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HLE Glascoat Ltd

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BSE Code : 522215 | NSE Symbol : HLEGLAS | ISIN : INE461D01028 | Industry : Capital Goods-Non Electrical Equipment |


Chairman's Speech

[Himanshu Patel has ceased to be the Chairperson effective from April 1,2022]

During the year, all our plants were working at high capacities. Our healthy order book combined with increased production capacities expected to result is stronger despatches and sales in the coming quarters.

Dear Shareholders,

I hope you and your families are healthy and safe. We have been through over two years of challenging times posed by the COVID-19 pandemic. The impact continues to be felt with supply chain disruptions and steep increase in energy, logistics and other input costs. The commendable efforts by the medical fraternity, governments and various organisations have enabled the return to normalcy. Consequently, FY 2021-22 witnessed a faster than expected demand recovery and revival in business confidence with the Indian economy growing by 8.7% during the year.

OUR PERFORMANCE

Our consolidated revenue for FY 2021-22 stood at Rs. 65,221.82 Lakhs as against Rs. 48,448.93 Lakhs in FY 2020-21, marking a growth of 35%. Growth was primarily driven by strong order book for both filtration and drying equipment and glass- lined equipment businesses along with continued robust demand from end-user industries as well as the acquisition of Thaletec GmbH in December 2021.

During the year, all our plants were working at high capacities. Our healthy order book combined with increased production capacities is expected to result in stronger despatches and sales in the coming quarters. This demonstrates our team's consistent efforts in delivering outstanding performance amidst a tough external environment.

During the year, we saw our consolidated EBITDA growing by 23% to reach Rs.11,776.38 Lakhs over Rs. 9,558.77 Lakhs in the previous year. Profit after tax increased by 9% to Rs. 5,823.34 Lakhs in FY 2021-22 from Rs. 5,337.10 Lakhs in FY 202021, despite an exceptional charge of Rs. 911.42 Lakhs.

Further, the revenue from filtration and drying equipment and glass- lined equipment segments increased considerably by 30% and 65%, respectively, in FY 2021-22. EBIT growth for filtration, drying, and other equipment during the year stood at 5% whilst the same for glass-lined equipment stood strong at 69% over the previous fiscal.

STRATEGIC EXECUTION OF OUR GROWTH PLANS

We are introducing improved products and technologies across all business segments to serve the evolving demands of the customers, particularly in the MSME sector. We believe that MSME as a sector has tremendous potential; therefore, the team is focused on adding newer customers from this segment. We also plan to expand geographically with a renewed thrust on global markets for both the key product segments. This will make our business model more resilient operationally as we diversify our customer base.

At the same time, we are focused on developing unmatched execution capabilities by strengthening our leadership team to execute the Company's vision and growth strategy. Towards this, we intend to make senior level hires in our operations and support functions.

Now, let me give you an overview of our capacity expansion programmes at Maroli, Silvassa, and Anand plants.

We have spent approximately Rs. 1,500 Lakhs for adding new manufacturing sheds at the Maroli plant, which will augment the floor area by about 40% for the manufacturing of filtration, drying, and other equipment. This additional capacity was commissioned in March 2022.

We have also completed and commenced operations of the Greenfield plant at Silvassa to augment the manufacturing capacity for the filtration and drying equipment. This new facility is spread across approx. 20,300 sq. metres of land with a built- up area of 8,591 sq. metres. The unit is equipped with a state-of-the-art machine shop, critical equipment, and EOT cranes which comply with the highest standards of safety.

Finally, we have added dedicated furnaces for components and critical equipment at the Anand facility. This will result in increased availability of baking capacity in the six main furnaces, four being electric furnaces and two being gas-fired furnaces. This additional capacity was commissioned in the third quarter of the financial year.

With these developments, we stand to reap the benefits of robust product demand and higher production capacities in the coming years.

Orbicular Dryer, Rapid Disc Dryer Cooler, and Glass-Lined Mixer Settler, among others, are some of our noteworthy product introductions during the year. Our production team continuously strives to improve man and material flow on the shop floor which will lead to better utilisation of equipment, optimal manpower usage, and improved throughput time.

Lastly, as you all are informed, the Thaletec GmbH acquisition was successfully completed in December 2021 after receiving all required regulatory approvals. With this acquisition, we are in a position to augment our consolidated revenues and profits whilst also reaping the benefits of multiple synergies and complementary capabilities of the two companies across geographies.

BUSINESS OUTLOOK

We are sharply focused on making our Company future-ready and drive sustained, high growth. Going forward, we intend to augment our market share in the filtration, drying, and glass-lined equipment in India and abroad, whilst continuing to focus on innovations and improved quality to meet customer needs.

The end-user industries are continuing to perform well; and the increase in our manufacturing capacities will further augment the business activity and growth across all segments. The Thaletec acquisition has opened a plethora of opportunities to penetrate newer markets in Germany and other European countries for the filtration and drying equipment, for which we already enjoy a leadership position in India.

Both HLE Glascoat and Thaletec are exploring possibilities of capitalising on each other's strong areas of manufacturing and distribution, glass lining and application technologies, cost synergies, and intend to launch first-of-its-kind products in the Indian market.

CONCLUSION

I would like to take this opportunity to thank our Board members and our stakeholders for their continued guidance and support on our exciting journey. I also thank our team members for their hard work and dedication to overcome the challenging times and contribute to the growth and success of the organisation.

Regards,

Himanshu Patel

Managing Director

[Himanshu Patel has ceased to be the Chairperson effective from April 1, 2022].