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The Road Ahead…. The Road Ahead…. Vision 2014 Vision 2014

Road ahead - Murugappa Presentation

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Page 1: Road ahead - Murugappa Presentation

The Road Ahead….The Road Ahead….

Vision 2014Vision 2014

Page 2: Road ahead - Murugappa Presentation

The economic upturn has truly begun!The economic upturn has truly begun!

Page 3: Road ahead - Murugappa Presentation

The economic upturnThe economic upturn

6.5%*

Jan/10

* Based on CII projections

Page 4: Road ahead - Murugappa Presentation

Projected Sectoral Growth RatesProjected Sectoral Growth Rates(for 2009-10)(for 2009-10)

2.8 to 3 % Growth*

5 to 5.5 % Growth*

7.5 to 8 % Growth*

Agriculture

Industry

Services

* Based on CII projections

Page 5: Road ahead - Murugappa Presentation

Expected Indian GDP (in Dollar terms) : $1.3 TrillionExpected Indian GDP (in Dollar terms) : $1.3 Trillion(2009-10)(2009-10)

Page 6: Road ahead - Murugappa Presentation

““The crisis is no more than a The crisis is no more than a

temporary interruption in the temporary interruption in the

financial market development of financial market development of

emerging economies”emerging economies”

McKinsey Report McKinsey Report on Global Capital Markets on Global Capital Markets (Sep 2009)(Sep 2009)

Page 7: Road ahead - Murugappa Presentation

The India AdvantageThe India Advantage

FDI Equity Inflow in US$ Mn*

* http://dipp.nic.in/fdi_statistics

Page 8: Road ahead - Murugappa Presentation

Global market : 37 million tonnes

India’s share : 23 million tonnes

Coromandel contributes 9.4% of that.

World consumption :166 million tonnes

India’s market share : 23 million tonnes EID Parry contributes 1.4% of that

Phosphate based Fertilizers (2008-09)

Sugar Industry (2008-09)

CTC Tea Market (2008-09)

(India)

(India)(EID Parry)

(Coromandel)

(India(India))

(India(India))

(Global (Global Market)Market)

(Global (Global Market)Market)

The Current ScenarioThe Current Scenario

(Rest of the world)

(Rest of the world)

(Others)

(Others)

(Parry Agro)

(Others)

(India - CTC)(India - CTC)(Global (Global Market)Market)

(India)

(Rest of the world)

World consumption : 1340 million kgs

India’s market share : 981 million kgs

Parry Agro contributes 14 million kgs

Page 9: Road ahead - Murugappa Presentation

T

Global Market : USD 14.5 Bn

Indian Share : USD 300 Mn

CUMI contributes 43 % of that

Abrasives Industry (2008-09)

(India)(India)

(Rest of (Rest of the world)the world)

The Current ScenarioThe Current Scenario

(CUMI)(CUMI)(Others(Others))

(India(India))

(Global (Global Market)Market)

T

Global Market : 100 Mn Cycles

Indian Share : 9.1 Mn Cycles

TI Cycles contributes 33 % of that

Cycles Industry (2008-09)

(India)(India)

(Rest of (Rest of the world)the world)

(TI (TI Cycles)Cycles)

(Others(Others)) (India(India

))(Global (Global Market)Market)

Page 10: Road ahead - Murugappa Presentation

Bigger Investments

Stronger Market Sentiments

Huge Opportunities

Looking Forward….Looking Forward….

More Development

Page 11: Road ahead - Murugappa Presentation

VisionVision

Turnover EBITDAMargin

CurrentCurrent

TurnoverEBITDA Margin

Market Cap / Value

12%12%

USD 2.1 bnUSD 2.1 bn

15%15%

USD 7.0 bnUSD 7.0 bn

USD 7.7 bnUSD 7.7 bn

Market Cap / Value

USD 2.9 bnUSD 2.9 bn

Our VisionOur Vision

Page 12: Road ahead - Murugappa Presentation

Turnover – FY 2009-10 Turnover – FY 2013-14

To become Rs.35000 cr To become Rs.35000 cr group by 2013-14group by 2013-14

Rs.cr 2009-10CFL 7150EID 1160CUMI 1400TII 2053Chola DBS 1058Chola MS 875DBG & Others 737Total 14433

Rs.cr 2013-14CFL 15000EID 3741CUMI 5100TII 4830Chola DBS 1962Chola MS 2500DBG & Others 2072Total 35205

To Grow group turnover from To Grow group turnover from USD 2.9 bn to USD 7.0 bn USD 2.9 bn to USD 7.0 bn

*Dollar rate assumed Rs 50

Page 13: Road ahead - Murugappa Presentation

How do we Achieve ?How do we Achieve ?

