Message from the Managing Director
We are very fortunate and thankful to our hon'ble Prime Minister as under his greatleadership and guidance our nation is in the privileged situation amidst theunprecedented worldwide crisis.
There are thousands of MSMEs have been decimated due to abrupt lockdown in year 2020-21on account of COVID-19 pandemic outbreak. Micro small and medium enterprises (MSMEs) arethe back bone of our Indian economy and more than 45 percent of total manufacturing outputof the country. There are approximately 40 million MSMEs in India which rank the secondlargest after China. These enterprises account for more than 40% of the total exports ofthe nation and contribute 9% (Approx.) to the GDP of our nation.
The year 2020-21 has been challenging for each one of us. The Covid-19 pandemic has hada significant impact on lives livelihoods and the business. Operational challengesmounted due to restricted movement and disrupted supply lines during the first few monthsof the pandemic. During those tough periods our entire focus has been towards our socialresponsibility initiatives and continues to be on our people's health & safetyensuring no major disruption in our communities caring for the communities in which weoperate and finally protecting our business model.
For retaining our financial strength it was also a year of transformation for ourcompany as we set out to aggressively to grow our retail segment while gradually reducingthe government sales/contracts to our overall sales mix. We believe that the strategic togrow our retail segment will enable us to deliver better value in the years ahead.
The financial year 2020-21 commenced amidst the nationwide lockdown the relentlesscommitment and dedication of every member of the V-Marc India Limited family helped thebusiness overcome many challenges in the past year. As a result we have been able tobring down the curtains on the financial year 2020-21 with a robust set of numbers. Wereported a turnover of Rs.175.13 crores growing by 2.29% as against Rs.171.21 Cr in theprevious year. Profit after tax at Rs.5.79 crores was up 17.63%. Our strong focus onoptimizing our costs enabled us to improve our EBITDA margin to 8.59% as against 7.25% inthe previous year.
Further our Company's credit rating is maintained in investment grade however ratingagency has downgraded to Ratings BBB- for long-term bank facilities and A3 for short-termbank facilities. The revised outlook along with our strong profile will enable us tosecure funds at competitive costs.
With the easing of restrictions and unlocking of the economy retail sales made astrong sequential improvement to almost erase the adverse impact of the first quarter. Forthe full year sales through the dealer / distribution market were almost improved fromthe last year 2019-20. More importantly the contribution of our Retail segment to overallsales mix now stands at 34% as against 29% in the previous year. This is in line with ourfocused strategy as the Retail business offers better margins and has lower workingcapital requirements. Going forward our target is to generate 50-60% of our overall salesfrom the Retail segment in coming years. To provide a thrust to the Retail segment wehave been strengthening our manpower in various sales branches at different levels.Presently company is having its own depot at Ghaziabad Indore Jaipur distributors &dealers across the country especially in the states of Uttar Pradesh Uttaranchal M.P.Chhattisgarh Rajasthan Maharashtra Gujrat Bihar Jharkhand and Odisha as far asdomestic & retail segment.
We have also hired Sumit Vyass (Actor) to increase focus on advertising and salespromotion for strengthening brand recognition in electricals industry. To increase oursales through our distribution network we remain focused on growing our dealer networkdeepening our market-leading position and the expanded customer relationships that we havebuilt in this segment make us look to the future with confidence especially as several ofthese sectors will be strong growth drivers powered by the government's focus oninfrastructure and building a self-reliant nation.
Presently V-Marc India is manufacturing power cable up to 11 KVA from our existingtechnology through Sio-plas line Machine cured by wet process now maximum GovernmentDepartments have switched over to Dry curing CCV line Method. Through CCV line methodinsulating material is being Cross Linked Polyethylene (XLPE) cured by dry curing processi.e. nitrogen gas curing applied by extrusion process as per IS-7098 and its latestamendments.
Due to changes in technology & technical specification changed by variousgovernments our sales are being affected and we have left no other option but to upgradeour technology & will have to establish the CCV Line Method. During financial year2020-21 we could not participate in tenders amounting Rs.692.21 Cr to various governmentdepartments due to non-availability of CCV Line method with us.
To support our growth ambition we will continue to invest in increasing our capacity.In the previous years we had augmented our housing wires capacity with the setting of anew facility. We are now looking at investing around Rs.50 Crore for growing ourcapacities for HT cables. The capex will be undertaken in current financial year 2021-22.Moreover the Company has sufficient capacity to cater to the market demand by when newproduction lines will also be available.
"Keeping in view of above we have decided to set up CCV Line machine to protectsales as well as business. Moreover through its technology we can manufacture powercable up to 66 KVA which improve our sales turnover and profitability as well".
We are enormously proud of how adaptive and resilient our employees were in the face ofa global pandemic. We would like to thank every one of our employees for their hard workduring this challenging time.
Regular sanitization at workplace free distribution of masks tie-ups with hospitalsfor COVID-19 testing hospitalization and other emergency requirements and arrangingoxygen concentrators were among the other measures taken for the safety and well-being ofour people. We are pleased to share that we have distributed mask across all our locationsfor our employees & their families and society as well. With the pandemic still ragingon we continue to strictly adhere to all COVID-19 appropriate protocols at all our sites.
During severe second wave of COVID-19 In the beginning of 2021-22 the nation was hithard with the huge loss of lives resulted in a renewed lockdown of the economy. Now thesituation is under control and lockdowns have been eased with the accelerating vaccinerollout by government strengthening of healthcare infrastructure and heightened publicawareness on adopting health and safety measures.
The improved operating environment combined with pent-up demand should boost the marketgrowth for wires and cables. Smart city projects are underway while the expected pick-upin demand for real estate will aid the recovery of the construction sector. Projects inareas of road and highways tunnels railways metro rail power transmission anddistribution airports solar power and nuclear power among others are being awarded tospur economic growth. Further the Government has extended its Rs. Ill Lakh Crore (USD 1.5trillion) National Infrastructure Pipeline which is an umbrella program integratingmulti-sector infrastructural projects to cover more projects by 2025. We are alsowitnessing capacity expansion and upgradation in various state-owned oil refineries. TheProduction-Linked Incentive (PLI) Scheme announced by the Government will encourageprivate players to enhance their domestic manufacturing capabilities.
All these factors point towards substantial growth for the wires and cables industryand we believe well-organized companies with good working capital management will beable to extract better value. At V-Marc India we have a strong cash flow and balancesheet and with our proven manufacturing and distribution capabilities positions us to beopportunistic in strategically reinvesting capitalizing on market trends and expandingour business.
We would like to take this opportunity to thank all our people who have been tirelesslyworking to ensure that we continue to serve the people of this country through thisextremely challenging year.
Our team is confident that while the pandemic has created near-term challenges thebusiness is fundamentally strong to deliver better value in the years ahead. Mostimportantly we would like to thank you our shareholders including customers bankersfinancial institutions Central and State government bodies business associatessuppliers and employees for your overwhelming trust support and confidence in V-MarcIndia Limited.
Thank you for your support and guidance. Take care and stay safe. With warm regards
|Vikas Garg |
|Managing Director |