Murugappa Group’s capex plan on track
Balance ₹1,250 cr. of planned capital expenditure to largely go into capacity expansion of group firms
City-based Murugappa Group has registered a 12% growth in its turnover to ₹36,893 crore for the year ended March 2019 from ₹33,079 crore in the preceeding year.
Net profit for FY19 grew 18% to ₹2,880 crore. The group debt-equity ratio improved to 0.62 from 0.66.
“Almost all the group companies posted growth ranging from 8% to 28%, except E.I.D. Parry India,” said group executive chairman M.M. Murugappan.
“E.I.D. Parry posted a negative growth of 28% in sales due to non-availability of cane in Tamil Nadu and rise in support price. Despite this, the group had posted an overall growth of 12% for the year,” he said.
To a question, he said: “Aspirations are always there to grow big. However, we are being careful and cautious to do good quality business, reduce losses and be consistent in business and customer service.”
He asserted that the group had not cut down on capex (capital expenditure), research and development, and application support services and training. “India will continue to grow. I am optimistic. We are a long-term player and continue to do business with that strategy,” he said. The group had, last year, announced a capex of ₹2,000 crore spread over two years. During FY19, the group invested over ₹750 crore and the balance would be invested this year.
It would largely go into ongoing capacity expansion of CUMI’s coated maker plant at Sriperumbudur, Tube Investments’ new plants for tubes at Rajpura and capacity expansion in metal forming business, commissioning of EID Parry’s back-end refinery at Haliyal and Coromandel International’s capacity expansion of its phosphoric acid plant at Vizag.
The group filed four patents in materials science and agriculture. Mr. Murugappan hinted at initiating the process of monetising them.
Cholamandalam Investments had set up a subsidiary for carrying out a housing finance business and was awaiting the National Housing Board’s nod, he added.
Expressing confidence that the sugar business would be back on track, Sridharan Rangarajan, president and CEO, Murugappa Group: “E.I.D. Parry has eight sugar crushing units spread across Tamil Nadu, Karnataka and Andhra. In Tamil Nadu, two units have been mothballed and the Puducherry unit has been closed down. Production in the other two units has come down due to non-availability of cane,” he added.
Mr. Murugappan said the group was not exiting the sugar business. “We will always aim to build value into any business even during challenging times,” he added.
Source: Read Full Article