"However difficult life may seem there isalways something you can do and succeed at."
It is a great privilege and pleasure to share an update on the performance of EasternTreads Limited (ETL) for the year ended March 31 2021. The last year was an exceptionallychallenging one as Covid 19 disrupted normal life and business activities not only inIndia but across the globe. Severe impediments to movement of people and goods curtailedeconomic activity. Your Company's operations were also seriously impacted during theinitial months of the first lockdown.
Though the lock down and movement restrictions were progressively relaxed disruptionsin operations in road transport and automobile sector continued which adversely affectedCompany's sales during the year. The revenue declined by 13.74% YoY but volume dipped byaround 8.13% due to the market not picking up high end products. We managed the downfallby appointing new franchisees as some of the franchisees could not commence theiroperations due to impact of the pandemic.
The Company has used the adverse environment of the Covid period to focus on profitimprovement through effective cost management. Despite the deceleration in revenue I amhappy to inform you that your Company has reported small cash profits during thisaccounting period through a series of cost reduction initiatives. PBIT grew from Rs.2.14Cr in the previous year to Rs.2.42 Cr during the current year an improvement of 13.8%.
Following the shut down in the first quarter of the period under report your Companymade quick recovery in the second and third quarters. The growth could not be continued inthe fourth quarter due to Covid related disruptions. This experience of working throughthe regulatory restrictions on movement of passenger and goods traffic on the roads hasbeen managed effectively by your Company. We anticipate based on the various Governmentinitiatives with regard to management of intra and inter-state movement that there will bea more graded regulation of freight movement as is in evidence during the management ofthe second lockdown.
The tire replacement segment continues to dominate the tire market. With rising cost offuel and the inability to pass on costs to customers in both the freight and passengersegments there will be even stronger emphasis on management of tire costs. This webelieve will strengthen the tire retreading business.
I am confident that cost efficiency that has been the focus of your Company combinedwith increasing emphasis on environmental concerns around disposal of tires willstrengthen tire retreading growth. The norms proposed recently to align Indian standardsfor new tire safety with international standards towards safer tires will have an impacton the tread industry also to move with International standards thereby impacting largeunorganized sector engaged in tire retreading. This should bode well for improved consumerawareness for higher quality retreads and improved realization for your Company. This willalso create new opportunities for tire recycling which your Company is uniquely poised tocapture.
In addition to our pan-India presence with an extensive network across 20 states wehave started to strengthen our presence in overseas markets as well. We are alsoleveraging fleet owner relationships through our subsidiary Shipnext Solutions (P) Ltd alogistics technology company. Your Company continues to explore newer avenues to continueto enhance shareholder value such as higher performance tire retreading materialscontracts to retread for fleet tire management services and also the introduction of newproducts under the Eastern brand.
Our people have managed the most challenging business environment of the year gone byand I thank our employees and the supply chain and dealer network for showing tremendousresilience through this trying time. I am confident that we will continue to innovateexperiment and improve with the dedication and determination of our people. During theyear we have identified areas of operations in your Company that could benefit from theinfusion of talented and experienced management professionals and will induct fresh talentto propel your business towards financially sustainable growth in the coming years.
I take this opportunity to thank the Board for their support and continued guidance.Most importantly I would like to thank you our shareholders for your overwhelming trustand confidence and for being an integral part of our journey.
|With warm regards |
|Navas M Meeran |