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Old 2nd August 2017, 16:55   #1
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Default VC Sehgal of Motherson Sumi - What a dude!

In the USA, automotive CEOs are stars in their own right (Alan Mulally, Mary Barra etc.), but it's not the same with India. Sure, everyone knows Anand Mahindra & Ratan Tata as they are leading their family companies. How many others can a petrol-head list? I'm sure most enthusiasts will run out of names after listing 5. Tops.

There is one hero however who you must know about - Vivek Chaand Sehgal of the Rs. 50,000 crore Motherson Sumi. Searched on Team-BHP and I don't see a post on him (leave aside a thread), so sharing some excerpts & interesting articles.

Seriously, what a story...what a dude!

In 1975, Sehgal formed a company with his mother called Motherson and started silver trading.
In just the past few years, MSSL has grown more than 10 times times into a Rs 25,225-crore company from just Rs 2,595-crore in 2008/09. MSSL, the flagship company of the Samvardhana Motherson Group, did business worth Rs 31,000 crore in 2012/13, with the mirror business accounting for Rs 8,880 crore of group revenues. MSSL has grown at an annual 75.63 per cent the past three years, and the group plans to close 2013/14 at Rs 35,000 crore.
It's a long way from the time Sehgal started the auto component business in 1983. For years, 80 per cent of the company's revenues came from supplying parts to Maruti Suzuki before Motherson charted a new course in 1995/96. The company then decided it would not focus on either one company or one product, and no customer would account for more than 25 per cent of its turnover.
Full Business Today Article

On 29 April, Noida-based auto component maker Motherson Sumi Systems Ltd (MSSL) stunned its peers when it announced that it had closed a Rs.15,400 crore deal with Daimler AG to supply a range of parts for future generations of Mercedes-Benz cars, the biggest such deal in India till date.

For MSSL, India’s largest auto component maker, the Daimler deal has been a booster shot—one that will help it beef up its business in North America and more than triple its revenue to $18 billion (Rs.1.15 trillion) by 2020 from $5.5 billion in end-March 2015.

If this target is met, MSSL will become bigger than some of the car and motorcycle makers in the country, its clients.

One day in 1995, while weighing the staff attrition issue, Sehgal was looking at the projections made by Hero Honda and Maruti Suzuki and figured that they could grow their revenue 10 times to Rs 100 crore by 1999-2000. "Nobody believed me then," he recalls. Around the same time some investors from Mumbai met him and spoke about wily north Indian promoters and why the stock market discounted them. Giving a future target would help, they suggested.

Since then, Sehgal started offering fiveyear targets to bolster investor — and employee — confidence. The strategy has worked — and all targets have been met. In 1999-2000, when MSSL's revenues crossed Rs 150 crore, Sehgal asked his staff how many believed that it would touch a revenue of Rs 1,000 crore in next five years. "All hands went up," he recalls.
Economic Times

Last edited by GTO : 2nd August 2017 at 17:00.
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Old 2nd August 2017, 19:10   #2
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Default Re: VC Sehgal of Motherson Sumi - What a dude!

I think I have seen him (self) drive a British Green Bentley Continental GT to office at Sec-1 Noida. That was few (almost 4-5 years) years ago.
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Old 2nd August 2017, 19:13   #3
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Default Re: VC Sehgal of Motherson Sumi - What a dude!

The article is right on the dot, Mr. Sehgal is truly an astute businessman and visionary.

Having been fortunate to have met him when i was working in Toyota, he is a simple and charismatic leader, highly respected in his company and by his peers, including OEM management.

A major factor i must point out which has helped them in the journey is to tie up with the right joint venture and technical agreement partners from overseas and to learn and implement successfully their production systems. A good example of this i found when visiting their wiring harness facility near Bangalore, which was set up with inputs from Sumitomo, Japan. Achieving high efficiency levels of a complicated part like the entire vehicle wiring harness and supplying parts to OEM's with Zero PPM levels has to be seen to be believed !
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Old 2nd August 2017, 19:25   #4
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Default Re: VC Sehgal of Motherson Sumi - What a dude!

Some great insight about the Company there!

