The prospect of accelerated growth in the present is a testament to our resilience in
the recent past.
Dear Shareholders,
Over the last two years, the novel coronavirus has presented an unprecedented health
crisis. The challenges we have all faced as a global economy and as a society have been
amongst the most testing in over a century. I share my deep condolences with those of you
that have lost dear ones to this global malaise.
It is also with profound grief that we remember Dr. Shashi Chand Jain, the Chairman
Emeritus of DCW Limited, who sadly passed away on August 6, 2021. Over the years, the
Company benefitted immensely from more than six decades of his service through various
leadership roles. His dynamic leadership helped DCW at different stages of its evolution.
We are all deeply indebted to him and hold it upon ourselves to carry forth his vision.
Our fiscal year 2022 has seen a significant turnaround in post-Covid market conditions.
The prospect of accelerated growth in the present is a testament to our resilience in the
recent past. We responded proactively to support our people and sustain our operations
through the restrictions and pressures of multiple national lockdowns. Apart from setting
up stringent SOPs at our operations for protecting the health and safety of our staff and
workers, we organised numerous vaccination drives without charge for all our employees and
their family members. We were committed to comprehensively supporting our people in
combatting the second wave of the global Pandemic.
Positioned for Growth
Throughout the Pandemic, our priority has been the well-being of our people. In
addition to extending a hybrid model of work culture, the Company rolled out its
operations with the minimum workforce to continue delivering the committed output to its
customer. We have worked diligently to foster employee engagement through online resources
to create a culture of support and understanding where everyone can access the assistance
they need. Our employee-led staff networks were a valuable source of advice and practical
support and played a crucial role in preserving the culture of our business while we
worked from home. The Board admires the resilience imbibed by everyone for their vigorous
work and commitment throughout this time.
As with most industries, DCW, too, faced several challenges from the less than
exuberant domestic and global demand for its products. Nevertheless, we are fortunate to
belong to an industry that has shown remarkable resilience through these two years. The
Indian chemical industry remains one of the fastest- growing industries in the world.
Demonstrating reliability while treading the beaten path is part of DCW's business model.
By ensuring the consistent generation of free cash flows combined with the efficient use
of capital and prudent decision-making, we have carefully curated our business, keeping in
mind a turbulent world business environment.
The Indian chemical industry remains one of the fastest-growing industries in the
world, and demonstrating reliability while treading the beaten path is part of DCW's
business model.
Thankfully, our dispersed market presence across multiple countries and diversified
product portfolios has kept us resilient through challenging market conditions. Today, we
have evolved into an enduring specialty chemicals business, with an extensive portfolio of
over a dozen products serving more than 100 customers globally.
Over the last five years, DCW has been on a steady journey of building a bigger and
better high-margin specialty chemicals business to provide consistency to the bottom line.
The EBITDA mix between Commodity Chemicals: Specialty Chemicals for FY2022 stood at 72:28.
Your Company continues to focus on increasing the volume share from specialty chemicals,
which will help DCW to boost its margin profile and return ratios. Today, the Company has
various products in its specialty chemicals portfolio like C-PVC, SIOP and Synthetic
Rutile. The Company is one of the few large-scale synthetic iron oxide manufacturers for
red and yellow pigments and the only C-PVC manufacturer in India.
Considering our prospects for the near-term future,of unprecedented disruptions, our
resilience has demonstrated our unrelenting pursuit of value creation. This has paved the
way to upscale our strategies from positive transformation - to positive growth.
Converging our resources to produce essential and niche, value-added chemicals aligns us
with a future that foreshadows robust development. By maximising our operating leverage,
we are firmly grounded to maximise our return on capital and withstand future market
cycles. From this activated position, I am pleased to share with you our performance for
FY2022.
