The world around us is turbulent since past few months. The pandemic has changed in anunprecedented way the professional and personal lives of each & everyone the worldover. I hope and pray that each of you your families and the society around you remainshealthy and safe. I also take a moment's silence to those who sacrificed their lives inour fight against the pandemic.
As the pandemic spread and lockdown announced subsequently although our key prioritywas to ensure health and well-being of our employees and the end users we stood shoulderto shoulder with our stakeholders to ensure business continuity and nullify the disruptionin the supply chain.
The lockdown tested our business model the resilience of our team and adaptability ofour delivery model too. We responded to the challenge with agility and withstood theshocks or disruptions.
Key macro developments shaping the Company's prospects
India continued to be recognized amongst the fastest growing economies globally evenduring these testing times of disruption in the global economic activities. Thanks to theefforts of Indian Government the Governmental agencies and the focus on inclusive growth.The short term monetary and fiscal policy is expected to help Indian businesses roll backon track at a faster pace.
LPG was the only fuel which continued to grow during the lockdown. Thanks topenetration of fuel to the lower strata of society. Further the downfall in global LPGprices helped increasing adoption of the fuel for industrial purposes as substitute tofossil fuels.
The energy industry is at an inflection point. Oil prices and consequently LPG pricescontinued to remain low. The continuing policy amendments to adopt clean energy by variousstates and the Central Government further increased the industrial applications of thefuel. India still has a long way to go with Air Quality Index ratings and continue to beone of the most air polluted countries in the world.
The pandemic has provided unprecedented opportunities for positioning of LPG as a safenon-pollutant and cheaper fuel with many industries across the country converting theirexisting thermal/oil based industries to LPG. These investments by manufacturers areexpected to increase in the next 2 to 3 years.
Performance and Strategies
In preparation CPIL revisited the strategic review for 2019-2022 to increase itspositive impact to the environment industry stakeholders and valuable clients as werespond to opportunities provided within the Indian energy industry and help itstransition to a low carbon economy.
The Company has achieved consolidated turnover of Rs. 1077.77 Crs up from Rs. 873.34Crs in FY 2018-19. The Company has been able to achieve this growth in turnover despitedecrease in prices by around 10 to 20 % in various segments. The Operating Profit hasincreased from Rs. 124.58 Crs to Rs. 130.90 Crs. However profit after tax has declinedbecause huge surge in depreciation during the year. Owing to various expansion programmersundertaken by company particularly in ALDS segment. Though Company has in current year tooalso completed various projects however commercial operations were pending due delay inprocuring licenses. The company is expected to complete this process in near future andexpected to grow miles.
The company has been able to achieve 50 % turnover in current period and isexpected to achieve 75 % of turnover looking after performance of previous year incurrent scenario however future is still un predictable.
The Company met its targets in 2019-20 which is largely due to our verticallyintegrated business models across LPG space. However the unanticipated nationwidelockdown did take a toll on the inventory which we are sure to cover in the near future.Over the years we benefitted from economies improved cost efficiencies through ajudicious management of inventories managed cash flows focus on value-added products;adding new territories and aligning long-term business strategies with diverse stakeholderexpectations.
The year 2019-20 had set momentum for CPIL to achieve the strategic and operationalgoals set for future years. During the nationwide lockdown which disrupted operations ofa majority of our clients we worked alongside them and kept a safe and secured supplychain.
Your Company established a central war room to deal with the disruptions and weensured we speak to each of our major customers. On the Auto LPG front we started themuch applauded free sanitization scheme at over 150+ locations across the country. Whilewe continued to take care of our clients we were rewarded with Go Gas becoming a choiceof Auto LPG fuel retailer at major locations.
Our future lies in our strategy. We had we have and we will always continue to standalong with our clients and do our part to help them manage fuel costs and ensurecompetitiveness.
Going in future we see significant gains from our packed cylinder marketing and theAuto LPG divisions. We have made a good progress in developing our dealer and stockistnetwork in new states and developing the right vendor relations to service our Auto LPGstations.
During the lockdown we continued to establish our dealer network and have receivedoverwhelming response signing up with entrepreneurs who wanted to invest in a recessionproof business of LPG.
Auto LPG as a transport fuel continues to grow and in 2020. Our previous discussionswith various policymakers of the State and Central Government for introducing Auto LPG inthe Northern States have gained momentum.
Cheaper prices of Auto LPG and lower fuel switching costs have seen overwhelmingresponse in various cities for shift of vehicles from Petrol to Auto LPG.
As a Company we are increasingly agile and readily adapting to the newer realtiesbought in by the Covid-19 pandemic. We are keenly looking at our downstream activitieswithin the oil and gas space to secure our supplies of LPG at competitive rates.
The pandemic has altered our expansion plans; we have opened up dealerships for AutoLPG Dispensing Stations and negotiating with other private bottlers for co- bottlingfacilities. The theme of the year will be to stay agile and expand the retail network at ahigher pace.
Our People - Driving The Momentum
While we initiated the performance management plan as on track the pandemic furtherpushed our digitalization at a faster pace. Our organizational values helped us tide overthe pandemic to gain the accelerated momentum. We are more agile and have new talents tofurther grow and improve our digital footprint.
Our spirit of professionalism is the key quality at a time of growth inflection. We aredetermined to recognize the talent in the Company's businesses and to support developmentof people from early in their careers not just to top-level succession planning butfocusing on divisional and departmental leadership.
Your Company takes pride in growth of its employees and their families who helped theCompany and the clients to tide over the disruption caused by the Covid-19 pandemic.
The Group has strong financial control sound administration and robust &transparent governance. Moreover we are building the assets and the teams to securefurther growth.
I would like to end by expressing my sincere thanks to all our talented and committedcolleagues for their unstinting hard work and dedication. would also like to thank ourBoard Members for their constant guidance. Finally I would like to thank all ourstakeholders for being with us and immense contribution to our success.
While we remain focused on the task in hand we are committed to delivering ourstrategies and to drive profitability within the business building upon the successes weachieved in 2019-20. We reaffirm our commitment to nation building by curbing airpollution and moving towards sustainable development.
Best Wishes Nitin Khara