From the desk of CHAIRMAN & Managing Director
It is my privilege to present to you the Annual Report of Rama Steel Tubes Ltd. for thefinancial year 2020-21. While this was a year of extreme economic challenges for the worlddue to COVID-19 pandemic our Company continued to play on its strengths and posted arobust financial performance. FY21 proved to be promising year as our Company has emergedstronger backed by diversified products manufacturing efficiency and superior projectexecution skills. We continued to strengthen our focus on customer experiencetechnological investments capacity expansion and widening our products offerings - all ofwhich plays vital roles to sustain our position as one of the leading player in steeltubes and pipe industry in India.
The unprecedented COVID-19 pandemic has had a significant impact on lives livelihoodsand the business globally. IMF expects the world economy to contract by 3.2% in 2020 andthe growth is expected to rebound by 6.0% in 2021. During the first few months of thepandemic operational challenges mounted due to restricted movement and disrupted supplychain. After significant GDP contraction in the first quarter of FY21 Indian economywitnessed a gradual recovery and aggregate demand has picked up in the second half of FY21with easing relaxations favourable policies and increased government spending. As theeconomy
continues to combat the second wave of COVID-19 pandemic the government allowedeconomic activities to continue with partial lockdowns and limited restrictions set byrespective states. However the fast pace of vaccination provides hope in containing thefuture waves of COVID-19.
Aided by favourable policy support large stimulus packages improving consumersentiment and fast recovery in China the pandemic effect on global steel industry wasbenign witnessing only minor contraction of 0.2% in global steel demand in 2020. Over thepast decade Indian steel industry has responded well to the increase in domestic steeldemand leading to significant capacity addition in the Indian markets. According to theWorld Steel Association (WSA) steel demand in India is expected to rebound by 19.8% in2021 after it had declined 13.7% in 2020 due to COVID-19 induced lockdown.
The Government's focus on Atmanirbhar Bharat initiative and strong impetus oninfrastructure and development will stimulate the demand for steel pipes and tubes. As thecountry is slowly moving towards a gas-based economy the success of 'One Nation One GasGrid' mission majorly depends on the infrastructural development of the natural gaspipeline. Under'Jal Jeevan MissionRs.initiative the
Government will provide piped water across India's rural areas. Moreover growingimpetus on the energy sectorthrough ambitious capacity addition programme presents hugeopportunity for domestic steel pipes and tubes industry.
At RSTL we are one of the leading player in Indian steel tubes and pipes industry witha strong legacy of more than 45+ years. In addition to manufacturing and supplying ourproducts we provide unmatched value proposition to our customers by offering end-to-endprojects execution solutions. Over the years we have emerged as a trusted brand globallywith strong recognition of our brand 'ill Rama'.
Our Company is constantly improving processes and fortifying existing systems todeliver superior quality products and meet thxe evolving needs of our vast clientele. Atpresent we are undergoing mill upgradation at Sahibabad plant Uttar Pradesh with latesttechnology which will help in improving efficiency and expanding the product portfolio.During the year under review we have completed capacity expansion at Khopoli Maharashtrawhile at Anantapur Andhra Pradesh it was halted for some time due to resurgence ofCOVID-19 induced restrictions. Post completion of capacity enhancement initiatives atAnantapur in FY22 total capacity of the Company will increase from 228000 MTPA to264000 MTPA. The added capacities will help us strengthen our share in the domestic andglobal markets.
We are perfectly poised to capitalize on emerging opportunities as our niche productsERW Black Pipes and Galvanised Steel Pipes find use in sectors like water pipelinesagriculture irrigation deep tube wells fencing tubes etc having huge growth potential.Being a pioneer in the industry we are also a preferred partner due to strongrelationship with our suppliers and reputed customers globally. Moreover we are alsoinitiating our new brand entity in order to align with the existing market situation.
Our best-in-class manufacturing units are located strategically in close proximity toraw materials sources that encourage efficiency and enhance productivity. With thecontinuous investment in R&D activities and advanced technology we are able to alignour production facilities with specific grade size and thickness. This allows us toleverage our capacities and make the most of the opportunities in rising sectors acrossthe globe.
After establishing ourselves as one of the leading player in the country we are allgeared to expand our operations globally. During the year under review we have acquiredland for setting up a manufacturing unit in Nigeria. The export sales accounted for 18% oftotal sales value in FY21. Our Company aims to further strengthen its global footprints byproviding more value added products.
On the back of our agile and resilient business model ability to effectively implementstrategies and relentless commitment we were able post robust performance in FY21. Thisachievement comes at a time when the world faces unprecedented challenges due to theoutbreak of COVID-19. The consolidated revenue from operations increased significantly by33.34% to Rs 470.43 crore in FY21. EBIDTA increased by 98.53 % YoY to Rs 24.46 crore.Profit after tax increased tremendously to Rs 12.38 crore in FY21 as against Rs 0.43 crorein FY20. During the year under review our Company managed to reduce debt and sustainedstrong cash generation.
Moving ahead we are excited about the future. At RSTL we are attractively placed inthe industry with our solid fundamentals and brand reputation. As our Company continues toscale its operations the customer-centric attitude and the zeal to outperform enables usto deliver impressive growth year after year. With rich experience diverse productsportfolio strong clientele we are well positioned to take advantage of the industryopportunities and contribute to nation's thirst for power and steel to build itsinfrastructure. Going forward we aspire to strengthen our technological expertise expandour manufacturing capacities and capabilities and create a stronger presence in newer aswell as existing territories. Our capacity expansion plans firm balance sheet andupcoming new brand entity will drive further growth and consolidate our market position.
Our Company believes that the key to outstanding business result is an excellent talentpool. We will continue to focus on building highly professional and experienced leadershipteam and attracts the best talent to provide a significant differentiation to our productsand processes.
Our exciting journey of growth and holistic value creation will continue with thesupport and guidance of our customers employees shareholders suppliers bankersgovernment and the Board of Directors.
I would like to take this opportunity to thank all our people who have been tirelesslyworking to ensure that we continue to serve the people of this country through thisextremely challenging year. Most importantly I would like to thank you our shareholdersfor your overwhelming trust support and confidence in RSTL.
|Naresh Kumar Bansal |
|Chairman & Managing Director |