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Permanent Magnets Ltd.

BSE: 504132 Sector: Engineering
NSE: PERMAGNET ISIN Code: INE418E01018
BSE 00:00 | 09 Dec 713.05 -2.90
(-0.41%)
OPEN

715.95

HIGH

731.65

LOW

695.35

NSE 05:30 | 01 Jan Permanent Magnets Ltd
OPEN 715.95
PREVIOUS CLOSE 715.95
VOLUME 3332
52-Week high 771.00
52-Week low 260.00
P/E 28.51
Mkt Cap.(Rs cr) 613
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 715.95
CLOSE 715.95
VOLUME 3332
52-Week high 771.00
52-Week low 260.00
P/E 28.51
Mkt Cap.(Rs cr) 613
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Permanent Magnets Ltd. (PERMAGNET) - Chairman Speech

Company chairman speech

MD's Communique

Dear Shareholders

I am happy to be addressing you through our annual report. This is such a greatpleasure and a good opportunity for me to share more insights about our Company PermanentMagnets Limited.

As you can see we have expanded the scope of our annual report this year to give ourinvestors a deeper understanding of our Company's business model industry positioning andstrategies both long and short term. I believe this will also be an excellent opportunityfor me to connect with you better and strengthen our relationship further.

FY22 Performance Review

I would first like to take you through our performance this year and give you anoverview and help you understand the Company's financial standing. To begin with ourtopline for the last two years has not grown the way we expected it to and a combinationof factors is responsible for this. Firstly our business was impacted significantly dueto the pandemic-induced supply chain disruptions which were closely linked to some of ourend-use industries facing the same issue. For instance the energy meter sector facedsevere heat on account of semiconductor shortages that led them to reduce productionthereby making the demand for our product lesser or deferred. The second factor thatimpacted our topline growth is the downturn in one of our product categories - gas meters.This product was already nearing the end of its lifecycle and these headwinds changed ourrevenue mix as well. Earlier in FY20 the contribution of gas meters to our top line stoodat roughly 18% which in FY22 declined to a mere 6%. Product life cycles coming to an endcertainly is not an unknown phenomenon in the industry but this particular one did catchus off guard a little bit.

The other issue that we faced during the pandemic was a slowdown of our geographicexpansion plan on account of travel restrictions. As most of you would be aware Europeand the Americas continue to be a stronghold for PML but our efforts to embark on ourAsian geographic expansion were dampened by the multi-year pandemic. However we arecertain about picking up on these plans and making progress in these markets as well inthe near future. While all of these headwinds and concerns made the year slightlychallenging for us it indeed didn't impact us negatively - we were able to demonstrateresilience through our financial performance. Our Revenue from Operations witnessed amodest 13% year-on-year growth and stood at Rs.133.26 Crore in FY22 while our PAT stoodat Rs.19.04 Crores recording an 18% increase year-on- year. Our operating profit marginstood at 21% this year compared to 22% in FY21. Further the size of our balance sheet hascertainly increased in the last two years on account of the increasing working capitalneeds of the Company. Moreover as a part of our risk management strategy we now have ahigher buffer inventories for imported raw materials such as special steels and nickelalloys among others.

Focused on technology development over product development

A fundamental lesson that we have learnt in the past as well as in recent times is thatproduct life cycles can be unpredictable and if not planned for properly they can have asignificant impact on business growth.

We have witnessed this recently with our calibration assembly product for gas metersand faced a similar concern for our magnets business due to a change in the energy meters'technology back in 2005. Essentially pointing to us that changing end-producttechnologies may many times make our products obsolete. What we have acknowledged andunderstood from these trends is that in order to maintain our growth trajectory we mustconsistently add newer products at a faster pace to counter the effects of productsapproaching the end of their lifecycle. This learning has empowered us to realize that itis much more advisable to focus on technology and capabilities rather than products.

Since technologies and capabilities tend to have a higher lifecycle than specificproducts it will ensure that we thrive in an increasingly fast-evolving future while alsoallowing us to design and deliver innumerable customer-specific solutions.

At present our technological strongholds include Magnetic Sensing Current SensingMagnetic Assemblies Alloys and ZAMAK Die Casting and the products we manufacture basedon these technologies find varied applications in the automobile energy meter renewableenergy aerospace & defence food & beverage and robotics sectors among others.

Our goal is to develop more products leveraging these technologies and capabilities aswe advance all the while making efforts to gain domain expertise in other technologies aswell. The new projects we are currently exploring include in the casting space ZAMAK diecasting high-volume sheet metal forming and wire winding. Simultaneously we are workingon introducing new modules and components.

Increased presence in value-chain

PML has also strategized to expand its presence in the value chain - from being an onlycomponent manufacturer the Company is now exploring projects in modules to capture awider space in the value chain. In many product categories a shift from components tomodules can render an increase in the value of the product to a factor of up to 5-6X onthe initial component. At present we are exploring projects in the shunts and soft magnetmaterial product categories for different product stages. This move will help take us astep ahead in our journey and create more significant avenues for growth in the nearfuture.

PML is preparing for the long haul and focusing on making its business model morerobust than ever before. We are confident that our focus on technology & capabilitiesover specific products increasing presence in the value chain and upgradinginfrastructure in accordance with future growth aspirations will surely aid the Companyin achieving its long-term goals. In that direction we have also decided to integrate ourthree manufacturing facilities into one site giving us enough headroom to grow in thefuture.

We sincerely believe that the best of our years are ahead of us and PML is geared toharness potential opportunities and leverage its strengths to make itself an indispensablepart of its ecosystem. In closing I would like to share my sincere gratitude to all theshareholders team members and stakeholders of PML. Your faith and trust in us have got usthis far and I am sure that it will take us to greater heights in the years to come.Thank you for all your support.

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