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Salzer Electronics Ltd.

BSE: 517059 Sector: Engineering
NSE: SALZERELEC ISIN Code: INE457F01013
BSE 00:00 | 27 May 169.15 3.45
(2.08%)
OPEN

170.50

HIGH

171.65

LOW

167.10

NSE 00:00 | 27 May 168.85 3.05
(1.84%)
OPEN

171.00

HIGH

171.00

LOW

166.00

OPEN 170.50
PREVIOUS CLOSE 165.70
VOLUME 2887
52-Week high 263.50
52-Week low 129.00
P/E 12.02
Mkt Cap.(Rs cr) 270
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 170.50
CLOSE 165.70
VOLUME 2887
52-Week high 263.50
52-Week low 129.00
P/E 12.02
Mkt Cap.(Rs cr) 270
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Salzer Electronics Ltd. (SALZERELEC) - Chairman Speech

Company chairman speech

Dear Valued Shareholders

The past financial year brought headwinds for the economy and overall industry in theform of the COVID-19 pandemic. As you all are aware the pandemic adversely impactedentire supply chains logistics and business operations across sectors in India andglobally. Several regions in India are still under the impact of the second wave of thispandemic.

However I am proud to say that our Company has shown tremendous resilience andsustainability through this tumultuous period. Our standalone revenue for this fiscal grew6.82% year-on-year to Rs. 605.62 cr while EBITDA and PAT stood at Rs. 61.79 cr and Rs.20.67 cr respectively. In terms of vertical performance our Industrial Switchgearsdivision contributed 41.3% to revenue while Wires and Cables accounted for 52.8% with astrong growth. The Building products division contributed only 5.4% to revenue mainly dueto a muted real estate sector especially in the initial quarters. With a revival in thissector we can hope to see higher revenues from this division. The Energy management is anorder book driven business and revenue was primarily from annual maintenance contracts.The lag in passing on the raw material price increase to the customers impacted marginsduring this period. Exports during the year grew accounting for 20% of our top line. Thiswas mainly from Europe and North America. We continue to focus on our export markets aswell with an aim to add more regions to our purview.

The initial months were most affected by the lockdown but over the last two quarterswe have seen gradual recovery as markets are slowly opening up in India and abroad. Weutilized the lockdown period in planning fine tuning reexamining our set goalsconstraints and focussing on building a contingency fund for any future crises. Asfactories reopened in a phased manner we took all necessary steps and precautions for thewell-being of our employees. Looking ahead it is still early to make long/medium-termprojections but the market sentiment looks optimistic as vaccination increases and theCOVID-impact subsides across regions. In April-May 2021 we even held a vaccination drivefor all our employees.

Our ability to sustain through turbulent market scenarios is based on our widespreadgeographical reach strong client relationships and brand presence and ourinnovation-driven diverse product portfolio. Moreover synergies from our recentacquisition of Kaycee Industries are also coming together. The acquisition was with theclear aim to capture a larger market expand our customer-base and boost our portfolio ofindustrial switchgears. The move is giving us a substantial competitive advantage in theindustry.

We at Salzer are continuously engaging in RS.D and innovation to bring new andadvanced technology products to the market staying abreast with new technologies. Withemission norms getting more stringent in the automotive industry electric vehicles [EV)are likely gain more widespread acceptance and adoption. While several developed nationsare already moving towards EVs India also has a long-term plan to increase the share ofEVs amongst vehicles on road. This would entail investments in charging stations andcables which would require switchgear and cable products thereby benefiting companieslike ours.

In line with this we have recently entered into Two Joint Ventures in the EV Field.

One is a technical alliance with Kostad Steuerungsbau GmbH an Austria-based specialistin EV FAST chargers. With this firm we are forming a joint venture company named SalzerKostad EV Chargers Pvt Ltd which will manufacture DC FAST chargers with latest advancedtechnology for e-vehicles along with related components and systems. Salzer would have a26% equity stake in this JV and would manufacture and market these products across IndiaSoutheast Asia and the Middle East. Kostad's technical know-how combined with ourmanufacturing capabilities places us in a position to capture a potentially large market-base in the future.

Second one is with EMarch LLP an India based technology Start-up who has IP forElectric Conversion Kits for Auto rickshaws Cars and busses. We have floated a 100%Subsidiary in the name of Salzer EV Infra Pvt Ltd. Going forward all investments into EVbusiness will be done through this subsidiary. Now we along with EMarch will form a JV inthe name of Salzer Emarch Emobility Pvt ltd. to manufacture E Conversion kits for Autorickshaws to start with and then for Cars & busses going forward.

In the post-COVID scenario we are continually working on being future-ready to be ableto grab new opportunities going forward. Our focus has always been on driving sustainablegrowth and increasing efficiencies across all our business with a clear target ofimproving our returns on capital employed. The pandemic has brought a lot of new learningsand opportunities for us and I believe the team and our Company has come out stronger.

Value Creation

Salzer has successfully gone through multiple technology cycles over the last threedecades adapting each time to build new capabilities and help our clients achieve thebenefits of these new technologies which will enable us to compete in the Global Markets.Our responsiveness agility and adaptability to change have been core to our endurance.

Though in this fluid and uncertain environment it is difficult to predict and give FY22targets but our internal target would be not just to maintain last year’sperformance but strive to outperform. Our team of capable engineers working in variousdepartments along with the investments made are helping us create customised solutions forour customers and understanding their future needs. Our vision/aim continues to besustainable value creation for all stakeholders. This vision reflects in each and everyemployee of our company who is working towards improving productivity reducing costs andenhancing return on capital in the long run.

Looking Forward

India is emerging as a preferred destination for global companies to source productsfrom here. With adopting advanced technologies in manufacturing labour availability andsupply chain many companies are looking at India as a viable option for theirrequirements. There is support from the Government also through 'Make in India'initiative to help boost local manufacturing and thereby increase contribution of exportfrom India.

We at Salzer are excited about these opportunities that the industry has to offergoing forward. We have already started witnessing a strong revival in demand from ourexport markets enabling us to increase our revenues and utilizing our capacities moreefficiently.

I am proud to have a motivated team of people who come together during times of crisisand are dedicated to performing better. Together we will continue to focus on growing ourbusiness improving our working capital cycle & efficiencies leading to a higherreturn on capital employed. Even as the second wave of the pandemic continues the teamhas demonstrated its mettle and come out strong.

I would like to thank all our stakeholders for their untiring efforts in all ourendeavours. We continue to look forward to your support motivating us to reach newerheights!

R.DORAISWAMY
Place: Coimbatore MANAGING DIRECTOR
Date : July 23 2021 DIN : 00003131

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