It is with great pleasure that I on behalf of the Board of Directorspresent the performance of your Company for the Fiscal 2020 and express my sinceregratitude to all our stakeholders for your partnership in this journey. Your unconditionalencouragement is the testimony of your strong support and faith in us which inspires us tocontinue achieving newer milestones of success.
The Fiscal 2020 was unprecedented in many respects with a trade warbetween the major economies in the world; an impending slow-down in other key economiesand finally the outbreak of the pandemic Covid-19. Consequently the global economy isexpected to contract by 3.0% for 2020 after registering a growth of 2.9% in 2019.
The Indian Economy too encountered various challenges during the firsthalf of this Fiscal with the NBFC crisis unfolding coupled with weak rural income growth.The Government's proactive measures to boost the economy like the reduced corporate taxrate and other measures to increase rural income helped in fostering some green shoots ofrecovery. However the last quarter was vastly impacted by the unprecedented challengesarising from the pandemic COVID-19. As a result the IMF
revised India's growth rate for Fiscal 2020 to 4.2%. While India'sfirm preventive actions led India to stand at a better position as compared to othereconomies the growth outlook for Fiscal 2021 is forecasted lower than 2%.
India has been one of the fastest growing emerging economies with arobust domestic consumption story and is also the largest consumer of sugar. During theFiscal 2020 the industry saw a dip in sugar production by almost 20% amid cropdestruction on account of heavy rainfall in various States. The Government's policy pushof increasing the MSP and a new export policy mandating 5.0 mn tonnes of sugar to beexported kept the sugar prices above the cost of production. For Ethanol theGovernment's impetus on production especially as an import substitute for fuel continuedwith an increase in the procurement price of ethanol especially from B Heavy Molasses.
Since the last month of Fiscal 2020 the Industry has witnessedCovid-19 led disruptions to both the demand side with curbs on social gatheringscelebrations etc. as well as the supply side caused by restrictions placed during thelockdown.
Your Company delivered a robust performance on account of improvedperformance across segments. Sugar segment saw a growth in volumes (crushed 242.08 lacquintals vs 242.26 lac quintals in Fiscal 2019) and realizations during the Fiscal withbetter recovery rate followed by enhanced volumes and realizations in distillery segmentand power segment. With better operating leverage the operating margins expanded duringthe Fiscal 2020. However there has been some impact on the performance on account of theCovid-19 led lockdown towards the end of the Fiscal.
During the Fiscal 2020 our Total Income stood at Rs. 919.41 croresagainst Rs. 744.91 crores in Fiscal 2019; Profit Before Tax stood at Rs. 107.64 crores asagainst Rs. 53.87 crores and Profit After Tax was at Rs. 83.03 crores in Fiscal 2020 asagainst Rs. 34.22 crores in the same period last year.
Our proactive approach towards changing market dynamics have alwayshelped us stay ahead of the curve. At Magadh we have consistently achieved remarkablesugar recoveries in Bihar enabling us to achieve better operating performance. The recentcapex project of setting up of 75KLPD Distillery including installation of incinerationboiler will further enhance our distillery segment. Our approach towards maintain adisciplined balance sheet will aid us to withstand during difficult periods. We believepost economic recovery we are well poised to regain momentum towards growth going forward.
"Our strong roots and disciplined philosophy will help us towithstand the storm and cherish the sunshine"
|Thank You |
|Chandra Shekhar Nopany |