This story belongs to the Fortune India Magazine January 2025 issue.
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THE VIKHROLI CAMPUS of Godrej Enterprises Group (GEG) wore a festive look on the evening of November 28, 2024. After all, it was the unveiling of GEG’s new brand identity — the 127-year-old Godrej cursive logo, which was relaunched in bright purple, with a promise of ‘moving the world forward’. Around 16,000 employees sang the new anthem along the beats of Dharavi Reloaded (a junk percussion brand) and Antaheen (a music band). Steering it all were 75-year-old Jamshyd Godrej, chairman, GEG, and his niece, executive director Nyrika Holkar, who promised a culture that would promote an ownership mindset, backed by innovative thinking, agility and speed.
Perceived as more conventional and less glamourous compared to uncle Adi Godrej’s Godrej Industries Group (GIG), Nyrika’s determination to change GEG is obvious. “We want to make sure our teams are building and investing in the company because they believe it is theirs. Managing that mindset is very important. The other crucial bit is to be more agile and proactive.” Her promise of moving the world forward rests on two pillars — creating strong consumer-facing brands and building nation-first businesses. From offering IoT-enabled connected home solutions through its locks business and AI-powered washing machines and air-conditioners, to foraying into zinc-manganese batteries, thermo-chips and concrete recycling, the locks-to-rockets engineering powerhouse is gearing up for a major transformation.
“Every business has a roadmap for the next three years. Our focus will be on research and development (R&D) and delivering seamless consumer experiences,” says Nyrika, who has set a revenue target of ₹20,000 crore for GEG in the next three years (from the current ₹16,379 crore). Though consumer-facing businesses contribute 60% to GEG’s revenue, it is the legacy engineering businesses which continue to yield higher returns.
And the Godrej next-gen wants to change that equation.
To begin with, the group, which has 1.1 billion customers, has streamlined its businesses under three distinct clusters — consumer business, nation-building (aerospace, aviation, defence and advanced engineering segments) and future-first (battery storage and green energy solutions). Godrej & Boyce (G&B), the privately held holding company of GEG, saw a 367.88% year-on-year increase in net profit to ₹546 crore in FY24, on the back of a 10.69% rise in net sales to ₹16,379 crore.
“The future is exciting, Godrej & Boyce will not be the same,” says an enthusiastic Jamshyd. “We’re seeing immense consumer interest in what we make. Our focus is on understanding the evolving needs and delivering premium, sustainable solutions,” he adds. The septuagenarian, however, is more than willing to let his niece do the talking.
The revamping exercise comes eight months after the split of the larger Godrej family between two factions — Jamshyd and cousin Adi Godrej. Adi, along with his children Tanya, Nisaba, and Pirojsha, got control of Godrej Industries and associated companies. Jamshyd, supported by his sister Smita, her husband Vijay Crishna and their daughter Nyrika, took the reins of GEG, which controls G&B, and its crown jewel — a sprawling 3,400-acre land parcel in Vikhroli, Mumbai. Termed as the most amicable separation of a family business in recent times, the deal includes a cooperative clause, wherein GEG will continue as the developer of the Vikhroli land, while Adi’s Godrej Properties will handle marketing for 10% share of sales value as fee. Both sides are bound by a non-compete agreement for six years, after which they can venture into each other’s domains under different brand names.
The split stemmed from differing growth strategies between the two factions. Adi’s children, known for their ambitious and assertive approach, set a bold target of achieving a ten-fold growth in 10 years way back in 2011. This aggressive pace clashed with the more measured, steady growth philosophy championed by Jamshyd. Amidst these dynamics, Jamshyd’s son Navroze, who has a passion for music and design, stepped down from his role as executive director in 2016 after leading design-driven innovations for six years. His departure left a gap, which was filled by Nyrika’s entry into the G&B board in 2017. Since then, Nyrika has carried forward consumer and design initiatives pioneered by Navroze, and is now leading efforts to revitalise furniture retail brand Interio and enhance its omni-channel customer experience.
“Relations between the two families are very strong,” clarifies Nyrika. “There are aspects where we would be working together. The most important is the brand, where we do need to work together. We can’t be at cross-purposes there,” she emphatically points out.
