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The current year will see the Murugappa Group build on the aggressive expansion in capacities last year across its diversified businesses.
The Rs 22,000-crore diversified group is optimistic of a 20 per cent growth.
Addressing the annual press conference, A. Vellayan, Executive Chairman, said the group had invested over Rs 1,750 crore, including Rs 600 crore of regular capital expenditure, in expansions and acquisitions across its businesses last year.
It had done this in a difficult period when its fertiliser and sugar businesses, which account for nearly half its income, had been hit by deficient monsoons. Fertiliser consumption had dropped 25 per cent and sugarcane yields had been hit.
Engineering business was also affected by the overall slow economic conditions. But financial services – vehicle and home loans and insurance business -- continued to grow at about 30 per cent.
The Group’s turnover of Rs 22,466 crore in 2012-13 and the net profit of about Rs 1,313 crore was just about one per cent higher than that of the previous year when it had reported a 30 per cent growth. In the three years till then, its growth rate had been treble that of the GDP growth.
But the investments of last year give the group the base to “plan ambitiously for this year” even in the face of the modest six per cent economic growth predicted.
In 2013-14, Vellayan said he “sees a marked change in the agriculture side.” Fertiliser and sugar are bound to be positive with predictions of a normal monsoon. Financial services will see a 35 per cent growth.
The group is cautious on the engineering business, he said.
In its fertiliser business, Coromandel International acquired a 48.62 per cent stake in Liberty Phospates, apart from fully acquiring its subsidiary. The total cost of Rs 350 crore takes its total Single Super Phosphate production capacity to over a million tonnes and a presence in six States.
The company has given up its plan to expand in Bhatinda, Punjab, following the acquisition of Liberty Phosphates.
In engineering business, the company has acquired a 70 per cent stake in Shanthi Gears, a power transmission production manufacturer, for Rs 464 crore.
On further investments, the Group will initially ‘wait and watch’ this year, he said.
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