I can firmly say that we are positioned for growth in FY2023. Emerging strong out of
the last two years
Performance by Numbers
Our revenue from operations for FY2022 stood at ' 24,547 Million, compared to ' 14,643
Million in FY2021, giving us growth of 67.6% YoY The overall revenue growth in specialty
chemicals was driven by 79.9% and 44.9% YoY growth in our SIOP and C-PVC businesses,
respectively. The overall demand for our products rebounded stronger on the back of a
revitalising economy, especially for PVC, CPVC & SIOP, giving us the window to exploit
our operating leverage.
For FY2022, our EBITDA grew by 49.9% YoY to ' 3,309.4 million, compared to ' 2,207.2
million in FY2021. As part of our value-added portfolio, PVC and CPVC contributed to the
higher share in our overall EBITDA. EBITDA margin for FY2022 stood at 13.5 %, soften by
(160) bps on a YoY basis. Our navigation on raw material inflation and tight-fisted
oversight of operational overheads contributed to minimal margins erosion despite
significant disruption in the global supply chain.
Our revenue from our bulk portfolio, including the Soda Ash business, stayed steady at
' 2,024 million in FY2022 from ' 1,787 million in the previous fiscal period, and our
Caustic Soda business did well to generate ' 6,702 million in Revenues as compared to '
3,557 million in the previous fiscal period.
Our PVC segment reported a revenue of ' 12,434 million in FY2022; 76% growth YoY. Firm
PVC prices, coupled with better capacity utilisation, continued to characterise the
performance of this division. Our
C-PVC revenues increased by 45% YoY and stood at ' 2,153 million in FY2022 as against '
1,486 Million in FY2021. The growth was primarily driven by higher capacity utilisation
and firm domestic prices. Our SIOP business continued to sustain its turnaround story from
last year, producing revenue growth of 80% YoY and stood at ' 1,075 Million for FY2022.
The Future Beckons
The outbreak of the COVID-19 Pandemic had put the Indian government's resolve to the
test. Overall, the period had been a challenging year for the Indian economy, with an 8%
contraction in CY2021. However, there was a lot of relief following the announcement of
the Union Budget for FY2021-22. It focused on strengthening the Nation First Vow, which
included, among other things doubling farmer income, supporting infrastructure, making
India healthier, better governance, improving opportunities for youth, universal
education, women empowerment, and inclusive growth. In addition, the government's prompt
vaccination efforts have resulted in more than 1.9 billion inoculations. From a
comparative perspective, India is expected to do well in the short-to-medium- term, with
projected growth in FY2023 at 8.2% per IMF. The ADB has forecasted India's growth at 7.5%
in FY2023, increasing to 8% in FY2024 based on the continued momentum of infrastructure
investment. Based on these prospects, India is set to become a global growth leader among
major world economies. As consumers and industry regain confidence, industrial consumption
and output increases will positively impact our business.
However, one must remain cautious of several headwinds. For starters, the ongoing
Eastern European war has incited global inflation, a food and oil crisis, and resulting
fear of global recession. As we witness a long-drawn conflict in Eastern Europe persist
into FY2023, these headwinds may take longer to subside. Despite these headwinds, we
remain cautiously optimistic. We believe in the ability of the Indian economy to deliver a
formidable showing.
Today we are stronger and more focused on the foundation required to achieve our vision
of becoming the premier specialty chemicals company. We are well invested in our
manufacturing capital and have sufficient capacity to see through demand growth in the
medium term. Going forward, we are focused on maximising our operating leverage and our
return on capital. We are already beginning to see strength reflected in our numbers.
Going forward, we are focused on maximising our operating leverage and our return on
capital. We are already beginning to see strength reflected in our numbers.
I would like to express the Board's sincere gratitude to all our stakeholders for your
support and faith in DCW Limited. With our positive transformation in progress, we are
aligned and activated to execute towards new milestones by chasing scale and quality
growth. We look forward to being a sustainable and responsible value creator for society's
benefit.
Yours sincerely,
Mr. Pramod Kumar Jain
Chairman & Managing Director