An important element of the realignment of the shareholding is the common ownership of brand ‘Godrej’. This means both entities, though operating differently, will still use the same brand identity and logo. But then, this could also be limiting for either side. “Traditionally, it was the massive diversification as well as the conservative goodness culture that prevented them from getting bolder. The new challenge to do so will come from the weight of the enormous Godrej equity. Either of the two factions will be wary of moving too far from it for the fear of looking like a spurious Godrej. GEG’s recent unveil of its subtle new identity confirms the hypothesis,” explains Ashish Mishra, CEO, India & South Asia, Interbrand.
But Mishra also believes the amicable split is an opportunity for value unlocking for both factions. “The two parts of Godrej were always a bit heterogenous. The split may potentially allow them to assume sharper positions within their more respective, focused spaces. This can set them free, and help them unlock value,” he explains.
Unni Krishnan, founder, The Living Machine Institute, a purpose-led business design advisory, further explains the difference. “The primary difference being one of them not wanting to get listed. The Adi Godrej side has been able to show that companies managed by him can withstand the scrutiny of the markets, and perform in a way that the markets are able to appreciate their long-term value. The Jamshyd faction doesn’t want to be at the mercy of the markets. They believe they would be far more suited to create value by staying away from the markets.” Also, businesses under Adi are more consumer-facing and hence have a better understanding of consumer orientation and the role of brands, while Jamshyd’s businesses traditionally have been engineering-led, which have kept them far away from end consumers.
“If the risk-return calibration of owners and guardians are radically different, they can’t take strategic decisions which are unifying. The separation is much better for the two groups because the rhythms and patterns that the Jamshyd Godrej side has been wanting to pursue might have been diluted inadvertently by the other side and vice-versa. Now each will pursue their own way of interpreting the value system,” Krishnan further explains.
Pete Dewar, founding partner, Clearing (the company which designed GEG's new brand identity), "From a strategy point of view, the aim was to retain the diversity of GEG and not to rationalise it. Whereas the identity is more of an evolution with the core signature logo retained to represent its legacy and heritage. The brand needed to feel fresh and modern but a natural progression of where GEG is going, rather than a complete revolution."
Reinventing Godrej
So, how different is GEG post split? “The businesses (GEG and GIG) always operated independently. It was more a realignment of shareholding. This helps us to focus on what we need to do for our businesses — on building the future,” says Nyrika. Jamshyd, however, is not so cautious. The Thursday lunch of the Godrej family, a much talked-about affair, is a thing of the past now. “There was a time when these meetings were important because we shared what we were doing. But once we agreed in principle to realign our shareholding, these meetings were no longer necessary,” Jamshyd admits.
The 127-year-old business which gave Indians the first springless lock later forayed into a host of specialised B2B ventures, including aerospace, aviation, defence and advanced engineering. Not many know that GEG’s Vikhroli facility is the component supplier for the upcoming Chandrayaan-3 mission of the Indian Space Research Organisation (ISRO). The company has developed expertise in manufacturing critical components for space projects such as liquid propulsion engines, satellite thrusters, and control modules. Besides playing a key role in missions, including Chandrayaan and Mangalyaan, the aerospace division has partnered with Rolls-Royce, Boeing and GE to design and produce vital parts for the civil aviation industry as well.
Nyrika intends to capitalise on GEG’s engineering capabilities to offer highly specialised services to consumers through its locks and security, and appliances and furniture businesses. She is eyeing IoT-enabled connected home solutions, which she claims has an addressable market of ₹42,000 crore. Even for categories such as washing machines, air-conditioners or refrigerators, the plan is to launch products with AI-enabled features. In September 2024, GEG opened a new manufacturing unit at Shirwal near Pune, which focuses on automatic front-load washing machines powered by AI technology, with a capacity of 3 lakh units per year.
The strategy is to capture market share through premiumisation. Despite being the first mover in the appliances segment, the company was not able to match up to the likes of LG and Samsung in terms of market share, until it embraced premiumisation. In the past one year, Godrej has moved to the fifth position (from ninth) in air-conditioner market share. It is also the fourth-largest in refrigerators, and sixth in washing machines.
