It is with great pleasure that I present before you the Annual Report of your Companyfor the financial year ended 201819. Throughout this period we have maintained focus onthe swift execution of our action plan to Enhance our strengths Engage with ourstakeholders and Expand our opportunities. We are confident that as our implementationsgather momentum it will take us on a sustained higher growth trajectory.
As expected the stabilisation of the Goods and Services Tax (GST) has resulted in thewires and cables industry steadily moving towards the organised market from a largelyunorganised market. However the demand for electrical and communication cables remainedmuted during the year due to subdued growth in end-user sectors especially real estateand telecommunications. The natural calamity of floods in Kerala also impacted ourbusiness operations. Notwithstanding this difficult market environment the distinctrecognition our brand commands enabled us to deliver a resilient financial performance.For the full year we recorded 6.2% growth in revenue realising Rs. 3200 crores asagainst Rs. 3012 crores in the previous year. Profit before tax increased by 5.5% to Rs.532 crores for the year as against Rs. 504 crores for the previous year. Profit after taxdeclined moderately to Rs. 344 crores for the year as against Rs. 358 crores during theprevious year. Volatile commodity pricing and unwinding of tax holiday benefits at ourfacility at Roorkee Uttarakhand impacted our margins.
Our state-of-the-art manufacturing facilities have been one of our greatest strengths.We continue to invest in maintaining this strategic edge. We have committed a capex of Rs.200 crores over the next 18 months for enhancing our manufacturing capabilities at UrsePune. This capex is directed towards enhancing production capabilities to meet therequirements of the Solar Power Industry and the Automotive Industry bringing in-housecertain value additions which were outsourced earlier and further expansion of the OpticFiber line. With the resounding results of the national elections progressive governmentpolicies and programmes that were initiated in the past five years the telecom networkexpansion is expected to pick up pace. Among these Bharat Net Digital India and SmartCities projects in particular provide a thrust to digitisation and offer attractivemedium and long-term prospects for the demand of optic fiber.
In the area of electrical wires and cables our wide array of quality products hasenabled us to serve almost every industrial and domestic requirement. Our focus onmaintaining industry-leading portfolio remains unchanged. We will soon be introducing newsolar cables and automotive cables that meet emerging demands of the respective sectors.Also the construction sector which accounts for 60% of our electrical wires and cablesrevenue is poised for strong growth aligned with the government's efforts to boost realestate and infrastructure development. Government projects such as Saubhagya Scheme - aninitiative to provide electricity to all households Power for All and Integrated PowerDevelopment Scheme - which will spur investments to improve transmission and distributionefficiencies Deendayal Upadhyaya Gram Jyoti Yojana to boost rural electrification andHousing for All also augur well for the sustained demand of our electrical wires andcables.
Led by our purpose of growing our new vertical of electrical consumer products andfurther diversify our business we are intensely focussing on getting the distributionmetrics right.
Our strategy is directed towards setting up a robust two-tier distribution model. Thiswill ensure that our home products are available on the store shelves of more retailersacross the country leading to higher sales conversion. Aligned with this strategy wehave commenced on an ambitious plan of enhancing our retail outreach to 150000 from thecurrent base of 30000 by the end of this financial year. To achieve this fivefold strongdistribution target we are deploying industry-best practices and latest technology toolsthat enable us to engage better with our channel partners.
We launched our exclusive retail store - Finolex House - during the year. The launch ofFinolex House is our commitment to the consumers to offer them the whole range of Finolexquality products under one roof. Our target is to set up 50 such Finolex Houses by the endof this financial year. Coupled with expansion of our distribution network the increasedspends we are making towards advertising and marketing will also deepen our brandengagement.
Our greatest thrust is in the realm of digital through a wide spectrum of compellingmarketing content on popular platforms. We are confident that our focussed efforts willmake us a well-recognised player in the fast-moving electrical goods segment and bolsterour revenues from this vertical.
Finolex Cables has a proud history of winning prestigious awards and recognitions forits premium offerings and technologically advanced operations. Adding to our accolades wewere conferred the 'Expert's Choice Award in the category of Electrical Wires and Cables'for the year 2018. This award further reaffirms our commitment of delivering excellenceacross our products.
In summary FY 2018-19 was a successful year as we bolstered our foundation for thefuture. Importantly we did so while staying true to our brand commitment of qualitysafety and reliability. Looking ahead we are confident that your Company is in attractivesegments in which it enjoys a strong competitive position. Our clear strategy ofreinforcing our capabilities will help us seize the opportunities and drive sustainablegrowth and profitability. Finally our strong balance sheet with a net cash surpluspositions us well to grow our business organically as well as inorganically.
We have been keeping a watchful eye for value-accretive acquisitions especially in theelectrical line of business.
Finally I would like to take this opportunity to thank our employees for their hardwork and commitment throughout the year. The success of our business is driven by theenergy they bring to work every day. I would also like to extend my appreciation to ourdistribution partners suppliers customers consumers and our bankers for their continuedsupport; and our valued shareholders for the confidence they have reposed in our Company.I look forward to our continued success in achieving our goals and delivering strongperformance.
Mr. D.K. Chhabria