It give me immense pleasure to connect with you all for KabraExtrusionTechnik's (KET) 39th Annual Report for the financial year ended FY22.
India continues to a bright spot amongst the global economy with 8.7%growth in 2021. The Indian economy is expected to register 7.4% growth in 2022 owing tonon-conducive global macro-environment coupled with policy tightening. The Union
Budget 2022-23 capex target surged by 35.4% from 5.54 lakh crore to7.50 lakh crore with effective capex for FY23 is breaching 10.7 lakh crore mark.
India's Atmanirbhar strategy Production Linked Incentive (PLI)schemes and macro-economic trend of China Plus One' presents mammothopportunity in the manufacturing sector propelling the economy to achieve US$5 trillionlandmark. The Government's PLI reward systems in 14 sectors with capital allocationof 30 lakh crore will spur 60 lakh new job creation in India.
I am happy to state Kabra ExtrusionTechnik achieved its highest evertop line in FY22 despite of a challenging macroeconomic scenario. The Company revenuessurged by 46.9% YoY to 406 crores led by growth in both Extrusion and Battrixx Business.KET's Battrixx vertical started to make meaningful contribution to the overallrevenue. The revenue mix of Extrusion Business and Battery Division stood at 73:26 in FY22vis-?-vis 99:1 in FY21. EBITDA grew by 34.2% YoY to 55 crores. EBITDA margin stood at13.5% in FY22. KET's PAT surged by 23.3% YoY to 30 crores. PAT margin stood at 7.5%during FY22. KET rewarded its long-term stakeholders with a dividend of 3 per share (60%of Face Value of 5) in FY22.
The plastic extrusion machines industry is estimated at US$ 6793.9million in 2022. It is likely to touch US$ 10754.4 million in 2032 growing at 4.70% CAGRduring 2022-32 period. There has been an increase in consumer preference towards minimalcarbon emission. The Government's allocation of 60000 crore towards Jal se NalYojana' and 40000 crore for Housing for All' in the Union Budget 2022-23is likely to benefit the extrusion machine manufacturers.
India's oil bill stood at three years' high at US$ 119.2billion in FY22 from US$ 62.2 billion in FY21 translating to 1.8% current account deficitof US$ 43.81 billion in FY22. According to Council on Energy Environment and Water (CEEW)research study India would potentially trim its oil import bill by US$14 billion providedEVs take 30% share in 2030.
EVs had mere 1% of total vehicle sales at 0.2 million units in CY21. EVsales are expected to swell to 39% at 9.1 million units of total automotive sales by CY27with majority growth estimated from the travel segment.
The electric car costs ~2x than its Internal Combustion Engine (ICE)counterpart. The e-buses costs ~1.5-2x higher than the diesel variant. Electric twowheelers and Electric three wheelers cost are at par with their ICE model thanks to thegovernment policies and support. The Lithium-ion (Li-ion) powered EV battery cells aremainly imported. The souring inflation plus adverse US$/INR spread hurts the Indian Li-ionbattery importers. Additionally India's battery capacity stands at 736GWh in 2021projected to surpass 1TWh in 2023.
India has framed progressive policies for promoting and implementingclean energy-based future. There is an EV policy in 20 states with draft or final levelstate policy. The Ministry of Housing and Urban Affairs (MoHUA) notified that theresidential and commercial complexes will have to allot 20% of their parking space for EVcharging facilities. The Ministry of Finance has rationalised the customs duty for allcategories of vehicles battery packs and cells in 2019. The GST rates on the purchase EVshas trimmed from 12% to 5%. The Union Budget 2022-23 battery swapping policy will boostthe setting up of charging stations for electric vehicles through subsidies andincentives.
The Company has been setting new benchmarks in plastics extrusionindustry through its latest R & D techniques. The Company has numerous processescatering the market requirements of low power consumption high output maintenance freeand user friendly Plastics Extrusion plants and machineries. KET constantly makesproactive efforts for developing a wide range of extrusion lines and allied products. TheCompany is confident to implement its key strategies thereby enabling to achievelong-term sustainable growth. KET focuses to invest in technology and increase its reachin the promising markets. The Company will navigate the short to medium term challengeswith its robust product portfolio. Battrixx's state-of-the-art facility at Chakan inPune is home to highly-skilled and experienced R&D validation and testing teamsdriven by industry best practices. Currently the Company is getting traction frome-two-wheelers OEMs. KET looks forward to leverage its expertise in two wheelers segmentand foray into e-three-wheeler space. The Company targets to achieve 100% localizationlevels in Battery Management System (BMS) and other auto-components. KET's R&Dteam is working on battery pack models for e-two-wheelers e-three-wheelerse-four-wheelers and electric bus.
KET plans to add 5 additional Cylindrical and 4 Prismatic battery packproduction lines. It will enhance the annual production capacity from 100000 batterypacks to 700000 battery packs by end of FY24. KET's business outlook for both thesegments looks robust for the coming years.
I would like to extend my gratitude to all esteemed stakeholders of theCompany namely shareholders creditors bankers suppliers customers and society. I amalso grateful to our human capital' for their unwavering passion innovationand continual support towards the Company's long- term goals and vision. I sincerelythank the Company's Board of Directors for their guidance and valuable inputs. Ifirmly believe that KET has just scratch the surface and our best performance will bedelivered in the coming years.
| ||Yours Truly |
| ||(S.V. Kabra) |
| ||Chairman and Managing Director |
| ||DIN:00015415 |
|Date:10th May 2022 || |