Our Valued Shareholders
It is my great pleasure to present to you our Annual Report for the year ended March31 2017. I am happy to report to you that your Company has recorded significant andall-round improvements in both capabilities and performance.
INDIA ECONOMIC FUNDAMENTALS
India's economic performance has attracted worldwide attention and acclaim in the lastfew years. India's economic growth has been recorded at 7.1% in FY2017 driven by a fallin oil prices and relatively low exposure to the current global financial turmoil. Withforecast of a better monsoon growth estimates for FY2018 could be higher. Thefundamentals are showing strong trends which validate the expected growth in the economy.There are several reasons to be optimistic. The Government has implemented a series ofmeasures to improve sentiments and remove hurdles to economic growth. India's new era ofreforms will grow from strength to strength encompassing all sectors of the economyincluding the edible oil sector.
WE ARE BCL INDUSTRIES
We are BCL Industries & Infrastructures Limited. We are proud of the strong legacyand over 4 decades of rich experience. We are a diversified business house with businessinterests in edible oil extraction distillery and realty. Our journey of progress istestimony to the core values of Trust Commitment and Transparency that we held then andcontinue to hold true even today. We have a solid track record of growth and valuecreation which comes from our strong manufacturing capabilities well permeatedgeographical reach a complete and top-notch product portfolio and best-in-classtechnologies. Our highly capable management team backed by a motivated workforce and astrong balance sheet has reinforced our position in the market. We are committed tobecoming an even more sustainable business.
FY2017 has been a year of consolidation. We took full advantage of generally softcommodity prices captive supply for key raw materials and improved operationalefficiencies to deliver satisfactory results. We added new clients and increased ourpercentage with existing clients. We are amongst the most integrated players in thebusiness of edible oil which grants us significant cost advantages.
OUR FINANCIAL PERFORMANCE
Our team at BCL Industries continued to refine and execute the BCL's strategy. The hardwork that has gone into growing each of our verticals is strongly getting reflected intoour consolidated results. Our diversification strategy helped us be de-risked from thehighly cyclical nature of certain industries. For FY2017 I am glad to inform you that wewitnessed excellent secular performance across each of our verticals to deliver strongaggregated double digit revenue and profit growth.
Our revenues on a consolidated basis stood at Rs 671.28 crore during the year underreview which was higher by 27.2% compared to Rs 527.82 crore in FY2016. Among ourdifferent businesses edible oil business which is firmly established as the largestdivision in the Group continued to perform exceedingly well and is the foundationcentre-piece behind the Group's steady and sustainable growth. It continues to be ourlargest contributing business within BCL representing over 65% of our revenues. Thedivision recorded total sales of Rs 433.43 crore higher by 50% compared to Rs 288.19crore sales in the earlier financial year. We earned an EBITDA of Rs 22 crore from thisvertical. This spectacular performance is based on the fact that our highly flexible andintegrated manufacturing facilities could take advantage of filling the supply gaps thatarose from the consolidation we witnessed in this industry during the year.
Our distillery business also grew well amid a competitive and regulatory environment.The vertical contributed about 32% to the revenues reporting a marginally lower top-lineof Rs 213.04 crore (primarily due to synchorinisation activities of plant expansion by 100KLPD) compared to Rs 228.17 crore in the previous year. We earned an EBITDA of Rs 17crore from this vertical. This can be attributed to the capital expansion for the new 100KLPD distillery unit we set up and made operational at Village Sangat Kalan during theyear under review. Naturally we incurred larger than normal costs due to set-up and trialrun costs of the new facility during the year. With our capacity now doubled FY2018 looksextremely promising.
The real estate vertical which currently contributes only 3.5% to our total revenueshas been progressing well. It recorded 140% rise in total sale at Rs 22.55 crore ascompared with Rs 9.37 crore in the previous financial year. Our homes and apartments havebeen well accepted in the marketplace and continue to support our multi-asset play.
BUILDING BRANDS SERVING CUSTOMERS
We build great local brands bringing fresh inspiration every day. Our family of localbrands serves a huge customer base across North India. Each of our brand shares a passionfor delivering quality value and experience to customers. We continue innovating anddoing better for customers for each other and for the communities we serve. Our challengetoday is to not only adapt to the rapid developments taking place but also to predictthem and lead the way.
Our edible oils business is all set to benefit from an increase in value additionmarket penetration capacity utilisation and margin expansion and we continue focusing ongrowing the business. We continue to see sustained growth leading to improved utilisationlevels in the distillation business. We are projecting optimal utilisation in ourdistillation plant over the next 2-3 years. Going forward we do not expect anysubstantial capex and will be mainly sweating the assets we have already set up. We arewell positioned to deliver quality growth and sustained cycles for our stakeholders.
We continue to look externally tracking trends and staying close to our customers aswell as across our businesses. In the midst of a busy year and while delivering strongperformance I'm proud of what we have achieved towards our strategic goals.
I would like to thank our shareholders who have supported us over the years. Weappreciate your confidence in our vision for the future.
R. C. Nayyar