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Shree Pushkar Chemicals & Fertilizers Ltd.

BSE: 539334 Sector: Industrials
NSE: SHREEPUSHK ISIN Code: INE712K01011
BSE LIVE 15:40 | 23 Aug 199.10 -1.45
(-0.72%)
OPEN

200.90

HIGH

201.85

LOW

197.00

NSE 15:42 | 23 Aug 198.70 -0.85
(-0.43%)
OPEN

199.00

HIGH

202.00

LOW

197.15

OPEN 200.90
PREVIOUS CLOSE 200.55
VOLUME 10066
52-Week high 244.80
52-Week low 114.10
P/E 19.18
Mkt Cap.(Rs cr) 602
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 200.90
CLOSE 200.55
VOLUME 10066
52-Week high 244.80
52-Week low 114.10
P/E 19.18
Mkt Cap.(Rs cr) 602
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shree Pushkar Chemicals & Fertilizers Ltd. (SHREEPUSHK) - Chairman Speech

Company chairman speech

Dear Shareholders

It is my pleasure to welcome you all on behalf of the Board of Directors to the 23rdAnnual General Meeting of your Company. Your Company’s annual report and accounts arewith you and with your permission I shall take them as read. Viewing back from here todaywe can see that it has been a year of great transition for Shree Pushkar. We are proud tobe a listed company and we welcome our 6000 odd new members to our family. It was becauseof your confidence in us that we have reached this coveted position and we look forward toyour continued support and confidence to take the company to better heights.

Our growth story to my mind has been largely due to our Unique Business Model ofcutting costs by backward integration which have opened up new vistas and have beenproving to be our Growth Drivers towards a unique model of Zero effluent. The plan hasprovided great mileage not only in terms of lower production costs but also providingnewer avenues of expansion which we had never thought of in the past. The fertiliserDivision is a glowing example on this count. Having started with a single product we nowhave a fairly pronounced division having 4 different products namely SSP SC NPK and nowSOP The division has proved to be a significant contributor to both the Top & theBottom Lines. And now with the commissioning of the Dyes plant the future looks brightermore so on account of a marked shift of global supplies of intermediates from China toIndia.

Coming to our ‘Industry Scenario’ the so called ‘China Factor’ hasbeen doing the rounds with most of us. In this regard you may recall that the extra largecapacities of units in China which till a few years back posed a perennial threat to ushas now transformed to be a boon. In this regard the pollution control factors have playeda major role.

Severe scarcity and water contamination in China have compounded land deterioration.Environmental degradation threatens to undermine the country’s growth and exhaustspublic patience with the pace of reform. It has also bruised China’s internationalstanding and endangered domestic stability as the ruling party faces increasing scrutinyand public discontent. According to 2013 UN figures life expectancy in China is 75.3 andthe life expectancy north of the Huai River is 5.5 years lower than in the south due toair pollution owing to an increased incidence of cardio respiratory mortality. Morerecently amid waning economic growth leaders in Beijing appear more determined toinstitute changes to stem further degradation.

With this backdrop wherein Chinese authorities are enforcing stricter controls on air& water pollution whereby we have been observing some large names of manufacturers inChina facing repeated shutdowns and even closures. We have been observing that the Chineseshares in the supply of these chemicals are slowly coming down with the benefit accruingto Indian manufacturers in the organised sector. We are thus poised for a quantum leap inthe years to come.

I also feel it my duty to mention here the likely fall out of ‘Brexit’ to ourindustry. India’s net exports of dyes and intermediates is in the range of Rs.24000Crs to Rs 26000 Crs with the passage of the Brexit referendum Global currency markethave been witnessing huge swings with some of the Asian currencies like the Chinese Yuanhave sharply fallen. This fall in Yuan would make Chinese products more competitive ThusIndian companies who are competing with Chinese firms globally are likely to be affected.

However if Indian rupee also becomes competitive then it may help to protect Indiancompanies to safeguard their export markets.

