OUR VALUED SHAREHOLDERS
I AM PLEASED TO PRESENT THE INTEGRATED REPORT OF YOUR COMPANY FOR THEFINANCIAL YEAR 2020-21.
A challenging year
The year was indeed unique as the COVID-19 contagion ravagedsocioeconomic developments globally. We are living through unprecedented times. When itfelt like the worst was over unfortunately a second wave of Covid again gripped thecountry with even higher ferocity. During this protracted pandemic wish that all membersof Havells' family and the country at large stay safe and follow Covid safetyprotocol.
At Havells we relied on agility and a pragmatic approach to theunprecedented and unforeseen pandemic. In the initial period we focussed on the safety ofour employees dealers and other stakeholders. As in the past during times ofuncertainty the constant communication provides some relief if not the entire solution tostakeholders. We held online townhalls with our workforce dealers and vendors to assuagetheir anxieties while assuring our support in such difficult times. We invoked the spiritof togetherness hope and humanity to be helpful to each other.
I would like to express my sincere gratitude to the entire team fortheir
exemplary contribution and efforts.
I would single out our factory staff the frontline staff supervisorsand supply chain team for their inexhaustible energy to keep going and fulfil deliveriesagainst all odds. They are Havells' Covid warriors and would thank them on yourbehalf.
As business gradually gained traction post lockdown Havells was ableto fulfil consumers' demands through its vast distribution network supported bycontinuity in product supply through inhouse production. We provided digital solutions notjust to the trade partners but also to our consumers who were able to access our serviceteam through multiple mediums and were provided solutions through audio and videoassistance.
There have been numerous examples set by each function of your Companywhere best results have been achieved this year. Sales supply chain and manufacturinghave surpassed their previous best by improving productivity. We are determined tocontinuously drive Innovation' Growth' and Productivity'throughout the organisation.
Creating delivering and sustaining
Havells has always believed in creating a long-term sustainablebusiness with an innovative product development aspirational brand own manufacturingwell-entrenched distribution network a strong supply chain and a responsive customerservice setup.
Volumes and efficiency were the key during these times and am glad toshare that your Company was able to deliver results because of the investments committedover the years. While one can scamper their way in exploiting access to the tradenetwork success is ephemeral unless backed by solid infrastructure and a value system.
Business sustainability is the key metric for our entry and expansioninto any new category. Sustainability is not confined to Environment Social andGovernance it is in each aspect of the organisation whether it is quality of the productor efficient utilisation of resource in the manufacturing process. For instance we helpcustomers build sustainable homes with our long-lasting high quality switchgear andwires which are the lifeline of any electric
distribution in the house. Similarly we maintain strong liquidity andprudent Capex and Opex mix to retain the nimbleness in the organisation.
We at Havells over the years have continued to take important stridesin playing our part towards a sustainable environment. We have been working steadilytowards conservation and management of water resources by increasing our renewable energyfootprint.
How we performed
The external challenges a weakened macro-economic environment andslowdown in infrastructure impacted demand for electrical goods and affected consumersentiment especially in the first half of the year. Covid-19 led lockdown impacted salesin April and May across the business yet was profound for the Fans and Air conditionerscategories. Despite these challenges havells performed satisfactorily registeringrevenue growth of 11% at Rs.10428 crores during FY2021. Net Profit was Rs.1040 crorescompared to Rs.733 crores earlier. EBITDA was Rs.1565 crores up 52% from Rs.1027 croresin the earlier year. Our EBITDA margins remained at an all-time high of 15%.
Havells a Bellwether
We remain proud of our lineage and the quality of products we churnout. ubiquitous with our established brands - Havells Lloyd Standard Crabtree and Reowe are one of India's most penetrated household brands in the electrical goodsindustry. We are an aspirational brand ranked among the top 5 in every product categorythat we entered during the last two decades. Our vast product range gives us theopportunity to capture demand from both Consumer and Residential as well as Industrial andInfrastructure sector. With focus on home improvement consumers are investing in goodquality
consumer appliances and Havells with its offering is well positioned tocater to varied needs at different price ladders and applications.
Lloyd our consumer appliances business improved its performance ledby ACs washing machines and recently launched refrigerators. It's a journey whereinwe are constantly implementing fresh ideas including expansion of product portfoliodistribution network increasing in-house product development and better consumerawareness. We remain positive on industry growth and Lloyd progression on key parameters.
After setting a strong foothold in the urban markets Havells is nowreaching the heartland by setting up a distribution network in semi-urban and ruralmarkets with our focussed initiative Rural Vistaar'. The rural channel was moreresilient during the pandemic and Havells had a disproportionate growth from rural areas.
Suitable adoptions have been done to the product range to make it morerelevant and affordable to the relevant market. We expect Rural channel to be a meaningfulcontributor in medium term.
Electrification is a Megatrend driving our growth creating newopportunities to participate in the infrastructure development and demand emanating fromsemi-urban and rural markets.
The recent impetus to AatmaNirbhar Bharat' augurs well forintegrated manufacturers like Havells. The Government's push towards large capitaloutlays uptick in the private capital investment cycle supported by low interest rateregime too will provide the much-needed stimulus. This will provide the necessaryfundamental transformation in balancing our
excessive dependence on consumption growth to investment growth.
Consumer preferences are changing too moving towards reliable andquality brands thereby creating a unique opportunity for organised players drivingpremiumisation with products which are feature led energy efficient and have a digitalfootprint.
PHYGITAL' is a new reality where physical (offline channels)co-exist with digital (online) channels. The Alternate channels (Online MFR Canteenetc.) are expected to gain relevance over the years. Havells has nurtured strongrelationships with these channels which would reflect in additive growth in the mediumterm.
The challenge related to inflationary trends in commodity and thesecond wave of Covid-19 might affect consumer sentiment in the shortterm. However we areconfident of the medium to long-term demand trends. With strategic building blocks inplace - strengthening the core broadening our portfolio and investing in people andprocess capability - we are looking at improved and sustainable growth.
Last fiscal we gained market share across categories along withincreased distribution penetration and Rural Vistaar. We will continue to strengthen ourcredentials in product development emerging consumer trends and serving throughomni-channel network. We believe in secular growth potential of India and Havells.
I wish you health and safety and urge you to follow Covid protocol.
Anil Rai Gupta
Chairman and Managing Director