When a nation is engulfed by a deadly epidemic like Covid-19 which has already gonethrough two waves in India infecting over 30 million people and claiming almost 396000you cannot expect to see any 'business-as-usual' scenario.
Like most corporate entities throughout the nation your Company has had to bear thebrunt of the human economic and business impacts of Covid-19. Let me briefly take youthrough these for the Company and its subsidiaries.
Your Company's core business is to provide IT consulting and support services to itsclients. Its strength lies in implementing best-in-class IT solutions for the power sectorthrough a robust mix of the capabilities in existing and emerging technologies-which isreflected in its strong intellectual property of over 350 applications and a sound teamwith skill sets in project management programming networking and security.
During the year it mostly provided IT services to CESC Limited and its subsidiaryentities in both power generation and distribution including the distribution ventures inRajasthan and Maharashtra.
With a portfolio of servicesthat encompass
(i) application development and management;
(ii) setup and operations and maintenance of IT infrastructure;
(iii) datacentre and disaster recovery set-up and solutions;
(iv) cyber security management; and
(v) smart building solutions it performed reasonably well given the year that itfaced.
Your Company's standalone total income for 2020-21 was Rs.229.3 crore. Total expenseswere Rs.59.2 crore. Profit before tax (PBT) was Rs.170.1 crore and Profit after tax (PAT)was Rs.127.3 crore.
Your Company's most significant subsidiary Firstsource Solutions Limited is a listedentity in the business process management industry in which your Company holds anownership stake 53.72%.
Firstsource provides customised services in the areas of
(i) digitally empowered contact centres;
(ii) intelligent back-offices; and
(iii) platform automation and analytics. With over 28000 employees operating from 39service facilities spread across the US the UK India and the Philippines Firstsourcehas a marquee list of clients-including 17 Fortune 500 and 9 FTSE 100 companies.
Despite Covid-19 2020-21 saw Firstsource's total income rising by 24% to Rs. 5079crore; PBT increasing by 9.5% to almost Rs. 432 crore and PAT growing by 6.5% to Rs.362crore.
Your Company forayed in to the FMCG business in 2017-18 through its wholly ownedsubsidiary Guiltfree Industries Limited (GIL) by launching packaged healthy snacks underthe brand 'TOO YUMM!'. GIL also has a 70% stake in Apricot Foods Private Limited (AFPL)which markets snacks under the brand name 'Evita'.
To an extent Covid-19 affected GIL's and AFPL's large distribution network.Consequently GIL's total consolidated income for 2020-21 was Rs.262 crore which was 9%less than what it was in the previous year.
Your Company is also present in the ayurveda industry through its subsidiary HerbolabIndia Private Limited. Herbolab has over 100 proprietary ayurvedic formulations approvedby the Ministry of AYUSH in formats that are relevant to 21st century consumers. Itsproducts are marketed under the brand 'Dr. Vaidya's' which has emerged as one of India'slargest ayurveda brands in the digital space with over 90% of its sales coming fromonline platforms. Given Covid-19 it launched several products catering to immunity andhygiene. The business saw total income grow by 26% to Rs.20.6 crore in 2020-21.
In real estate Quest Properties India Limited (QPIL) a wholly owned subsidiary ofyour Company launched Kolkata's first upscale shopping mall 'Quest' in November 2013.Over the years 'Quest' has become an iconic shopping centre brand.
The mall was severely affected by the Covid-19 lockdowns. Income from mall operationsis a function of the overall revenue of the retailers. This coupled with short-termconcessions to retailers to tide over the pandemic significantly affected revenues duringthe year. QPIL's total income declined by 29% to Rs.76 crore in 2020-21.
The other real estate venture-a 3.5 acre residential project in Haldia-has been partlycompleted and most of the apartments have been sold. Sale of the remaining inventorycould not be undertaken in 2020-21 due Covid-19. And management has decided to keep thesecond phase of the project on hold.
Bowlopedia Restaurants India Limited (BRIL) is a 100% subsidiary your Company withrestaurants in Kolkata and Delhi NCR. It operates three brands: (i) Biryani Battuta aspecialty biryani and kebabs brand; (ii) Waffle Wallah in the dessert segment; and (iii)Bombay Toastee in the Indian comfort food segment.
Covid-19 significantly impacted the dine-in restaurant business. Consequently BRILsignificantly scaled down its operations to keep its fixed costs in control. Moreimportantly it launched 'Frozen Ready to Eat' meals. By the end of 2020-21 BRIL's frozenfood range was available at some 500 general and modern retails outlets across key marketsas well as on all major online B2C delivery platforms. BRIL's total income was Rs. 4.2crore in 2020-21 versus Rs.8.9 crore in 2019-20.
During the year your Company made its foray in the sports business by acquiring 100%stake in APA Services Private Limited (APA). 80% stake in ATK Mohun Bagan Private Limitedwhich operates and manages the football club ATK Mohun Bagan is held by an APAsubsidiary. APA also has a 76% stake in Rubberwood Sports Private Limited which operatesand manages a table tennis franchisee 'RPSG Mavericks' that competes in the Ultimate TableTennis league.
Your Company's total consolidated income grew by 21.9% to Rs.5663 crore in 2020-21.Consolidated PBT increased significantly to Rs.294.4 crore in 2020-21 versus Rs.113.6crore in the previous year. However due to a fairly sharp increase in tax out-goconsolidated PAT for 2020-21 was Rs.58.4 crore versus Rs.75.8 crore in the previous year.
On the face of it this does not look like a good result. But do consider a few things.
Will there be a steady growth in demand for dedicated intelligent software for powergeneration distribution and the management of power franchises? I believe the answer is'Yes' which augurs well for your Company's standalone revenues and profits.
Will there be a widening of reach for best-in-class IT solutions to the marquee clientsthat Firstsource provides? Indeed there will. Therefore Firstsources's topline andprofits point to one direction-upwards.
Will more Indians continue to enjoy healthy crunchy packaged snacks? Of course theywill. That speaks well for Guiltfree Industries Limited.
Will a large section of upper middle class Indians get back to shopping in malls? Andto investing in well-constructed well-designed residential properties? Of course theywill. That foretells well for Quest.
Will there be a growing demand for ayurvedic remedies? It has and will continue. Thatportends well for Herbolab and 'Dr. Vaidya's'.
And will Indians stay away from watching football? No most definitely not. That makesyour Company's investment in APA Services Private Limited worth the while.
Yes Covid-19 has wreaked havoc. Equally with a sharp rise in the pace ofvaccinations it will become more of a thing of the past-a flu as it were-than the clearand present danger that it is today.
Think of these things. And then think of the areas where your Company operates. Youwill immediately see how it is betting on some characteristic features of India's growth.Which are bound to happen. Which ought to make your Company stronger with each successiveyear.
I am confident of your Company. So should you be.
Thank you for your support.
In the meanwhile please get vaccinated as quickly as you can if you haven't already.Even after that please maintain safety and social distancing. Please wear masks properlyand not as occasional chin-guards. If we all do these things the third Covid-19 wave willbe combated with far less pain. As it should.
|Stay safe. Stay healthy. ||With my best regards |
| ||Yours sincerely (3P) |
|Place : Kolkata ||Dr. Sanjiv Goenka |
|Date : 16 June 2021 ||Chairman |