It gives me pleasure to present the Annual Report for Pennar Industries Limited for thefinancial year ending March 2016. Pennar Industries delivered growth in revenue andprofits across all business units and subsidiaries. The consolidated gross revenues of theCompany increased to C1480.54 crore while PAT increased by 22.14% to C43.85 crore.
Pennar Industries operates in a diverse range of sectors in India including generalengineering solar energy railways building construction water treatment automotiveand specialty additives. Consequently we consider ourselves a diversified engineeringfirm with a strong presence in engineering infrastructure and capital goods segments.While this diversification does afford us a level of protection from general marketdownturns some of our verticals such as industrial components did struggle to increaserevenue and scalability. The decline in steel and commodity prices over the course of thisfinancial year also resulted in a decline in selling price across most of our productcategories. However margins did increase in almost all of our business verticals due tothe combination of a higher percentage of higher margin orders and better spreads.
Our markets are primarily in India. The Indian infrastructure and capital goods sectorshave been extremely volatile. Our Business Unit heads and the CEOs of our subsidiarieshave accordingly focused their capital and management on growing in high-margin verticals.Railways solar pre-engineered buildings and environment businesses reported high growthin terms of revenues and profitability. I congratulate our BU heads and our CEOs foraccomplishing solid and sustainable growth in a year dominated by market uncertainty. Weremain optimistic that our India businesses will continue to increase and in planning forour growth over the next few years we are confident that all of our business verticalsand subsidiaries will report attractive revenue and margin growth.
While a growing component of our overall sales revenue will be derived frominternational sales for the near-term we will remain an India-focused company. We areconfident that over the next few years we will substantially increase the proportion ofour sales from our international operations. Our current international revenue streamsinclude hydraulic systems industrial components precision tubes and structuralengineering services. Our international business verticals all have high margins strongpartnerships and significant scalability potential. We believe that within the next fewyears we would be able to achieve a revenue share of 20% from our international businessoperations.
The standout performers in this last financial year were our railways solar PEBS andenvironment verticals.
An increasing influx of orders from the Integral Coach Factory and RCF propelledrevenue growth in the railways segment. We expect this increase to be a part of amulti-year trend allowing our railway revenues to grow fuelled by an increasing offtakeof railway coaches and wagon components. While the wagon components vertical is morevolatile we are seeing an increased level of enquiries and steady order book growth. Wecontinue to invest in scaling our manufacturing capacities and upgrade our technologyplatform by procuring laser fibres stretch-forming and specialised infrastructure for themanufacture of coach roof assemblies.
Our solar module mounting system (MMS) vertical is split between Pennar Industries andits subsidiary Pennar Engineered Building Systems. While Pennar Industries manufacturesmulti modular structural components PEBS provides turnkey design supply and erection ofMMS systems including civil and DC works. The solar revolution in India started with theNational Solar Mission and is currently exhibiting high growth rates with the state solarpolicies driving a rapid expansion in the demand for the installation of solarphotovoltaic plants. This has created a large market opportunity and accordingly solarrevenues scaled during this financial year.
Together PILs solar and railways business verticals (comprising our systems andprojects businesses) achieved a growth of 50.53% to reach C293.36 crore in sales.
Pennar Engineered Building Systems is the second-largest business vertical at Pennarand the most profitable. Since 2010 PEBS achieved strong growth in terms of revenues andmargins and closed the last financial year with sales of C491.21 crore. PEBS also startedoperations from a leased plant in Vadodara and intends to complete its own plant duringthis financial year. With an ever increasing order book and new growth verticals in highrise buildings and engineering services PEBS is well-placed to continue on the path ofhigh growth.
Pennar Enviro (PEL) a subsidiary of Pennar Industries operates in the specialtyadditives water treatment and environment technologies segments. With a fast-growingorder book PEL completed desalination demineralisation effluent treatment and recyclingand zero liquid discharge projects across India. The Company also built strong corecapabilities in instrumentation and civil design. It is the fastest-growing Pennarvertical and achieved gross sales of C100.50 crore.
In the realm of corporate social responsibility we made new investments during thelast financial year to enhance the quality of lives in the country and especially in thetowns villages neighbourhoods that we operate in.
The positioning of Pennar Industries will allow us to record growth relentlessly. Anyrevival in the capex cycle will provide a boost to our revenues and profitability but eachof our business units is well geared to ensure that they continue to record good growth. Iam confident that the next few years will see Pennar Industries continue to evolve into astronger engineering company.
In conclusion I would like to express my thanks to all of our shareholders employeescustomers suppliers and the Board of Directors for their support and goodwill.
With best wishes