In all these, sustainability is key. GEG has set a target of 50% revenue from green products by 2032. It will not just involve launching greener products, but also educating and creating awareness among consumers, says Nyrika. “We will also work with the government to ensure green products are made more affordable. For instance, five-star ACs are considered discretionary. But as climate change gets more pronounced, it may become a necessity. So, how do we work with the government in the same way as LED lights, whose adoption is close to 99%? Generally, people look at upfront costs, but don’t look at the cost to own a product over its lifetime. With more energy efficient appliances, the cost goes down. So, it’s up to brands like ours to highlight that and make those options available.”
Green products would also include launching B2B solutions. GEG plans to manufacture zinc-manganese batteries for large-scale power storage. According to Jamshyd, the chemistry of zinc and manganese is an ideal solution for large-scale energy storage, and is better than lead-acid batteries. “The materials used in zinc-manganese batteries are sustainable, and available in the market. We are doing R&D to set up a pilot plant,” he explains. The commercial production of batteries will take a few years to start, though.
The manufacturing of thermo chips is another focus area. The major application of thermo chips is in optoelectronic devices, which can detect, generate and control light, and in photovoltaic cells, cameras and virtual reality devices for detecting and controlling heating.
The company has also set up a pilot factory for concrete recycling for reuse in construction. The Indian Building Code limits the use of recycled concrete aggregate in new constructions, something that’s allowed in developed countries.
Unlocking Value
Brand Godrej (before the split) has always been part of the most-valued lists of brands, mainly due to the equity the Adi Godrej side of the business enjoyed. “GIG has a natural everyday consumption and living context, whereas GEG is engineering focused. The former involves a higher role of brand and hence has historically contributed greater brand value to the Godrej master brand compared to the latter, according to Interbrand’s Best Indian Brands studies. This simple perspective, too, has value unlock cues embedded in it. GIG could find legitimate and authentic ways of helping people get better at living through its portfolio. It is well placed to do this by resolving the many conflicts its stakeholders and society at large is marred with today,” explains Mishra of Interbrand. GIG’s Godrej Consumer Products is its most valuable business with a market cap of ₹1.09 lakh crore as on December 20, 2024.
“Adi Godrej companies have a different understanding of consumer orientation and the role of brand, culture and innovation. They are a lot easier and nimbler to understand,” agrees Krishnan of The Living Machine Institute. Krishnan, who was earlier with Brand Finance, which helped the Godrej Group carve its master brand strategy way back in 2008, says Godrej Consumer Products at that time was struggling to stay afloat, and was unable to compete with multinationals. “The Adi Godrej side has shown it can not only meet market expectations, it can also take forward the heritage of Godrej brands. Companies usually sell their soul to create market valuation, but Adi Godrej has always stuck to the promise of being a company which makes high-quality products and yet managed to succeed in the valuation game.”
Jamshyd Godrej’s philosophy of not exposing his businesses to the tyranny of the market has its own reasons as well. Brand experts say by not getting listed, GEG has managed to insulate itself. But then, things seem to be changing. “We have cash-flow, which is why we are able to take care of our needs. If we ever go into a project which requires huge investment, we will certainly look at an IPO,” says Jamshyd, who has always avoided speaking about tapping the capital markets.
While the amicable split at Godrej is an opportunity for value unlocking, it also runs the risk of brand dilution. Over the years, the Godrej brand has been perceived as trustworthy, but conservative. The challenge for both factions will be to get bold and iconic, “In order to unlock value, two imperatives hold — defining their new arenas carefully and sharply, and getting bold and iconic about their new promises and qualified identities. GEG could build a human engineering and design slant to ‘Hero’, its limited B2C business, showcase itself through its brand businesses, and drive greater brand value,” explains Mishra.
“At any time if the Adi Godrej side loses this delicate balance of maintaining all the living elements of brand Godrej and yet meeting its quarter-on-quarter targets, the value system of the group will be under threat,” adds The Living Machine Institute’s Krishnan.
Jamshyd is well aware that comparisons between his business and cousin Adi’s are inevitable. “We definitely need to be more cohesive and move forward together within our group,” says the GEG patriarch. Clearly, future glory cannot be achieved by clutching onto history alone. The one who shows belief, springboards from the equity and makes iconic moves for the future, is likely to break through the existing cocoon and scale further.
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