On behalf of our Board of Directors it's my pleasure to share an update on yourCompany's performance for FY20-21.
Before I start I wish and hope that this letter finds you safe and in good health. Myheart goes out to the families and friends of all those people whose lives have beenimpacted by the pandemic. I would also like to take this opportunity to show my immensegratitude to all our frontline heroes police personnel doctors health workers andsanitation workers for their tireless efforts in keeping us safe.
India's economic growth was decelerating with a 3.1% GDP growth rate in Q4FY20 whenthe Covid-19 first wave hit the country. With the gradual unlocking India's GDP growthrate was 0.4 % in Q3FY21 a great improvement from the negative impact of Covid-19 whichhad seen it sink to levels of negative 23.7%. In Q4FY21 the GDP grew by a modest 1.6% on ay-o-y basis. On a cumulative basis in FY21 the Indian economy de-grew by -7.3%.
During the challenging times we engaged with our sales marketing and supply chainteams to share and resolve issues on a real-time basis. We strengthened the strategicframework stepped up on innovative marketing strategy despite the overall macroeconomicheadwinds and demand slowdown in the industry. Our Brand strategy has worked well and ourbrand continue to outgrow the industry in our extruded category even when categorygrowths are negative in some cases. At the backdrop we witnessed a major increase ine-commerce sales and anticipate this channel to continue to gain salience. There has beena steep jump in advertising through digital media and even activities like market researchare now becoming digital and online. We believe these initiatives are not just for theshort term but will lead to more opportunities for an efficient and technology-enabledworking culture in the organization. At the heart of it all is our talented team. We takemuch pride in fostering an inspiring workplace with an agile and high-performance culture.We are also deeply committed to recognizing and valuing diversity across our teams
Our response to COVID can be put in the following five categories:
1. Employee safety health and training.
2. Brand Building
3. Go to Market
4. Streamlining Supply chain
5. Community welfare
This year the macro-economic environment had been challenging with lower GDP growthrates liquidity crunch and peaking unemployment rate. This resulted in sluggish demandand weakening consumer sentiment. FMCG markets witnessed deceleration from the highs ofpre covid years with rural markets seeing sharper rate of consumption slowdown than urbanmarkets. Overall market also saw disparate trends. Extruded sub-category seeing thebiggest adverse impact of slow down as schools remain shut. Bridge tradional snacks andpotato chip consumed by adults and at home resulted in higher consumption. Government hasinitiated various measures to boost the economy including direct benefit transferincreased allocations to key sectors like infrastructure agriculture MSMEs etc. Thegovernment revamped and relaunched the Make in India initiative with Atma Nirbhar Bharatproject linked incentives to new industrial clusters and imposing import restrictions tohelp gain market share.
Reserve Bank of India has cut repo rate several times on a cumulative basis this yearto support the aggregate demand and private investment as well as ease liquidity given theCOVID-19 situation. The slew of policy measures and announcements helped the Company toarrest and reverse the slowdown to some extent. Indian Government adopted a four-pillarstrategy of containment fiscal financial and long-term structural reforms. Calibratedfiscal and monetary support was provided cushioning the vulnerable during the lockdownand boosting consumption and investment while unlocking.
Health and Safety
The health and safety of employees is of paramount importance. We have been focusing onincreasing safety and health awareness among all our employees including ourextended/sub-contracted workforce.
Drivers of Growth
India's population is rising along with an increased urbanisation which in turn hasgiven a huge boost to the food industry. Rising disposable incomes mall culture andmetropolitan lifestyles are boosting higher-customer spending. Due to the impact ofCovid-19 many Indian consumers were confined to their home. This has resulted inincreased consumption of packaged foods - snacks namkeens and similar items. At the sametime there is increase focus on healthier snack choices. Hectic schedules are making itdifficult for people to maintain the right work-life balance. Also due to Covid as wellas rise in lifestyle diseases like heart ailments and diabetes many have started makingthe switch to healthy snacking. Now consumers want to purchase products that arenutritious tasty and convenient to procure.
The changing trends and patterns have led to a growth in the demand of responsible andethical food processing. Packaged products like ready-to-eat foods are becoming highlypopular. We aim to creating a better future by making CRAX brand affordable for themasses.
With the COVID pandemic impacting economies lives and livelihood all over the worldthe Company's sales and profits were adversely impacted during first quarter of thefinancial year. Despite the COVID impact Company ended FY 2020-21 with a 3.17% growth inRevenue from Operations at Rs.52406 lakhs against comparable revenues last year. NetProfit for the full year stood at Rs. 2870 Lakhs compared with Rs. 2442 Lakhs in theprevious year.
The proactive measures taken by our management team and agility displayed in respondingto the changing dynamics in the marketplace with a more streamlined portfolio andrefreshed positioning to meet the emerging needs of our consumer is indeed commendable.Few new products/variants were launched in FY21. All the efforts reflect a strong andcommitted effort to mitigate the immediate crisis and emerge from it stronger and FutureReady.
Further we are committed to investing strongly in our business and driving it on astrong growth trajectory and we look forward to continuing this rewarding journey togetherwith you.
I would like to extend my gratitude to our distributors vendors business associatesand our consumers for their continued support and commitment towards DFM. Finally I thankyou our esteemed shareholders and investors for your continued trust confidence andguidance in these trying times.
As we navigate these uncertain times together we look ahead to your continued support.I hope that you and your family remain safe and well in these difficult times.
|Hemant Nerurkar |
|11th June 2021 |