In a world where major changes normally happen at a glacial pacethe size and speed of events brought about by Covid-19 this year have been dizzying.
They have come so thick and fast that it is hard to remember just howradical some of these changes are. In many ways life will return to a semblance of thepast. But in more areas than one might expect life will never be the same. This iswhat crises tend to do. The world now has accepted and is slowly adapting to the impactof Covid-19. And we continuing the journey towards our long-term strategy stood by ourpromise to deliver consistently while adapting the new phase of post Covid-19 life.
We have experienced a good growth with the addition of new customersand products. Fortunately room
air-conditioning industry witnessed about 18-20% of growth in FY2019-20.
Despite the slowdown in the Indian economy and severe impact ofCovid-19 towards the end of the March 2020 we recorded a healthy set of numbers forthe year. Though Covid-19 led to loss of revenue it could not stop us from growingstronger. We have been able to maintain our growth momentum and clocked a robust growth asfollows:
Revenues for FY 2019-20 recorded a growth of 44% at' 3963 e ascompared to ' 2752 Crore in FY 2018-19. Operating EBIDTA for FY 2019-20 stoodat an increase of 50 bps Y-o-Y. PAT for FY 2019-20 stood at' 164 Croreregistering a growth of 73% as against last year. PAT margins were recorded at 4.1% upfrom
3.4% in FY 2018-19.
As highlighted earlier we will continue to endeavour
growing at a higher pace than the industry. The growth in the volumeswas primarily due to addition of new customers increase in wallet share of the existingcustomers and new product offering.
3 Mn Units
Manufactured in FY 2019-20 up 43%
(2.1 Mn FY 2018-19)
During the year RAC industry was not much impacted due to overallslowdown in the economy. The industry did well and the delta of seasonality curve wasseen reducing. As a result the volume uptake was noticed in the non-seasonal periodas well. I would also like to highlight that with our RAC division our AC Componentsand Non-AC Components division are also gaining momentum. Our penetration level withcustomers has increased providing us better profitability.
Business integration with respect to the systems and processes weresuccessfully implemented.
We identified synergies between the Amber and Sidwal which areexpected to bring cross selling opportunities operational efficiencies and marginenhancement going forward. By entering new segments like commercial cooling we aretrying to capitalise on the outsourcing trends largely made in house in the industryuntil now. We also successfully established ourselves in the mobility segment. This involvesmanufacturing ACs for railways (with O&M contracts) and other commercial applicationswhere brand presence is not required.
The indigenous manufacturing shift is a big opportunity for us andeconomies of scale will further pick up with the market growth. While 30% of ACs inthe country are still imported growing realisation of self-reliance in manufacturingalong with opportunities in the form of diversifying supply chains in addition toChina is also picking up pace. Imposition of 20% duties on IDU imports was a positiveturnaround favouring us.
Further addition of new energy efficient models on a continuous basisincrease of custom duty resulting in shift to domestic procurement in place ofimports and increased demand from online players without manufacturing facilities willalso generate demand for us.
Seeking multiple opportunities in the export markets we startedexporting components to Sri Lanka Bangladesh and the USA. With the world diversifyingits supply base other than China we are optimistic
that exports will prove to be a huge potential market in mid to longterm. We have already started discussions with various OEMs for export opportunities andenvisage good potential going forward.
We see a decent growth potential in the RAC industry due to lowerpenetration of the product high aspiration for desire of comfort living growing percapita income and easy financing options available in the market. Together these enhancethe purchasing power to buy the product. Lastly the shortening of the replacementcycle it also expected to aid the industry growth. Deeper penetration of omnichannel ande-commerce players are further helping increase the market reach of our products in ruralIndia.
In times such as this the spirit and compassion of our peoplereinstates my belief in our core philosophy.
We endeavour to build on our strong foundation and achievements inour journey of excellence. Equipped with strong growth enablers and streamlined operationswe have a clear gliding path to the future.
I take this opportunity to thank our shareholders for their continuedtrust and support. I would also like to thank all our stakeholders for supporting ourvision and initiatives.
|Best Wishes |
|Jasbir Singh |
|Chairman & CEO |