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Kalpataru Power Transmission Ltd.

BSE: 522287 Sector: Infrastructure
NSE: KALPATPOWR ISIN Code: INE220B01022
BSE 00:00 | 28 Sep 396.35 -0.55
(-0.14%)
OPEN

392.00

HIGH

399.05

LOW

389.45

NSE 00:00 | 28 Sep 395.65 -0.80
(-0.20%)
OPEN

396.60

HIGH

398.80

LOW

389.45

OPEN 392.00
PREVIOUS CLOSE 396.90
VOLUME 14844
52-Week high 495.95
52-Week low 228.00
P/E 12.03
Mkt Cap.(Rs cr) 5,902
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 392.00
CLOSE 396.90
VOLUME 14844
52-Week high 495.95
52-Week low 228.00
P/E 12.03
Mkt Cap.(Rs cr) 5,902
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kalpataru Power Transmission Ltd. (KALPATPOWR) - Chairman Speech

Company chairman speech

Chairman's Message

Our response to the crisis was a testament to the strength of ourculture and the resilience of our people. We acted swiftly and responsibly to ensure thatwe protected the interests of all our stakeholders.

Dear Shareholders

The year 2020-21 has been one of the most testing year in our 40 yearhistory. The Covid-19 pandemic severely impacted societies economies and industries. Thebusiness environment remained volatile and challenging particularly affectingconstruction activities production lines work force availability and supply chainsacross the country and in many parts of the world as well. Our response to the crisis wasa testament to our inherent strength and the resilience of our people. We acted swiftlyand responsibly to protect the interests of all our stakeholders. Our priority remainedthe health and safety of our employees suppliers and subcontractors as we supportedthose working on the front line in the fight against COVID-19. We remain grateful to thedynamism and responsiveness demonstrated by our employees in challenging circumstances.Through their professionalism dedication and commitment in supporting our customers KPTLhas delivered a strong performance reinforcing our leadership position in the EPCindustry. This resilience has been developed and embedded over several years wasthoroughly tested by the unforeseen events of 2020-21. Throughout the last twelve monthsefficient organizational structure robust technologically backed systems and processesand strong financial capacity have helped KPTL to navigate a constantly changing andcharacteristics allow us to continue to create value for society in general and for ourshareholders in particular as demonstrated by the results obtained in 2020-21 in terms ofoperational financial and social performance.

2020-21 PERFORMANCE

Our performance this year is further evidence of KPTL's resilienceand commitment to driving disciplined growth. The Company also undertook concerted effortsto overcome the challenges posed by the Covid-19 pandemic. It enabled us to improveturnover obtain profits secure orders and reduce debt despite an adverse businessenvironment and pressure of mounting commodity prices. Our consolidated revenue grew by 2%to reach RS. 12949 Crore in 2020-21 with EBITDA and PAT of RS. 1477 Crore and RS. 662Crore respectively. We also continued to maintain healthy margins with EBITDA margin at11.4% and PAT margin at 5.1% during the year under review. Our heightened focus on timelyclosure of projects and optimising capital employed along with cash flow focused workingcapital management has helped us to reach a position of financial strength. We approacRs.2021-22 with a robust balance sheet as our consolidated net debt has declined by 33% toRS. 2304 Crore as on 31st March 2021 with a debt to equity ratio of 0.62times. We have maintained a healthy and well-diversified consolidated order book of RS.27900 Crore at the end of 31st March 2021. At KPTL standalone level We havedelivered revenue of RS. 7671 Crore with PBT growth of 25% and PAT growth of 33%. We havemaintained EBITDA margin of 10.5% in 2020-21. We continue to fortify our Transmission& Distribution (T&D) business in India as well as in foreign countries. We haveexpanded our T&D business and entered into five new countries across Asia LatinAmerica and Africa. The acquisition of Fasttel Engenharia in Brazil at an equity value ofUSD 8.8 million for a controlling stake of 51% was a major highlight duringenvironmentthe year. Our subsidiary in Sweden – Linjemontage registered a phenomenal revenuegrowth of 84% YoY and 133% growth in profitability. We also successfully commissionedKohima-Mariani Transmission Ltd. (KMTL) within stipulated timelines.