I came across the name VC Sehgal a few years back in an article about the top 10 richest People in India. He was 7th or 8th on the list at that time. He is probably not in the top 10 list any more.

Nevertheless, since then I have been following him and the activities of Motherson Sumi as a Company, and have also invested in it from time to time.

The strides that the Company has taken in the last 5 years is amazing! And i believe they have a lot of steam left to grow at the same rate for the next 3 to 4 years.

What impresses me the most is their ability to consistently bag massive orders from German OEMS!

Working in one of the biggest German Tier 1 suppliers in Germany itself, I regularly deal with German OEMS as clients, and I have first hand experience of their strict quality requirements. The fact that Motherson Group gets consistent orders from the German OEMS is a testament to the Quality of their Products!
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Old 2nd August 2017, 19:53   #5
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Default Re: VC Sehgal of Motherson Sumi - What a dude!

Motherson Sumi is a company that has managed to grow via acquisitions, and this is very rare. The only other names that come to my mind are Arcelor Mittal (Lakshmi Mittal's company) and Berkshire Hathway (Warren Buffet's company). Sure, Ratan Tata did well with JLR acquisition but he messed up big time with his multi-billion dollar Corus steel acquisition.

I guess the difference is in the acquisition strategy. Most promoters make big acquisitions - big enough to get them on the cover of pink papers and business magazines. But Motherson's acquisition strategy follows the "string of pearls" strategy - small to medium sized complementary and easily digestible acquisitions.

I wish other promoters read and understand Motherson's corporate mantra - " Topline is vanity, bottomline is sanity & cash in bank is reality "

Some useful infographics from the above links:

VC Sehgal of Motherson Sumi - What a dude!-webmotherson2.jpg

VC Sehgal of Motherson Sumi - What a dude!-master.jpg

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Last edited by smartcat : 2nd August 2017 at 19:54.
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Old 4th August 2017, 15:26   #6
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Default Re: VC Sehgal of Motherson Sumi - What a dude!

Originally Posted by GTO View Post

In the USA, automotive CEOs are stars in their own right (Alan Mulally, Mary Barra etc.)
Today is Alan Mulally's 72nd Birthday, what a coincidence I had to read it today. Great thread.
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Old 4th August 2017, 16:48   #7
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Default Re: VC Sehgal of Motherson Sumi - What a dude!

Indian automotive market has a great potential for budding entrepreneurs. 20 years into the future, I'm sure we'll pride ourselves as home to the best startup supporting nation worldwide. I'll be founding my own company too after my B.E
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Old 5th August 2017, 08:18   #8
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Default Re: VC Sehgal of Motherson Sumi - What a dude!

When we talk about Mr. VC Sehgal we generally look at MSS (Motherson Sumi Systems). However the truth of matter is that he has a large unlisted entity called SMIL. He had tried to get it listed a few years back but unfortunately things did not work out as the markets went into a tizzy. If listed the entire group would represent atleast 25% higher market cap removing the overlapping businesses.

While his goal is USD 18Bio for MSS, on a group level he is aiming at USD 24Bio by FY20. In the industry he is known for his 5 year plans, but is famous for meeting them. The philosophy with which he manages his company is 40% RoCE (pre tax). The statement quoted by smartcat " Topline is vanity, bottomline is sanity & cash in bank is reality " is truly difficult as he is looking at reaching his targets at such a high RoCE.

Corporate governance has always been a high point of the group. The promoters ie. Mr. VC Sehgal and his son Vaaman do not draw a salary from the company but just receive dividend just like the rest of the shareholders.

It may sound that I am in awe of him and truth is I am. I do not work for the group but am a delighted shareholder.
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Old 5th August 2017, 10:11   #9
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Default Re: VC Sehgal of Motherson Sumi - What a dude!

Just read this thread and got to know about Mr. V. C. Sehgal and his incredible achievements. Thanks to GTO for this thread; folks like me get to know such stalwarts. Honestly, I never knew so much detail about him and loved reading through the details - the golden rule, 5 year plans, RoCE focus, Goal of 3Cx15 etc. It not only needs business acumen but certain discipline and focus to come thus far.

Wish him all the success and more! Hope to see much more such threads like these.
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