However as far as our company is concerned since we are in the manufacture of ReactiveDyes in which segment China comparatively has a very limited presence besides the factthat we are having the advantage of Backward integration wherein we manufacture most ofthe Intermediates required we feel that we may not face any major competition on thisfront.

As regards the implementation of our expansion project through the proceeds of the IPOI may mention here that the same has been progressing satisfactorily. To update you on thecurrent position I wish to say that the reactive dyes plant has been commissioned inJanuary 2016 and after successfully completing trial runs and stabilizing the operationaland quality parameters we have effected the first sale of Dyes manufactured in our ownplant in May 2016. I am also happy to mention here that our products are being wellaccepted in the market and we look forward to a steady improvement in the flow of orders.The expansion of the VS plant has also been commissioned in May 2016 and is operatingsatisfactorily. The H-Acid plant is currently in the advanced stage of implementation andwe expect the same to be commissioned by the beginning of Q3 - 2016.

As regards our SOP project which is outside the purview of the IPO I may state thatthough we had been sanctioned a term loan of Rs.12.50 Crs by the SBI looking to ourinternal accruals we have restrained from availing the said term loan and the project hasbeen funded entirely through internal accruals. The plant has been successfullycommissioned in end June 2016.

I may also mention here that our efforts for seeking a license for manufacture of NPKmixed fertiliser over the last nearly 2 years have fetched positive results and we havebeen successful in receiving the license from Govt. of Maharashtra. As we had sufficientidle capacity in or Soil Conditioner granulation plant we have established a capacity of20000 MTA for manufacture of mixed NPK fertiliser without any capital cost. Theproduction on this item has commenced from January 2016. This project has also beenoutside the purview of the IPO.

As regards our existing activities barring the fertiliser division which experiencedanother year of inadequate monsoon our full- year performance has recorded a fair growthover last year. After an unprecedented volatility in the prices of some of our Dye-intermediate products which beginning July 2014 prevailed over a period of nearly a year& a half. This volatility and uncertainty in the prices of the finished products hadresulted in the compression of order quantities from our valued customers. I may say thatduring the year 2015-16 we have experienced a steady reduction in this price volatilityand to my mind it has been a period of stabilization. Though this has had a dampeningeffect on our top line which recorded a fall by nearly 6.5% the capacity utilisation hasbeen better resulting in improved EBIDTA margins and consequential improvement in thebottom line.

Today I am happy to say that those trying times are behind us and we are back on thepath of a steady growth. I am proud to say that with our net sales at Rs.248.70 Crs duringthe FY 2015-16 we have achieved an EBIDTA level of 14.04% at Rs. 34.91Crs and a PAT ofRs.22.30 Crs which works out to 9%. We have also in March declared an interim Dividend of10% which has been the first ever dividend declared by the company.

Standing at this point of time with both our Dyes plant & the SOP plantcommissioned I am confident that the current year should usher us into a different leaguenot only in terms of sales but also in terms of profits.

We have faced a few administrative glitches wherein our earlier Statutory Auditor couldnot devote sufficient time and was indisposed. The Board has however taken timely actionand has appointed M/s. S. K. Patodia & Associates Charterd Accountants as ourStatutory Auditor. Similarly our Company secretary has resigned from the services of thecompany for better prospects and we have a new Company Secretary and Compliance officer.These changes have however not brought any pressure on our business or our performance

I would also like to reiterate that our desire for future expansions throughsynergistic alliances to improve the depth of our business to provide the desired growthstrategy still prevails and we are constantly surveying the horizon in this regard.

I would like to conclude with a sense of confidence and strong optimism that we arestriving and will continue to strive for a sustained and enduring growth across ourvarious product divisions.

I take this opportunity to express my sincere thanks to all the shareholders for theircontinued trust in the Board of Directors and the Management of the Company. On behalf ofthe Company I would also like to thank all our stakeholders - customers dealerssuppliers other business associates the Government and regulatory agencies and employeesfor their invaluable support and co-operation in the year gone by and expect similarsupport in the years to come.

Thank you.

Punit Makharia

Chairman & Managing Director