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Suryalakshmi Cotton Mills Ltd.

BSE: 521200 Sector: Industrials
NSE: SURYALAXMI ISIN Code: INE713B01026
BSE LIVE 15:40 | 18 Aug 98.70 -1.55
(-1.55%)
OPEN

100.25

HIGH

100.25

LOW

96.50

NSE 15:54 | 18 Aug 98.30 -1.70
(-1.70%)
OPEN

99.60

HIGH

99.85

LOW

96.00

OPEN 100.25
PREVIOUS CLOSE 100.25
VOLUME 11679
52-Week high 151.70
52-Week low 95.65
P/E 8.04
Mkt Cap.(Rs cr) 165
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 100.25
CLOSE 100.25
VOLUME 11679
52-Week high 151.70
52-Week low 95.65
P/E 8.04
Mkt Cap.(Rs cr) 165
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Suryalakshmi Cotton Mills Ltd. (SURYALAXMI) - Chairman Speech

Company chairman speech

The Indian economy has shown resilience amidst the challenging and volatile globaldownturns and has emerged as the fastest growing economy of the world (growing by morethan 7% in HY15-16). As the world observes the performance of USD 2 trillion economy (atcurrent prices) India stands firmly to continue its growth trajectory beyond the 7%level.

The country's macro-economic condition witnessed an upswing with investment signspicking up due to an increase in the public sector expenditure and upturn in the capitalreplacement cycle. Considering this the textile sector continues to play a significantrole in the country's industrial production GDP growth export earnings and employmentgeneration.

Business Sentiments

Our operations are spread across diverse growth markets driven by strong consumer andsocio-demographic trends. We believe denim shall continue to grow strong beyond thevolatility of economies. The emergence of the youth and new generation as the primeconsumers has helped the market move at a brisk pace. In the last five years thedomestic market for denim has grown at a CAGR of over 15%. In fact the last couple ofyears have been quite remarkable for the industry as the demand witnessed a real upsurgeboth on the domestic and exports market.

Financial Highlights

As our strategies take shape in reality we have been witnessing a financial turnaroundsince the past couple of years. Strengthening our business economic structure has helpedus record a turnover of H77314.84 Lakhs in FY15- 16 (against H 71555.94 Lakhs in theprevious year).

Our EBIDTA margin has also improved by 253 basis points from 11.71% in previous year to14.24% today. Post our recent capital expenditure we have strengthened the balance sheetincreasing our overall networth levels to H 26195.58 Lakhs from H 14780.96 Lakhs in FY10-11 (excluding revaluation reserve). This financial discipline has helped us reward ourshareholders where we have recorded our EPS at H 17.59 maintaining a continuous dividendpayout ratio (Dividend recommended 18%).

Strategy to Delivery

One of the cornerstones for our outstanding performance has been the execution of ourthought-driven strategies.

First the commissioning of the Amravati plant expansion whereby the new capacitystrengthens our competitiveness towards manufacturing of high quality yarns. This hashelped us enhance our competitiveness in manufacturing products for fast fashion industryand stay with the changing times. Second is our focus on increasing the share of ourvalue-added products across our business verticals. We will produce margin accretiveyarns fabric and garments and all three will significantly contribute value to ourclients as well as our business. Being in this niche segment it will also enable us toincrease our share of exports from the current levels of 18.32% of the total revenue to~22% by FY19-20. Third we have made investments strategically across our businessverticals. From setting up a captive thermal power plant of 25MW at Ramtek Nagpur toupgrading the existing units it has helped us create a robust customer base of globalbrands and retailers.

Big Picture

Our long-term vision is built on solid culture embodied with the ability to thinkahead. Innovating for the future has been one of our core competencies in recent times. Wehave laid emphasis on product development and setting up our own design-cum- R&D team.We are also working in collaboration with denim fashion designers from Europe for bettercomprehension of the 'fast fashion' and latest design trends. As a result today we areable to develop more than 100 variants of denim fabric every season (in terms of texturesdesigns washes fibre mix among others). We recently introduced several unique shades ofnew denim which have been appreciated well in the markets we operate.

Road Ahead

Our transition from being a just another yarn manufacturer to a specialised denimmanufacturer has been eventful. We have overcome the challenges moved up the value-chainand created a robust integrated business structure. The expected surge in denim marketwill provide us the boost helping us leverage our core competencies for stakeholderwealth creation. With a strong order book we are confident of recording another strongfinancial performance in the coming year. More than ever we are convinced of ourstrengths and are confident of delivering as per the expectations of our customers. Ourpassion for innovation across different platforms is sure to drive our profitability andensure stakeholder value-creation.

We would once again like to thank our team the board bankers and shareholders fortheir continued trust and support. You have indeed been an inspiration for us and we lookforward to the coming fiscal year with renewed anticipation and excitement.

Regards

L N Agarwal

Chairman & Managing Director