Murugappa Group records highest ever EBITDA of ₹4,065Cr in FY 2016-17, a 34% growth over previous year; PBT grows 59%; Market Capitalisation surges to $8 billion

Chennai, 19thMay 2017: Murugappa Group recorded a turnover of ₹ 30,023Crores during 2016-17 (last year ₹ 29,395Crores). Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) posted a growth of 34%, at ₹4,065Crores (last year ₹ 3,032Crores). Profit before Tax and Extra Ordinary Items was ₹2,973Crores (last year ₹ 1,873Crores), registering a growth of 59%.

A: Company-wise Performance:

Figures in ₹ Crores

Group Companies Gross Sales EBITDA
2016-17 YoY Growth % 2016-17 YoY Growth %
E.I.D.-Parry (India) Limited 4,465 15% 618 194%
Cholamandalam MS General Insurance Company Limited 3,133 28% 314 37%
Cholamandalam Investment and Finance Company Limited 4,693 11% 1,146 27%
Coromandel International Limited 10,304 -12% 1,038 25%
Tube Investments of India Limited 4,620 4% 481 10%
Carborundum Universal Limited 2,200 9% 357 8%
Other Businesses 608 -7% 111 19%
Total 30,023   4,065  

B: Market Capitalisation

Market Capitalisation of the listed/unlisted companies of the Group surgedby 43% to $8 billion in March 2017 from $5.6 billion a year ago.

C: Highlights

  1. Cholamandalam Investment and Finance Company Limited (CIFCL) expanded its footprint to Maharashtra, Karnataka & Bihar,adding 169 branches.CIFCL currently operates out of 700 branches across India.
  2. Carborundum Universal Limited (CUMI) commissioned three fusion plants at its Electro-mineral Complex at Cochin, Kerala, at an investment of ₹ 80 Crores. This is one of the most advanced and integrated electro-mineral complexes in the world.CUMI has also inaugurated a Centre of Excellence for Research in Technical Ceramics for industrial & advanced applications at Hosur, Tamil Nadu. This facility will aid CUMI’s growth in Wear Resistant & Technical Ceramics including Metalised Ceramic range of products.
  3. Tube Investments of India Limited (TII) set up a state-of-the-art bicycle manufacturing factory at an investment of ₹ 105 Crores at Rajpura, Punjab, to cater to the growing demand in North and East Indian market.

TII andAbsolute Specialty Foods Chennai Pvt Ltd entered a 50:50 Joint Venture to open bicycle cafés in India under the brand name ‘CicloCafé’. This initiative is aimed to bring bicycles and lifestyle under one roof and is becoming a preferred destination for people passionate about cycling and fine food.

The Board of TIIhas approved the Scheme of arrangement to demerge the manufacturing and financial services businesses and the same is under implementation.

  1. EID Parry (India) Limited merged its subsidiary Parry Sugar Industries Limited with itself effective1st April 2016.
  2. Aggregate capital expenditure programmes towardsexpansion/ debottlenecking / modernising facilities across Group companies were ₹ 398Croresduring the year.

D: Sector highlights for 2016-17

Financial Services Businesses

Cholamandalam Investment and Finance Company Limited

CIFCL’s Assets under Management (AUM) registered a growth of 15% to ₹ 34,167Crores during FY2016-17. With a strong and favourable growth in thecommercial vehicle market coupled with the strengthening of dealership networks, CIFCL’s Vehicle Finance disbursements registered a growth of 17% in FY2016-17. Home Equity Disbursements de-grewby 12% in FY2016-17.

CIFCL has revised NPA provisioning to 3 months from 4 months and increased standard asset provisioning to 0.40% from 0.35%,one year ahead of the regulatory requirement. Profit after tax for FY 2016-17 stoodat ₹ 719 Crores, a growth of 26% year-on-year.

Capital Adequacy Ratio (CAR) was at 18.64% against the regulatory requirement of 15%. Tier I capital is at 13.61% against regulatory requirement of 10%.

The subsidiaries together made a profit before tax (PBT) of ₹ 7Crores in FY 2016-17 against ₹ 8 Crores in FY 2015-16.

Cholamandalam MS General Insurance Company Limited

Gross Written Premium recorded a growth of 28% during FY2016-17 to ₹ 3,133 Crores. The growth was supported by new partnerships entered into during the year. Profit after tax grew by 41% year-on-year to
₹ 208 Crores.

