Murugappa Group to invest Rs 450 crore in 2013-14

Looks at growing 20% in the current fiscal compared to 1% in FY13

Chennai-based conglomerate, the Rs 22,466 crore-Murugappa-group is planning to invest around Rs 450 crore in 2013-14 to complete its on-going expansion plans. The group also said that it would look at growing around 20% during the current fiscal as compared to 1% in 2012-13.

Speaking to reporters in Chennai today, A Vellayan, executive chairman of the Murugappa Corporate Board said, “Our focus will be on consolidating the gains from acquisitions made and will complete our expansion plans”.

It may be noted, the group capex in 2012-13 was Rs 1,750 crore including Rs 850 crore in acquisitions.

Last year the group companies acquired stake in companies like Shanthi Gears Ltd, Libety Phosphate Ltd, Liberty Urvarak Limited, Thukela Refractries, Isithebe and Andhra Pradesh Gas Power Corporation.

The group also consolidated its stake in Financiere C10, S.A.S (Sedis), France, bought out joint venture partner Cargill’s stake in sugar refinery Silk Road Sugar Pvt Ltd and sugar major EID Parry completed the merger of two plants of the subsidiary Parry's Sugar Industries Ltd with itself.

“We will look at consolidating all this during the current fiscal,” said Vellayan.

The group reported Rs 22,466 crore in 2012-13 as compared to Rs 22,314 crore in 2011-12. Group's total profit rose to Rs 1313 crore from Rs 1304 crore, merely an one% increase.

“Last fiscal marked with a deficient monsoon, steep increase in critical input cost and an economic slowdown, was a mixed performance for the Group,” said Vellayan. He added, while the engineering and agri-business businesses had their share of challenges, the financial services businesses consolidated their position and grew their businesses aggressively. The NBFC business grew by 44% and general insurance company grew by 20%.

Citing predictions of normal monsoon this year N Srinivasan, director-finance of the Group said the various group companies would be on the growth path,

“We are seeing marked change in agricultural sector. With the prediction of normal monsoon the signs are positive for our fertiliser, sugar and agricultural businesses,” Vellayan added.

Besides, other positive points like decontrol of sugar, contributions from acquisitions made and the growth in financial services would help the Group, he said.