Keeping in tune with the changing economic environment, the city-based Murugappa Group had reduced its aggregate capital expenditure in group companies by 19.5%, or by ₹390 crore, in the last two financial years.
The group’s manufacturing entities, however, reduced a loan outstanding of ₹1,540 crore, leading to an improvement in total debt-to-equity ratio to 0.47 from from 0.74.
The group incurred a capital expenditure of ₹1,610 crore for the last two fiscals against its planned investment of ₹2,000 crore.
Aggregate capital expenditure programmes towards expansion, debottlenecking, modernising and digital infrastructure facilities across group companies was over ₹1,009 crore during the year.
“The financial results of 2019-20 reflect the capabilities of the group to face a difficult economic environment and make the required changes in all elements of operations to ensure sustainable business results,” said M.M. Murugappan, group executive chairman.
“Some of our companies and SBUs have managed to buck the industry trends to achieve higher sales and profitability, while some recorded higher profitability even on the back of flat or lower sales. A few businesses were impacted on both topline and profitability.
“There was a strong focus on improving cash flows and reducing debt. We have also been prudent in making suitable provisions arising out of economic conditions and the impact of the pandemic,” he said.
“With the economy locked down for almost the entire first quarter of the financial year 2020-21, most of the businesses in the Group are gearing up to face much tougher challenges in the months ahead. Cash conservation, cost management, technology, digital capability and agility are the key areas that we are focusing on to drive performance,” he added.
The group posted a 20.4% increase in net profit for the financial year ended March 2020 to ₹3,489 crore, after excluding special provisions
. The group registered a 3.3% growth in its turnover to ₹38,105 crore while net profit stood at ₹2,946 crore (including the special provisions). Market capitalisation of listed group companies aggregated to ₹46,683 crore.
In FY21, EID Parry sold 2% stake in its subsidiary Coromandel International Ltd aggregating to ₹368 crore. The proceeds from the sale will be utilized towards reduction of debt. The group also raised capital to the tune of ₹1,200 crore to support the growth in NBFC business. This resulted in increase of capital adequacy to 20.7%. CIFCL diversified its source of funds and raised maiden masala bond of ₹400 crore.