EBITDA of ₹ 5,347 Crores, a 3.8% growth; PAT grew by 2.8% at ₹ 2,946 Crores;

PAT excluding special provision of Financial Services companies grew by 20.4% at

₹ 3,489 Crores;

Impressive Free Cash Flow to PAT at 119%;

Market Capitalization at ₹ 46,683 Crores 

MUMBAI, 22^nd JUNE, 2020 (GPN):  Murugappa Group registers a growth of 3.3% in turnover at ₹ 38,105 Crores during 2019-20 (previous year ₹ 36,890 Crores). Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) posted a growth of 3.8%, at ₹ 5,347 Crores (previous year ₹ 5,152 Crores). Profit after Tax was ₹ 2,946 Crores (previous year ₹ 2,866 Crores) registering a growth of 2.8%. Manufacturing entities of the Group generated a Free Cash Flow at 119% of PAT (previous year -2%).

A: Group Highlights

1. Profit After Tax excluding special provision of Cholamandalam Investment & Finance Co. Ltd and Chola MS General Insurance Co. Ltd grew by 20.4% at ₹ 3,489 Crores
2. Return on Capital Employed of the Manufacturing Entities improved to 18.9% in the current year from 17.0% in previous year.
3. Return on Equity of the Financial Services businesses improved to 20.4% in the current year from 19.8% in previous year without considering the extra-ordinary provisioning.
4. Manufacturing entities of the Group generated a Free Cash Flow of ₹ 1,903 Crores (previous year, negative ₹ 30 Crores), which stood at 119% of Profit After Tax.
5. During the year, the Group Manufacturing entities have reduced loan outstanding of ₹ 1,540 Crores leading to an improvement in Total Debt Equity from 0.74 times as on 31^st March 2019 to 0.47 times as on 31^st March 2020. The working capital in comparison to the total loan is at 1.42 times (previous year 1.22 times).
6. In the current financial year (FY21), EID Parry has sold 2% stake in its subsidiary, Coromandel International Limited, aggregating to a value of ₹ 368 Crores. The proceeds from the sale will be utilized towards reduction of debt.
7. Raised capital to the tune of ₹ 1,200 Crores to support the growth in NBFC business. This resulted in increase of Capital Adequacy to 20.7% with Tier I at 15.3% and brought down the gearing to 6.7 times from 8.2 times.
8. CIFCL diversified its source of funds and raised maiden masala bond of ₹ 400 Crores.
9. During the year, CIFCL equity stock is split from one share of ₹ 10/- each to five shares of ₹ 2/- each.
10. Capex spent by Group Companies for the year was ₹ 1,009 Crores with a total spend in 2 years (2018-19 and 2019-20) to the tune of ₹ 1,610 Crores against the plan of ₹ 2,000 Crores

B: Company-wise Performance:

Figures in ₹ Crores

Group Companies	Net Sales		EBITDA
	2019-20	YoY Growth %	2019-20	YoY Growth %
E.I.D.-Parry (India) Limited	3,967	20.8%	309	56.2%
Coromandel International Limited	13,091	-0.5%	1,771	19.6%
Tube Investments of India Limited	4,520	-17.2%	641	7.2%
Cholamandalam MS General Insurance Company Limited	4,398	-0.7%	278	2.3%
Carborundum Universal Limited	2,569	-3.2%	444	-4.7%
Cholamandalam Investment and Finance Company Limited	8,713	22.6%	1,699	-10.0%
Other Businesses	847	6.7%	206	-17.9%
Total	38,105	3.3%	5,347	3.8%

Note: previous year’s numbers have been re-grouped / re-stated, wherever necessary

C: Market Capitalization

Market Capitalization of the listed companies of the group aggregates to ₹ 46,683 Crores as of 31^st Mar 2020.

