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Pitti Engineering Ltd.

BSE: 513519 Sector: Engineering
NSE: PITTIENG ISIN Code: INE450D01021
BSE 00:00 | 21 Oct 173.10 3.30
(1.94%)
OPEN

174.90

HIGH

177.00

LOW

170.10

NSE 00:00 | 21 Oct 172.75 2.85
(1.68%)
OPEN

169.90

HIGH

178.00

LOW

169.90

OPEN 174.90
PREVIOUS CLOSE 169.80
VOLUME 77426
52-Week high 215.10
52-Week low 32.10
P/E 12.07
Mkt Cap.(Rs cr) 555
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 174.90
CLOSE 169.80
VOLUME 77426
52-Week high 215.10
52-Week low 32.10
P/E 12.07
Mkt Cap.(Rs cr) 555
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Pitti Engineering Ltd. (PITTIENG) - Chairman Speech

Company chairman speech

Dear Stakeholders

As I sat to pen down this letter I wondered which key business aspects would you likeme to address first. Is it the performance review for the year gone by the businessstrategy and the outlook going forward or the existential crisis that the human race isfacing all over the world.

Caught clueless and unprepared the world headed home to fight Covid-19 the mostsevere pandemic of the recent 100 years. Economic activities came to a grinding haltalmost instantaneously.

On the social front nearly 20 million people have reportedly been infected while 0.75million precious lives been lost. This is the time to show solidarity with the vulnerableones - communities societies nations regions industries.

The socio-political framework governing various nations economic regions andmultilateral organizations need to focus on two key pivots of our corporate world namelyrisk management and resilience. At the global and national levels we need to createhealthcare framework that is commensurate with the size of vulnerable population. Creationof structural emergency national reserves can help scale up our response when thecalamity of such magnitude strikes. That would also make nations more resilient.

Coming to our Company we too have been steadily bolstering our risk managementframework and our resilience quotient particularly in the last four-five years. The samehas helped us navigate the current disruption prudently.

Despite the temporary blip in customer supplies we succeeded in protecting our assetsboth tangible and intangible. We were able to not only resume but also ramp up productionand supplies quickly staying extra vigilant and well within stipulated norms. We witnessedearly signs of additional demand which serves as an indicator of resilience of capitalgoods and in turn the manufacturing sector across many regions of our global presence.The intense exploratory work that our teams undertook in newer user segments openedadditional avenues of capacity deployment and revenues.

The fiscal prudence that we kept fortifying in this period not only helped protectstakeholders' value but also lent significant strength towards our next mega Capex.

You would be happy to note our new Capex announcement towards adding another megafacility. The proposed state-of-the-art facility would further our continuing campaign ofvertical integration by adding few more processes. This would help the Company manufacturemore components that we were sourcing from other vendors. The Capex would also help us addfew dedicated lines for some of the emerging segments. In order to avail incentives undervarious ongoing schemes we are evaluating location options from couple of states. Whiledeciding other strategic aspects such as logistics would also be considered. The unitwould imbibe multiple tenets of industry 4.0.

Looking back at FY20 we made significant progress in delivering prototypes as well ascommercializing approved ones for a number of customers from new user segments. Thebusiness from traditional segments and customers remained strong. But for the deliveryconstraint faced in the last month (March) of FY20 our operating results would have beenmuch better. With estimated revenue deferment of ' 25 crores we closed FY20 with residuallong-term order book of about Rs. 700 crores.

Our revenue from operation stood at ' 525.06 crore as compared with Rs. 622.21 crorerecorded in FY19. EBITDA was lower at ' 77.72 crore down from Rs. 90.10 crore achieved inFY19.

In spite of significantly lower revenue that constrained optimal absorption ofoverheads we delivered a 30 bps (basis point) improvement in EBITDA margin (14.8% from14.5%) in FY20. Our PAT came down to Rs. 17.10 crore from Rs. 23.72 crores in the previousyear. The fact that current year numbers would have been much sharper in a normalizedsituation makes these results immensely satisfactory.

Engineered products catering to user industries like diesel and electric locomotivesdata farms consumer durables and renewable energy formed a large portion of our residualorder book. It is encouraging to see emerging segments like power systems for data farmspropulsion systems for electric vehicles various sub-assemblies for intercity passengerand freight movement components for mass urban transit systems and components andassemblies for renewable energy segments starting to make sizeable contributions to ourorder book now.

Capital goods players operating mostly on just in time inventories are countering afully depleted inventory across the supply value chain. The pent up demand shall helpmanufacturing companies like us to ramp up production to pre- Covid levels. Stimuluspackages aimed at reviving economic activities would keep large scale infrastructure andcapital creation projects at the core. These factors strengthen my conviction of nextcycle of sustained growth descending on a multitude of our user industries. Thankfully wewould be meeting this demand growth with significant stabilization and maturity of ourrecently added strengths. And back it up with capacity expansion and capabilitydiversification emanating from our next expansion.

From a slightly longer-term perspective the global supply chain of capital goodssector would also undergo a major realignment. Your Company remains favorably positionedthanks to its established and proven credentials as a global sourcing partner of some ofthe reputed global names. It is with this optimism that I would like to conclude mymessage.

I thank you dear stakeholders and specially our shareholders for your continuedcontributions in our growth and progress! Let us all stay safe and continue contributingtowards a safer progressive and more equitable world.

.