Dear Shareholders,
We are pleased to present our Company's Annual Report, providing a
comprehensive overview of our performance across key business areas. Operating in a
complex environment with substantial macroeconomic volatility and geopolitical challenges,
we have demonstrated steady progress. This achievement is a direct result of our
employees' exceptional dedication and hard work.
Economy at a glance
FY24 was a year of economic resilience and growing imbalances. While
the global economy maintained strength with steady growth at 3.2% despite disparities,
geopolitical tension in regions like Russia, Ukraine, and the Middle East persisted,
impacting stability.
Geopolitical stress between China and the U.S. continued to reshape
global trade dynamics. Challenges have persisted in the manufacturing sector since 2023,
including high global inflation, dampening demand, supply chain disruptions and regional
conflicts.
Central banks worldwide adopted a hawkish monetary policy stance to
combat inflation, leading to increased interest rates and shaking consumer confidence.
Notwithstanding global headwinds, India demonstrated remarkable
resilience driven by government capital expenditure, a sharp rise in the manufacturing
sector and a revival in the services sector.
Despite the economic resurgence, most sectors faced the heat of global
disruptions, commodity price volatility and trade route fragilities. The chemical sector
was impacted by these factors and reported a dismal performance.
Our Performance
In keeping with the sectoral trend, we experienced considerable
challenges, too. Total revenue declined by about 10% to B 14,194.2 million. However, the
EBITDA dropped by 17.6%, whereas the net profit plummeted sharply. This was primarily due
to increased interest liability owing to our investment in the greenfield facility.
Interestingly, while our performance remained subdued in the first
three quarters, there was a strong rebound in the last quarter of FY24. We achieved a
revenue of B 3,990.3 million in Q4 FY24, marking a sequential growth of 16% compared to
the previous quarter. Moreover, the quarter's revenue exceeded the average of the
preceding three quarters by 17%, signalling a positive trajectory. The Company is
optimistic about sustaining this upward trend and building on this momentum in the coming
year.
Key milestones
Strategic milestones and deliberate expansion have characterised our
progress in the dye intermediates industry. We have broadened our product offerings
through targeted acquisitions and the enhancement of benzene derivatives. Our growth is
anchored in a commitment to consistency - maintaining exceptional quality, achieving
strong performance, and implementing strategic planning. This steadfast yet adaptable
approach has been pivotal in driving our ongoing success.
In FY24, we covered an important milestone in our strategic journey as
we commissioned our greenfield unit at Sayakha on December 29, 2023. The initial
production of MCB, followed by PNCB and ONCB on March 16, 2024, marks a significant
milestone in our step towards diversification into value-added products and opens new
growth avenues.
I am confident that our new unit will significantly contribute to the
Company's profitable growth over the coming years.
Furthermore, we have decided to permanently discontinue production
operations at our legacy facilities in Vatva GIDC, Ahmedabad. These units, commissioned
between 1989 and 1993, have encountered diminishing returns due to technological progress
and have operated below capacity for an extended period.
To ensure uninterrupted production, we have proactively augmented our
dye intermediate capacity by optimising Units 6 and 7. As a result, the closure of the
older facilities is anticipated to have a negligible impact on overall output while
substantially reducing fixed costs and enhancing operational effectiveness.
The decommissioning and subsequent sale of our manufacturing facilities
are projected to result in a modest reduction of less than 3% to our overall production
capacity. While this decision may seem counterintuitive, it is a strategic move aligned
with our broader business objectives. By streamlining our operations and divesting from
older, less efficient assets, we are positioning ourselves to focus on higher-value
product lines and expand our market reach.
The future holds promise.
We have our eyes on the future, which appears promising.
Geopolitical stress and increasing fragilities in the global trade
dynamics are forcing large corporations to veer away from traditional sourcing hubs to
more stable havens. Moreover, with sustainability assuming centre stage, developed nations
have articulated their preference to partner with vendors, making a conscious effort to
optimise their carbon footprint. India stands to gain appreciably from these trends.
Additionally, India is projected to experience considerable growth over
the medium term as it marches steadily towards becoming the third-largest economy in the
world and subsequently progresses into a developed nation.
With abundant raw materials and a strategic vision to become a
comprehensive chemical solutions provider, Bodal is well-positioned to capitalise on this
global shift. Our expanded product range, emphasising high-value and customer-relevant
products, positions us perfectly to capitalise on emerging growth opportunities.
In closing
We remain optimistic about our future and are grateful for your
continued trust and confidence in our vision. Our achievements are a testament to our
employees' hard work and dedication, who have demonstrated exceptional commitment even in
challenging times. We sincerely thank our stakeholders for their steadfast support and
encouragement. Your belief in our organisation is deeply appreciated.
With regards,
Suresh J. Patel
Chairman & Managing Director