From the desk of Chairman
It is always a pleasure to connect with you!
Last year I spoke to you about our Company's Resiliency andResponsible behaviour during the peak of the COVID-19 pandemic. The steadfast dedicationof our employees who came together to support our customers and provide a consistentsupply of products despite the challenges was commendable. The current year is nodifferent and I'm happy to report that despite the challenging external environmentespecially with high input costs the company continues to stay resilient and shine inFy'22 also.
Macro Economy and Industry Perspective
The past financial year was a period of recovery and new uncertaintiesin equal measure for the Global economies. The period saw a broad-based uptick ininvestments and demand revival followed by the vagaries of a global commodity shock due towar in Europe and supply chain disruptions in China. These supply-side bottlenecks and astronger than-anticipated rebound of demand have resulted in major commoditiesexperiencing a significant price surge during the year. Meanwhile subsequent waves of theCovid-19 pandemic continued to jitter governments and exert pressure on the healthcaresystems across the globe.
For India the situation was no different as the economy startedwitnessing green shoots of recovery post the first wave of Covid19 pandemic. The secondwave of the COVID-19 pandemic struck hard right from the beginning of 2021. However rapidvaccination roll-out by the Government led to upticks across a range of indicatorsincluding the mobility index direct tax collections and electricity demand reflectingpositive levels of economic growth. While demand is yet to fully recover to pre-covidlevels and consumer prices continue to increase steeply RBI used its policy levers topreserve macroeconomic and financial stability while enhancing the economy's resilience.
Talking about the industry the Indian shrimp market is projected toreach US$ 12 billion by 2027. India's long coastline and favourable geographical conditionoffers opportunities for the farming of healthy and disease-free shrimp which representsone of the key factors impelling the growth of the market. The escalating demand forshrimp products at a global scale and its growing popularity at various regional andinternational cuisines along with the rising health consciousness among individuals ispositively influencing the demand for shrimp products in the country. The Government ofIndia has introduced various initiatives to encourage organic shrimp farming practicesthereby offering lucrative growth opportunities to key players operating in the country.Apart from this the escalating demand for ready-to-eat food products on account of rapidurbanization lifestyle changes and higher disposable incomes of individuals arefacilitating the consumption of frozen and processed shrimp products in India.
Looking back at our performance
Although we were able to mitigate much of the impact of pandemicrelated challenges on our business the profitability numbers fail to reflect the truecourage and positive initiatives from our side. During the current year our Revenue fromOperations jumped by nearly 41% to Rs. 298 Crores but Profit Before Tax declined by nearly98% to Rs. 36 Lakhs. This decline in profits was largely on account of externalenvironment as rising input costs dented the margins. With inflation rising the situationis expected to continue for some more time before it plateaus out. However from theCompany side the management is taking stock of the situation carefully with stringentcost controls and diversification of product offerings to improve margins. With severalinitiatives already undertaken I am confident of soon regaining our growth momentum interms of profitability.
Rising with Resilience
The age-old adage 'When the going gets tough the tough get going'could never find a better proponent than our very own company. In the face of adversitybeing challenged by a unfavourable economic environment with rising input costs we atWaterbase have braced and fortified ourselves and placed ourselves at a vantage pointfrom where we can not only identify the opportunities but have also positioned ourselvesto make good on them. Thereby creating our very own mantra 'Rising with Resilience'.
All of our business moves are underpinned by financial prudence: astrong balance sheet net cash position and access to liquidity. This gives us theconfidence and ability to weather any storm.
With a clear vision and precise application we have built a strongfoundation that has laid the path to build a sustainable business. By being constantlyattentive to the ever-evolving shrimp farmer's needs we have always endeavoured increating feed and farm-care products that not only ensure better yield to farmers butwhich are also free from any antibiotics or banned substances that can harm our endconsumer. Armed with best-in-class products with the right balance of cost quality andtechnology we have embarked on a transformational journey of excellence across the valuechain in the organization. And not just in manufacturing but we have also invested in theR&D transformation that will aid the growth of the company in the foreseeable future.Its full implementation will result in faster go-to-market development and productionefficiency better cost competitiveness and sustainable farming practices.
Society & Waterbase
Any good business organisation will always evaluate its successalongside the progress of the society that it operates in. At the KCT Group our ethos isthat we believe it is in giving that we shall receive which is why the CSR initiativesmonitored from the Group Level are planned around this theme to ensure better educationhealthcare support and helping the less privileged walk towards a better life and I amconfident we shall continue on this path to make a difference.
Waterbase as a company in the aqua culture space continues to focus onpractices that ensure environmental sustainability especially in times when aqua farmingis increasingly moving towards sustainable farming practices so as to provide the end usera chemical free food experience.
Sense of optimism
Looking ahead I believe there is a significant runway for organicgrowth within our existing business and we will direct as much attention and resources aspossible to realizing this value. We are fortunate to have a strong business foundationproven market leadership successful products and a branded value-added offering thattargets the evolving and diverse needs of our farmer friends. And of course theseattributes are supported by the strength of our balance sheet and leverage ratio whichgives us the financial flexibility required to grow even under prolonged headwinds.
With a strong financial flexibility and stability we are exploringopportunities to accelerate growth through investing in shrimp processing & exportsand R&D initiatives. We will be extremely prudent as we evaluate potentialopportunities to ensure a strong strategic rationale value upside and alignment with ourvision and purpose.
I am extremely grateful to the Board and all our stakeholders forreposing their continued trust in us and for motivating us to keep excelling at what wedo.
|Together we rise. |
|With warm regards |
|Vikramaditya Mohan Thapar |