One of the most principal messages that I would like to convey is that even weexperienced one of the most challenging periods in the external environment; we performedcreditably in this challenging environment.
Looking at the scenario of the external levels we are pleased to report a satisfactoryperformance during 2018-19. The Company recorded 43% growth in turnover and EBIDTAincreased by 42% over the previous year. Increase in sales volumes and improved costefficiencies were however offset by rising raw material costs. The net profit after taxgrew by 42% over the previous year.
In my opinion this performance and counter slow down is attributed to many reasons -one of them being superior quality of our products.
It is a sign of deep prospects that despite the real estate slowdown in the last coupleof years the country continues to remain one of the most attractive in iron & steelsector opportunities. With a new dawn in the Indian economy Government of India has alsocome up with various policy reforms to address the root needs of people. We are of theview that this initiative will boost construction activity thereby increasing the demandfor steel
Further India's urban population is also growing at breath-taking speed. This makes itimperative to strike the right balance of urban development alongside the infrastructuregrowth. Towards this our country is foreseeing a massive allocation to the infrastructuresector. This will turn the spotlight on reinforced structures like ports roads railwaysand other areas like affordable housing physical infrastructure thereby providingnecessary momentum to the steel sector to meet its growth targets.
Supershakti is attractively placed to capital ize on India's projected 7.5% GDP growthfor 2020 through a combination of prudent vertical selection in-depth knowledge provencompetence best-in-class assets transparent governance and spare capacity to grow.
Demand and Challenges
Steel production in India grew by 3.1% to 103 million tonnes and consumption increasedby 7.9% to 90.7 million tonnes in FY 2017-18. India is currently the second largestproducer of steel after China and has recently surpassed Japan. An increase in domesticdemand from sectors like infrastructure real estate and automobiles is anticipated. Thegovernment has mooted a plan to boost domestic steel capacity to 300mt per annum by 2030.
The low per capita consumption of around 65 kg in India compared to the world'saverage of 214 kg and an encouraging government stance towards the steel industry allcontribute to India being an attractive location for steel. Additionally rapidly growingdemand with particular growth in demand from certain sectors such as construction andauto economising of domestic steel demand and decline in steel capacity in China that isexpected over the next decade are further expected to act in the country's favour.
Currently the steel being used in real estate contributes only 15-20% of total steelproduction in India. However Indian real estate sector is likely to be most benefited dueto rapid urbanisation which is expected to reach 543 million by 2025. Additionallygrowing economy is also driving demand for commercial hospitality and retail space.
The demand for affordable housing further enabled by the various government schemes andinitiatives and the need to grow cities vertically and implementation of regulationsregarding resistance and building strength further leading to an increase in steelintensity in construction are also likely to create a huge impact in the industry.Government introduced initiatives such as Pradhan Mantri Awas Yojna- Housing for AllSardar Patel Urban Housing Mission 100 Smart Cities Mission (by 2022) Pradhan MantriGram Sadak Yojna Urban Infrastructure Development Scheme for Small & Medium Towns(UIDSSMT) National Heritage City Development and Augmentation Yojana
(HRIDAY) BharatmaLa project 24x7 Power for AH initiative (by 2019) Development ofIndustrial Corridors & National Investment & Manufacturing Zones 75000 MWCLean-Energy initiative (by 2022) etc. are expected to drive further demand for steel inIndia.
Sowing to gain
At Supershakti MetaLiks we believe that through a superior management of factors -enhancing production efficiency compressing costs resource security and phase-wiseexpansion of the existing facilities we can counter any future threats.
Our Company is ready to expand provided it gets a good opportunity either throughexpansion or via acquisition of any potential opportunity that may come in our way. TheCompany can either go for any green field projects or brown field projects in future inorder to tap growing demand.
Our driving force
The belief that 'great people create great organizations' is the philosophy of theCompany's approach to its people. We continued to make significant investments fortraining in the areas of marketing exceLLence customer service and buiLding capabiLitiesfor organized retail trade. Human Resources aLways have been and shaLL continue to becentral to the growth of our Company. We are continuously making efforts in thedevelopment of Human Resource through a series of employee-friendly measures aimed attalent acquisition development motivation and
retention. Our endeavour is to develop a culture where a sense of beLongingness andownership of work are the key motivating factors and provide world class training tocreate a worLd- cLass work force.
Expectations and Prospects
India is expected to report steady growth over the foreseeabLe future backed by stabLegovernment. This growth wiLL be manifested in rising disposabLe incomes post-GSTstabiLisation and increased aspirations. Given this context I am pLeased to state thatSupershakti MetaLiks Limited is the right company in the right verticaLs at the righttime. My optimism stems from the fact that we have created a strong foundation and a richrepository of sectoraL experience . The products in which your company deaLs are both usedby industries and consumers and since our products commands premium vaLue it heLps inquick saLes reaLisation.
We wiLL continue to focus on enhancing efficiency optimising costs and increasingLiquidity and preparing for the big Leap when the sector rebounds. We are optimistic thatthis wiLL transLate into superior margins returns on capital employed and market capitalization enhancing vaLue in the hands of aLL those who own shares in our company.
With warm regards
|With warm regards |
|Dilipp Agarwal |