For the fiscal year 2020 21 we clocked a total revenue of Rs5238 million andmaintained EBITDA margin at 14.6% despite a decline in revenue of 22% y o y. This wasprimarily due to a COVID 19 induced contraction in the Aerospace vertical. That said inQ4FY21 we observed that growth momentum had revived across verticals especially inAerospace and Heavy Engineering where we delivered a growth of 7.4% and 9.4%respectively and increased traction in other verticals as well.
Let me start by wishing that this letter finds you and your loved ones in good health.
I urge you to heed the necessary safety precautions and take utmost care of yourphysical and mental wellbeing. FY21 was turbulent and challenging year in many ways. TheCOVID 19 pandemic was the event that defined the year causing the sharpest decline inglobal GDP in recent history. The health social and economic toll are still being felt bypeople all around the world. At an industry level and by extension for AXISCADES too therestrictions to contain the infection spread posed an enormous challenge. We acted swiftlyand decisively to protect our people and the Company. Our crisis management teamscoordinated many initiatives to minimise the disruption to our businesses. We were thusable to flexibly adapt our operations to fulfil the needs of our customers safeguard thehealth of our employees and ensure reliable deliveries.
For the fiscal year 2020 21 we clocked a total revenue of Rs5238 million andmaintained EBITDA margin at 14.6% despite a decline in revenue of 22% y o y. This wasprimarily due to a COVID-19-induced contraction in the Aerospace vertical. That said inQ4FY21 we observed that growth momentum had revived across verticals
especially in Aerospace and Heavy Engineering where we delivered a growth of
7.4% and 9.4% respectively and increased traction in other verticals as well. We wereable to maintain our EBITDA margin at
14.6%; and our PAT adjusted for exceptional item stood at Rs196 million. We achieved arobust cash position of Rs848 million ( Rs 146 million growth y o y). Furthermore weacquired 7 new clients in Automotive and Heavy Engineering; and ventured into newerdomains such as transportation naval and healthcare. We leveraged ourCentres-of-Excellence to launch 3 innovative products in Healthcare: Elevated SkinTemperature Sensor Social Distancing Application and Remote Operations Desk. We continuedto work closely with our clients expanding our service offerings to key accountsand in effect strengthening our relationship with them. Top Engineering R&D(ER&D) players are increasingly spending more in digital engineering to improvemanufacturing process and new product development.
During the year we saw significant digital engineering spend across our customers intandem with a rise in our digital revenue. This proved to be a strong validation of theinvestments in digital that we've made in previous years.
All in all AXISCADES delivered a resilient set of results in the face of challenges.My heartfelt gratitude goes to all of our colleagues suppliers customers andstakeholders who made this possible.
External reports indicate that ER&D spend will touch ~US$2.2 trillion by 2025digital engineering being the key driver. Digital
ER&D is likely to grow at a CAGR of 19% in this time. Digital engineering spend inthe Automotive segment alone is expected to touch US$60 billion by 2025. Automotive firmsare primarily investing in ADAS Factory 4.0 and Electric Vehicles.
As a direct consequence of the mobility restrictions commercial aviation firmsexperienced production stoppages and decelerating demand. Commercial travels have startedacross geographies however this is lower compared to pre covid level. We expect slowrecovery in this segment. Aerospace firms are already at lower production rate and anyfurther cuts are unlikely. Earnings and cash flow are starting benefit to from last year'scost control measures. Due to this we started seeing early signs of growth in Aerospacevertical Q4 FY21 onwards. However it is still lower as compared with pre-COVID-19 averagelevels. We are working on new areas such as passenger-to-freighter conversion andairworthiness recertification and activity . related to business jet. We are also indiscussion with other customers to offer digital services in Aerospace by showcasing thedigital work we have done for other key clients.
On the Defence side we are well positioned to deliver in a big way in alignment withindustry needs. The Government of
India opening up the defence industry to the private sector coupled with theMake-in-India push for defence modernisation is a major opportunity for domestic privateplayers. Demand over the next two years might remain constant to some extent since budgetsfor these projects had been allocated prior to the pandemic and many of the projects arecritical to national defence.
As demonstrated by this year AXISCADES is well designed for growth in the comingyears in spite of macro challenges. We expanded our portfolio of services to be closer tomarket needs. Our earlier investments in digital space have shown positive results and wewill continue to invest in this space to multiply our offerings. In H2FY21 we witnessedgreater traction from existing customers as well as client additions in some of our fastgrowing verticals (like Automotive Heavy Engineering and Energy). We are hopeful for abetter FY22 particularly as mass vaccination drives are rolled out restrictions aregradually relaxed and cross border mobility resumes pace. This is expected to benefit theAerospace vertical H2FY22 onwards.
would like to end by reiterating that I innovations have made AXISCADES the company itis today. I am convinced that our innovative power will continue to be an importantsuccess factor for profitable development. And this depends in equal measure on excellentR&D and highly qualified talent which is exactly what we have at AXISCADES. In thisexceptional year the AXISCADES team demonstrated remarkable solidarity and passion; andworked tirelessly to find tailor made solutions for our customers whether working fromhome or in the plants.
I want to thank all employees for their outstanding efforts.
While the operating environment will always present its set of challenges we willensure that our customers are always activities the central focus of all our
I appreciate your support as we pursue this goal and thank you for your trust in
AXISCADES. Here's looking forward to a deeper collaboration.
|Warm regards |
|DAVID BRADLEY |
|Chairman & Non-Executive Director |