We continue to see a lot of interest in railways and oil & gasbusiness both in the domestic and international markets. In oil & gas business wehave also successfully passed evaluations and technical bids to pre-qualify for EPC worksin Middle East Africa & Asia.

We have expanded our T&D business and entered into five newcountries across Asia Latin America and Africa. The acquisition of Fasttel Engenharia inBrazil was a major highlight during the year.

We remain confident to expand our railways and oil & gas businessto newer geographies in coming years.

Both our subsidiaries - JMC and Shree Shubham Logistics recorded robustperformance during the year under review. JMC closed with an impressive order book ofclose to RS. 14009 Crore with net debt reducing by 30% Y-o-Y to RS. 512 Crore. JMCrecorded revenue of RS. 3689 Crore in 2020-21. For JMC . These 2020-21 has been one ofthe best years in terms of order inflow and it has received orders worth RS. 7916 Croreconsisting of a healthy mix of projects pertaining to Buildings & Factories (B&F)and infrastructure. JMC has also successfully made inroads in the international marketleveraging our scale and know-how in various geographies. With increasedorderflow fromboth domestic and international markets we are constantly focusing on improvingprofitability increasing margins reducing debt and enhancing return ratios.

In an industry which is traditionally behind the game on digital toolswe have always been at the forefront and ready to take big step forward as far as digitalpreparedness is concerned. We are harnessing the power of technology to deliver businessexcellence. Various state-of-the-art technologies such as AI automation and otherdigital processes platforms and applications are enabling us to enhance our businessprocesses drive efficiency and deliver superior quality work in a highly dynamic businessenvironment.

On the other hand Shree Shubham Logistics recorded revenue growth of13% Y-o-Y to RS. 149 Crore with EBITDA margin of around 31% in 2020-21. SSL operationsregained profitability given focus on hired warehouse model and optimisation ofoperational and cost.

STRATEGIC EVOLUTION – FOCUS ON CORE BUSINESS DIVESTMENT OF ASSETS& DIGITALISATION

Despite the uncertain and challenging business environment we remainguided by our values and core priorities and we achieved real progress on our strategicinitiatives in 2020-21. Over the past two years we started to implement the next phase ofour strategic evolution with a purpose to drive incremental sales and value by drivinggrowth in our core EPC businesses with a clear vision to be amongst the top players inthe global EPC market. Simultaneously we moved ahead with our strategy to exit theT&D developmental asset portfolio and other non-core businesses. This year has markedthe completion of significant strategic milestones for KPTL. We have successfullyproceeded with divestment of our T&D assets (Jhajjar KT Transco and AlipurduarTransmission) and announced the acquisition of Fasttel Engenharia. With the acquisition ofFasttel a niche Brazilian EPC Company in the T&D space we have enhanced our marketposition in the Latin American market and accelerated the adoption of our localisationmodel offering greater scope to provide EPC service in high potential markets. It alsostrategic advancement which further aligns KPTL with the key megatrends in the global EPCmarket. The acquisition of Fasttel provides KPTL with access to one of the largest T&Dmarkets in the world. KPTL has a long heritage of relying on its ability to respond andevolve with the times adopting key technologies. In an industry which is traditionallybehind the game on digital tools we have always been at the forefront and ready to take abig step forward to ensure digital preparedness. We are harnessing the power of technologyto deliver business excellence. Various state-of-the-art technologies such as AIautomation and other digital processes platforms and applications are enabling us toenhance our business processes drive efficiency and deliver superior quality work in ahighly dynamic business environment. This digital preparedness along with robust riskmanagement practices remain an integral part of our business strategy and has helped us toprepare for any potential disruption in operations something that was put to good use atthe start of the crisis when we executed our contingency plans. While the short-termeconomic outlook remains uncertain due to the ongoing pandemic we remain committed toadvancing our ambitious yet prudent growth strategy. Our objective of becoming a leadingEPC player globally remains unchanged and seems well within our reach. KPTL'sperformance confirmsis built on a solid foundation of clear values a strong balancesheet diversified global business model and trusted brand. We remain focused on our coreEPC business – our core competence – and are adapting organic and inorganicgrowth strategies to take our major business verticals to emerging and high potentialmarkets across the world. We are innovating more than ever and investing in our peopletechnology and operations to develop solutions that take advantage of emerging trends inthe industry.

