It is with immense gratitude and hope that we ink these sheets with our thoughts. Wehope that you and your loved ones are safe and doing well. Gratitude to all those who havecontributed to build Kajaria to what it is today a robust business enterprise that hasovercome multiple challenges yet continued to deliver sustainable performance. And hopefor making
Kajaria increasingly resilient over the coming years.
We lived upto our ethos of looking at challenges in the eye. We pushed harder even asstrong headwinds persisted. The big positive of 2019-20 was that we got back to winningways towards the tail end of the fiscal with a spurt in sales volume but then thepandemic hit the Indian landmass.
The resilient India is not new to challenges. It has faced them braved them andovercome them with stature and poise. Concurrently the average Indian is braving the oddsto give the Indian economy an all-out push. India's backbone its rural economy continuesto thrive. Harvest has been good. Rainfall has been good. As a result India has notexperienced any supply shortages in farm produce or milk supplies. As a logical falloutconsumption in lesser-known towns has been picking up.
Moreover commercial activity is happening. The services sector is in overdrive. Theurban Indian is out on the streets. The people of India have accepted the pandemic as anyother health ailment which is here to stay for some time.
Our simple barometer of commercial activity is the GST collection. In the first threemonths of 2020-21 when the lockdown was the most stringent India collected GSTequivalent to its historic two-month average. So when we look at this objectively Indiaappears to have lost normal business for a couple of months at worst. In business thesethings happen.
India will resume its progressive journey with a stronger stride. This is because theworld is looking at India as an important base in the global supply chain cycle.
This intent promises to create innumerable opportunities for India Inc. both over themedium and the long term.
Tiles sector has already been struggling over the past 3-4 years on account of issueslike real estate sector slowdown demonetisation adoption of
RERA GST implementation and the NBFC funding crisis. The demand took a further hit inthe month of March 2020 with the nationwide lockdown announced by the Centre due to suddenoutbreak of Covid-19.
Exports have significantly opened up for tile players since the mid of the lastfinancial year. This is largely attributed to a) USA imposing ADD on Chinese tiles exportsand b) anti-Chinese sentiments. Further with Covid-19 impacting major exporters of tilesi.e. China Italy and Spain we believe the momentum in exports is going to elevatefurther.
Moreover the recent imposition of anti-dumping duty by Gulf Co-Operation Council (GCC)from June 2020 has witnessed limited impact so far.
Also the pricing environment is likely to remain stable with Morbi players witnessingan increase in costs driven by higher labour costs due to labour migration post Covid-19breakout.
From Kajaria's perspective we are back to business. The company implemented necessaryprocedures to ensure continuity of operations with a safety-first environment our toppriority is the health and safety of our people. Our plants are operating at 85-90%utilisation. Almost all our dealers are at work. Our collections have been strongenhancing our liquidity war chest.
Kajaria is a battle-hardened warship. It is a company that has delivered value to itsstakeholders even as it weathered the challenges of a beleaguered real estate ecosystemthe deepening NBFC crisis and demonetisation for years.
The pandemic has presented a rare but narrow window of opportunity to reflectreimagine and reset our world. This health scare and the social distancing has brought tothe fore digital transformation which is now business imperative.
In aligning with the new normal we are investing in SAP S/4 HANA Digital Core tostreamline our business processes and enable knowledge-led decision-making across variousfunctions. As such even as we spread wide we will emerge as emphasis.Inthisuncertain amore cohesive and streamlined organisation.
While we have absorbed the reality that our financial performance in 2020-21 will bemarginally lower than what it was in 2019-20 our determination to surge ahead will be inoverdrive.
In closing we would like to thank the Board for guiding us to execute ourresponsibilities in the best possible manner. We would like to extend our appreciation toour team for their relentless efforts in facing and overcoming challenges to grow ourrespect and stature in the business world.
Our deep appreciation to our shareholders for their confidence and support. We alsoplace on record our gratitude to our other stakeholders vendors dealers retailerscustomers bankers and Central and State government authorities for their consistentsupport and assistance in our journey. We solicit your continued co-operation in helpingKajaria move into a brighter future.
|Warm regards |
|The Management Team |