The world today is confronting one of the greatest health threats of this generationthe COVID-19 situation is a global concern and we are all dealing with an unprecedentedchallenge. It has profoundly impacted the lives of people everywhere and the globaleconomy. Our thoughts and prayers remain with the families of every one of those who havelost lives to this deadly disease. My heart felt gratitude to all front line workersacross the world who have kept things running especially to healthcare workers and firstresponders who have continued to save lives. I believe that we will emerge out of thiscrisis wiser and stronger. Adversity has brought out the best in our teams and by stayingtrue to our purpose we have made progress even in these tough times. We continue to standby our employees customers and the community.
The Indian economy was faced with huge losses in the first quarter and industryestimates that the GDP could contract by more than 40% during the period. The firstquarter may suffer a contraction of 25% which could hit India with the worst-everrecession As the pandemic cripples urban centres India will have to rely on farm economyto provide much needed relief. Consumption growth in rural India has outpaced urbangrowth. With the extended closure in metros wage reduction and a rise in unemploymentacross the country consumer sentiments have weakened. With favourable monsoons andgovernment support the farmer community is expected to do much better. Overall apartfrom the continuing resilience of agriculture and allied activities other sectors of theeconomy will be adversely impacted by the pandemic depending upon its intensity spreadand duration. Relatively modest upsides are expected to emanate from monetary fiscal andother policy measures and the early containment of COVID-19.
With some states are now restarting economic activities in a staggered manner and somemarkets opening up the Indian economy does seem to show signs of recovery with goodsmovement rebounding close to pre-lockdown levels and goods and services tax (GST)collections rising sharply. GST collections are growing though still 41% lower than theearlier year reflecting a rise in consumption. The purchasing managers' index formanufacturing (PMI) recovered to 47.2 in June from 30.8 in May. The Centre for MonitoringIndian Economy (CMIE) states that unemployment rates fell in June to 11.1% compared withan all-time high of 23% in the lockdown months of April and May during which 122 millionpeople lost their jobs. Demand needs to be stepped up in order to maintain the improvedlevels of capacity utilization.
The performance during the year was hugely impacted due to disruption in sales in thelatter half of March 20 led by lockdown to contain the outbreak of COVID-19. We achievedoperating revenue of Rs 852 crores with a decline of 7% compared to the previous year. Ourprofit after tax has been at Rs 185 crores decline of 252 bps over previous year. Theoverall commodity prices were flattish for most part of the year with softening of LLP andPET bottles prices being offset with inflation in refined mustard oil and glass bottles.During the year we have made significant investment behind our brands and marketexecution to increase market share and strengthen brand equity which has led to dilutionin profitability margin.
The Board of Directors have proposed a dividend of Rs 2/- per share subject to theapproval of the shareholders at the ensuing AGM.
Last year we gave Bajaj Almond Drops our iconic hair oil brand a new look and feelwith brand new packaging. This year we have changed the communication strategy to focusmore on nourishment from almond and Vitamin E than the lightness of the oil. Thecommunication also highlights our Key Brand Asset The Iconic shape of the BajajAlmond Drops bottle. This is helping your company in expanding the target audience for theBrand and build on its key imagery attributes of lightness nourishment in anenvironmentally sustainable manner. The brand re-launch has been very successful and hasresulted in market share as well as penetration gain. The value market share in the totalhair oil segment touched an all-time high of 10.5% in Jan'20 (highest in past 3 years).This rise in market share has been driven by increase in household penetration. Thepenetration of Bajaj Almond Drops has gone up to 21% with a rise of 1% in penetrationwithin one year. In keeping with our purpose of creating innovative products to serve ourcustomers Bajaj Zero Grey Anti Greying Hair Oil was launched on Ecommerce platforms andin select Pharmacy outlets earlier this year. This oil helps delay greying of hairnaturally. Bajaj Zero Grey Hair Oil is enriched with natural actives and increases theproduction of natural black colour of hair by 5 times. We also added an expert rootapplicator to enable ease of oiling.
To support our customers through the pandemic your company has decided to enter thehand sanitizer market with a brand new product the Bajaj Nomarks Hand Sanitizer. Thesanitizer marks the entry of Bajaj Consumer Care in the Personal Hygiene Segment. Theproduct is aimed at serving our fellow countrymen in this time of Covid-19 where personalHealth and Hygiene is essential. The new range of Hand - Sanitizers have more than 70%alcohol which is required to give the user protection against germs. Use of alcohol doesmake the hand dry and hence we have added Neem and Aloe-Vera extracts to moisturize thehands.
The COVID-19 pandemic while completely changing the way we live and do business hasalso given us an opportunity to be innovative in our approach. While we continue to driveproductivity and implementing safety measures we will focus on innovation led growth toweather this crisis which is bound to have a lasting impact on all of us. Your companyaspires to evolve into a complete FMCG company by introducing a culture of innovation tocreate newer path breaking products for consumers across the globe. We want your companyto be recognised as providing innovative solutions to solve tomorrow's problems for ourcustomers.
We will continue to work on micro segmentation of the Hair Oils market and analyse keymarkets in great depth to design and activate the ideal assortment and marketing mix ineach state. We will start small and scale fast while focusing on cost excellence andinnovation to deliver sustained profitability along with accelerated growth. We continueour work on the Multi-year Transformational Program focused on building an organizationgeared to succeed in the long-term.
Responsibility towards Society
Your Company undertakes its CSR activities through the Bajaj Foundation. The Foundationfocuses on the areas of Natural Resource Development Human Resource Development andEnhancement of Livelihood Opportunities. I am proud to report that the Foundationhas reached 1197 villages benefitted 312347 families and has covered a population of1444255 till date. It is doing commendable work around conservation of water bodiessustainable agriculture women empowerment skill and entrepreneurship development whilefocusing on rural infrastructure development at the same time.
Employees & organization culture
Our efforts to attract the best talent has helped us achieve a talent pool that isengaged and motivated to partner with your company in its journey of growth. During thelockdown period the employees have continued to learn and develop through use oftechnology and creative impactful programs that is building a high performing team. It isa matter of great pride for your company to have been certified as a "Great Place toWork" consecutively for the second time. The trust index score of the survey resultsfor the year has significantly moved up validating the efficacies of our developmentaljourney. BCCL was also recognized as "Maharashtra State's Best Employer" andalso won the "Best Employee Engagement Initiatives" by World HRD Congress atMumbai. The company continues to stand by each and every employee during these testingtimes and is committed to support them through any crisis that they may face personallytoo.
We continue on our journey to keep growing as an ethical innovative customer focusedcompany while creating a future ready organistaion to build value for stakeholders. Wehave realigned ourselves as an organization which "Thinks Tomorrow". Our newvision now is "To harness our heritage of 90 years and combine it with leading edgescientific knowledge to bring innovative products for consumers across the world to helpthem get more out of life". I thank each one of you in partnering us on this journey.
With warm regards
Kushagra Nayan Bajaj