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The Tatas of South India deserve your attention, dear investor—here’s why
Summary
- A southern powerhouse with a century-old legacy, this group rivals India's biggest names with unmatched financial strength and a diverse global footprint.
In India’s vast corporate landscape, several business groups have made their mark, yet few stand as tall as the Tata Group. Known for its strong long-term performance and exceptional corporate governance, the Tatas enjoy a level of trust few others can claim.
However, in a large country like India, very few groups can truly compare to the Tatas. Among them, one group from the South belongs in this rarefied bracket, with over a century of exemplary performance and robust governance. Though it has been around for more than a century, its story deserves a closer look.
In 1898, a 14-year-old named Dewan Bahadur AM Murugappa Chettiar ventured to Burma, now Myanmar, as an apprentice in his family’s business. Hailing from the Nattukottai Chettiar community in Tamil Nadu, renowned for its business acumen, he quickly mastered Burmese and acquired deep expertise in banking and finance. Within two decades, he built the largest private bank in Lower Burma and expanded into rubber.
The outbreak of World War II in 1939 forced Dewan Bahadur to relocate his operations to southern India, establishing Chennai as the group’s headquarters. Understanding local market needs, the group diversified into agri-solutions, financial services, and engineering.
Today, nearly a century after its return to India, Dewan Bahadur’s Chennai-based enterprise, the Murugappa Group, stands as one of the country’s largest family-owned businesses.
Rock-solid businesses
With nine listed companies—most of them leaders in their segments—the group posted combined revenues of approximately ₹79,000 crore in FY24, alongside a net profit of around ₹7,660 crore. Collectively, these companies hold a market capitalization of ₹4.1 trillion, placing the group among the largest in India by market cap.
Notably, the group now boasts two companies with a market capitalization exceeding ₹1 trillion: CG Power & Industrial Solutions and Cholamandalam Investment & Finance Co.
Murugappa stands as the largest business group in southern India by revenue, profit, and market cap, 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, fertilisers, and agrochemicals to bicycles, auto components, abrasives, capital goods, and financial services. The group also holds niche positions in home decor, textiles, tours and travel, solar power, and polymer nets and fabrics.
Often referred to as the “Tatas of the South" for its industry-leading presence and strong, profitable portfolio, Murugappa shares Tata’s family-owned heritage and values. Much like the Tatas, Murugappa leverages its diversified portfolio to balance risks across sectors, reduce reliance on any single industry, and capitalize on emerging opportunities.
Six of the Murugappa Group’s seven listed non-financial companies 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 strong financial position is not recent; Murugappa has a long-standing reputation for financial conservatism and efficient management.
Turnaround specialists
Beyond its conservative financial practices, the group excels at acquiring struggling businesses at low cost and transforming them into market leaders within a few years.
A recent success story is Mumbai-based CG Power & Industrial Solutions, acquired by Murugappa Group’s Tube Investments of India (TII) in November 2020 under the Insolvency and Bankruptcy Code (IBC).
In just four years, CG Power has risen to become the most valuable company in the group by market capitalisation. Its turnaround is striking: from 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 sales surged from ₹5,100 crore to ₹8,100 crore, and its market cap has skyrocketed over 300 times, from ₹320 crore in March 2020 to ₹1.09 lakh crore as of November 8, 2024.
This isn’t Murugappa’s first success with turnarounds.
In the past, it acquired and revitalised loss-making companies like EID Parry, now one of India’s top integrated sugar producers, and Coromandel International, a leader in fertilisers and agrochemicals.
The group’s ability to transform underperforming businesses into profitable leaders has established Murugappa as one of India’s top business groups. Over the past five years, the group companies have achieved a compound annual growth rate (CAGR) of 16.5% in revenues, 26.8% in net profit, and 39% in market capitalisation.
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, though in less publicized sectors. Today, it operates in 50 countries across six continents, with manufacturing facilities for abrasives in Russia and China, industrial chains in France, and zirconia in South Africa. Through the acquisition of US Nutraceuticals (now Valensa International), Murugappa is also a notable player in dietary formulations.
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 work, Murugappa’s AMM Foundation—its autonomous charitable trust—has now completed a century of service.
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The foundation supports initiatives in education, healthcare, environmental stewardship, sports, and more. Guided by its philosophy of “people before products, rendering services before profits, and community welfare before commercial success," Murugappa’s philanthropic efforts are woven into every facet of its operations.
With a strong reputation in corporate governance, profitability, and a far-reaching footprint, Murugappa mirrors Tata in many ways. For investors seeking high-growth companies with strong management and a long-term vision, it may be time to look to the South of India. Lesser-known than their pan-national peers, groups like Murugappa offer compelling opportunities.
Stay tuned for deeper insights into Murugappa’s companies in the coming weeks under Profit Pulse.
Note: This article relies on data primarily sourced from www.Screener.in and www.bseindia.com. Alternative sources, widely accepted and reliable, have been used only when specific data was unavailable.
The purpose of this article is to present insightful charts, data points, and thought-provoking opinions. It is not a recommendation. For investment considerations, please consult a financial advisor. This article is intended solely for educational purposes.
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 her dependents do not hold any stocks discussed in this article.
