Diversified business conglomerate Murugappa Group has chalked out Rs 2,000 crore capital expenditure plans for the 2018-19 and 2019-20 financial years, which include ramping up capacity at its existing facilities, a top official said here today.
"If you look at this (financial year and next year), the capital expenditure planned is Rs 2,000 crore. It will be for FY 2018-19 and 2019-20", company Executive Chairman M M Murugappan told reporters here.
The city-headquartered company had spent about Rs 616 crore for the 2016-17 fiscal as capital expenditure and Rs 660 crore for the previous financial year 2015-16.
To a query on the increase in capital expenditure, he said the investments would be mostly on the agriculture and engineering side.
"One of the investments will be in expanding our existing phosphoric acid plant in Vishakapatnam to 440 tonnes per day, which will require Rs 350 crore (investments)", he said.
Company President and Group CFO Sridharan Rangarajan said the proposed capital expenditure does not include any acquisition of another company. "It is normal capacity expansion plans and debottlenecking programmes", he said.
The Murugappa Group, which owns several companies under agriculture and engineering businesses,clocked a total revenue of Rs 32,893 crore for the 2017-18 fiscal, up from Rs 29,206 crore in the 2016-17 financial year.
Responding to a query, he said 48 per cent of the total revenue was registered from financial services business, 31 per cent from agri-business and the rest from the 'engineering division'.
To another query on how the funding would be done to meet the Rs 2,000 crore capital expenditure, he said it would be through internal accruals.
Asked if the Rs 2,000 crore capex would be invested in domestic market or overseas, Rangarajan said some amount of the investments would be made in Russia. "We are putting up a gas based powerplant there," he said.
On areas that offer growth for the Group, Muruguppan said the company would certainly like to grow faster than the GDP.
The World Bank has forecast a 7.3 per cent growth rate for India this year and 7.5 per cent for 2019 and 2020, and noted that the country's economy has recovered from the effects of demonetisationand the Goods and Services Tax.
"Double digit growth. That is the way we would plan it as we go forward", he said.
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