D: Capital Expenditure

Aggregate capital expenditure programmes towards expansion / debottlenecking / modernising / digital infrastructure facilities across group companies were over ₹ 1,009 Crores during the year:

1. Coromandel has commissioned “state of the art” Phosphoric Acid plant at Vizag, making the unit self-sufficient.
2. CUMI has commissioned new Coated Maker Plant at Sriperumbudur doubling its Coated Abrasives capacity.
3. TII has expanded its capacities in Cold Drawn Welded Tubes, Cold Rolled Steel Strips, Doorframes of Passenger Vehicles and Passenger Coaches for Railways.
4. EID Parry has put up incineration boiler at Sankili facility at Andhra Pradesh and upgraded diffuser, warehouse & other infrastructure at Haliyal facility at Karnataka.
5. The Group Companies (including Chola Finance and Chola MS General Insurance) have invested in IT & Digital initiatives to the tune of ₹ 102 Crores to enable greater focus on improving customer connect, servicing and analytics.

E: Sector highlights for 2019-20

Financial Services Businesses

Cholamandalam Investment and Finance Company Limited (CIFCL)

CIFCL’s Business Assets Under Management (AUM) grew by 12% at ₹ 60,549 Crores as compared to ₹ 54,279 Crores in FY19. Aggregate disbursements for the year ended March 20 were at ₹ 29,091 Crores as against ₹ 30,450 Crores in the previous year registering a decline of 4%. Vehicle Finance (VF) business has clocked a volume of ₹ 23,387 Crores for the year ended March 2020 as against ₹ 24,983 Crores in the previous year, registering a decline of 6% Y-o-Y. There was severe de-growth in the auto Industry across product segments, including HCV, LCV, MLCV, Car/MUV and Two wheelers. With higher disbursements from Used, 3-wheeler and 2-wheeler products we were able to offset drop in other segments. This enabled us to restrict the de-growth in overall disbursement to 6%.

Home Equity (HE) business disbursed ₹ 3,662 Crores as against ₹ 3,836 Crores for the year ended FY19, registering a decline of 5% YoY. Home Loan (HL) business disbursed ₹ 1,505 Crores as against ₹ 1,157 for the year ended FY19, registering a growth of 30% YoY.

Profits after Tax (PAT) for the year ended March 2020 were at ₹ 1,052 Crores after creation of one-time provision of ₹ 504 Crores to cover contingencies due to COVID-19 and Macro economic factors. On a comparable basis, Profits after Tax (PAT) for the year ended March 2020 were at ₹ 1,387 Crores before one-time provision of ₹ 504 Crores to cover contingencies due to COVID-19 and Macro, as against ₹ 1,186 Crores previous year, registering a growth of 17%. 

Return on Equity was at 15.2% including – one-time provisions towards COVID-19 and Macro factors. Return on Equity before one-time provisions was at 20.0% for FY 20 against 20.9% in FY 19.

CIFCL Asset quality as on Mar’20 Stage 3 Assets had stood at 3.8% with adequate provision coverage 41.5% ECL provision, as against 2.7% of last FY with provision coverage of 38.0%.

The Capital Adequacy Ratio (CAR) of the company as on 31st March 2020, was at 20.68% (As per Ind AS) as against the regulatory requirement of 15%. During Q4, the company raised ₹ 900 Crores of equity capital by issuing 2,81,25,000 no of shares (FV-₹ 2/-) at a price of ₹ 320 per share, through a QIP process, which was oversubscribed by nearly 4 times by marque investors both domestic and international. This was followed through by a preferential issue of 93,45,794 no of shares at ₹ 321 per share to the promoters, resulting in further addition of ₹ 300 Crores to the net worth. Thus, the total net worth increase on account of the capital issue was ₹ 1,200 Crores during the quarter.

Cholamandalam MS General Insurance Company Limited (Chola MS)

Chola MS’s Gross Written Premium recorded a de-growth of -0.7% during FY 2019-20 to ₹ 4,398 Crores overall (excluding Crop line of business it has registered a growth of 9.72% as against the market growth of 9.52%). Combined Ratio (CoR) has deteriorated to 107.46% in FY 2019-20 from 104.60% in the previous year. Profit after tax was ₹ 149 Crores in FY 2019-20 as against ₹ 179 Crores in the previous year. The investment impairment in the current year was ₹ 276 Crores as against ₹ 51 Crores in FY19.

Retail has been the dominant growth strategy with Motor, Health contributing more than 86% of the premiums with a good mix across Metros and Non-Metros.

