TO THE SHAREHOLDERS
This has been a pleasing year at Bodal. We achieved a good set of financial results andsatisfactory operational achievements despite challenging economic conditions. Ourstrategic endeavours towards business integration have further strengthened ourcompetitiveness and allowed us to remain relevant for the future.
The year went by witnessed trade tariff wars between the world's two major economieswhich impacted the growth momentum across the globe. The uncertainty of the Brexit outcomein Europe further led to a sluggish growth across the developed and emerging nations. EvenIndia had its own set of challenges in the form of volatile crude prices liquidity crunchand rupee depreciation. It slowed down the overall momentum of the economy leading to amere 6.8% GDP growth which was marginally higher than that in last year. However withthe renewed stability at the Centre India will continue to progress on the back ofpositive reforms and investments across key growth sectors.
The global chemical industry continued to be impacted by the stringent environmentalconcerns and Government regulations in China. The consolidation in the Chinese chemicalindustry has led to several MNCs reworking the sourcing strategy and are now consideringIndia as the major destination. Moreover India has much stringent environmental norms forchemical business which is largely preferred by the MNCs. As a result there has been anupswing in demand and strong capex cycle across the industry. At Bodal we proactivelyinitiated capex plans and explored strategic acquisition opportunities to leverage uponthis opportunity and consolidate our positioning in the industry.
Around 40-45% of Basic Chemicals and Dye Intermediate is used for captive consumption.
The Indian Dyestuff and Dye Intermediate industry has seen a massive transition. Thecountry went from being a net importer to a leading exporter across the globe. The IndianDyes market is expected to generate revenues worth approximately र 48000 Crores by2022. The demand will be driven by the user industries such as textile leather paper andprinting ink among others.
At Bodal we are India's largest manufacturer of Dye Intermediates accounting for 20%of domestic capacity and 5% of global capacity. The business segment is well-diversifiedwhere majority of the revenue is generated from Dye Intermediates followed by DyestuffBasic Chemicals and others. We enhanced capacities of our Dyestuff business by 6000 MTPAand Basic Chemicals by 36000 MTPA.
Our strong and consistent performance in 2018-19 is an outcome of the capacityexpansions and the favourable industry dynamics during the year.
Given below are some of the prominent highlights on a consolidated basis:
Total revenue from operation increased by 24.63 % to र14235 Million in2018-19 from र11422 Million in 2017-18 owing to better product mix better realisationand higher exports
EBITDA increased by 22.37% to र2495 Million in 2018-19 as compared to र2039 Million in 2017-18
PAT strengthened by 15.89% to र1413 Million in 2018-19 as compared toर1219 Million in 2017-18
Debt to equity decreased from 0.26 in 2017-18 to 0.20 in 2018-19.
Strategies for the next level of growth
We have several future strategies lined up that will further strengthen our integratedcapabilities and allow to explore new product lines newer geographies and widerapplications. These include:
Diversification into Chlor Alkali plant with capacities of 300 TPD forinhouse production of caustic soda flakes caustic soda lye chlorine and hydrogen atSaykha GIDC near Dahej
Expansion of Sulphuric Acid plant with capacities of 1000 TPD to cater tothe increasing requirements from dye intermediates fertilisers pharmaceuticals aluminaand textiles industries at Saykha GIDC near Dahej
Expansion of Dyestuff capacities to 19200 MTPA at Padra Vadodara toproduce various shades of high-margin products and meet the global demand
Addition of Turquoise Blue capacities to 4 800 MTPA at Ahmedabad to capitaliseon the nicheness of the product and strengthen our margins
Acquiring 80% stake in a Turkish company for र320 Million to strengthen B2Cbusiness and enhance exposure to the newer markets
The softer aspect
At Bodal our business growth is driven by being concerned about three importantaspects: by giving back to the community by creating a healthy environment and byproactively framing policies and standards which foster greater trust and transparency.Our consistent R&D outcome has helped us to improvise our sustainable productionprocess which includes treatment of wastewater at plant. As far as community isconcerned we through our CSR activities cover wide spectrum of activities acrosseducation health sports and animal welfare. We strictly comply with legal and regulatorynorms which makes a comprehensive and lasting impact that will positively transform howall our stakeholders view our business.
I would like to appreciate the efforts of our employees for their untiring anddedicated efforts. I would also like to acknowledge the support of our stakeholders andthe Board for their relentless support in our growth journey.
They have put utmost confidence in our experienced Management team who have remainedquick in the execution of strategy of growth and value creation.
I look forward to the next phase of development and will come back to you once againnext year with the progress on our set strategies.
Suresh J. Patel
Chief Executive Officer Chairman & Managing Director.