Poised to grow attractively
The story of Stylam for close to three decades has been that ofcontinuously raising the bar and building the foundation to expedite future growth. Fiveyears ago we had kickstarted a two-phased business transformation process and I am happyto inform that FY20 saw the completion of the first phase. Before I share the keyhighlights of the reporting year and the strategic roadmap going forward it is importantto emphasise how we have evolved over the years.
In the preceding five years we have steadily upgraded ourmanufacturing capacities enriched our product mix improved our sales and marketingnetworks and built a strong team. Our focus continues to be on expanding our product mixto substantially expand the share of value-added products in
our offerings which reflects in our improving margins. We conductextensive research and development to bring technologically advanced innovative productsto delight our discerning patrons in India and the overseas markets.
We have deleveraged our balance sheet by attracting institutionalinvestment and divesting our non-core real estate assets. These strategic decisions havehelped us perform profitably and sustainably even in a tough operating scenario in FY20.
FY20 was largely challenging for businesses with trade uncertaintiesgeopolitical tensions liquidity crunch and macroeconomic strain in several emergingeconomies.
The COVID-19-induced lockdown further worsened the scenario globally.
In March the nationwide lockdown to flatten the COVID-19 curveadversely impacted lives livelihoods supply chains and the overall economic activity inIndia.
Performance and strategy
Notwithstanding overwhelming headwinds FY20 saw us grow our revenue to' 462.15 crore from ' 460.62 crore in FY19. Our EBIDTA margin and PAT (without consideringexceptional items) stood at 17.23% and ' 34.12 crore respectively compared to 17.34% and' 38.82 crore in the previous year. The marginal decline was due to the fact that ourbusiness was impacted due to lockdowns across India and the overseas markets in the lastfortnight of March.
Stylam's liquidity position remains steady despite disruptions in
operations on account of the lockdown. Our strategy now revolves aroundreviving and growing sales while simultaneously focusing on cost-effective measures. Theresult of these efforts will be visible in the near future following the gradualresumption of economic activities at normal levels across global markets.
We have worked hard to maintain our position among the prominentlaminate manufacturers in the country and other geographies. Our aim is to be recognisedglobally as a trendsetter with a repertoire of some of the most advanced interior andexterior products. We analyse broad market trends and customer aspirations and fine-tuneour range accordingly. Our diverse product basket talented team and zeal to make adifference for our customers give us the confidence to remain competitive and profitablefor the long term.
Innovation has always been a key differentiator for us. It isworthwhile to mention here that we came up with the world's first hot coating processmachine to make a wide range of premium laminate surfaces on thin laminates. We areexpanding our business to include new and innovative market-leading products that are morealigned with customer needs.
To consolidate our business engaged in building materials products wedecided to amalgamate the business of Golden-Chem-Tech Limited (GCL) with the Company. GCLis into the manufacture of solid acrylic surfaces. The resolution for amalgamation waspassed by our Board on December 21st 2017. The Hon'ble NCLT has approved the scheme onFebruary 11th 2020. This amalgamation will lead to sound economies of scale and businessgrowth. Solid acrylic surfaces were imported in India in large volumes. The amalgamationempowers us with the combined synergies to develop the product within the country andfacilitate import substitution.
This enables us to support the Government of India's vision ofAtmanirbhar Bharat.
To focus on our core business we sold during the year a propertylocated at Panchkula at ' 33.77 crore; the loss on our books totalling ' 15.21 crore(reflects as an exceptional item in the Profit & Loss account). We have thus saved themaintenance cost of the property and the proceeds from the sale were used to reduce ourdebt exposure. The finance cost will also decline in the coming quarters and positivelyimpact our bottom-line.
Having incurred significant investments over the last 3-4 years we arenow optimising our capital expenditure. We will continue to pursue the consolidation ofcapex and modernisation of existing capacities with a strategic focus on cost controlsand increasing margins.
COVID-19 and the aftermath
Although the short-term outlook continues to be uncertain thegovernment's stimulus package of ' 20 lakh crore and other support measures and gradualresumption of economic activities are expected to revive consumer sentiment. Additionallythe government's sustained focus on infrastructure spend and thrust on indigenousmanufacturing will also lead to a rise in business activity. We envisage that demand forour products will gather momentum from the second quarter of FY21. We expect more demandfrom secondary markets and from tier 2 and tier 3 cities as the impact of the pandemic inthese areas is comparatively less severe.
In the post-COVID world customers have become extremely particularabout hygiene and safety. We are committed to providing them the best and safest solutionsin the prevailing scenario. Our anti-bacterial laminate is effective in retardingbacterial attack and keeps the surface hygienic and
germ-free. Our solid acrylic surface can resist moisture pollutantsand bacterial impact for every space making it hygienic and safe. To contribute our bitto the war against the pandemic we installed 12 cubicles of Novo Series in SanjeevaniHospital Chennai. These anti-bacterial cubicles will be used as changing rooms for theaffected patients. Our team completed the installation of the cubicles within 24 hours.
As we prepare ourselves for the next phase of growth our prioritieswill comprise leveraging advanced technologies maximising operational efficiencies anddeveloping innovative products for global markets.
Our objective is to expand presence rationalise costs and enhanceefficiency to achieve economies of scale. We are anticipating the needs of tomorrow whilegearing up for it today. In all that we do our teams play a pivotal role and we arecommitted to steadily upskill our people and empower them.
I thank our go-getters customers partners business associatesinvestors communities and other stakeholders for their enduring faith and support. We areundeterred by short-term challenges and invite all to an exciting and enriching journeyforward.
Here is hoping for a brighter and stronger future together.