Investment income during the year was ₹400 Crores; Investment book size as of end March 2017 (including pool funds) was ₹ 4,905 Crores.

Cholamandalam MS General Insurance Company Limited (a Joint Venture between Murugappa Group and Mitsui Sumitomo) has become the largest entity outside of Japan among the JV companies of Mitsui Sumitomo.

Engineering Businesses

Carborundum Universal Limited (CUMI)

CUMI reported an increase in consolidated gross sales by 9% to ₹ 2,200 Crores in FY 2016-17 compared to
₹ 2,024 Crores in the previous year. Full year consolidated segmental profitability improved for Abrasives and Ceramics businesses, supportedby higher sales volume.

On a consolidated basis,in FY 2016-17, profit after taxincreased to ₹ 175 Crores from ₹ 144 Crores.

Abrasives

Abrasives division at consolidated level registered a growth of 10%. The sales for FY 2016-17 were
₹ 1,016 Crores compared to ₹ 922 Crores in the previous year. Both Indian and overseas entities had a good growth.

Profit before interest and tax (PBIT) for the year FY 2016-17 increased to ₹ 113 Crores from ₹ 83 Crores, supported byhigher volumes from Indian and overseas entities.

Electro minerals

Electro minerals division at consolidated level registered a growth of 3%. The consolidated sales for FY 2016-17 were ₹ 769 Crores compared to ₹ 749 Crores of previous year. Indian operations registered a growth; however, sales were marginally lower for the Russian entity.

The profit before interest and tax (PBIT) dropped from ₹ 127 Crores to ₹ 91 Crores, owing to adverse exchange movement of Rouble (RUB) and lower rainfall affecting power generation in captive hydel power plant.

Ceramics

Ceramics division registered a growth of 15%. For FY 2016-17 the sales were at ₹ 472 Crores from
₹ 409 Crores of previous year. The standalone industrial ceramics and refractories businesses delivered a good growth.

Profit before interest and tax increased from ₹ 50 Crores to ₹ 70 Crores, driven by higher volumes in both standalone and overseas operations

Tube Investments of India Limited

For the year 2016-17, TII’s consolidated gross sales were higher by 4% at ₹ 4,620 Crores as against ₹ 4,434 Crores in the previous year.Profit after tax for the year 2016-17 was ₹208 Crores.

Cycles and Accessories

The total revenue from Cycles and Accessories division in FY 2016-17 stood at ₹ 1,358 Crores against
₹ 1,491 Crores in previous year, registering a drop of 10%due to lower institutional sales. Trade sales were affected due to demonetisation. Profit before interest and tax for the year was ₹ 36 Crores as against ₹ 79 Crores in the previous year.

 

Engineering

The Engineering division has registered a growth of 14%. The sales volume from Tubes grew by 10% and from Cold Rolled Steel Strips by 7% during the year.

Total revenue for FY 2016-17 was ₹ 2,077 Crores as against ₹ 1,821 in the previous year. Profit before interest and tax for the year was ₹ 146 Crores as against ₹94 Crores in the previous year.

Metal Formed Products

The Metal Formed Products division has registered a growth 9%. The sales volume from doorframes, Industrial Chains and Fine Blanked Components grew by 6%, 9% and 5% respectively over the previous year. However, the sales of automotive chains to OEMs were slightly lower than the previous year.

Total revenue for FY 2016-17 was ₹ 1,141 Crores as against ₹ 1,043 in the previous year. Profit before interest and tax for the year was ₹92 Crores as against ₹86 Crores in the previous year.

Shanthi Gears Limited

Shanthi Gears Ltd., a subsidiary company of TII operating in the Industrial Gears Business, registered a growth of 12% in gross sales for the year.  Profit aftertax for the year was higher at ₹ 23 Crores against ₹ 18 Crores in the previous year.

Agri-businesses

Coromandel International Limited

Coromandel International Limited registered consolidated gross sales of ₹ 10,304Crores in FY 2016-17 compared to ₹ 11,726 Crores in the previous year.Despite challenging business environment due to failurein North East monsoonin some of the Southern states and volatile exchange rates, Coromandel by leveragingits diversified product portfolio, wide market coverage and strong brand presence, improved its performance across the nutrients and crop protection segments.

