It gives me immense pleasure to share my thoughts on your Companys performancefor the fiscal year 2021-22. Last year during this period the world looked very differentfrom today. Over the past 12 months we have encountered fundamental changes to the way welive work and do business.
People around the world have gone through very challenging times facing severe risks.Covid-19 which started as a risk to health and wellbeing expanded to how we operatebusiness through its disruptions. The disruptions lead to supply chain issues resulting inhigh inflationary pressures on input costs including raw material utilities and logisticcosts.
Following a substantial downturn in 2020 due to the pandemic the world economy stageda V shaped recovery very swiftly. However the momentum was slowed down with repeat wavesof the Covid-19 virus. Moreover towards the close of Q4 FY2022 increased financialvolatility was caused by rising geopolitical tensions resulting from the Russia-Ukraineconflict. Oil and other commodity prices have skyrocketed exacerbating already stronginflationary pressures in both advanced and emerging/developing nations. All Central banksare raising interest rates significantly to fight inflation and there is also risk ofdemand contraction due to this.
In the past two years we have gone through unprecedented challenges but we accepted allthe challenges and bounced back every time. This resilience led us to be stronger andbecome better to serve our customers globally. Recent geopolitical developments globalinflation and rising interest rate cycle has introduced an element of uncertainty whichleads to the risk of demand contraction but we are determined as ever to fulfil ourcourageous goals.
Our strong commitment and passion makes us strongly believe that were on thepath of
RISE TO WIN!
Some key trends impacting the global pigment industry:
Industry Consolidation at the top with major M&A activity amongst the top players
Pressure on costs driven by supply chain disruptions resulting in price pressure inbase chemicals and indirect materials
Enhanced focus on sustainability with push towards ESG challenges faced due tovarious disruptions during the year
Apart from the raw material cost increases we have also witnessed acute increase inenergy and logistics cost this is pushing up the manufacturing and selling costs.
The challenges in the logistics area persisted; shortage of shipping container due toCOVID situation in China and congestion at various ports is leading to delays in theshipping. This has also led to the freight cost escalation of three to four times. Withthe direct as well as the indirect material cost pressure lingering we took calibratedapproach to achieve our dual objectives of volume growth and margin protection.
We also continue to monitor the geopolitical situation for any potential impactspecifically in our sales in the Europe region.
Our segment performance during the year
As last year was one of the more volatile years for the business teams have putsignificant efforts to manage RM cost availability pass on cost increases and controlmanufacturing costs. From performance perspective we were able to grow sales despite costpressures however operating margin was adversely impacted. Profitability in some commoditysegments and demand in some speciality segments remain a concern and we are taking stepsto reverse the trend in these.
Despite these disruptions our team made great
1) Commercialisation of major capex projects
2) Great push towards sustainability by reducing our water consumption and improvingour energy mix towards green energy
3) Your company is honored with Maha Brand Brands of Maharashtra MahatmaAward for CSR Excellence and Excellence award 2021 for LeadingPractices in employee relations
On the consolidated basis the total income from operation stood at 2201 Crores in FY2021-22 as compared to 1864 crores in FY 2020-21 reporting a growth of 18%year-on-year. EBITDA for the FY 2021-22 stood at 275 Crores versus 288 Crores in FY2020-21. EBITDA margins were 12.5% in FY 2021-22 as compared to 15.4% in FY 2020-21.Profit after tax is at 130 Crores FY 2021-22 as compared to 140 crore over last year.
Update on capex projects
In terms of the expansion we progressed well on capex projects. We are now at advancedstage of implementing the overall Capex program of 750 Crs. and we expect these to getimplemented by end of H1 FY23. Multiple projects which are in final stage ofimplementation are likely to soon get commercialized. Post this capex we will have aproduct portfolio equivalent to that of global leaders.
We are optimistic
Our customer-centric vision is at the core of our business models resilience andlonger-term sustainability. This helps us spot trends early on and embrace businessopportunities by continually investing in research and innovation developing newercapabilities reskilling our workforce and launching new solutions and products. Ourstrategies have resulted in enduring customer relationships a vibrant and engagedworkforce a steady expansion of our addressable markets and a proven track record indelivering longer-term stakeholder value.
Our priorities for FY 23 are:
Commercialisation of new capex projects and generate cashflows from these investments
Focus on controlling costs with a frugal mindset
Improve customer experience through consistent and reliable quality and Upgradeoccupational and process safety to world class level with individual accountability
Building a global culture through right mindsets of resilience and entrepreneurship
Sustainability is at the core of our business strategy. We are committed to upliftingthe lives of our employees local communities and preserving the planet. SudarshanChemical towards: Industries has taken multiple initiatives through its Corporate SocialResponsibility (CSR) projects over the years to make an impact in the ESG domain. Ourinitiatives are aligned with United Nations Sustainable Development Goals (UN SDG).
We are focused on efficient operations identifying material risks and maintainingtransparency with our stakeholders. With increasing awareness of ESGs impact onbusiness among investors and customers it has become easier for us to integrate valuecreation and profits with sustainability. We also continue to strive toward theelimination of health hazards and accidents by adapting effective practices andinterventions. We have the best-in-class practices in place to achieve our goal of zeroharm to people and the environment. closing Note
I am proud of the progress we have made towards implementing our strategy amidst theglobal pandemic. I am impressed by the resilience of our business which has enabled us toachieve the business performance despite the difficult performance collaboration andpositive attitude of our teams have shown over the past two year have been exemplary. Iwould like to thank all of them for their invaluable contribution in this trulyexceptional year. I extend my deepest gratitude to all the stakeholders associated withthe Company my sincere gratitude to all my fellow Board members customers suppliersgovernment officials bankers and our shareholders for their continued trust belief andsupport in our journey of making Sudarshan a reliable and sustainable leading globalpigment player.
Together we will RISE TO WIN achieve major milestones set new benchmarks each timewhile positively impacting our communities society and the planet! Your continualpatience and belief in our
Companys progress is deeply appreciated.
|Yours faithful |
|Rajesh Rathi |
|Managing Director |