Investment income during the year was ₹ 759 Crores; Investment book size as of end March 2020 stood at ₹ 9,079 Crores.  The company operates from 135 branches across India.

Engineering Businesses

Carborundum Universal Limited (CUMI)

Consolidated sales for the full year, decreased by 3 percent to ₹ 2,569 Crores from ₹ 2,656 Crores. On a consolidated basis, Profit after tax was at ₹ 275 Crores (previous year ₹ 248 Crores). 

Abrasives

For the full year, consolidated sales was at ₹ 995 Crores compared to previous years’ sales of ₹ 1,124 Crores, resulting in a decline of 11%. The American subsidiary saw good traction over the year.

The Profit before finance costs and tax for the full year decreased from ₹ 140 Crores to ₹ 113 Crores due to lower volumes and offtake from end user industries.

Electro Minerals

For the full year, consolidated sales was at ₹ 1,026 Crores, compared to previous years’ sales of ₹ 1,019 Crores resulting in a growth of 1% driven by higher volumes from the Russian Subsidiary.

The profit before finance costs and tax for the full year decreased from ₹ 128 Crores to ₹ 104 Crores due to lower realization from the Indian and Overseas entities.

Ceramics

For the full year, consolidated sales was higher by 4 percent from ₹ 604 Crores to ₹ 629 Crores. The Indian operations as well as the overseas subsidiaries delivered good growth on the back of higher volumes.

Profit before finance costs and tax substantially increased from ₹ 108 Crores to ₹ 132 Crores, driven by operational efficiency and fixed cost coverage.

Tube Investments of India Limited (TII)

For FY 2019-20, TII’s consolidated net sales for the year was at ₹ 4,520 Crores as against ₹ 5,462 Crores in the previous year. The profit after tax for the year was at ₹ 313 Crores as against ₹ 251 Crores in the previous year.

Engineering

The Revenue for the full year was at ₹ 2,258 Crores compared with ₹ 2,896 Crores in the previous year. Profit before interest and tax for the year was at ₹ 264 Crores as against ₹ 254 Crores in the previous year, registering a growth of 4%. For the year ended March 2020, ROCE of this division improved to 41% as against 37% in the previous year.

Cycles and Accessories

The Revenue for the full year was at ₹ 781 Crores compared with ₹ 1,238 Crores in the previous year, mainly because of exit from institutional sales in the current year. Profit before interest and tax for the year improved to ₹ 26 Crores as against ₹ 11 Crores in the previous year. For the year ended March 2020, ROCE of this division improved to 17% compared to 6% in the previous year.

Metal Formed Products

The Revenue for the full year was at ₹ 1,399 Crores compared with ₹ 1,360 Crores in the previous year, registering a growth of 3%. Profit before interest and tax for the year remained flat at ₹ 123 Crores For the year ended March 2020, ROCE of this division was at 26%, marginally lower than 27% in the previous year.

Shanthi Gears Limited

Shanthi Gears Ltd.’s net sales for the full year remained flat at ₹ 234 Crores, compared with the previous year. Profit before tax for the year was at ₹ 33 Crores as against ₹ 42 Crores in the previous year.

Agri-businesses

Coromandel International Limited (CIL)

For the year ended 31 March 2020, the Company’s consolidated net sales is ₹ 13,091 Crores (previous year ₹ 13,159 Crores). Profit before depreciation, interest, taxes, and exceptional item (EBIDTA) is ₹ 1,771 Crores registering a growth of 20% over previous year ₹ 1,480 Crores and profit after tax is ₹ 1,065 Crores (previous year ₹ 720 Crores) a growth of 48%. Coromandel had a strong performance in FY 19-20, driven by Nutrient and allied businesses and a good recovery in crop protection business. The Company continued its focus on offering superior farm solutions, introducing new generation products, improving cost & operational efficiencies through backward integration, smart sourcing and managing its working capital.

