reported a profit of
`78.05 crore and SMR reported a
small but significant standalone
profit of `9.16 crore.
Laksh says he followed some
time-tested formulae that he had
learnt from his father. He first broke
the business down into units, so that
each manufacturing unit operatedlike a separate company and found its
own strategy to becoming profitable.
This technique helped them keep a
close watch on costs and processes
(SMR had 16 plants and a majority
of them were loss-making).
He also brought in a lot of financial
discipline. Laksh repeats the mantra
the company believes in and follows:
“Topline is vanity. Bottomline is
sanity. Cash in bank is reality,”
something that has also helped the
firm choose its acquisitions well.
The $9.1-billion Samvardhana
Motherson Group has made 19
acquisitions since 2002 and in all of
them, it has created synergies but
allowed them to manage themselves
as autonomously as possible. It has
230 factories across 37 countries and
MSSL’s auto components are found
in cars manufactured by some of the
automotive world’s biggest brands
like Peugeot, Ford, Volkswagen,l aksh believes in: “Topline is vanity.
Bottomline is sanity. cash in bank is reality.”