Consolidated Profit after tax for year ended March 2017 is ₹477 crores as against ₹357Crores of the previous year, registering a growth of 34%.

E.I.D.-Parry (India) Limited

E.I.D. Parry (India) Limited reported an increase in consolidated gross sales by 15% to ₹ 4,465 Crores in FY 2016-17 compared to ₹ 3,895 Crores in the previous year. Profit after tax for the year 2016-17 was ₹302 Crores against loss of ₹ 135 Crores in the previous year. The improved performance is on account of better sugar prices, which have been on an upswing on account of lower sugar production due to drought in Maharashtra, Karnataka and Tamil Nadu.

Sugar Division

The consolidated revenue from Sugar division (including Parry sugar refinery private limited) for year 2016-17 was ₹ 4,156 Crores against ₹ 3,442 Crores in previous year, recording a growth of 21%.

 

Bio – Products

The consolidated revenue from Bio-products division (comprising Bio-Pesticides and Nutraceuticals) for year 2016-17 was ₹351 Crores against ₹348 Crores in previous year, recording a growth of 1%.

Other Businesses

Coromandel Engineering Company Limitedregistered a decline in revenues of 74% on account of sluggish market conditions.

Parry Agro Industries Limited registered a marginal growth of 2% in revenues mainly on account of lower crop in South India.

New Ambadi Estates Private Limited (a Company engaged in rubber plantations) reported a decline in revenue by 36%.

Parry Enterprises India Limited (PEIL) reported a 20% growth in revenues at ₹156Crores.

Ambadi Enterprises Limited reported a decline in revenueby3% over the previous year mainly on account of fall in export turnover due to a weak Pound arising out of Brexit.

Profit after tax of the other business was ₹ 98Crores for the year 2016-17.

E:HR Updates

The HR initiatives during the year were centred around recognition programmes and employee communication with the focus on enhancing employee engagement.

  • EID Parry was recognised for its ‘Commitment to Engagement’ by AON, as part of their ‘Best Employers India Study 2017’.
  • Digitisation in HR was another key theme, with three of the Group Companies introducing mobile apps to improve employee experience – an online rewards platform and an app for employees to access HR systems at TII, and HR on the go for the substantially mobile workforce at Chola and Chola MS. CUMI deployed a popular mobile messaging platform to increase connect with and among employees and to speed up decision-making.
  • The Group’s central L&D team, the Management Development Centre, developed and deployed multi-lingual e-modules to enhance the Group’s Knowledge Management Strategy, especially for behavioural competencies, soft skills and technical know-how.
  • The Group has also embarked on an initiative to drive Design Thinking to improve customer experience in all business aspects, including HR.
  • For its sustained efforts to develop a women-friendly workplace, the Group was ranked among the Top 100 Best Companies for Women in India, an award instituted by the Working Woman Magazine and AVTAR Group for the year 2016.

 

