Strengthening operations sustainably
India is well on track to achieve its goal of becoming a $5-trillion economy. In theshort term increased global concerns are presenting headwinds however these areexpected to subside and position the country back to healthy economic growth. //
The global economy recorded a significant growth after recovering from the impacts ofthe pandemic. While the recovery was smooth in the first half of 2021 it lost momentumduring the second half of the year on account of supply chain disruptions and risingcommodity prices. What looked challenging to manage at first became even difficult postRussia's invasion of Ukraine. This isn't the end of it as the fallout on the supply chainis likely to further drive inflation and overshadow the growth prospects of the globaleconomy.
India is well on track to achieve its goal of becoming a $5-trillion economy. In theshort term increased global concerns are presenting headwinds however these areexpected to subside and position the country back to healthy economic growth.
With the world population expected to grow to 9.8 billion by 2050 demand for food willrise. As per the United Nations there will be a need to double world's agriculturaloutput by 2050 in order to keep up with the population growth. India being anagriculture-based economy the country will always play a pivotal role in contributing tothe demand of the overall agricultural output.
Against such background the domestic tractor and farm machinery market are extremelyimportant.
With the shortage of farm labour rising wages and the need to improve productivitythere is an increased demand in both lower HP tractors and tillers. Majority of Indianfarmers owning less than 5 acres of land are increasingly adapting small and affordablefarm mechanisation tools.
Amid these transformations in the agriculture landscape of India our strong marketpositioning as well as capacity readiness are enabling us to capitalise on the sector'sexpanding prospects. We have recognised our role in uplifting the agriculture communitybuilding strategic collaborations and making a positive difference in farmer life.
During the pandemic many contract workers /urban workforce working on many contractualjobs started moving to rural /semi-urban areas has resulted in higher demand for agrimachineries. Also normal monsoons during the pandemic boosted Kharif season crops and hada significant bearing impact on rabi crops as well. These factors had big positive impacton agri sector and on our company prospects of delivering better results. VST capitalisedon above momentum by catering to the needs of small & marginal farmers and ensuredavailability of tillers tractors and weeders . also increase in coverage has helped usin tapping the rural demand for agri machineries.
With the prediction of a good monsoon in FY23 there will be an increase in demand forsmall machines to the tune of approx 10% - 15 %. Crop-specific machines demand will be onrising for crops such as sugar cane turmeric ginger and horticulture where VST haslined up a wide range of products to tap the potential like 16HP tiller for sugar caneRT70 weeder for ginger and turmeric ignito 9hp compact tiller for multi-cropapplications.
Our team rallied to deliver a strong performance with revenue from operation of Rs.853.86 crore as compared to Rs. 764.24 crore in the previous year. Our EBITDA and PATstood at Rs. 124.18 crore and Rs. 99.31 crore respectively.
Our Power tiller sales volume stood at 31776 units while tractor sales volumes stoodat 7991 units. In 2021-22 we continued with our efforts of making strong partnerships. Weentered into a Master Supply agreement with Zimeno Inc. d/b/a Monarch Tractor.
We have recorded a topline growth of 12% with a 3-year CAGR of 25.33%. We also made anumber of new product launches during the year. The launch of VST 95 DI Ignito India'sfirst 9 HP electric start indigenous power tillers 30HP tractor and VST 171 DI SingleCylinder Tractor and electric Pumps are some notable ones that found growing acceptancein the farmer community. In this context
I would like to mention that our products are backed by service and spares availabilityvia our well-established network. The aftersales division continues to be an importantbusiness enabler driving enriching customer experience.
With this stellar performance I am also pleased to report that our Board haverecommended a final dividend of Rs. 20 per equity share for the financial year ended 31March 2022.
We continue to take steps to strengthen our sustainability resolve across ouroperations. We aim to bring positive changes to environment by identifying specificparameters of ESG. Some of the efforts were directed towards water conservationincreasing renewable energy consumption and adequate hazardous waste management.
Given that we are one of the leading mechanisation player in the domestic market wehope to further strengthen our position in the Indian farm mechanisation market. Among theinternational markets Africa presents an opportunity for growth. Our new productintroduction of high horsepower tractors have garnered a good response from the Africanmarket giving us the optimism to penetrate the market further.
Our endeavours in new product development widening our dealer network and strategicpartnerships with global players will help us achieve our long-term objectives.
In conclusion I will like to express my deepest gratitude to Board of Directorsstakeholders and our employees for their dedication they have showed in the mostchallenging times during the pandemic. As we concentrate our efforts towards recovery onbusiness and economic front I remain optimistic about the growth prospects foragriculture industry and believe your Company is well-positioned to capture the emergingopportunities to drive long-term value creation.
Mr. V K Surendra