I HOPE YOU AND YOUR LOVED ONES ARE SAFE AND HEALTHY DURING THESE TRYING TIMES. I AMGRATEFUL TO OUR EMPLOYEES AND LEADERSHIP TEAM FOR BEING SO COMMITTED IN THE FACE OFNUMEROUS DIFFICULT SITUATIONS During THE LAST YEAR. WE CONCENTRATED ON ASSISTING THEAUTHORITIES IN SAviNG LivES WHILE ALSO SAFEGUARDING THE HEALTH AND SAFETY OF OUR PERSONNELAND THE COMMUNITIES IN WHICH WE OPERATE. WE ARE HONOURED TO HAvE Contributed TO THE FIGHTAGAINST COviD-19.
The Macroeconomic Landscape
Notwithstanding challenges India aspires to become a 5 Trillion- dollar economy in thenext few years. However FY 20-21 started volatile with declining GDR rising unemploymentand increasing inflation. Furthermore the COVID-19 outbreak prompted a rigorous lockdownhalting our economic activities causing India's economy to contract by 23.9% in Q3 FY20-21.
To help the Indian economy recover the Government placed numerous stimulus packagesincluding a Rs 20 Lakhs Crore package as part of the Atmanirbhar Bharat campaign to makeIndia self-reliant.
With the help of this stimulus package and phased unlocking there was a revival in theeconomic activity. The reduction in COVID-19 cases and increased demand during thefestival season further aided the economic recovery. Demand continued in the fourthquarter with a GDR growth of 1.6% in Q4 FY 20-21. With the rollout of multiple vaccinesand a large-scale vaccination drive we are witnessing an overhaul in business activitiesacross sectors.
Throughout FY 20-21 the Indian economy has been unpredictable with a cascading effecton the cement business. The Indian cement industry is a crucial contributor to the Indianeconomy; it is the world's second-largest cement manufacturer accounting for more than 7%of global installed capacity.
The Indian cement industry had a sluggish start to the year owing to the lockdownimposed to contain the spread of COVID-19 and the subsequent migration of labour to nativeareas resulting in a 50% reduction in construction activities and a drop in cementdemand. Domestic manufacturers' capacity utilisation was approximately 45% during H1-FY20-21 due to units working at sub-par capacities and staggered shifts. With the gradualresumption of economic activities overall demand witnessed a sharp revival led by ruraldemand. The rural economy was relatively less impacted by the pandemic especially in theNorthern and Eastern regions.
The unlocking in the second half also aided the construction sector in resumingoperations increasing demand and consumption of cement and a rise in the demand for realestate space. Higher Government spending also contributed to demand recovery in theinfrastructure segment. However on a Y-o-Y basis production declined by 12% in FY 20-21.
With the economy reviving sectors recovering to pre-pandemic levels and a significantpush by the Government towards housing and infrastructure development we are anticipatingto witness growth in cement demand going ahead. The rating agencies expect the overallcement production to expand in the range of 4 to 7% in FY 21-22.
The Year under Review
Despite the headwinds Star Cement stood strong showing resilience against the impactsof the pandemic and the logistical issues in the North-Eastern region. We had a slow startwith the plants being shut in April. However with the resumption of production in Maythe demand has started to pick up significantly. During the slow period the Companyconcentrated on cost optimisation which substantially reduced fixed costs.
We faced some concerns regarding COVID-19 and lockdown in the first quarter of thefinancial year but we made a strong comeback in the second quarter. However the bridgecollapse en route to near our plant in the North-East during the year caused majorlogistics issues resulting in a marginal contraction in our annual sales. Despite thechallenges we produced 2.64 Mn metric tonnes of cement in FY 20-21. Total revenue for theyear stood at Rs 1720 Crore with an EBITDA of Rs 361 Crore and EBITDA margin of 20.98%.Profit for the year stood at Rs 187 Crore with a margin of 10.88%. The pandemic has poseda challenging scenario and to combat it we have maintained a robust cash positiongiving us the stability to remain strong.
We started our Siliguri grinding unit this year. The entire project was funded throughour internal accruals. The plant started commercial production on 16th January2021 honourable Chief Minister of West Bengal Ms. Mamata Banerjee formally inauguratedit on 1st February 2021. This plant has
increased our manufacturing capacity by 2 Mn metric tonnes per annum (MMTPA). Duringthe year we also hired Mr. Akshay Kumar as our brand amabassador. Moreover variousmarketing strategies were also undertaken by the Company during the year under review toincrease the visibility of the brand 'Star Cement' and achieve top-of-mind recall.
Taking Care of our People
Our people are our most valuable asset and it is imperative that we take care of ouremployees during such times of crisis. Our efforts towards the health safety and careerprogression of our employees testify to the true character of our organisation. The healthand wellbeing of our employees was given top priority. We helped not only our permanentstaff but also our contractual workers through the pandemic. During the lockdown weprovided them with rations and paid them in full. We ensured regular sanitisation at ourworkplace and strictly followed all other COVID-19 protocols as per the Government'smandate. Our people were provided with all COVID-19 essential gear and we also spreadawareness about the pandemic. We ensured social distancing and switched to work from homefor everyone's safety. Additionally we covered all medical expenditures for our peopleinfected with the virus and also organised vaccination camps for all our employees.
Vote for Thanks
On behalf of the Board we extend our gratitude to Star Cement management and employeesacross the country for their commitment fortitude and hard work. We thank all ourstakeholders for their continued support. Their support and engagement over the past yearhas enabled Star Cement Limited to emerge stronger and resilient to the pandemic.