The RP-Sanjiv Goenka Group's aim to more than double its market capitalisation to Rs 2 lakh crore over the next two and a half years is conservative, the entertainment-to-energy conglomerate's chief Sanjiv Goenka has said.
"Rs 2 lakh crore, to my mind, is a conservative number. That's based on the assumption that there is no bear run in the market. We're going big on renewable energy and we expect a significant part of this is coming from the energy space. We are growing big in the chemical space. We're growing big in the carbon black space. We are getting into the chemicals which go into the EV batteries. Now that again, we expect to be a very big player contributor to this Rs 2 lakh crore," Goenka told Moneycontrol in an interview.
"Firstsource would be a big contributor. So, we expect that 75 or 80 percent of the 2 lakh crores will come from these three. Then you have music and the whole content in the IP business which is growing... it will increase profitability very dramatically and that will increase valuations. We also expect our sports vertical to grow," he added.
The group has plans to ramp up expansion of chemicals and carbon black business and target a group market capitalisation of Rs 2 lakh crore over the next 30 months.
Goenka shared capex plans of his diversified business interests and said the group would spend about Rs 35,000 crore as capex over the next 12-18 months, which would be scaled up to Rs 50,000 crore in the next three years.
The group is expanding its outsourcing business and increasing its onshoring mix to pad up margins.
Firstsource, a mid-sized business process management company owned by the Rs 90,000-crore group, is setting up an office in Melbourne that will employ 500 people in the Australian metropolis as the firm is looking to expand its margins. The company says it will still create three jobs in India for each person it employs in Australia.
“We are changing the mix of onshore-offshore. Earlier, we were very heavily skewed in terms of most of our businesses being onshore. If we shift that ratio and we are successfully beginning to do that, that in itself changes the margin profile,” Goenka said.
“As a service provider, it's about what your client needs and how you can add value to your client. Today, the buzzword is Generative AI… Of our 50 top business clients, we've had limited wallet share. Now, if we take that up to 8 percent or 10 percent, which is very doable, that in itself means an additional business of $550 million,” he added.
The retail-to-technology services conglomerate is also optimistic that the US Fed’s 50 basis point rate cut would help ease costs on its balance sheet. “That's a good step. It helps us in certain segments of our business, for example, the mortgage business,” Goenka said.
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