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Aro Granite Industries Ltd.

BSE: 513729 Sector: Others
NSE: AROGRANITE ISIN Code: INE210C01013
BSE LIVE 15:40 | 22 May 71.60 -0.60
(-0.83%)
OPEN

72.40

HIGH

73.00

LOW

71.00

NSE 15:51 | 22 May 71.05 -1.30
(-1.80%)
OPEN

71.65

HIGH

73.70

LOW

70.70

OPEN 72.40
PREVIOUS CLOSE 72.20
VOLUME 4716
52-Week high 91.40
52-Week low 41.20
P/E 8.68
Mkt Cap.(Rs cr) 110
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 72.40
CLOSE 72.20
VOLUME 4716
52-Week high 91.40
52-Week low 41.20
P/E 8.68
Mkt Cap.(Rs cr) 110
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Aro Granite Industries Ltd. (AROGRANITE) - Chairman Speech

Company chairman speech

Dear Stakeholders

Financial Year (FY) 2015-16 was very challenging for us due to stiff competition fromBrazil irregular supply of rough granite blocks and increasing popularity of engineeredstone i.e. Quartz. Our Revenue declined by 18% to Rs. 216Cr compared to last year. Thiswas largely due to fall in the exports by 20% to Rs.202Cr in the fiscal 2016 as comparedto fiscal 2015. EBDITA margins dropped from 11.18% in fiscal 2015 to 9.25% in fiscal 2016.Our profitability was impacted due to high competition in our major markets especially USAand Poland and extra cost in sourcing raw material from new sources due to closure oftraditional quarries in Tamil Nadu.

USA has been our largest Export Market. Our export to USA declined by 14% to Rs. 45Crin FY 2016. USA Sales are hit by Brazilian exporters which now account for more than 80%of US granite imports. The Brazilian currency has depreciated dramatically in last twoyears against US Dollar and that has allowed Brazilian exporters to offer heavy discounts.Our sales to Europe were also hit due to the Euro Depreciating. The resulting priceincrease in Euro terms was unacceptable by the European Importers and hence our sales andprofitability took a hit. The situation with the closure of over 100 quarries in TamilNadu has not changed. More than 25 traditional colours in White Cream Ivory and Goldbased are still not available and there is no respite in sight. With the current trendaround the world only Black Grey and White material are selling and the portfolio ofcolours that we can offer has been greatly reduced. Colours like green and brown arealmost out of the market. This has created a spike in the rough block prices and alsolimited the range of shades we can offer to our customers.

Though the business conditions have remained tough we took steps which will benefitour business in years to come. We have started sourcing raw material from Rajasthan forsome newer shades. Though the transport cost for these materials are high we have beenable to command a reasonable price for these new colours. We have added a few new coloursto our portfolio from Rajasthan in white and blue tonalities which are in line withcurrent market trends.

We started a new segment “CUT-TO-SIZE” and have received positive responsefrom our existing customers. While it is a small part of our sales currently we expect itto grow to 10-15% of our sales in the coming 2 years. “CUT-TO-SIZE” will help usincrease our sales and also increase the margins due to more value addition and use ofcheaper rough blocks.

We have partially commissioned our 11000 square meter Granite studio with a capacityto store over one lakh square meters of finished granite slabs. We will be able to betterdisplay our inventory which will help us better serve our customers in a shorter periodof time. Post the full commissioning of the warehouse we further aim to expand ourproducts offerings. We continue to search for new business and foray into new countrieslike Slovakia Mongolia & Iran. Response from these markets was encouraging and weexpect more business from these countries in year to come.

We have been awarded the Top Export Award for our exports in Natural Stone making usthe largest exporter of granite Tiles and Slabs from India. Though the business conditionsin granite industry remain challenging we are tracking them closely and aim to counterthem by improving our internal efficiency and productivity.

I would like to thank our employees for their relentless efforts in helping us tobecome competitive and all our shareholders for their continued encouragement and support.

Sunil K. Arora

Managing Director