Challenges are an inevitable part of business. It is how we respond to them that makesthe difference. For Paramount Communications Limited challenges are not something newhaving been through a deep debt crisis and eventually restructuring to become a profitableand sustainable company
FY 2019-20 has been a challenging year. The Indian economy that was already passingthrough a rough phase due to liquidity crisis high oil prices and weak consumersentiments was faced with another bigger challenge of COVID-19 pandemic. It has triggeredan unprecedented social and economic crisis whose impact will linger for some time as theglobal economy faces an eminent recession. Despite this it is fascinating to witness howthe world has united to ght this crisis resiliently while quickly adopting to the newnormal. It gives us hope that human race shall prevail as done in many such crises acrosshistory.
One thing is for sure that the post pandemic world will never be the same again. Whilethere will be multitude to changes digitalization is an area that will witnessaccelerated adoption giving a major push to technology and communication devices. This isan area where your Company already has strong focus with its world-class products.
FY 2019-20 has been another year of remarkable progress for the Company. We were wellon target to deliver record growth until COVID-19 pandemic broke out and interrupted ouroperations. While the official lockdown was announced in the final few days of the fiscalthe mounting fear globally led to businesses taking a back seat and practising informalshutdowns as early as February 2020. This not only impacted new business generation fortwo months it also disrupted delivery schedules of confirmed orders as customers delayedtaking delivery thus leading to inventory build-up. The transportation segmentcomprising mainly of migrant labor was also under strain and vehicular movement wasimpacted.
As a result our Sales revenues declined 1.4% from Rs 6145 million in FY 2018-19 to Rs6062 million in FY 2019-20. However EBITDA has increased from Rs 455 million to Rs 477million.
Responding to the crisis
With the crisis your Company's immediate focus was to deploy business continuity planand have heightened focus to de-risking. This is in line with our long-standing commitmentto ensure business perpetuity and protecting stakeholders' value. Priority was given tothe safety and wellbeing of our employees as well as all stakeholders. We rolled out awell-planned exercise of enabling work from home by providing all necessary support.
As the lockdown started to lift we ensured gradual resumption of operations whileensuring all safety protocols and social distancing norms are followed. We maintainedsustained coordination with various customers to lift the products already manufacturedand to collect the amounts outstanding. We also implemented a series of measures tooptimize cost structure.
Achieving a milestone in crisis
In the FY 19 Paramount
Communications Limited successfully completed the repair and installation of BharatLanka Cable System. A big milestone for Paramount Communications Limited during the yearhas been the successful implementation of subcontractor order in the ambitious Chennai toAndaman & Nicobar Islands (CANI) Optical fibre Submarine Cable System. Our part ofwork involved ~60 km of Trenching and Cable Pulling and erecting about 14 Beach Manholes160 Manholes and 22 Joint Manholes.
I am happy to state that despite many challenges rocky and wet terrains unavailabilityof manpower dependence of machine and materials on mainland apart from the recentCOVID-19 disruption we executed the project on time with the stipulated quality standard.The project proves our calibre as an organization capable of handling complex EPCprojects apart from manufacturing best products.
Strategy for the future
The future is a connected world. It has immense potential for development andalleviating the challenges of traditional world. We have already witnessed its gamechanging power in the times of COVID-19 when the world was restricted to homes. In linewith this your Company will continue to retain its focus on connectivity cables i.e.telecom railways and power cables. Orders in these segments largely originate fromgovernment tenders and PSU organizations. Our strong relationships focus on qualityprequalification criteria and cost competitiveness will enable us to capitalize on theopportunity.
We are increasingly witnessing a scenario where China is losing its place as themanufacturer to the world after the pandemic incident. This presents a significantopportunity for Indian companies like us to step up and target the export markets.
Another important focus for us will be to diversify our customer base from existinginstitutional customers. We have already strengthened retail focus in select micro marketsto develop a strong dealer and distributor network for House Wires and Power Cables. Thiswill help us to enhance granularity in revenue sources thus reducing dependence on singlelarge accounts.
With the successful execution in CANI project we will continue to explore more suchopportunities for high value addition complex EPC projects that have higher margins. Theintent will be to move towards specialized products and projects to create our niche as atechnologically advanced Cables and Wires Company.
The coming fiscal is going to be challenging. COVID-19 is here to stay for some time.Apart from disrupting supply chain it has thrown open the issue of manpower availabilitywith the migration of labor. Further the social impact of the pandemic will necessitatethe Government to channelize more funding towards healthcare and supporting the weakersections of the society. This will impact infrastructural spending and thus delays inofftake of fresh orders in railways and telecom sectors.
I believe Paramount Communications Limited is well placed in these times with a robustproduct portfolio strong customer orientation and constant focus on innovation. We arealso positioning to become a leaner and responsive organization by undertaking efforts tostreamline operations and control costs. We believe the Company will emerge stronger postthis crisis and get back to its track of fast growth.
On behalf of the Board I thank all stakeholders for the trust placed on us. We lookforward to your continued support as we strive to make this organization sustainable inthe long term and maximize value creation for all.