FY2020-21 has been a challenging year for your Company. The COVID-19 pandemic and itsrelated restrictions and disruption of supply chains adversely impacted our operations inthe first half of the financial year. Though significant improvement was witnessed in thesecond half of the financial year with 100% capacity utilization and strong profitabilityhigher input costs continued to rally and controlling the product pricing. This inaddition to ban on imports of PET bottle scrap and flakes led to significant pressure onend product pricing mechanism.
Your Company had to bear a production loss of around 65% in the first quarter of theyear. It was as early as middle of May 2020 that we began re-starting our operations in aphased manner. By July we had our plants firing from all cylinders with higherutilization providing us with superior operating margins.
Our focus on premiumisation and innovative and value-added products have helped usmaintain EBIDTA margin levels at 11.28% in FY21 despite the dampened sales due to slowdemand and COVID-19 related challenges. During the year your Company reported a PAT ofRs. 45.51 crore and revenues of Rs. 751.14 crore. Net worth stood at Rs. 518.83 crore inFY21 as against Rs. 477.69 crore in FY20.
The macro economic factors such as economic output unemployment rate and inflationcontinue to concern world over as newer variants of COVID-19 threaten with rise of freshinfections. Your Company has been cognizant of the risks and has been taking appropriatesteps to reduce the impact of the pandemic and realise better value and growth.
A major fire incident at our Kanpur unit caused by a mechanical failure in themachinery has led to loss of two production lines while the remaining production linecontinues to be operational a total loss of Rs. 25.13 crore (net of taxes) isestimated due to it. Your Company's plants are fully insured and currently the insurancecompany is assessing the loss. As part of our restoration plan of this Kanpur unit we areexploring to put up recycling capacity of other plastic scrap in addition to PET scrap.
To achieve our goal of being Future Proof we are building a robust business model thatwould immune us from unprecedented risks such as the COVID-19 and also enable us tode-risk our business to explore newer boundaries and product segments.
Our goal is to leapfrog into the next decade of growth as a stronger
Ganesha Ecosphere breaking our own record of CAGR of 12% (topline) and 13%(bottomline) achieved in the last 10 years. We aim to improve our free cash flowmanagement and are look at investing into newer markets with facilities and products. YourCompany through its subsidiary has two new facilities in the pipeline including Warangalat Telangana and washing and chips plant in Nepal. The new facility at Warangal isexpected to be operational by Q1FY23 and Nepal plant to be operational by December thisyear.
In our journey to become a premium and sustainable player in the market we have beenstrengthening our R&D capabilities and developing newer value-added products such asantimicrobial products fibres for paper and construction industry micro filament fibremono fibre and biodegradable fibre etc. These products provide great impetus to ourvision of becoming a responsible corporate committed towards converting waste into wealthand exploring the potential to consume alternate or virgin materials to produce the finalproducts and develop new supply chains.
We are constantly adding capacity and diversifying our product mix to keep our growthengine fuelled. In the next 2-3 years we aim to expand our value- added product portfoliofrom 25% at present to 50%.
While the second wave of COVID-19 in the beginning of the new financial year (FY22) hasled to a setback in terms of revived demand and operations in the first quarter thingsare looking up with restoration of the supply chain and demand returning in from secondquarter onwards.
We are also witnessing firming up of prices in the market indicative of the businessnormalcy. For FY22 we expect our operations and profitability levels to improve over FY21both in terms of bottomline and topline.
Moreover the regulatory compulsions in the form of extended producer responsibilityand pledge for sustainability by brands and corporates is expected to create good demandfor the recycled inputs.
In the end I want to thank all our partners and stakeholders for their unconditionedsupport and trust in Ganesha Ecosphere. I thank all our employees for remaining committedand determined in the worst of times as well.
It is our collaborated efforts that have enabled us to sail through the crisis and madeus emerge stronger.
I am obliged to your unwavering support!
Shyam Sunder Sharmma