The outbreak of COVID-19 pandemic has taken the world by surprise. The fear of unknownlockdowns and travel restrictions took a toll on global economy. The impact on the Indianeconomy was even more pronounced due to stringent lockdown across most of the firstquarter of FY 2020-21 with staggered exit through the year. Almost all sectors werenegatively impacted barring those that fell among essential categories.
While the social and economic impact of the event will continue to be felt for sometime it also gave us several lessons to learn from. It reminded the importance of sharingsocial and economic benefits for inclusive growth the need to be future-ready and moreimportantly that of resilience and agility in overcoming any crisis. As a long-termfocussed organisation we will continue to embed these aspects into our business model todeliver value sustainably to all stakeholders.
Performance review - FY 2020-21
I am delighted to share with you that despite challenging conditions and losingproduction for almost the entirety of Q1 FY 2020-21 we delivered a solid performance. Ourrevenues grew by 44.83% to Rs_88.24 Crores in FY 2020-21.
The growth was driven by increased demand for our basic clothing products as thepandemic triggered a market shift from fancy clothing which are discretionary items tothis segment which are more of essentials. This also gives us confidence on the longevityof our business given that our product line will continue to be in demand irrespective ofcycles. We remained responsive to the market needs launching several products in line withthe basic trend including new segments in t-shirts shorts joggers and leggings by usinga new range of fabrics and adding innovative printing techniques. We also added newcategories of padded suits for infants printed leggings for girls and sweatshirts forboth girls and boys. Encouraging demand trend was witnessed across each of these segments.
Our sharp focus on reducing working capital cycle by ensuring timely collections andimproving production efficiency and quick movement of finished goods inventory helpedimprove our profitability. Productivity improvement measures by optimising utilisation ofspace man and machinery has further helped reduce per unit production costs. As a resultEBITDA increased by 24% to Rs_17.14 Crores and PAT by 65.80% to Rs_6.53 Crores in FY2020-21.
Unparalleled agility and_resilience
The year saw us demonstrate robust year-on-year recovery supported by our completelyin-house production and ability to maintain high utilisation despite on-ground challengesrelating to pandemic. To meet the growing demand we augmented production by adding 12 newstitching lines giving us an incremental capacity of ~7000 pieces daily. We also added~200 people to support expanding operations putting us among the few companies thatgenerated employment in times when most were getting laid off. This enabled us to fulfilall orders thus enhancing our credibility as a reliable supplier.
We rallied to explore prospects across domestic and export markets and accordinglyimplemented accelerated marketing strategies. Measures like distributing notepads pensbags and other merchandise to our distributors and retail partners were undertaken toincrease our brand presence. In the domestic market we deepened penetration by enteringnew tier II and III cities across Uttar Pradesh Maharashtra Chhattisgarh GujaratRajasthan and Jharkhand. Our distribution network was also strengthened by adding ~20distributors and ~400 retailers.
In the exports business which is primarily in Africa we marked our presence inNigeria by adding new customers. We are now present in Mozambique and Nigeria and plansare underway to increase our stronghold in these regions.
Focussed approach to_growth
At Iris Clothings we have identified a four-pillared approach to drive our businessgrowth.
One we will continue with our strategy of innovation-driven sustained new productlaunches to deepen our presence. Increased emphasis is on the undergarments sportswearand nightwear segment where we see strong growth prospects. Capex to set up dedicated newcapacities and sales team to acquire customers in these segments will be committed as andwhen there are adequate opportunities.
Two continually add new markets in both domestic and international locations. InIndia we are exploring more tier II and III cities. Globally we are targeting newregions in Africa and opening up West Asian markets.
Three capture market share in existing markets with new products and strengtheningnetwork.
Four grow online business. While offline stores continue to be our key focus area theonline business will provide a new dimension and help target new customers in untappedlocations. We already have presence in major e-commerce platforms like FirstCry Amazonand Flipkart which we continue to nurture. Further we are nearing the launch of our owndedicated e-store. Having interactive and user-friendly features it will provide uniqueshopping experience and help enhance our brand equity as well as drive business growth. Adedicated team to manage both marketplace and our e-store sales is on anvil.
Message to the shareholders
I thank all our stakeholders for their trust and confidence in us. The coming years aregoing to be exciting for the Company and we look forward to your continued support. Havingestablished our position as a leading branded kids garment player we are focussed onconsolidating our efforts to build on this stronger foundation and create long-term valuefor all stakeholders.
|Warm regards |
|Santosh Ladha |
|Managing Director |