the CMD's Desk
I am happy to share that even amid a volatile environment in 2019-20the Company continued its growth journey in a sustainable way. No matter what! Ratnamanistayed ahead with a robust core strong preparedness resolute strategies and deepinsights across business segments.
Since the last quarter of 2019-20 economies across the world arewitnessing testing times owing to the COVID-19 pandemic. At Ratnamani we are all workinghard to bring back normalcy to our lives and ensure safety of our employees andcommunities.
2019-20 was a challenging year for the Indian economy. Weak consumersentiment slackening demand and liquidity crunch contributed to stunted GDP growth of4.2% during the year. With sluggish manufacturing activities Index of IndustrialProduction (IIP) growth turned unfavourable. The Government and the Reserve Bank of India(RBI) responded with prompt fiscal and monetary measures to counter the outbreak of virusand protect the economy that had come to a near standstill state. The Government alsoannounced fiscal support under the 'Aatma Nirbhar Bharat Abhiyan' on May 12 2020with an intention to inject Rs 20.9 trillion into the economy.
In addition the clarion call given by the Hon'ble Prime Ministerto go 'vocal for local' aims to promote competitiveness of local produce vis-a-visglobal brands. The resultant impact shall lead to a gradual recovery in the medium term.
The Steel Pipes and Tubes industry witnessed headwinds towards the endof the year owing to COVID-19 induced supply chain disruptions falling global crude oilprices and deferred projects. However given the strong Government impetus oninfrastructure sector and wide end- user application the industry displays positiveoutlook in the future.
Ratnamani emerged even stronger backed by diversified products withglobal benchmark quality manufacturing efficiency and superior project execution skills.No matter what we continued to explore opportunities and expand capacities contributingto the stakeholders' value creation and the nation's prosperity at large.
Against the challenging backdrop we delivered steady performance onthe back of a strong order book flexible product line from Stainless Steel to WeldedCarbon Steel Pipes to Coating and Induction Bend solutions in various grades along withefficient raw material management. Our Stainless Steel division experienced sturdy orderbook from domestic and international clients. The Company posted a total revenue of Rs2644.98 Crore during FY 2019-20. Profit after tax grew 21.57% from Rs 252.93 Crore in2018-19 to Rs 307.50 Crore in 2019-20. Order book for the year stood at Rs 1160 Crore. Todeal with the pandemic we adopted adequate safety measures realigned mobility andenhanced digital working capabilities for our employees.
As one of the leading steel pipes and tubes manufacturers in thecountry we remained insulated despite plunging oil prices and COVID-19 relateddisruption. Over the shortterm demand from various industries moderated due to thepandemic impact. However over the medium- term various end-user sector outlook ispositive as rapid urbanisation and various schemes undertaken by the
Government is expected to revive demand. Presently the country ishighly dependent on imports for its natural gas requirement. As a result increasedGovernment focus on expanding the country's Natural Gas pipeline Oil and Gastransmission and City Gas Distribution infrastructure will continue to fuel the demand forhigh quality ERW pipes. We stand to benefit immensely on the back of consistent demandfrom the petrochemicals segment and ambitious capacity expansions of refineries along withdevelopment of new grass-root refineries. Moreover the Company is looking forward toleverage the opportunities from the upcoming LNG terminals on the western coast of thecountry. Being a preferred supplier of pipes and tubes worldwide we are all set to tapthe opportunities in Thermal Nuclear and Solar Energy sector Fertilizers Atomic EnergyAerospace and Water sector as well.
Internationally the Gulf countries
US Europe South East Asia and Africa offer multiple opportunitiesfor the Company's quality products. Ratnamani is approved by Saudi Aramco for itsstainless steel tubes and pipes backed by its brand reputation and recognition in themarket. The Company is also set to capitalise on the export opportunities owing to itsprice location and quality edge.
We continued to invest aggressively into product innovation andexpansion of our manufacturing capacities. I am pleased to announce successfulcommissioning of our new Hot Extrusion Press which will enhance our capacities tomanufacture upto 10" NPS Seamless products in both Stainless Steel as well as inNickel Alloys and Inconel. The challenges posed by the pandemic have resulted in approvaldelays. However the Company expects to commence production by fourth quarter of thefinancial year 2020-21. I am proud to state that the Company will be the first player inthe country to manufacture such range of import-substitute product.
Our new state-of-the-art manufacturing facility at Kutch will establishglobal competitiveness of the L-SAW division. The Company has further plans to expandfinishing capacity in the ERW segment.
The added capacities will help us strengthen our share in the domesticand global markets.
Caring for the Communities
The Company believes in striking a balance between environmentalsustainability and socio-economic development. In 2019-20 we touched numerous livesthrough our initiatives in skill development education health and environmentprotection. Even during the lockdown we continued to engage in activities thatcomplemented Government's relief efforts by distributing medicines meals food kitsand PPEs.
I would like to reiterate that our business model is highly resilientwith financial stability optimised cost structure reliable products and sizeablemanufacturing capabilities. Therefore I am confident that we will successfully passthrough this turbulence and continue with the implementation of our long-term growthstrategy and value creation for stakeholders.
I would like to thank all our employees for their hard work andcommitment throughout the year. I would also like to thank our stakeholders for theircontinued support as we look forward to a brighter year ahead. We are well-poised to takeoff on a robust trajectory and enter new realms of growth and profitability.
|Prakash M Sanghvi |
|Chairman and Managing Director |