Entertainment Boy

IIPM : EXECUTIVE EDUCATION

Moser Baer’s Ratul Puri has taken risks & entered uncharted territories, which will test his mettle to the fullest, feels MANISH K. PANDEY

Often, leaders tend to shun complicated projects, but Ratul Puri, Executive Director, Moser Baer, thrives on them. And that aggressive stance has earned rich rewards as well, as he has played a major role in making Moser Baer a global behemoth. “Ratul is a sharp-minded professional with a proactive approach towards work. He is a visionary...,” says one of his current employees. In retrospect, his is a journey from a 3-storeyed infotech firm in Delhi’s congested Lajpat Nagar, which was on the verge of closure thrice during its initial days, to the second largest optical storage media manufacturer in the world and, finally, to the new diversifications into photovoltaic & home entertainment.

After Ratul joined Moser Baer in 1994 at the age of 22, he was instrumental in setting up Moser Baer’s Noida & Greater Noida plants to manufacture recordable compact discs (CDRs), and the plants were the first of their kind in India. Moving further, he is now leveraging Moser Baer’s robust R&D strengths to develop a new generation of storage devices, which can archive critical & sensitive data for years. Already, Moser Baer has become the leader in marketing new storage formats like Blu-ray Discs and HD DVD.

But his impeccable strategic acumen came to the forefront when the company ventured into new and unrelated areas like photo-voltaic and home entertainment. Since 2006, Ratul has bet big bucks on non-conventional energy sources. By 2010, Moser Baer aims to derive 40% of its overall revenues from selling solar panels, which is now a hot bed of opportunity. Industry sources expect the global PV business to grow over six times to $40 billion by the same year. Moreover, the demand here is price-elastic. If Ratul can offer a cheaper option, as Moser Baer has done in storage devices, he can expand this market exponentially.

By acquiring stakes in three firms – Solaria, SolFocus and Stion – and establishing thin solar film plants across India, Ratul has made his intentions clear. Moser Baer has also made investments in Slovenia-based Solarvalue, which manufactures silicon ingots/wafers. This may turn out to be a smart strategy as it will help overcome the existing supply constraints in raw materials.


Moreover, how can one forget Moser Baer’s foray into home video segment last year? It was Ratul’s vision to swamp and invade the already-entrenched market with low-priced VCDs and DVDs. The move opened up a new opportunity, as the segment is expected to grow at a CAGR of 18% over the next five years (according to joint study conducted by FICCI and PricewaterhouseCoopers). And he doesn’t want to stop there. Ratul has chalked out huge plans to mark Moser Baer’s presence across the value chain – from film production to distribution at the customer’s doorstep. As he is responsible for corporate management and financial control, Ratul has always focused on maximising shareholders’ value and raising funds from global and domestic investors. Under his leadership, Moser Baer wooed various institutions like IFC, Electra Partners and Warburg Pincus Singapore LLC to invest in the company. In fact, Electra had picked up a sizeable 17% stake in Moser Baer and offloaded 4% at huge profits. Moreover, a year ago, when the storage media industry was facing a severe global pricing pressure, coupled with competition from low-cost producers and rising raw material prices, Ratul played a crucial role in bringing Moser Baer back on the growth and profitability path. In FY 2006-07, the company not only posted a 19.8% increase in gross revenues to Rs.20.74 billion, it improved margins that drove a 2,253% growth in net profits to Rs.1.09 billion. Says Yogesh Mathur, Group CFO, Moser Baer, “I agree that two years prior to the last one were not good. But now, both the industry and Moser Baer are back on the growth and normal profitability cycle.”

So, should one give credit to Ratul or was the recovery a part of the improving business cycle in the sector? Current employees contend it was a mix of both; Ratul also imposed cost efficiencies & forced productivity improvements during that critical period. Many feel that this crisis also gave Ratul the idea to transform Moser Baer into a multi-technology organisation & ventured into solar electricity & home entertainment.

However, Ratul faces many challenges in the near future. In the storage device business, technology becomes obsolete in no time, and all players have to keep pace. Although Moser Baer has successfully transformed itself several times with changing technology, it may not be so easy in the near future. In home entertainment, distribution is still a weak link. While Moser Baer has played the price warrior card nicely, it has to soon play the premium content & technology ace too.

But Moser Baer managers are excited and enthusiastic about Ratul’s capabilities. “We are bullish about all three businesses. We see the optical storage business growing at 25-30% CAGR over the next few years. Home Entertainment is a huge opportunity and we expect this to be over half-a-billion dollar business in the coming few years,” says Mathur.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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