It is with great pleasure and optimism that I address all of you as the Chairman &
Managing Director of Godawari Power & Ispat Limited. Celebrating a remarkable
milestone, GPIL stands proudly at the culmination of 25 years of excellence and
dedication. As we commemorate this significant anniversary, we reflect on the rich legacy
that has shaped our organisation into what it is today. Since its inception, GPIL has been
synonymous with innovation, integrity, and unwavering commitment to our customers and
stakeholders. Our journey has been marked by achievements, challenges, and above all, the
collective efforts of a team driven by a shared vision. As we celebrate our 25th year of
our journey, we honour the legacy of GPIL and look forward to a future defined by
continued success and prosperity.
Reflecting on the past year, our theme "Embracing Our Foundation and Defining
Tomorrow" highlights our commitment in leveraging our strong legacy and foundation in
shaping a sustainable future. From vertical integration, green innovation, cost
optimisation to capacity expansion and value addition in finished products, GPIL has taken
significant strides in defining its tomorrow. Building upon a foundation that is
financially prudent and resilient to market challenges, enables GPIL to not only expand
its turnover but also expand on its margins and profits.
Market Outlook
In the international market, global iron ore prices reached $144 in January 2024, up
from $103 at the beginning of the year, and are currently stable at $110. China's iron ore
production has seen an increase during the current year.. The World Steel Association
forecasts a 1.7% growth in steel demand to 1,793 million metric tons in 2024, and another
1.2% to 1,815 million tons in 2025, which supports sustained demand for iron ore. While
steel demand in China is expected to plateau in 2024 due to decreased real estate
investment, this dip is likely to be offset by increased demand from infrastructure
projects and the manufacturing sector.
Operational Performance
GPIL achieved record-breaking production levels in FY 2023-24, with a remarkable
increase in the output of steel billets up by 48%, sponge iron by 20%, and ferro alloys by
18%. The company also benefited significantly from its cost-saving initiatives,
particularly the commissioning of 45 megawatts of solar power projects and a
high-efficiency turbine generator, which collectively contributed to a 7-8 megawatt
increase in power generation. This strategic move not only reduced power costs but also
allowed for higher operating capacities, leading to improved operating margins.
Additionally, GPIL's captive iron ore mine provided a substantial competitive edge,
offering iron ore at a significantly lower cost compared to the market price, thereby
enhancing overall operational efficiency and production capabilities. The upcoming
completion of debottlenecking CAPEX projects, including a new solar power project and a
rolling mill modification, is poised to further strengthen our operational efficiency and
performance. Despite challenges such as the lower production volumes from closure of Boria
Tibu iron ore mine and maintenance shutdowns, we have persevered and continued to deliver
superior results.
Financial Performance
From the financial perspective, we continuously improved our performance and delivered
a robust set of numbers for FY 2023-24. Our consolidated revenue from operations for the
FY 2023-24 came in at ' 5,455 Crores. Despite a slight decline in annual revenue by 5% as
compared to FY 202223, the company has demonstrated robust financial health in FY 2023-24.
EBITDA saw a positive uptick with 14% to ' 1,328 Crores, and PAT rose by 18% to ' 937
Crores. EBITDA margin improved to 24%, up from 20% the previous year, driven by increased
production and sales of value-added products, cost savings from solar power initiatives,
and operational leverage. The heightened capacities led to a surge in sales of steel
billets, MS rounds, wire rods, and ferro alloys, with the realisation of iron ore pellets
witnessing an 8% increase to over ' 10,000 per ton. These financial milestones underscore
GPIL's strategic vision and resilience in effectively navigating market adversities.
Capacity Expansion
As part of strategic growth initiatives, GPIL is embarking on a comprehensive capacity
expansion plan to enhance its operational capabilities and meet the rising demand in the
market. Our completed debottlenecking CAPEX and enhanced operating efficiency program,
have laid a strong foundation for future growth. By commissioning solar power plants with
a combined capacity of 145 megawatts and a new high-efficiency turbine generator, the
company has strengthened its energy infrastructure for sustainable operations.
Looking ahead, the company is focused on significant expansion projects, including
doubling the iron ore mining capacity at Ari Dongri mine to 6 million tons, establishing a
6 MTPA beneficiation plant at the same location, and increasing pellet production capacity
by additional 2 MTPA. These ventures, alongside the construction of a 2 MTPA Greenfield
integrated steel plant, reflect our commitment to innovation and progress. With esteemed
industry experts joining as Independent Directors on our board, the company is poised to
drive these expansion efforts forward efficiently and responsibly. GPIL's dedication to
invest in the future through additional CAPEX for capacity expansion underscores its
vision to continuously elevate its production capacities and elevate as a key player in
the steel and mining industry.
Empowering Excellence
At GPIL, our strategic focus on Human Resource Management underscores our commitment in
optimising workforce effectiveness and aligning employee development with company
objectives. With a strong emphasis on diversity and inclusion the Company creates a
supportive atmosphere that values uniqueness, promotes creativity and foster team work.
With an aim to place its people first, GPIL focuses on providing holistic wellness,
rewarding long-term association and diverse career opportunities.
Sustainability and Governance
At GPIL, sustainability is at the core of its operations, and the company is actively
pursuing a comprehensive decarbonisation roadmap to mitigate its environmental impact. By
leveraging cutting-edge technologies and collaborative partnerships, the company is
dedicated in significantly reducing carbon emissions across its value chain. Its ultimate
goal is to position itself as a pioneer in low-carbon steel production, emphasising
environmental responsibility and long-term business resilience. It is dedicated in
reducing its carbon footprint through energy efficient technologies, renewable energy
adoption and effective waste management.
On the social front, the Company is relentlessly working to empower communities around
its areas of operations and bring better access to healthcare, education and means of
financial independence for the beneficiaries. It is dedicated in building a stable
ecosystem of vendors based on strong relationships and shared values. The Company
recognises the importance of collaborating with vendors who uphold ethical standards,
quality assurance, and sustainability practices. By developing a network of reliable and
responsible vendors, it ensures the integrity of its supply chain and promote fair
business practices within its ecosystem.
Good governance is the key to succeeding across all other fronts, and the company is
determined to adopt the best- in-class governance practices for the benefit of all its
stakeholders. Governance at GPIL embodies its commitment to transparency, integrity, and
accountability. It upholds rigorous standards to ensure sound decision-making and ethical
conduct across all levels of the organisation. The Company's governance framework is
designed to facilitate efficient oversight and strategic coherence, empowering to navigate
challenges and cultivate sustainable expansion. It places a strong emphasis on
prioritising stakeholder concerns, building trust through transparent communication, and
conscientiously managing resources. Governance at GPIL is fundamental to its commitment in
creating lasting value while maintaining uncompromising standards of corporate ethics and
responsibility.
In closing, I extend my sincere thanks to all the employees for their resolute efforts
towards forging a resilient and agile organisation. I also express my sincere gratitude to
all stakeholders for their unstinted support over many years and hope for their continued
support in our journey to take the Company to greater heights.
B.L. Agarwal |
Chairman & Managing Director |