Riding high on an encouraging sign on the sugar, commercial vehicle and financial services sectors, the diversified Murugappa group is aiming for a 20% growth in its total business for the current fiscal.
The group posted a 9% growth in total sales to R29,470 crore in FY16 as against R26,926 crore.
The 20% growth in FY17 will be possible as the group expects production capacity to touch 90% across companies as against 70% in the last fiscal, said A Vellayan, executive chairman, Murugappa group.
The group, which saw negative growth at the EBITDA level in its sugar and fertiliser businesses, is confident of reporting higher profits in the current fiscal owing to quick measures initiated by the union government, Vellayan added.
Addressing the annual press conference here on Tuesday, Vellayan said, “We are confident of posting 20% growth in our total businesses owing to lot of initiatives taken by the Union government in the above sectors.
A R15 kg hike in sugar, excise withdrawal on molasses, encouraging sugar exports, early release of fertiliser subsidy by the government and rising demand for crop and weather insurances across the country will help us.”
“We are confident that group companies such as Coromandel Fertilisers (which reported 8% degrowth at Ebitda level) and EID Parry (which reported 49% degrowth at EBITDA level), will reverse back and hope to post better margins in the current fiscal with increased production capacity,” he said.
Similarly, a flow of orders from Railways and defence sectors would also help our group company Shanti Gears to achieve better results in the current fiscal.
With the sharp pick up in commercial vehicle financing and an encouraging demand on the housing finance front coupled with a marked offtake in crop and weather insurances would help our financial services companies such as Cholamandalam Investment and Financial Services as well Chola MS General Insurance Co, Vellayan said in response to a query.
According to Vellayan, based on representation from the industry and with the active intervention of the Union government, the fortunes of the sugar industry changed.