At the outset I hope you and your family are safe. We are indeed living through veryunusual times. 2020 proved to be one of the most challenging years the world has everseen. The outbreak of COVID-19 pandemic forced the entire world into a lockdown andseverely affected livelihoods and economic activities. India being no exception. Slowdownin the economy was marked by weak rural growth muted investments and liquidityconstraints. These challenges were further aggravated by the coronavirus outbreak towardsthe end of the fiscal year. The external environment did impact our growth but we drewupon our advantages and stood resilient as an organisation.
The post COVID-19 era will pose new challenges as the economy will take some time torecover. Meanwhile a raft of stimulus packages has been enforced by major economies tolimit the economic fallout. In India particularly the mammoth Rs 20 lakh crore reliefpackage announced under the Atmanirbhar Bharat Abhiyan' will help the country tideover the crisis and make India self-reliant.
Your Company has a strong foundation distinct brand recognition powerfulcapabilities and a truly extensive reach. Our smart technology manufacturinginfrastructure and R&D capabilities enable us to develop pioneering products andenrich consumers' lives. By continuing to invest in product innovation brand connect anddistribution reach we are determined to make HPL stronger. Favourable industry dynamicsand government initiatives give us confidence that we will rise to the challenges withresilience.
Our revenue for the year declined by 15.7% to Rs 976.5 crore from Rs 1158.5 crore inthe previous year. The decline is largely attributable to loss of sales in the month ofMarch 2020 on account of nationwide lockdown to curb the spread of the virus. Despitelower revenue operating margins remained largely stable led by saving in material costand other cost control initiatives. Operating EBITDA stood at Rs 124.9 crore as against Rs133.5 crore in the previous year. Profit after Tax stood at Rs 21.9 crore as compared toRs 32.7 crore in FY 2018-19.
Now let me give you an overview of the segment-wise performance.
Revenue of the metering segment fell to Rs 511 crore from Rs 610 crore in the previousyear marking a de-growth of 16.2%. Delay in imports of critical components on account ofCOVID-19 disruption and pending inspection from utilities led to a decline in meterdespatches and sales. Notwithstanding the COVID-19 induced disruption in the fourthquarter the Lighting segment witnessed good traction during the year driven by networkexpansion new product launches and brand building initiatives. Slowdown in end-userindustries and macroeconomic headwinds impacted the switchgear and wires and cablesbusinesses with revenues declining by 16.5% and 40% respectively. Notwithstanding thechallenges we continue to maintain leadership position in the metering and switchgearsegments along with a growing presence in the lighting segment. You would be delighted toknow that we have a healthy order book pipeline of Rs 367.7 crore (net of GST) as of 9thJune 2020 which includes orders for meters with smart communication technologies and withRF and IRDA communication.
Strengthening business dynamics
In FY 2019-20 we had several product launches mostly in the lighting switchgear andmetering segments. Strong emphasis on research and development enables us to roll outdifferentiated products to meet the evolving market needs. In the switchgear segment welaunched products for both domestic and industrial use along with new products in solarcategory. These products are witnessing good demand so far. Going forward we willcontinue to direct our efforts towards introducing products with improved featuresenergy-efficiency and automation.
Since the last few years we have placed strong thrust on enhancing our consumerbusiness by way of aggressive marketing and brand building activities. Focussedinitiatives like continued association with the Indian Premier League (IPL) successfuloutdoor and promotional campaigns regular channel partner meets and incentive programmeshave enabled us to garner significant brand visibility and increase our reach. Along withthis we continue to leverage social media and digital technology for our brandcommunication strategies in order to engage better with audiences.
am glad to state here that we completed the installation of our lightingproducts in more than 100 retail stores across the country this year. All of theseinitiatives
believe will help us expand our network and strengthen consumer facingbusinesses.
Further strengthening our global presence remains a key focus area of your Company. Toattain and sustain on international edge our business presence is more than in 42countries for which we strive to build platform for new and existing buyers by providingcompetitive and innovative products. We intend to leverage our healthy businessrelationships and engage experienced local representatives to grow our overseas saleschannels.
While the current scenario is challenging the long-term market dynamics appear to beattractive. Government's strong thrust on installation of smart meters across the countryis a major step in the right direction and will open tremendous opportunities for us. Weare already witnessing huge in_ux of enquiries and expect more tenders to be floated soon.Moreover the liquidity injection for discoms will help them deal with the financialdifficulties caused by the pandemic and support demand for smart meters over themedium-to-long term. We are well placed in this segment with our comprehensive productsportfolio including prepaid meters and software communication driven meters and strongprequalification credentials.
The government is consistently placing strong thrust on making India self-reliant withnumerous policy reforms such as promoting indigenous manufacturing infrastructuredevelopment rural electrification and augmenting digital connectivity. Under theNational Infrastructure Pipeline Rs 102 trillion has been earmarked for infrastructureover the next five years. These initiatives along with favourable structural drivers likerapid urbanisation rising incomes and increasing consumer awareness will drive demandfor our products.
Overall the social and economic implications of the pandemic are going to be felt fora long time. Against this backdrop we remain agile and responsive to capture the evolvingbusiness trends. Our focus is on enhancing our revenues and profitability while seizingthe enormous opportunities to drive sustainable growth.
On behalf of the Board I would like to thank all our esteemed stakeholders for theirimmense faith and trust reposed in us. It is a matter of pride for us to partner India'sjourney towards self-reliance with our robust manufacturing marketing and manpower.Together I am confident that we will sail through these testing times and emerge as astronger organisation.
|Warm Regards |
|Lalit Seth |