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

EID reported a consolidated net sales, excluding the Coromandel International Limited, of ₹ 3,967 Crores in FY 2019-20, registering a growth of 21%. EBITDA has gone up by 56% from ₹ 198 Crores in FY 2018-19 to ₹ 309 Crores in FY 2019-20 supported byhigher realizations from the distillery segment coupled with the effective cost management.Increase in share in retail segment through product differentiation has also helped the Company in achieving higher growth and profitability. PBT before EOI stood at negative ₹ 47 Crores in FY 2019-20 against negative ₹ 135 Crores in previous year.

PBT after EOI stood at negative ₹ 50 Crores in FY 2019-20 against ₹ 109 Crores (including one-time extra ordinary income of ₹ 242 Crores from sale of Bio Business) in FY 2018-19.

Sale of 2% Stake in Coromandel International Limited:

In the current financial year (FY21), EID Parry has sold 2% stake in its subsidiary, Coromandel International Limited, aggregating to a value of ₹ 368 Crores. The proceeds from the sale will be utilized towards reduction of debt.

Other Businesses

This business group predominantly consists of Plantations, Floor Covering / Home Textiles, Technical Textiles / Shade Nets, Construction and Risk services. The net sales of this business group were recorded at ₹ 847 Crores registering a growth of 7%. Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) were recorded at ₹ 206 Crores registering a de-growth of 18%.

1. HR Updates

• Partnered with SafeStart, a Canadian firm, for behavior-based safety programme for over 90 senior executives. Planned and facilitated – Leadership Orientation sessions with CEO, Larry Wilson, Gary Higbee & Mark McLellen. Also conducted a train the trainer workshop for executives to deploy the program at various companies across the Group

• With a focus on employee well-being, an Employee Assistance Programme (EAP) was rolled out to all employees across the Group The facility aimed at facilitating the mental wellness of employees and their families giving them easy access to confidential counselling services.

• The annual Group-wide best practices sharing session, Pride of Murugappa, was conducted between August and December 2019. This year, 2702 entries were received. A panel of high-calibre external jury members evaluated the presentations and shortlisted 29 winning projects.

• A unique 72-day wellness programme cum contest, Fitness, Health and Happiness, began in 2014 with 722 participants. In the last 5 years, over 17,000 employees from across the Group have benefitted from this programme.

• The Group has developed and piloted a custom-designed Murugappa Safety Excellence Model (M-SEM) that will be progressively rolled out to the 80+ manufacturing facilities across the country to enable plant teams to continuously raise the bar in the safety of their operations.

• A platform to provide on-tap-mentoring for employees who seek support in any aspect of their professional life – career development, skill development, problem solving, work life balance etc – has been piloted and will be deployed more widely in the current year.

Please refer to Annexure for details on CSR, Brand Initiatives and Awards & Recognitions

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. ENDS

About Murugappa Group

Founded in 1900, the INR 381 Billion (38,105 Crores) Murugappa Group is one of India’s leading business conglomerates. The Group has 28 businesses including nine listed Companies traded in NSE & BSE. Headquartered in Chennai, the major Companies of the Group include Carborundum Universal Ltd., Cholamandalam Financial Holdings Ltd., Cholamandalam Investment and Finance Company Ltd., Cholamandalam MS General Insurance Company Ltd., Coromandel International Ltd., Coromandel Engineering Company Ltd., E.I.D. Parry (India) Ltd., Parry Agro Industries Ltd., Shanthi Gears Ltd., Tube Investments of India Ltd., and Wendt (India) Ltd.

Market leaders in served segments including Abrasives, Auto Components, Transmission systems, Cycles, Sugar, Farm Inputs, Fertilisers, Plantations, Bio-products and Nutraceuticals, the Group has forged strong alliances with leading international companies such as Groupe Chimique Tunisien, Foskor, Mitsui Sumitomo, Morgan Advanced Materials,Sociedad Química y Minera de Chile (SQM), Yanmar & Co. and Compagnie Des Phosphat De Gafsa (CPG). The Group has a wide geographical presence all over India and spanning 6 continents.

Renowned brands like BSA, Hercules, Montra, Mach City, Ballmaster, Ajax, Parry’s, Chola, Gromor, Shanthi Gears and Paramfos are from the Murugappa stable. The Group fosters an environment of professionalism and has a workforce of over 51,000 employees.

For more details, visit www.murugappa.com