However, in a big country like India, very few groups can truly compare to the Tatas. Among them, a group from the South belongs to this rarefied bracket, with more than a century of exemplary performance and solid governance. Although it has been around for over a century, its history is worth a closer look.

In 1898, 14-year-old Dewan Bahadur AM Murugappa Chettiar ventured to Burma, now Myanmar, as an apprentice in the family business. Hailing from the Nattukottai Chettiar community of Tamil Nadu, renowned for its business acumen, he quickly mastered Burmese and acquired deep expertise in banking and finance. In two decades, he created the largest private bank in Lower Burma and expanded into the rubber sector.

The outbreak of World War II in 1939 forced Dewan Bahadur to relocate its operations to southern India, establishing Chennai as the group’s headquarters. Understanding the needs of the local market, the group has diversified into agricultural solutions, financial services and engineering.

Today, almost a century after his return to India, Dewan Bahadur’s Chennai-based company, Murugappa Groupis one of the largest family-owned businesses in the country.

Rock solid companies

With nine listed companies, most of them leaders in their segments, the group achieved a cumulative turnover of approximately ₹79,000 crores in FY24, along with a net profit of approx. ₹7,660 million. Collectively, these companies have a market capitalization of ₹4,100 billion, placing the group among the largest in India in terms of market capitalization.

The group now includes two companies whose market capitalization exceeds ₹1,000 billion: CG Power & Industrial Solutions and Cholamandalam Investment & Finance Co..

Murugappa is South India’s largest business group in terms of revenue, profit and market capitalization, ahead of regional peers like TVS Group and MRF Ltd.

Unlike many of its southern peers, the Murugappa Group operates a diversified portfolio spanning 29 businesses, from sugar, fertilizers and agrochemicals to bicycles, auto components, abrasives, capital goods and financial services. The group also occupies niche positions in interior design, textiles, tours and travel, solar energy and polymer nets and fabrics.

Often nicknamed the “Tatas of the South” for its industry-leading presence and strong, profitable portfolio, Murugappa shares the Tata heritage and family values. Much like the Tatas, Murugappa leverages his diversified portfolio to balance risks across sectors, reduce dependence on a single industry and capitalize on emerging opportunities.

Six of the seven listed non-financial companies in the Murugappa group are debt-free after accounting for cash reserves, and all but one – Coromandel Engineering – are profitable. Coromandel Engineering, however, represents less than 1% of the group’s total revenues and assets. This solid financial situation is not recent; Murugappa has a long-standing reputation for financial conservatism and efficient management.

Recovery specialists

Beyond its conservative financial practices, the group excels at acquiring struggling companies at low cost and transforming them into market leaders within a few years.

A recent success story is that of Mumbai-based CG Power & Industrial Solutions, acquired by Tube Investments of India (TII) from the Murugappa Group in November 2020 under the Insolvency and Bankruptcy Code (IBC).

In just four years, CG Power has become the group’s most valuable company in terms of market capitalization. Its turnaround is striking: a net loss of ₹1,323 crore in FY20, the company reported a net profit of ₹1,427 crore in FY24. Over the same period, net turnover increased from ₹5.100 billion to ₹8,100 crores, and its market capitalization skyrocketed more than 300 times from ₹320 crore in March 2020 for ₹1.09 lakh crore as on November 8, 2024.

This is not Murugappa’s first turnaround success.

In the past, it has acquired and revitalized loss-making companies like EID Parry, now one of India’s leading integrated sugar producers, and Coromandel International, a leader in fertilizers and agrochemicals.

The group’s ability to transform underperforming businesses into profitable leaders has made Murugappa one of India’s leading business groups. Over the past five years, the group’s companies achieved a compound annual growth rate (CAGR) of 16.5% in revenue, 26.8% in net profit and 39% in market capitalization.

Murugappa is also one of the most financially efficient groups, with an average return on equity (RoE) of 17% over the last five years, one of the highest among large diversified Indian business groups.

Global presence and philanthropy

Much like the Tata Group, Murugappa has quietly expanded its global presence, albeit in less publicized sectors. Today, the company is present in 50 countries on six continents, with abrasive manufacturing plants in Russia and China, industrial lines in France and zirconia in South Africa. Through the acquisition of US Nutraceuticals (now Valensa International), Murugappa is also a notable player in the dietary formulations space.

Another key commonality with Tata is Murugappa’s commitment to philanthropy and social responsibility. While Tata Sons dedicates 66% of its equity to the Tata Trusts for philanthropic purposes, Murugappa’s AMM Foundation – its autonomous charitable foundation – has now completed a century of service.

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The foundation supports initiatives in the fields of education, health, environmental management, sports and much more. Guided by its philosophy of “people before products, service delivery before profits, and community well-being before commercial success,” Murugappa’s philanthropic efforts are integrated into every facet of its operations.

With a strong reputation for corporate governance, profitability and a far-reaching footprint, Murugappa mirrors Tata in many ways. For investors looking for high-growth companies with strong management and a long-term vision, it may be time to look to South India. Less known than their pan-national peers, groups like Murugappa offer interesting opportunities.

Stay tuned for more in-depth information on Murugappa’s companies in the coming weeks under Profit impulse.

Note: This article is based on data primarily from www.Screener.in and www.bseindia.com. Alternative sources, widely accepted and reliable, were only used when specific data were not available.

The goal of this article is to present insightful charts, data points, and thought-provoking opinions. This is not a recommendation. For investment considerations, please consult a financial advisor. This article is intended for educational purposes only.

About the Author: Rashmi Pratap is a financial and socio-economic journalist with over two decades of experience, having contributed to India’s leading business newspapers and magazines. She is also the founder of 30Stades.

Disclosure: The writer and his dependents do not hold any shares discussed in this article.