I am pleased to present to you our annual report for FY 2019-20. Before I take youthrough our performance and where the Company is headed it would be important tounderstand where Sharat Industries Limited comes from.
We started with the business of shrimp farming and eventually created a presence acrossthe value chain over a period of 10 years. Today we are an integrated aquaculture companyengaged in hatchery operations shrimp farming shrimp feed manufacturing and shrimpprocessing operations. Innovation has been our forte. We pride ourselves in rejuvenatingthe shrimp industry in India by pioneering Vannamei (white shrimp) culture which is themost produced shrimp variety in India today. Our strong knowledge of the industry longstanding relationships with vendors and customers experienced team and state-of-the-artfacilities position us attractively in the industry.
The year in retrospect
The year gone by has been one of the most challenging in recent times. The fiscalstarted with a contraction in shrimp demand which led to lower production and decline ininternational prices. As the year progressed the markets witnessed recovery thus bringingstability to demand and international prices. The onset of COVID-19 pandemic eventuallybrought a halt to the momentum gained as the lockdown severely disrupted the supply chain.Ordering remained weak as demand from the primary consumers i.e. the foodservicesindustry was low due to the shutdown.
The year ended with a decline in shrimp exports from 667879 million tonnes in FY2018-19 to 652253 million tonnes in FY 2019-20 the first ever decline after anexponential growth in the last decade.
Amidst this challenging background I am happy to state that your Company delivered aresilient performance. Our total income increased by ~3% from ' 195.66 lakh in FY 2018-19to ' 201.70 lakh in FY 2019-20. The growth was largely driven by our focus on specificvarieties of processed shrimp which were in demand and exporting to more lucrativemarkets thus ensuring higher capacity utilisation. Further despite certain countriesbarring imports from India during the pandemic we were able to divert exports to otherdestinations thus mitigating its impact.
Coming to profitability our EBITDA grew 5.97% to ' 1248.42 lakh. PAT howeverdeclined by 38.94% to ' 177.11 lakh. This was due to the impact of higher base in theprevious year where the Company received tax credit along with a rise in interest andmanpower costs.
Poised for growth
Alongside focussing on sustaining our performance we used this challenging year tobuild competencies and prepare ourselves for the future. We undertook the followinginitiatives:
Apart from this we undertook efforts to reach out to other seafood companies to ensurea mutually supportive and beneficial relationship as cooperation and not competition isthe need of the hour. We believe that the sustenance of every individual company willensure the sustenance of the industry.
We are optimistic of the Government's Pradhan Mantri Matsya Sampada Yojana aimed atbringing Blue Revolution 2.0 through a proposed investment of ' 20000 crore over the nextfive years. The scheme focusses on sustainable and responsible development of fisheriessector as well as increasing production productivity and quality through leveragingtechnology and developing robust logistics infrastructure. We believe that the variousefforts by the Government brings hope for renewed growth in the sector.
Message to the shareholders
As you are all aware your Company is a recognised brand in the Indian shrimp industryand has come a long way since inception. We have a proven track record of weatheringseveral storms without losing sight of our goal. We are equipped with technical expertisecapacity and manpower. Alongside this our geographical spread and deep relations withfarmers and foodservice companies position us attractively to capitalise on the growthopportunity in the industry. We are also relatively well-placed in terms of financialposition with a debt:equity of 1.01 which provides us enough headroom to invest in growthcapex.
Glancing back at the year gone by I can say with reasonable confidence that we havesuccessfully countered every challenge to emerge steadier and stronger. I thank all ourstakeholders who have supported us in achieving this. I extend my deepest appreciation toour supply chain partners and committed employees who displayed immense resilience inthese testing times. Finally I am grateful to all our shareholders for their faith andpatience and for continuing to send positive vibes that have enabled the Company toresume the trading of shares after a hiatus of nearly 21 years. With your continuedsupport we seek to reach greater heights sustainably and profitably.
S. Prasad Reddy