PURPOSEFUL BUSINESS – ENHANCING SHAREHOLDER VALUE ANDSUSTAINABILITY

A purposeful business is fundamental to both our operations and ourstrategic direction. We are firmly focused laying the foundations of a purposeful businesswith shareholders society and environment as key elements. Since the establishment ofKPTL responsible behaviour has been core to everything we have done from offeringhealthcare to the local community at Kalp - Seva Arogya Kendra to most recently going outinto the community in India to help deal with the health crisis – ethical andsustainable business practice has been in our DNA and our culture right from the start.

The KPTL Board is mindful of the importance of shareholder valuecreation and as a result of the strength of the Group's balance sheet the proceedsfrom divestment of T&D assets and its confidence in the strategy and outlook for theGroup has returned over RS. 320 Crore to shareholders through buyback and dividends in2020-21.

Continuously throughout the pandemic KPTL has strongly stood with itsstakeholders during this unprecedented time. We strived to strengthen the public healthsystem and subsequently supported the most vulnerable sections of society. Theinterventions included setting up of a dedicated COVID-19 hospital in Thane engagementwith NGOs to provide over 50000 meals to vulnerable communities distribution of medicalequipment to government hospitals providing masks sanitizer and PPE kits to frontlineworkers across India and giving dry ration kits to migrant and daily wage workers. TheCompany also made contributions to Chief Minister Relief Funds of various states and PMCares Fund to support the government machinery to fight the pandemic. We ensured all ofour employees and their families thousands of them across project sites and with limitedaccess to healthcare facilities received our complete support in case of medicalemergencies. We are facilitating vaccination drive for employees at our corporate officesand project sites. Simultaneously throughout the pandemic we have worked closely withour vendors subcontractors and supply chain partners to minimise the disruption caused byCOVID-19 by ensuring adequate liquidity in the system through timely processing ofpayments and effective implementation of our business continuity plan. The KPTL Board ismindful of the importance of shareholder value creation and as a result of the strength ofthe Group's balance sheet the proceeds from divestment of T&D assets and itsconfidence in the strategy and outlook for the Group has returned over RS. 320 Crore toshareholders through buyback and dividends in 2020-21. Going forward the Board aspires touse the free cash flow to fund its business growth self-finance bolt-on acquisitions andincrease shareholder returns. With rising concerns about climate change and resourcescarcity we are progressively moving towards a more eco-friendly approach of conductingbusiness. Right from reducing our dependence on non-renewable sources of energy toadopting eco-friendly business practices accelerating digitisation & automation ineach of our processes and enhancing greener spaces within communities we recognise howsmall measures can make a big remain committed to foster sustainable operations across ourbusiness verticals and enable the well-being of communities in which we operate.

LOOKING AHEAD

Time and again at KPTL we have demonstrated our resilience and stoodtall against all odds. Despite uncertainties ahead especially after the second wave ofCovid-19 has caused considerable damage to human health we remain confident aboutaccomplishing our goals. As we continue to scale up operations in India and abroadrelying on organic and inorganic growth strategies we are optimistic about increasing ouroperational ciency and improving our top and effi bottom line. Before I conclude I wouldlike to express my heartfelt gratitude for our shareholders business partners customersand other stakeholders for their continued trust and support in our abilities to drive theorganisation forward. I remain thankful to everyone in the organisation for theirinnovative capabilities and tremendous enthusiasm to tide through difficult times.

Regards
Mofatraj P. Munot
Executive Chairman

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