We're Going To Make Aerospace A Subsidiary: Gautam Singhania Of Raymond Group | CNBC TV18

Summary

In this exclusive interview with Gautam Singh Hania, Chairman of Raymond Group, he discusses the company's future plans, including the division of subsidiaries into aerospace, real estate, auto components, and engineering. He highlights the significant opportunities in aerospace, particularly in the context of 'Make in India' and the 'China Plus One' strategy. Hania also shares insights into his long tenure with the company and the group's succession plans, emphasizing the professionalization of management and governance, with his children not expected to join the business for at least five years.

Takeaways

• 😀 The Raymond Group is splitting into separate subsidiaries for aerospace, real estate, auto components, and engineering.
• 😀 The aerospace sector, especially in India, is seen as a significant opportunity due to the 'Make in India' initiative and the shift towards China Plus One strategy.
• 😀 The company is focusing on increasing its top-line and EBITDA targets for all subsidiaries, aiming for 20% and 15% respectively.
• 😀 Gautam Singh Hania emphasizes that it’s too early to discuss specific projects in aerospace, defense, and automotive, but they are actively exploring opportunities.
• 😀 Gautam Singh Hania has been with the Raymond Group for 45 years and has been the chairman for 26 years.
• 😀 Succession planning is a key topic, with Hania mentioning that his children are too young to join the business yet.
• 😀 The Raymond Group plans to professionalize its management structure and governance to ensure long-term success and wealth creation for shareholders.
• 😀 The company is committed to best-in-class governance and incentivizing professional boards and management for each subsidiary.
• 😀 Gautam Singh Hania clarifies that while his children may eventually join, the decision will be theirs to make, and it's not part of his current business plans.
• 😀 The focus on professionalizing the boards and creating separate entities within the Raymond Group aims to protect shareholder interests and ensure high-quality management.
• 😀 Hania emphasizes the importance of separating management from shareholders' interests, ensuring that shareholder wealth is the ultimate goal.

Q & A

What is Raymond Group's approach to its engineering business?

Raymond Group is focusing on splitting its engineering business into separate subsidiaries. The group plans to make aerospace one subsidiary and real estate, auto components, and engineering into a different subsidiary.

What opportunities does Raymond Group see in the aerospace and defense sectors?

Raymond Group sees significant opportunities in aerospace, especially with India's 'Make in India' initiative. The company is also focusing on the 'China Plus One' strategy, where companies are seeking to establish a presence in India, including in aerospace and defense.

What are the revenue and profitability targets for Raymond Group going forward?

Raymond Group has set a target of achieving a 20% top-line growth and a 15% EBITDA margin for each of its subsidiaries, including the engineering segment.

What specific projects is Raymond Group pursuing in the automotive and aerospace sectors?

While Raymond Group is exploring opportunities in automotive and aerospace, the specifics are still premature to discuss. The company is awaiting results from an upcoming major show, the Parasite Show, which may reveal more about potential projects.

How long has Gautam Singh Hania been involved with Raymond Group?

Gautam Singh Hania has been with Raymond Group for 45 years and has been at the helm as chairman for 26 years.

What are Gautam Singh Hania's plans for succession at Raymond Group?

Gautam Singh Hania does not plan to involve his children in the business immediately. He believes his children are too young, with his daughter being 20 years old, and they will decide whether to join the business in the future. Instead, Hania is focusing on professionalizing the company's management with a professional board and incentivizing top management.

How is Raymond Group ensuring strong governance in its business units?

Raymond Group is aiming for best-in-class governance by splitting its business into three separate companies, each with its own top-class board and governance structure. This will ensure clear management practices, with the company protecting shareholder interests.

Why is Gautam Singh Hania focusing on professionalizing the management of Raymond Group?

Hania is focusing on professionalizing the management to differentiate between management and shareholders. He believes this approach will ensure the best governance practices and long-term wealth creation for shareholders.

Is Gautam Singh Hania open to involving his children in the business in the future?

While Gautam Singh Hania acknowledges that his children will make their own decisions about joining the business, he is not actively planning to bring them into the company at the moment. He prioritizes professional management and governance in the interim.

What role will shareholders play in Raymond Group's future?

As a shareholder, Gautam Singh Hania plans to step back from day-to-day management and focus on ensuring the company has top governance and management practices. The goal is to create value for shareholders, leading to wealth creation for the family.