Message from Managing Director
On the financial front we attained significant accomplishments and stupendous increasein profitability. Your Company's revenues increased by 8.76% during the year to Rs. 1040.29crores. EBIDTA increased by 42.74% to Rs. 166.89 crores while PAT grew by 68.26%to Rs. 101.56 crores. This can be attributed to economies of scale on the back ofconsistent demand better recovery processes adoption of environment-friendlytechnologies and stringent cost control measures. The margins increased remarkably due tohigher spread between the prices of PA (finished goods) and Orthoxylene (raw material).
Moreover reduction in our leverage position led to 20.40% decline in finance costs.The return on equity increased from 20.7% in 2015-16 to 25.8% in 2016-17. Earning pershare increased from Rs. 19.60 to Rs. 32.98. In consideration of thisperformance your Directors have recommended a dividend of 30% i.e. Rs. 3 perequity share of Rs. 10 each.
Key Strategic Initiatives
Your Company continued to explore investment opportunities for synergic benefits andsustainable growth. We took over the Maleic Anhydride business of Mysore Petro ChemicalsLtd. (MPCL) with effect from 1st April 2017. MPCL manufactured MA using washwater as raw material which is generated by I G Petrochemicals. This is certainly awin-win situation for us as both MPCL and IGPL's plants are located at Taloja. Theresulting balanced portfolio ofassets scale and financial flexibility will enable us todeliver the growth and value that our shareholders expect.
Favorable Industry Reforms
Owing to the liberalisation of tariffs under FTA the PA industry had been constantlyfacing threats from the low-cost imports into our country. As a positive move theGovernment has taken measures to safeguard the interest of the domestic manufacturers andby imposing anti-dumping duty on Taiwan Korea Russia Japan & Israel. Further theGovernment is also exploring possibilities of having an integrated entity in explorationrefining and petrochemicals. This will be favourable for us as it will facilitate theintegrated entity to diversify into various downstream industries.
We look forward to leverage positive industrial opportunities coming our way. Theaggregate demand for the Petrochemical sector in India is likely to increase to 41.4 MMTby 2017-18 (Source - APIC 2017). India has emerged as the 3rd largest consumerof plasticizer and is expected to grow by 8% to 9% in the future. This is backed byGovernment's increasing thrust on infrastructure affordable housing agriculture andirrigation. With oil prices being estimated to stay in the range of US$60 to US$65 perbarrel it is encouraging for both the industry and the country. Today PA industry isexperiencing innovative applications ranging from paints to pipes across various sectorsand industries. With additional capex planned across our end user industry there will bean exponential boost in the consumption of PA from the entire spectrum of end users.