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Bodal Chemicals Ltd.

BSE: 524370 Sector: Industrials
NSE: BODALCHEM ISIN Code: INE338D01028
BSE 00:00 | 11 Jun 110.75 -0.80
(-0.72%)
OPEN

113.55

HIGH

113.55

LOW

108.00

NSE 00:00 | 11 Jun 110.55 -1.15
(-1.03%)
OPEN

112.00

HIGH

113.40

LOW

107.95

OPEN 113.55
PREVIOUS CLOSE 111.55
VOLUME 100475
52-Week high 115.35
52-Week low 50.75
P/E 27.01
Mkt Cap.(Rs cr) 1,355
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 113.55
CLOSE 111.55
VOLUME 100475
52-Week high 115.35
52-Week low 50.75
P/E 27.01
Mkt Cap.(Rs cr) 1,355
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bodal Chemicals Ltd. (BODALCHEM) - Chairman Speech

Company chairman speech

Dear shareholders

I am pleased to report that collectively the Management and its people have risenabove disruptive headwinds faced in the fiscal 2019-20. And against the challengingbackdrop one element that remained unchanged throughout the period was our progress instrategy implementation. This approach along with our social initiatives andenvironmental stewardship is what makes us sustainable for the future.

Economic scenario

Things were looking good for the global economy in the first three quarters of 2019-20with phase one trade talk stability in crude oil prices Brexit coming to a closure and alow-interest rate environment. In consonance with the global economy India was on arelative growth trajectory with the strengthening of the agrarian space corporate andincome tax rate cuts narrowing trade deficit and increasing foreign investments. Thepositive outcome of this was expected to translate into increased consumer demand andprivate investments which had been slacking for a while. However the unprecedentedoccurrence of Covid-19 outbreak led every economy industry and company to re-think theirstrategic road map and lay out a path ahead. And I am confident even in the face of thiscrisis there are certain silver linings in the form of growing interest amongstmultinational companies to shift their manufacturing facilities to India adoption ofdigital payments favourable crude oil prices for India and more. Though this isone-in-a-lifetime event we are also confident of overcoming this crisis like done withmany other crises in the past.

Industry landscape

The Indian Chemical Industry has witnessed tremendous growth owing to the lucrativeadvantage it possesses over other countries. It benefits from the easy availability of keyraw material lower cost of labour large end-user industries' base. Whereas the adoptionof technology by big companies has enabled them to strengthen cyber security systemimprove overall operational efficiency and measure the environmental impact. The Indianchemical players recorded a CAGR of 15% as Total Returns to Shareholders (TRS) over thelast decade or so (Source: The Indian chemical industry: Unleashing the next wave ofgrowth McKinsey February 2020). The growth was primarily on the back of an increasingtopline which was supported by favourable policy environment efforts to curb import andstrict regulatory norms around the globe. However smaller players are finding itchallenging to cope with the pace of evolution and hence are forced to either liquidate orconsolidate. Going ahead the Indian Chemical Council's (ICC) goal to reach a USD 300Billion-industry turnover by 2025 seems to be a possibility with full support from theGovernments to set up a strong infrastructure and compete against the threat from China.

Business landscape

Dyestuffs covers every aspect of our lives. This signifies the importance of Dyes andPigment sector for the economy. Intermediates are a prominent raw material used in theproduction of Dyestuffs. Over the years India has reduced its reliance on other countriesfor intermediates used in Dyestuffs and today the country is gradually becoming‘Atmanirbhar'. However the country is still dependent for k-acid J-acid BromamineAcid Sulpho Tobias Acid and Cyanuric Chloride on a large share of imports. With Chinafacing issues owing to the environmental norms India is well-poised to benefit from thesame.

Let us see how we have performed in the last ten years:

Total Revenues from Operations increased by 157% (10% CAGR) to Rs. 12318 Million in2019-20 from Rs. 4793 Million in 2009-10.

EBITDA increased by 200% (12% CAGR) to Rs. 1580 Million in 2019-20 as compared to Rs.527 Million in 2009-10. PAT strengthened by 658% (22% CAGR) to Rs. 1022 Million in2019-20 as compared to Rs. 135 Million in 2009-10. Debt to Equity ratio decreased from4.56 in 2009-10 to 0.25 in 2019-20.

A responsible firm

As a proactive response to the current paradigm change we remain ardent to our dutiesand responsibilities. These include creating a safe working environmentadhering to thebest management practices and embedding sustainability into our facilities.

Through strong R&D we are doing our bit in adding economic value by strengtheningour in-house feed production. This reduces our dependency on other countries for rawmaterial import and through this we are also aligned to the Government's‘Aatmanirbhar Bharat Abhiyan' initiative. Moreover our 45% of revenue comes fromexport thereby playing a minuscule role in contributing to the country's foreignexchange.

At the same time our social contribution through renowned NGOs like YUVA and othervarious Trusts has helped us to focus on a wide array of areas such as health educationand basic infrastructure among others. We take pride in positively having influenced manypeople's lives through our initiatives.

Responding to the pandemic

As a responsible corporate citizen we adhered to the Government guidelines that wereissued during different phases of the Covid-19 induced lockdown to contain the spread ofthe virus. With the slow and gradual upliftment of regulations the reopening of plants indifferent sectors is likely to lead to a gradual recovery. The Company's fundamentals areintact to support the strong growth prospects. And I am confident we will start fromwhere we left and keep moving to be on a strong footing.

In closing

I would like to thank the entire team at Bodal Chemicals for their constant commitmentand efforts undertaken during the year. It is this pride of working with such anillustrious team that drives us every day as we work to honour our stakeholders' faith andinvestment in us.

suresh J. Patel

Chief Executive Officer Chairman & Managing Director