Much like the preceding few years FY2016-17 witnessed a decline in the o3 take forferro alloys. This glut in demand got reflected in the fact that the Company produced12605 million tonnes of ferro silicon during the year under review compared to 15104million tonnes during FY2015-16. The result was that our topline declined fromRS.11363.42 lac during FY2015-16 to H9108.70 lac in FY2016-17. Fortunately our netprofit improved from RS.158.77 lac during FY2015-16 to H798.51 lac on account of increasein sale price and achieving cost e3 ciency. The year also saw our y-o-y realisations growfrom H71176.47 per tonne to H72629 per tonne. Our power business too put up a robustperformance by generating 1044 lac units compared to 552 lac units during FY2015-16. Theentirety of the power generated was consumed in-house enhancing our self-sustainability.Furthermore the performance of Meghalaya Power Limited an associate company brightenedour long-term prospects. Here's proof: power generation reached 2016 lac units duringFY2016-17 compared to 1831 lac units during FY2015-16 and thereby allowed to clock a PBTof RS.1481.03 lac and PAT of RS.1203.72 lac during the fiscal gone by compared toRS.1472.07 lac and RS.1082.84 lac respectively.
Ferro alloys are critical additives in the production of steel and iron and the growthof the industry is largely influenced by demand traction in the downstream industries.India is among the preferred ferro alloys suppliers in the world owing to its abundantlyavailable natural resources cost competitiveness and locational advantages. Theperformance of the iron and steel industry had been lacklustre during the past couple ofyears. This has been primarily owing to a visible reduction in demand from theinfrastructure automobile and white goods sectors. However with increased governmentalinvestments being channelised towards the infrastructure sector the tide has begun toturn. Case in point: the Central Government has approved the National Steel Policy toboost the country's steel industry. The salient features of this key piece of legislationinclude:
Achieving self-su3 ciency in terms of steel production by providing policy support andguidance to private manufacturers MSMEs and CPSEs among others
Guaranteeing adequate availability of iron ore coking coal and natural gas
Developing globally-competitive steel manufacturing capabilities
Easing asset and raw material acquisition processes Achieving cost-e3 ciency in termsof production
Ensuring adequate capacity additions
Enhancing domestic steel demand Facilitating foreign investment
The policy targets reaching a crude steel capacity of 300 million tonnes an output of255 million tonnes and a finished steel consumption level of 158 kilograms (per capita) byFY2030-31 compared to the current consumption level of 61 kilograms. The policy alsoenvisages to meet the entire demand of high-grade automotive steel electrical steelspecial steels and alloys for strategic applications and increase the domesticavailability of washed coking coal so as to reduce import dependence on coking coal from~85% to ~65% by FY2030-31.
With the Indian Government single-mindedly focusing on infrastructure creation thedownstream steel sector is poised for rapid development on the back of a robust growth indomestic demand. Here's a lowdown on some of the key downstream sectors which will have asignificant bearing on SCFL's prospects:
The Indian Government plans to develop a total of 66117 kilometres of roads underdifferent programmes such as the National Highways Development Project SpecialAccelerated Road Development Programme in North East and Left Wing Extremism. The IndianGovernment has identified development of 2000 kilometres of coastal roads to improveconnectivity between ports and remote villages.
The Cabinet Committee on Economic A3 airs (CCEA) permitted 100% equity divestment byprivate developers after two years of construction completion for all BOT projectsirrespective of the year of awarding of the project.
The Central Government approved the construction of ~1000 kilometres of expressways ata cost of ~ RS.16.68 crore via the DBFOT mode. The approved corridors are Delhi-Chandigarh(249 kilometres) Bengaluru-Chennai (334 kilometres) Delhi-Jaipur (261 kilometres) andVadodara-Mumbai (400 kilometres). The Central Government will also take up the developmentof 135 kilometre-long Eastern Peripheral Expressway at ~ RS.5763 crore.
The Ministry of Road Transport and Highways has undertaken the development of about7000 kilometres of National Highways under the Bharatmala Pariyojana at a cost of~H80000 crore in consultation with State Governments. The National Highways Authority ofIndia has invited bids for preparing detailed project reports for road development alongborders and coastlines under the Bharat Mala project.
The Central Government earmarked RS.396000 crore for driving infrastructuraldevelopment in India. As part of the new integrated infrastructure planning paradigmcomprising roads railways waterways and civil aviation the Central Government unveiledthe largest-ever rail budget of RS.1.31 trillion an 8.26% increase over the RS.1.21trillion allocated during FY2016-17.
The Automobile Mission Plan 2016-22 envisages the size of Indian automotive industry togrow to ~ RS.1888500 crore by 2026 from
RS.464000 crore in 2015. This will cement India's position among the top-3 players inthe realm of engineering manufacture and export of vehicles and automobile components.Subsequently safe e3 cient environment-friendly and a3 ordable mobility for people andgoods will become a reality for most Indians. The result: this sector will account for>12% of India's GDP and generate an additional 65 million jobs.
The Indian ferro alloys industry is expected to post substantial growth over theforeseeable future. SCFL being one of the prominent manufacturers of ferro alloys isexpected to make the most of the aforementioned macroeconomic developments. I am thankfulto all our stakeholders for their continued support and assure them that the journeyforward will be a spectacular one.