July 20, 2008

Murugappa Group to invest INR 1,300 crore until 2010 – Report

BS reported that the INR 9,600 crore Murugappa Group will invest approximately INR 1,300 crore every year until 2010 to achieve a group turnover of INR 14,000 crore. The investments will be made in the core businesses of the group which are sugar, fertilizer, abrasives, distilleries, co generation and tube products.

Mr A Vellayan VC & director of Murugappa Group, while presenting the group's financial performance in 2007-08, said that overall group performance was below expectation and hoped to recover some ground in the current financial year. He added that "For a group of our size, we expected to grow 3 times the country's GDP growth rate which would be 24%. In the current year we hope to grow by 20%."

Murugappa Group's turnover in 2007-08 nearly touched INR 10,000 crore growing at 15.5% YoY over 2006-07. Net profit was INR 535 crore in 2007-08 down by 13% YoY due to extraordinary income of INR 197 crore reported in the previous fiscal due to realization of some investments.

In terms of EBIDTA, it has reported a growth of 17.4% YoY to INR 1075 crore. The two major laggards in the group that pulled down the EBIDTA margin were sugar company EID Parry and tubes and cycle making company Tube Investments of India. The downward cycle in the sugar industry and rising cost steel were cited as reasons for the poor performance of these two companies.