It is my pleasure to present on behalf of our Board of Directors theAnnual Report of your Company for the financial year ended 31st March 2021.
During the year under review the COVID-19 outbreak triggered anunprecedented health crisis causing huge economic disruption and lockdown across thecountry. Against this extraordinary backdrop we delivered a creditable performanceunderpinned by our investments in long-term strategic choices and decisive action inresponse to the pandemic. This includes our investment in customer-centric productinnovation enabling us to bring meaningful offerings to the market. Our aggressivego-to-market strategy focussed on empowering our channel partners supporting them throughthis period of uncertainty and growing our distribution footprint. We also stepped up ourinvestments in people e-commerce and rural channels and intensified our focus onleveraging technology a crucial enabler of our business efficiency. Fiscal prudenceremained the order of the day in these uncertain times amply reflected in costoptimisation measures efficient management of working capital and a strong balance sheet.
Looking back Crompton and its people can be proud of the way withwhich they navigated the challenging landscape and we would like to commend thecommitment that our people have shown in supporting our channel partners customerscommunities as well as each other throughout this difficult period.
The Indian economy was severely impacted on account of the COVID-19pandemic and contraction of economic activity following the nationwide lockdown. As perthe advance estimates released by the National Statistics Organisation (NSO) the economyis estimated to contract by 7.7% in FY21 as compared to 4.2% economic growth recorded inthe previous fiscal.
Recent economic indications and data suggest that the economy is headedfor a gradual revival; however the intensity and depth of the second wave of COVID-19 mayderail this rebound. Notwithstanding the shortterm challenges due to the pandemic themedium and long-term growth drivers are in place. The Government's fiscal support packageto support demand and economic recovery significantly higher allocation forinfrastructural development and policy reforms implemented under the vision ofAtmanirbhar Bharat' or self-reliant India will be fundamental in shaping the growthstory of the Indian economy. Resumption in economic activity will also be contingent onthe fast and successful roll-out of the vaccination drive.
Industry Growth Drivers
Rapidly growing urbanisation and rising disposable income are drivingthe adoption of consumer electrical goods among Indian households. Moreover withincreased consumer awareness of energy-efficient and better products the demand forofferings that embed newer technologies is witnessing a strong acceptance. TheGovernment's continued strong focus on rural electrification and affordable housing alsoaugur well for the consumer electrical goods industry. At Crompton we offer products inboth the mass as well as premium segments enabling us to reach out to a wider consumerbase across income groups. The COVID-19 pandemic has also fuelled the demand forelectrical appliances that can help consumers and their families to live healthily andstay safe. Further with the work from home trend expected to continue consumers wantsmart electrical products that can make their life easier and productive. We areproactively investing in R&D to respond to these new market trends and developproducts that meet emerging expectations.
Despite the manufacturing and distribution hurdles faced in the earlypart of the pandemic a dip in market demand till almost the first half of the year andcommodity inflation in the fourth quarter we reported a resilient financial performancefor the full year. Our Total Income stood at Rs 4825.58 crore while Profit After Tax wasRs 604.74 crore as against 4570.84 crore and Rs 494.70 crore respectively in theprevious fiscal.
Our sustained results were driven by a strong performance from ourElectrical Consumer Durables segment which includes our fans pumps and appliancesbusinesses. In the fans business we introduced superior new additions especially in thepremium category and enhanced our reach which enabled us to increase our market share.In the pumps segment with the plan of creating product differentiation and segmentationvarious new products were introduced across segments especially in premium segment. Inthe appliances segment the revamping of our product range in the water heater air coolerand mixer grinder categories undertaken over the past few years rewarded us well. In theLighting vertical while the B2C business witnessed healthy volume growth this was partlyoffset by the subdued performance of the B2B business due to slower than anticipatedrecovery in the institutional sector.
Our lean cost structure aided by our asset-light business modelenabled us to cope better with the high level of uncertainty throughout the year. Arigorous focus on cost controls along with Rs 153 crore saved in the year from our ongoingcost rationalisation exercise Project Unnati further helped in delivering astrong/healthy operating performance.
Five-dimensional Growth Strategy
We continue to execute against our five-dimensional plan taking thenecessary actions and making the essential investments to shape the future of your Companyand deliver long-term growth and outperformance.
Brand excellence: Our success in building a resilient brand wasreflected through robust improvement in brand recall in focus segments and geographies andin our strong sales across categories in a difficult year. To further deepen ourengagement with consumers we are reaching out to them through multiple channels.Responding to the step-change
in e-commerce growth we have enhanced our focus on direct-to- consumerprogrammes which includes our presence on leading e-commerce platforms.
Portfolio excellence: By driving
customer-centric innovation through investments in R&D andtechnology our emphasis is on building a strong portfolio of differentiated productsacross categories. We also remain focussed on developing premium category products anddriving their saliency. Our premium category products have been generating strong salesyear-on-year endorsing the strength of our strategy.
Go-to-market excellence: Our go-to- market execution remained strong interms of leveraging technology to drive productivity and improve customer reach buildingalternate channels like ecommerce modern retail and rural. We focussed on enhancing oursuperior partnership with our trade partners and supporting them during the lockdown withextended credit and other support areas. Continuous efforts and investments are being madeto improve the number of retail points where our products are available.
Operational excellence: In addition to building our portfolio andenhancing our reach we believe that a culture of continuous improvement will be acritical enabler of business performance. Several new initiatives were implemented todrive operational excellence. We continued to invest in growth initiatives and strengthendigital enablement and help achieve the objective of enabling the business usingtechnology i.e.: Make people productive make processes efficient and make productrelevant. Acutely aware of the impact that digitisation has on operations we are takingour digital transformation journey to the next level with our ongoing programmeUrja'.
Organisational excellence: Our
Company's progress is rooted in the skills and capabilities of ourpeople. We continued to invest in their development by offering extensive opportunitiesfor learning through specially-designed training programmes. Throughout this pandemic ourforemost priority has been the health and safety of our employees. Apart from adoptinggovernment and public health authority guidelines additional measures such as theinstallation of the MyShield app to enable contact tracing and monitoring of physicalpresence were put in place to support the health and well-being of all our employees. Wealso enabled them with technology solutions so that they could work remotely from theirhomes with safety.
I want to thank all the people who have helped Crompton succeed - ourconsumers channel partners suppliers investors and employees and last but not theleast our community. Crompton could not have grown into the Company it is today withoutyour confidence and support. While the pandemic has created nearterm challenges we arewell placed to recover and deliver sustained value in the years ahead.
|Stay safe stay well. |
|Hemant Nerurkar |