Ad Here  
December
January
February
March
April
May
 
 
Preparing for the next growth curve Nissan exit shouldn’t affect ALL Tata gets 4-star rating for Zest LVB posts 31 per cent growth in Q1 net profit IOB on turnaround path Emami – a new growth mantra L&T profit up by 11 per cent A niche in FMCG business... ITC chairman calls for policy impetus to transform agriculture Tata Motors joins compact SUV bandwagon with Nexon M & M unveils driverless technology for tractors Gamesa to set up a plant in Nellore Is this a generation gap? Carnival Films acquiring 3000 screens pan India Vellayan is back, after 150 days 29 per cent jump in TCS revenues New India Assurance posts impressive show AL secures orders for 3600 buses Smartphone onslaught by Chinese brands PSU non-life firms seek to protect share HPCL plans Rs.61,000 crore capex over 5-years TVS Srichakra plans capacity expansion AL wins Deming prize again Housing demand revival Tata Motors aims to be among the Top 3 global CV & PV firm TVS Automobile invests Rs.75 crore in start-up firms Forging industry worried over lower supply of steel and its price CAPITAL NOTES It takes two to tango Last stages Mercedes-Benz sales continue to zoom The gainers and the losers Chinese smart phones flourish in small towns too! Singur minus Nano – victory or folly? Daimler’s truck exports from Chennai cross 5000 units Increasing market share V-Guard launches app-enabled water heater system Back in growth mode The unexpected exit Maruti – for young buyers Kone India eyes further growth in elevator market Yamaha unveils scooter boutique Land wars PPP model for infrastructure development Toyota and Suzuki to introduce EVs in India by 2020 Ode to Ratan Tata Titan Company – sales recovery to kick in Hyundai to focus on SUVs and AMT variants L&T bags the Mumbai Trans-harbour link order He excels in the nuts and bolts of entrepreneurship Tata Motors charts investments in PV and CV businesses Hindalco – re-rating Record two-wheeler sales Tata Motors bets on new launches L & T’s floating dock for navy Michelin to double Chennai capacity Eyes strong growth in 2016-17 Daimler grows sales and share in India RoC in the dock... Aurobindo Pharmacy: good turnaround Shriram Life clocks more than Rs.1000 crore premium in 2015-16 From the toughest to the best year Are they really independent? TN government keen on revival of operations at Nokia complex ITC – steep excise hike Tata Steel, ThyssenKrupp sign MoU to merge European units Sundram Fasteners rejigs international Dish TV – subscriber additions encouraging TI Cycles plans retail expansion to drive sales for premium bicycles AL introduces Guru & Partner Sivasankaran enters taxi space to take on Uber and Ola Ponni Sugars (Erode) Ltd: not so sweet 2012-13 Hyundai India achieves 7 mn production at Chennai factory A welcome initiative-even critics are recognised Solar installations exceed 2015 capacity in five months Smooth sailing of SAIL Wabco launches safety system When small is not so beautiful… Consolidating leadership position in smartphones L & T set bigger ambitions in defence business Right to privacy – now it’s fundamental! E.I.D Parry (India) Ltd: another sweet year Welcome focus to improve rural India... Bajaj Finserv – Q1: fare well Rane targets Rs.5500 crore topline by 2018-19
 
Eyes strong growth in 2016-17
The group has guided 20 per cent growth for the current fiscal on the back of good monsoon and favourable policy push by the Centre.

After a challenging year in 2015-16, diversified industrial conglomerate Murugappa Group is confident of recording 20 per cent growth this year aided by an upswing across its major business verticals, including financial services, agriculture and engineering.

The group reported gross sales of Rs.29,470 crore in 2015-16, a growth of nine per cent over the previous year, while it’s EBITDA at Rs.3035 crore grew by four per cent.

The group’s EBITDA growth was led by financing arm – Cholamandalam Finance (29 per cent) and its insurance unit – Cholamandalam MS General Insurance Co (12 per cent). Sugar and fertiliser units faced challenges with EID Parry Ltd reporting a 49 per cent decline in EBITDA to Rs.168 crore and Coromandel International reporting eight per cent loss. Engineering arm Tube Investments grew at nine per cent.

“It was a challenging year. But this year, EID Parry and Coromandel International are well positioned to take advantage of the uptick on sugar – driven by higher prices and fertiliser business – expected to do well on the back of good monsoon predictions,” said A Vellayan, Executive Chairman, Murugappa Group.

 

Bright prospects

While favourable monsoon will drive growth in fertiliser business, the policy environment has infused some confidence with the Centre expediting subsidy disbursements and considering new initiatives such as direct payments to farmers.

 Likewise, the sugar business is expected to gain a lot in the coming season due to government’s action on supporting exports that helped reduce surplus stock, boost to ethanol policy and waiver of excise on molasses for ethanol production. All these measures would lead to an overall growth of the sector.

Vellayan also said its rural retail business will see expansion this year. The network of 775 agro input retail outlets under Mana Gromor in Andhra Pradesh, Telangana and parts of Karnataka will be expanded to north Karnataka, south Maharashtra and Tamil Nadu next year.

He also said group’s financial services business would continue to maintain strong double growth due to revival of commercial vehicle industry and Central government’s strong thrust to increase insurance penetration.

Cholamandalam MS General Insurance Company grew 30 per cent in terms of gross written premium in 2015-16 against an industry average of 14 per cent.

The growth in commercial vehicles and other segments will drive growth in group’s NBFC arm Cholamandalam Investment and Finance, which saw its vehicle finance disbursements grew by 32 per cent and home equity disbursements by 14 per cent in 2015-16.

Though Vellayan expects strong growth prospects this fiscal, the group is unlikely to chalk out any major capex plan due to low levels of capacity utilisation at its factories.

“Our plants are currently running at 70 per cent capacity. We want to increase optimum usage at the plant to 90 per cent. Currently, we don’t see the need for further capital expenditure,” said Vellayan.

“We had invested Rs.300 crore last year as capex. We had spent most of it. The remainder will be used during this fiscal,” said N Srinivasan, Director - Finance, Murugappa Group.

 

Reason to call off payments bank biz

Vellayan also said the Group had to surrender the payment bank license due to unviable business model. One of the key reasons was the shift in business platform for payments bank that presents an attractive opportunity for telecom players, e-commerce firms or banks than others.

“I reckon that companies, which are going into this, will be only telecom companies or banks that want to retain their customers or have a large customer base. What happened with the platform is that the base has changed very fast. We would have to burn a huge amount of capital even to stay in the business. Probably only 4-5 players will come into the market and they would be either telecom companies or bankers,” he said.

Srinivasan explained that the entire base was different when it applied and got in-principle approval. “We found that it is no longer like a financial inclusion, it is like playing the e-commerce market. You require huge capital and long gestation period,” he added.

It was proposing to invest about Rs.100 crore to make a sustainable business in two-three years. But it would be required to pump in more money to meet the losses for at least six-seven years.

The Group’s finance services firm Cholamandalam Investment and Finance Company had, in March this year, announced its decision to abandon plans for establishing payments bank, for which it was given RBI approval in August 2015.

 

1 2
Author :
Reported On :
Sector :
Shoulder :
RELATED NEWS
ABOUT IE
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
 
PRIVACY POLICY
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
TERMS AND CONDITIONS
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
 
CONTACT US
S-15, Industrial Estate,
Guindy,
Chennai - 600 032.
PHONE: +91 44 22501236
EMAIL: indecom1968@gmail.com