THROUGH LIGHT AND SHADE
The first quarter of Financial Year 2020 - 2021 was severely impacted on account ofCOVID-19 pandemic and sporadic lockdowns across the domestic and international markets. Wewitnessed disruption in logistics and supply chain which have affected our revenues.However despite the challenging market environment we were able to maintain our marginsand record a strong performance.
After a nationwide lockdown our Company resumed operations at its various facilitiesin April and early May 2020 and thereafter all plants were operating at near optimumcapacity. We continuously worked towards cost and efficiency improvement measures whiletaking all necessary precautionary measures as advised by the government. The currentsituation continues to be challenging due to the intermittent lockdown and restrictions invarious regions. However in the nearterm we believe there will be a gradual recovery. Weare hopeful that things will stabilise soon and Maithan being one of the largestmanufacturers of Ferro Alloys will be able to continue its onward journey withoutlong-term adverse effects.
Looking ahead we are seeing certain green shoots in the Indian steel market with signsof recovery. Domestic steel demand is reviving with rural economy taking the lead. Afaster pick up in construction and infrastructure projects will further speed up theeconomic growth and steel consumption. Demand for steel has recovered during the secondhalf of the financial year driven by increase in Government spending on rural housing androads and recovery in automobile sales. We expect further recovery in the steel marketwhich will influence the demand for Ferro Alloys.
With a complete basket of Ferro Alloys product strong relationship with the customersand financial flexibility we believe Maithan continues to be at a sweet spot and will bein a position to grow faster than the Industry.
Our focus on operational efficiencies and tight cost control led to manufacturingEBITDA margin of 19.2%. We have managed to maintain the margins even in this challengingenvironment.
We expect the Government's strong focus on reviving the economy through execution ofprojects and infrastructure spending will drive demand for steel. Work on projects whichwere stuck due to the pandemic has resumed which augurs well for rise in steel demand. TheGovernment's continued thrust on affordable housing railway and metro projects wouldensure growth in steel consumption. Increase in steel consumption would propel demand forFerro Alloys.
To conclude we have delivered a healthy performance and expect this momentum tosustain going ahead on the back of increased steel production.