It is my privilege to share this message as KEI celebrates five decadesof a powerful journey. Over these past 50 years your Company has invested in the rightcapabilities at the right time and at scale comprehensively expanded its offeringsthrough innovations on a continuous basis and reached out to new geographies whilecontinually strengthening its presence in India. We have responded to the promise of newtechnologies emerging opportunities and intense competitive pressures. It is a matter ofimmense pride that today KEI is counted among India's top three wires and cablesmanufacturers a trusted EPC partner for nation building and has an impressive globalfootprint. The credit for our eventful journey belongs to all our stakeholders - thank youfor your support on this journey.
During FY 2017-18 the Indian economy was characterized by resiliencewith several transformative policy changes seeing the light of day. Most important amongthem was the implementation of the Goods and Services Tax bringing 29 states under onetax regime. While the country saw short-term pains due to the disruptive nature of thetax with Gross Domestic Product (GDP) growth remaining subdued at 6.6% as compared to7.1% clocked in FY 2016-17 the long-term gains I believe will outweigh temporaryshortfall. India continues to be a strong stable economy with several internationalinstitutions maintaining a positive growth outlook taking into consideration theGovernment's reformatory agenda. Infrastructure continues to be amongst the toppriority for the Government and this should have a cascading effect on other sectors ofthe economy.
Financial and Operational Performance
I am extremely delighted to report another year of stellar performanceby your Company. We reported 29% overall growth in turnover with Net Sales increasingfrom Rs 2666 Crores in FY 2016-17 to Rs 3446 Crores in FY 2017-18.
What makes our performance even more compelling is the fact that wehave been able to achieve strong growth in each of our business verticals: RetailInstitutional and Exports. Our business is now well-diversi_ed by products segments andmarkets underscoring the success of our strategy in capturing growth opportunities acrossverticals and building a stronger de-risked entity. Further robust growth in everyvertical has enabled better utilization of our capacities leading to better margins. PATfor the full year grew by 54% on an annual basis while EBITDA stood at Rs 348 Crores asagainst Rs 279 Crores in the previous year.
Our world-class infrastructure has been pivotal to our dynamic growth.Further building on our manufacturing strengths we have completed the first phase ofexpansion of our new facility for LT cables at Pathredi Rajasthan. The second phase ofexpansion of the facility is in progress. After the completion of the second phase ofexpansion of our facility your Company will be able to drive output amounting to Rs500-550 Crores annually. We have also commenced expansion of our HT capacities at the sameunit expected to be commissioned by early next year. Our intense focus on augmentingscale we are con_dent will enable us to generate significant value from the market.
Strengthening Retail Growth
The adoption of impact branding measures such as television anddigital media advertisements and third successive year of sponsorship of the IndianPremier League (IPL) Cricket tournament have enabled us to drive strong brand visibility.In equal measure we continued the thrust on strengthening our distribution network. Weare doing this through a two- pronged approach: addition of new channel partners andexpansion of business from existing partners through several schemes. Our focused effortshave rewarded us well. Today Retail is an important contributor to our overall sales. Anadded advantage with this vertical is that it ensures positive cash flows in theorganization.
The Retail segment offers significant prospects propelled by increasingurbanization and a growing economy. We will continue aggressively with our branding andmarketing strategy to capture a greater share of the market. Also GST has narrowed theprice differential between the organized and unorganized segment and also enabled us toreduce transit time and logistic costs for goods delivery. This should enable us toenhance our retail penetration.
We are pleased to share that as part of our 50-year celebrationsseveral programs were held during the year which helped deepen connect and relationshipwith our channel partners. It is also an opportune time to acknowledge the contributionsof our channel partners towards helping KEI emerge as a market leader. We see great futurefor this collaborative partnership. Going forward we will continue to demonstrate thesame level of commitment and transparency to ensure our mutual success.
Continued Institutional Success
Our ability to provide customized power cable solutions has enabled usto win contracts and respect from leading institutional customers across sectors.Additionally forward integration of our cable business has led us to offer EPC servicesin the _eld of power transmission and distribution. We have recently commissioned ourproduction line for 400 kV EHV cables a manufacturing capability powered by onlyselect Indian companies. During the year leveraging these competitive differentiators wecontinued to build on our institutional performancewith both EPC segment and EHV salesrecording robust growth.
Going forward our focus is to maximize the opportunities given theGovernment's intense focus on infrastructure development. Power railways roads andpetrochemicals sectors in particular offer considerable opportunities. The Government isencouraging investments at the transmission and distribution level to boost access toreliable and continuous power supply through schemes such as Deen Dayal Upadhyaya GramJyoti Yojana (DDUGJY) and Integrated Power Development Scheme (IPDS). Additionally inline with the Supreme Court directive to reduce emissions as per BS-VI normspetrochemical companies are going for plant modernization along with plant expansionincreasing the demand for cables. The real estate sector is also beginning to show greenshoots of revival. With our proven capabilities in executing large and complex turnkeyprojects all the above sectors offer attractive opportunities to boost our EHV Cable andEPC business.
KEI's strong growth in the global arena over the last _ve decadesin a dynamic industry is indeed a worthy achievement. What has helped us to sustain ourperformance is our ability to meet stringent pre-quali_cation parameters and key approvalsfrom major testing houses based abroad. Careful selection of geographies and projects hasenabled us to replicate our success on scale. Along with this we have always kept ourcustomers at the centre of our product development strategy. Product customization hasenabled us to meet niche demands of clientele across industries. During the year exportsmaintained its positive growth momentum exemplifying the global acceptance for ourproducts. In the current year we will continue to fortify customer relationships andenhance export revenues through setting of new of_ces and product innovation.
We have followed our vision and built on our strengths at each step ofour journey. Our industry-leading capabilities have enabled us to respond effectively tothe demands of customers across industries. We have scaled global growth and brought ingreater recognition for Indian products and manufacturing long before Make inIndia' was made a national goal. Our business is now well-diversi_ed and de-riskedthus reinforcing our abilities towards achieving new milestones.
Along with technical competence _nancial stability has always remainedour topmost priority. We have ensured that our growth does not come at the cost ofstretching our debts. Also we have always believed that longevity is a function of ourdetermination to be a respected corporate and do what is right. Being a professionally-runCompany that maintains a personal connect with its customers through its offerings as wellas principles has always been important to us. We will continue to grow while ensuringthat transparency and ethics remain engrained in our value system and our approach goesbeyond compliance.
Powered by Our People
Celebrating 50 years it is be_tting that we appreciate the efforts ofour employees and colleagues over the years for helping build KEI into what it is today.Our people have been the true engines of our growth and we intend to build on thisstrength further. We will continue to empower our people through training across variousdisciplines to ensure that we have the pipeline of talent and leadership for drivingtomorrow's success.
Through our _ve-decades journey we have had the privilege of growingalong with our nation India. Today as India moves resolutely ahead to script the mostpowerful growth globally we remain steadfast to participate in full measure towards thenational agenda of infrastructure development. We remain committed to drive increasedsales and pro_tability through extending the reach of our offerings. All our verticalsoffer exciting growth opportunities and we are well-positioned to capitalize on them. Ourfinancial health is sound providing us ample scope to expand our capacities as and whenrequired through internally generated funds.
I want to thank all the people that help to make KEI successful fromour Board of Directors and investors to our customers bankers financial institutionsCentral and State government bodies channel partners business associates suppliers andemployees and last but not the least our community. KEI could not have evolved and growninto the Company it is today without your con_dence and support. As we embark on the nextera of our journey with your continued trust we will take your Company to new heights.
|Anil Gupta |
|Chairman-cum-Managing Director |