Page 14: Road ahead - Murugappa Presentation

Four Important Business Approaches

Page 15: Road ahead - Murugappa Presentation

Risk Assessment and Risk TakingRisk Assessment and Risk Taking

Professionalism and EntrepreneurshipProfessionalism and Entrepreneurship

Agility despite SizeAgility despite Size

Humility despite SuccessHumility despite Success

Page 16: Road ahead - Murugappa Presentation

Risk Assessment and Risk TakingRisk Assessment and Risk Taking

Page 17: Road ahead - Murugappa Presentation

• Risk taking is an integral part of business and life

• Risk has a positive side – a chance of hitting a big win

Risk Assessment and Risk TakingRisk Assessment and Risk Taking

Risks

Intelligent Risks

Unworthy Risks

Page 18: Road ahead - Murugappa Presentation

Risk Assessment and Risk TakingRisk Assessment and Risk Taking

• Never pursue a Unworthy Risk / Never oversee an Intelligent Risk

• Develop the expertise to spot the Opportunities among the

Diversions

• Considering an Opportunity is Risk Assessment

• Investing in the Opportunity is Risk Taking

Risk taking is required to stay in business, Risk Assessment is essential to remain profitable

Page 19: Road ahead - Murugappa Presentation

Risk Assessment and Risk TakingRisk Assessment and Risk Taking

The TATA NANOThe TATA NANO

An Engineering MarvelAn Engineering Marvel

The People’s CarThe People’s Car

Detroit is duplicating the Detroit is duplicating the ideaidea

Priced at under RS. 1 Priced at under RS. 1 LakhLakh

Untapped MarketUntapped Market

InnovationInnovation

Page 20: Road ahead - Murugappa Presentation

Risk Assessment and Risk TakingRisk Assessment and Risk Taking

““We need to hone our skills of risk assessment and We need to hone our skills of risk assessment and leverage on emerging opportunities profitably”leverage on emerging opportunities profitably”

• Being conservative has been our strength

• It has provided a solid wherewithal to take on the challenges of today’s corporate responsibilities.

• Opportunities are aplenty

Page 21: Road ahead - Murugappa Presentation

Professionalism and EntrepreneurshipProfessionalism and Entrepreneurship

Page 22: Road ahead - Murugappa Presentation

Professionals

Entrepreneurs

Professionalism and EntrepreneurshipProfessionalism and Entrepreneurship

“Corporate Entrepreneurs”

• Extremely exciting business environment

• Business Opportunities are abundant and increase with time

• Professionals lack the entrepreneurial spirit to spot these opportunities

Page 23: Road ahead - Murugappa Presentation

At Murugappa GroupAt Murugappa Group

Professionalism and EntrepreneurshipProfessionalism and Entrepreneurship

Page 24: Road ahead - Murugappa Presentation

““Let us Strive towards building a culture of Corporate Let us Strive towards building a culture of Corporate Entrepreneurship”Entrepreneurship”

• Professionals entrusted to manage Business

• Family proactively influences the environment

• Government and the Industry looks up to us as one of a kind – “An Ethical Professional Business House”

Page 25: Road ahead - Murugappa Presentation

Agility despite SizeAgility despite Size

Page 26: Road ahead - Murugappa Presentation

Agility despite SizeAgility despite Size

• Ability to satisfy a customer’s requirement is the key to profitability

• An organization has to be agile to satisfy the needs of the customer because, customer’s needs are never static

Economic Intelligence Unit Survey on Organizational Agility*

Respondents who said Organizational agility as a key to global success

Respondents who said Organizational agility is not important

* - www.eiu.com

Page 27: Road ahead - Murugappa Presentation

Agility despite SizeAgility despite Size

““There is no match for a large organization that develops There is no match for a large organization that develops an organizational structure and culture that is nimble”an organizational structure and culture that is nimble”

• Agile firms grow revenue 37% faster and generate 30% higher profits than non-agile companies.*

• Midsize companies have the agility edge over the size and reach of large companies and the entrepreneurial skill of small firms.*

* - www.eiu.com

Page 28: Road ahead - Murugappa Presentation

The Toyota WayThe Toyota Way

The Toyota way The Toyota way initiativeinitiative

Continuous Continuous DevelopmentDevelopment

Respect for AllRespect for All

Employees, 316,000.Employees, 316,000.

Robotics, Financial services Robotics, Financial services and Biotechnologyand Biotechnology

Revenue, US $ 203 billion.Revenue, US $ 203 billion.

Agility despite SizeAgility despite Size

* - www.toyota.co.jp

Page 29: Road ahead - Murugappa Presentation

Let us aspire “to get that small-company soul inside our Let us aspire “to get that small-company soul inside our big company body”big company body”

• Continue our growth journey without getting into a bureaucratic attitude

• Humility is a conscious decision

• Let us remain Agile despite Size

Agility despite SizeAgility despite Size

Page 30: Road ahead - Murugappa Presentation

Humility despite Success Humility despite Success

Page 31: Road ahead - Murugappa Presentation

Humility despite Success Humility despite Success

• The most important aspect of any business is humility.

• Humility is in understanding that our processes and practices are not perfected yet.

• Knowing that our current success is not promised, it’s earned.

“ “ Only 74 companies survived out of the 500 after 50 Only 74 companies survived out of the 500 after 50 years”years”

(1997 Company (1997 Company Index)Index)

Page 32: Road ahead - Murugappa Presentation

Travels in Economy Travels in Economy ClassClass

Very Similar to our Very Similar to our groupgroup

Revenue : Revenue : USDUSD 4.98* Bn 4.98* Bn (2009)(2009)

Total Assets Total Assets USDUSD 5.37* Bn 5.37* Bn (2009)(2009)

Incorporated in 1945Incorporated in 1945

Azim PremjiChairman and CEO of WIPRO

WIPROWIPRO

Humility despite Success Humility despite Success

* - The Hindu – dated 14th Aug 2009

Page 33: Road ahead - Murugappa Presentation

Our 5 guiding lightsOur 5 guiding lights

IntegrityIntegrity

PassionPassion

ResponsibilityResponsibility

QualityQuality

RespectRespect

Humility despite Success Humility despite Success

Page 34: Road ahead - Murugappa Presentation