In the third week of January, Kumar Mangalam Birla summarised the current global situation as uncertain, unpredictable, and unorthodox. “Importantly, we will be embracing an uncertain world, not wrestling with it,” he said in his annual note.
As Chairman of the $65 billion Aditya Birla Group that has a presence across 41 countries, he must stay ahead of developments. The group has a global presence across sectors and holds the top slot globally in aluminium rolling and second in carbon black, cellulosic staple fibres and copper rods and third in cement (excluding China). Besides, it has become more diversified in the three decades that Birla has helmed it, even as he has strengthened existing businesses.
In recognition of these efforts, Birla has been chosen as the Business Icon of the Year in the BT-PwC India’s Best CEOs list.
Strategic Heft
The Aditya Birla Group has a blend of traditional businesses with a focus on commodities and a strong business-to-consumer portfolio—an indication of the diverse opportunities India offers.
“The strengths of the traditional businesses can be leveraged in almost all the new businesses that the group has entered,” says Rajiv Memani, Chairman and CEO of professional services firm EY India. He points to the group’s distribution might in cement and how that works well for paints. The group has entered sectors driven by value creation, like in jewellery—with the launch of Indriya in 2024—which has a natural affinity to retail, where the customer profile is more towards the upper end.
For a group that was historically known for a big play in the commodities sector, the shift to customer-facing businesses was not just strategic but also in line with a changing India. That was kicked off with the acquisition of Madura Garments in late 1999 for `236 crore, marking the entry into fashion retail. In one swoop, Louis Philippe, Van Heusen, Allen Solly, Peter England came into the fold. Since then, it has extended the portfolio to include ethnic wear by investing in domestic brands such as Sabyasachi, Shantanu & Nikhil, House of Masaba and Jaypore.
“An ambitious revenue target of $25 billion has been set for the consumer businesses and that is 25% of the group turnover over the next five years. By comparison, this segment clocked revenues of $13 billion in 2023-24,” says Rajiv Agarwal, Professor (Strategy, Entrepreneurship & Family Business) and Department Chair (Strategy), SP Jain Institute of Management & Research, Mumbai.
Constant Evolution
Hemendra Kothari, veteran investment banker and Chairman of DSP Investment Managers, who has known Birla for decades, describes him as “successful and focussed.”
Birla was thrust into a leadership role quite early after his father, Aditya Vikram Birla, passed away in 1995 aged 51. “He was only 28 when he took over as the group’s Chairman but displayed tremendous maturity even then. Very strategically, he acquired Indal (through Hindalco) and later L&T’s cement business.” Kothari says beyond just the head of a massive business enterprise, Birla is a grounded man. Kothari credits Birla for the freedom he gives people. “He has been successful across businesses and that is an indication of his sharpness. There have been challenges as well but that is a part of the game,” he says. The entry of the next generation—daughter Ananya and son Aryaman Vikram Birla on boards of some group companies—is another strategic move. “It is his way of keeping them engaged across businesses and inculcate entrepreneurship,” he says.
The new ventures sit well with the traditional ones, Memani highlights. “Kumar hires fresh talent, providing them enough freedom to operate and try out innovative ideas. This, combined with traditional people, makes for a lethal combination.” Birla has a clutch of senior leaders in older businesses who have worked closely with him for years.
In terms of structure, Birla is known to give his “A-team” enough independence and resources as well. Besides, there is an emphasis on deriving synergies and expertise from other group businesses.
Kothari also highlights Birla’s decisiveness when he spots an opportunity—be it Hindalco’s $6 billion buyout of Novelis or more recently UltraTech’s acquisition of India Cements and picking up a minority stake in Star Cement. “It comes down to having the right mix of conservatism and aggression. That is one of his strengths,” adds Kothari.
That trait was clearly in evidence in the big-bang entry into the paints business with Birla Opus. Launched in early 2024, in no time the venture has already become a challenger for well-established players like Asian Paints and Berger Paints. Besides, it is looking to extend its presence inside the consumers’ homes by launching a new cables and wires business. Two aspects that stand out are innovation and deep focus, says Memani. Birla is known to go for the big-ticket investment if he is convinced. Equally important is his ability to integrate them with existing businesses and persevere with them.
The group’s focus on technology was most evident in financial services, an intensively competitive space where a host of other large corporate houses are also present. “They used the direct-to-consumer digital platform to offer a range of core financial products, acquire new customers to double the existing base and enable cross-selling and upselling to become a full-stack financial services player,” explains Agarwal.
For the group, the world is its oyster. According to Agarwal, it has become the largest Indian investor in the US, pumping in over $15 billion, with manufacturing operations in 20 locations across 15 states. In an era marked by uncertainty amidst geopolitical tensions, how Birla continues to go about globalising his business will be interesting.
Memani outlines how it has always followed a disciplined and rigorous approach to evaluating opportunities and identifying white spaces to invest in. “Historically, they have invested in other emerging markets in the Asia Pacific. However, in the last decade and a half, they have put their money in mature markets,” he says.
Birla’s ability to think long term, backed by strong execution, has ensured the group continues to grow. Be it at home or any global market of significance, the group’s footprint continues to get larger. Clearly, ambition and execution is what makes him tick as a business leader.
@krishnagopalan