The Murugappa Group is confident of achieving a 20 per cent sales growth this year.
Addressing at a press conference in Chennai on Tuesday, the group’s Executive Chairman A. Vellayan said, the optimism stemmed from visible sign of improvements in activities in the economy. The group reported a turnover of Rs. 29,470 crore in 2015-16, a rise of nine per cent over the previous year. The group registered a six per cent growth in profit before tax and extraordinary items at Rs. 1,880 crore (Rs. 1,780 crore).
Mr. Vellayan said, there won’t be any significant increase in capital expenditure programme this year. The emphasis would be more on improving the capacity utilisation. The capacity use stood at an average 70 per cent across plants for the group. The intention was to take it to 90 per cent this year, he added.
On a consolidated basis, the group spent Rs. 289 crore last year in capital expenditure (Capex) programme, he said. To a question, he said, the focus would be on reducing the debt. In this context, he pointed out that a significant part of the one-time income that it had earned last year by selling stake in Cholamandalam MS General Insurance Company went to retire a portion of the debt of a group firm.
Mr. Vellayan said, the non-banking finance field offered newer growth opportunities for the group with the commercial vehicle and housing sectors looking up. The stressed assets-induced lending problems in the banking sector also provided the non-banking finance firms further scope for pushing up business. A spate of quick-footed actions by the Central government (such as ethanol policy, excise duty cut on molasses and the like ) augured well for the sugar industry, he said. The group was also expanding its cycle capacity to cater to the demand in the northern markets, Mr. Vellayan said.
