Dear Shareholders,
I write this message to you against the backdrop of a receding second wave of the
COVID-19 pandemic. Unlike the first, the second wave has been far more aggressive in its
intensity and geographic spread leading to a tremendous impact on the nation, its citizens
and economy. The national lockdown during April and May 2020 resulted in various
operational and supply chain challenges that your Company was able to mitigate by
establishing stringent safe operating protocols at its sites and offices. The measures
adopted at our manufacturing sites coupled with the resilience and commitment demonstrated
by our team enabled the Company to successfully meet the strong demand from our customers
in the second half of the financial year. Your Company undertook various measures
addressing the health and welfare of its employees, their families, and the communities in
which we operate. As a preventive measure, we actively promoted vaccination amongst our
employees and organized dedicated camps at our manufacturing sites and offices, wherever
possible. In addition, your Company donated lifesaving medical equipment, oxygen cylinders
and oxygen concentrators to augment the medical infrastructure in the vicinity of our
facilities. We partnered with industry players to install three state-of-the-art mobile
acute care units that augmented the availability of ICU beds during the peak of the
crisis. I take this opportunity to thank you, our team and the Board of Directors for the
trust and guidance in helping deal with this unprecedented situation and emerge stronger
than ever before. Post the national lockdown in Q1 and gradual resumption of industrial
activity in Q2, the economy witnessed a strong bounce back in Q3 and Q4 of FY 20-21.
India’s GDP which had contracted by 24.4% in Q1 FY 21 now stands at minus 7.3% for
the full year. The agriculture sector aided by a favourable monsoon proved resilient to
the impact of the first wave of the pandemic and is estimated to have grown at 3.4% in FY
20-21. The automotive sector which accounts for a substantial portion of business for your
Company, transitioned to the BS VI emission standards in April 2020 and emerged from the
complete shutdown during Q1 with a "V-shaped" recovery in Q3 and Q4. Against the
backdrop of this macro environment, I am pleased to share the financial performance of
your Company. Revenue from operations grew by 26% Y-o-Y in FY 2021 to INR 95,583.4
million, along with robust growth in Profit After Tax of INR 5,526.1 million compared to
INR 228.7 million in the previous year. Most business segments of your Company including
Agricultural Solutions, segments focused on the Automotive industry as well as the
Nutrition and Care Chemicals business delivered profitable growth. You would be happy to
note that the Board of Directors of your Company have recommended a special dividend of
INR. 5 per equity share, due to portfolio restructuring measures in addition to a final
dividend of INR. 5 per equity share for the financial year ended 31st March 2021,
aggregating to INR. 10 per equity share i.e. 100%.
Focused measures for continuous improvement in the areas of operating margins, working
capital and fixed costs across our diverse portfolio was the foundation to achieve this
strong performance in a challenging year. The stellar results for your Company would not
be possible without an engaged and motivated employee force. My heartfelt gratitude and
respect for colleagues who have continued to perform at the highest levels despite the
challenges and adversities. To strengthen competitiveness, your Company continued to
optimize its business portfolio with the divestiture of the Construction Chemicals
business in July 2020 and the acquisition as well as subsequent merger of erstwhile BASF
Performance Polyamides India Private Limited business into our Materials segment in
February 2021. Further, your Company continued with the planned expansions for the Dahej
and Mangalore plants.
Very pleased to share that our manufacturing site at Mangalore celebrated 2 milestones
– completion of 25 years of operations and a decade of successful operations for the
Technology Coatings Center. We also continued to receive recognitions from key
stakeholders and customers in 2020-21, a testimony of our superlative achievements. Our
on-going digitalization initiatives ensured business continuity and efficiency gains,
resulting in customers experiencing minimal supply chain disruptions even during the
lockdown. Our teams adapted to the new ways of working and enhanced customer engagement
with virtual collaborations contributing to our above market growth.
While the short-term prospects from a business and economy perspective seems uncertain,
the medium to long term growth potential remains intact. Health and safety of our work
force will continue to remain important for our success. The models predict potential
upcoming waves of the pandemic, however an improvement in vaccination rates and the
overall health care system should enable the nation to deal with the future waves better
and reduce the risks of disruptions to economic activity. To summarize, your Company is
confident that with the measures undertaken, the nation will tide over the crisis. We
remain committed to our priorities of sustainable and profitable growth.
Stay safe and take care!
Best wishes,
Narayan Krishnamohan