F:Corporate Social Responsibility

  • Group companies have incurred ₹ 35 Crores during the year 2016-17 on various initiatives for Corporate Social Responsibilities.
  • As part of the ongoing corporate social responsibility initiatives, the Group continued its contribution to various projects through the AMM Foundation and Shri AMM Murugappa Chettiar Research Centre (MCRC).
  • In this fourth year of the AMM Murugappa Chettiar Centenary Scholarships (Full Fee), the Foundation has supported 111 Murugappa scholars, funding the entire course as well as hostel fees. These scholars are pursuing Medical (22), Engineering (64), Arts and Science (19) and Agriculture (6) courses in government and government-aided colleges. The Foundation also facilitates a series of workshops and training programmes for the students to hone their soft skills.
  • The Foundation has also supported the education of 77 most-deserving economically backward students through the AMM Murugappa Chettiar Centenary Scholarship (General).
  • Over the past year, the hospitals run by the AMM Foundation have reached out to over 8 lakh people through their outpatient services, and 12,000 beneficiaries through the in-patient facilities.
  • The facilities at Sir Ivan Stedeford Hospital are being upgraded with a renovation and expansion project, the first phase of which was completed in 2015-16 at a cost of Rs 19 Cr. The revamped maternity block has modern facilities at par with top hospitals in the country.
  • Through the Mobile Health Van service, the Foundation has reached out to 23,000 patients from twelve villages around the EID Parry sugar plant at Haliyal (North Karnataka). The second van, launched in 2016 to serve Umargam Taluk of Sarigam, Gujarat, has reached out to 9500 patients in the past year.
  • The educational institutions (schools and polytechnic college) run by the Foundation cater to the educational needs of around 10,000 students, of which 7000 belong to marginalised sections of society.
  • The Murugappa Youth Football Academy currently coaches 96 students in football. One of the students, S. Mathew, was selected to be part of the playing-11 of the Tamil Nadu team in the School Nationals Tournament. He was awarded the best player and was also the top scorer.
  • The Foundation also launched a Mobile Science Van in June 2016. This van reaches out to 25 government and government-aided schools in Sivagangai district.
  • In addition to the above, during the year, the Group’s manufacturing companies stepped up development initiativesin the area of education and healthcare, primarily catering to communities around the plant/office locations:
    • Coromandel International worked on the areas of education with special focus on the girl child, community development, and health and hygiene
    • TII contributed in the areas of women empowerment, upliftment of the girl child, health, education, community development and promotion of sports, arts and culture
    • CUMI reinforced its efforts towards skill development for underprivileged and marginalised youth in Tamil Nadu/Karnataka and Kerala
    • EID Parry organised several healthcare-oriented camps and educational activities in and around the towns where the sugar plants are located
    • CIFCL worked in the areas of education and rural sports, provision of drinking water and sanitation facilities, and community development with special focus on truck drivers
    • Chola MS took up the causes of education, healthcare and rural development

 

G:Brand initiatives

The Group continued to invest in building awareness and engagement among core audiences with the multi-lingual ‘Together Let’s Progress’campaign.  During the year, we also made significant investment in digital campaigns.  Our initiatives on social/digital media were well-received and Brand Murugappa was awarded ‘Best Social Media Brand’among corporates in the B2B Category by Social Samosa, India’s leading social media thought-influencer.

 

H:Awards and Recognitions

  • Cholamandalam Investment and Finance Company won the ‘Golden Globe Tigers Award 2017’ for Excellence in Leadership and CSR in the category ‘Best use of CSR practices in Banking and Finance’
  • Coromandel International received the ‘Sustainable Waste & Resource Management’ award at the India Sustainability Leadership Summit Awards 2016, for various initiatives including efficient use of raw materials at Vizag, a bird sanctuary developed inKakinada andfresh watergeneration from waste seawater at Ennore
  • Coromandel’s Annual Report 2015-16 received the ‘Excellence in Financial Reporting’ award from The Institute of Chartered Accountants of India
  • CUMI’s Abrasives Unit at Tiruvottiyur won the ‘TPM Excellence Award’ from the Japan Institute of Plant Maintenance (JIPM) and became the third unit after Maraimalai Nagar and Sriperumbudur to receive JIPM recognition
  • CUMI also won the Golden Peacock Awards for CSR and Corporate Ethics presented by the Institute of Directors
  • EID Parry was the winner of the‘Best Performing Company and Winner in the Sugar Sector’ at the Dun & Bradstreet Corporate Awards 2016
  • TI Cycles received the ‘Emerging Brand Award’ for Mach Cityfrom CMO Asia
  • TPI was conferred the ‘Star Performer Award for Exports’ for the year 2014-15 by EEPC, Government of India


Safe Harbor

Some of the statements in this news release that are not historical facts are forward looking statements. These forward looking statements include financial and growth projections as well as statements concerning our plans, strategies, intentions and beliefs concerning our businesses and the markets in which we operate. These statements are based on information currently available to us, and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward looking statements. These risks include, but are not limited to, the level of the market demand for the products, the highly competitive market for the types of the products that we offer, market condition that would cause customers to reduce their spending for the products, our ability to create, acquire and build new businesses and to grow existing businesses, our ability to attract and retain qualified personnel, currency fluctuations and market conditions in India and elsewhere around the world, and otherwise not specifically mentioned herein but those that are common to industry.


For further information please contact

Vijayalakshmi D
Murugappa Group
+91-9500029527
vijyalakshmid@corp.murugappa.com

Vinod Kumar
Ogilvy PR
+919840126179
vinod.kumar@ogilvy.com