We trust you and your families are safe.
FY21 has been one of the most eventful years in living memory. The Covid-19 impact onlives and livelihoods can be regarded as one of the most significant black swan events ofour time. Through these tough times we have witnessed remarkable resilience of our fellowIndians government responsiveness and multi-faceted co-operation much of whichhave changed the way we live and interact.
FY21 was a year of contrasting halves. The first half witnessed economic erosion. Thesecond half saw an equally remarkable recovery assisted by the efforts of the Governmentand the banking sector. The story for us at Kajaria was largely similar.
Our performance remained tepid in the first half owing to subdued businessopportunities consequent from dampened consumer confidence. In the second half of thefiscal demand re-surfaced steadily owing to the buoyant Tier II and III towns as theyemerged as activity pockets. Supply on the other hand was lower owing to reducedpresence of the informal sector a number of players increased their focus on addressingexport opportunities emanating out of new and large markets.
Hence increasing volumes coupled with our cost optimisation strategies resulted in asatisfactory performance. Revenue from operations stood at B2781 Crore in FY21 againstB2808 Crore in FY20 a marginal decline of 1%; Net Profit grew by 21% over the previousyear. We surpassed the budgets set at the beginning of the year with relative ease.
FY21 in one sentence was a dismal start with a remarkable finish.
To the current year: FY22 was a good start but our momentum was constrained by amore fatal and aggressive second wave. What is heartening is that India once again cametogether to fiatten this curve in a shorter period than the first wave. Unfortunatelythough the losses were more painful. Even as we pen our thoughts the nation has opened ina phased manner with an aggressive push for inoculating its people which holds thepromise of reducing economic adversity from a probable third wave.
Barring this roadblock FY22 appears to be promising with India expected to report aGDP growth in excess of 9%. This positive resurgence is expected to provide interestingopportunities for India Inc. across sectors.
This time around metros urban and Tier I cities are expected to spearhead theresurgence. A number of projects which were stalled in FY21 are expected to commence inFY22. New avenue of growth such as Data Centers and organised warehousing projects areexpected to create demand. The pent-up demand from Tier II and III towns should surfacetowards the second half of the current year.
Moreover the informal sector should continue to look West - towards solidifying itspresence in the new and large market destinations namely the US the UK and Europe providing a healthy opportunity for the branded players to gain market share in thedomestic market.
The pandemic has opened interesting growth opportunities beyond the domesticboundaries. As global consuming markets are working on strengthening their supply chainwith a China+1 sourcing strategy they are considering India as reliable and dependablesupplier.
We assure our shareholders that our Brand our Team and our Balance Sheet will drive usto outpace the industry.
Over the medium-term: The way we look at it is that the pandemic is not a roadblockto India's resurgence it has only delayed it by a period of time. The positives thatIndia holds remain intact. The focus to becoming better has only sharpened. The policyimpetus to catch up on the time lost will be more aggressive. As such opportunities goingforward will only abound.
Having said that the origin of opportunities in our opinion could shift a little.
Over the coming years we expect the accelerated urge to urbanisation will temper down.Tier II and III towns will emerge as new age economy drivers owing to their demonstratedresilience during the health emergency. This transition will attract considerableinvestments in these towns positioning them as new age construction hub. We arereasonably confident of this shift because of the silent change transpiring here.
In keeping with these realities we are augmenting our manufacturing capabilities our three brownfield projects at Gailpur (Rajasthan) Morbi (Gujarat) andSrikalahasti (Andhra Pradesh) which will take our total installed capacity from70.4 MSM to 82.8 MSM. These projects should commence operations by the end of FY22.
We are also strengthening our dealer network further to ensure that we are able toeffectively capitalise on the exciting future and deliver healthy returns to ourshareholders.
Statement of gratitude
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.
Our deep appreciation to our shareholders for their confidence and support. We alsoplace on record our gratitude to our other stakeholders vendors dealerscustomers bankers and Central and State government authorities for theirconsistent support and assistance in our journey.
|Warm regards |
|The Management Team |