A roadmap to our long-term vision
"Our financial strength gives us the confidence to continue
pursuing our long-term objectives, regardless of short-term headwinds."
Sadashiv K Shetty
Chairman and Executive Director
Dear Shareholders,
I hope this letter finds you in good health and high spirits. I write
to you with an update on our Company's performance for the financial year2022-23. As
many of you may be aware, we have faced several industry headwinds and challenges during
the previous year that have impacted our financial results in FY23.
This is true for much of the agrochemicals and crop protection space.
However, I am pleased to inform you that despite these near-term obstacles, we have
demonstrated resilience and maintained a strong position in the market.
The challenges we encountered during this period were primarily driven
by industry headwinds and to an extent an unfavourable global economic scenario. There has
been an inventory build-up in the trade channels post the Covid led price escalation
across the chemicals and agrochemicals value chain, a trend which is reversing now. This
reversal has led to destocking across the supply chain. Moreover, we experienced sluggish
demand from some key export regions. Consequently, the prices of base raw materials and
agrochemicals witnessed a persistent decrease, impacting both our top line and bottom
line.
Nevertheless, it is important to note that these challenges and
scenarios are not unfamiliar to us. Throughout our Company's history, we have
weathered many industry cycles and demonstrated remarkable agility in the face of
adversities. Our ability to navigate through such cycles has been a testament to the
strength and resilience of our organisation, and a litmus test for our business model.
One of the factors that have contributed to our resilience in the
current cycle is our robust capital structure. We are proud to maintain a robust capital
structure with a net-debt free status, and our surplus cash and cash equivalents provide
us with the financial stability needed to execute our growth oriented projects while
weathering this challenging period. This financial strength gives us the confidence to
continue pursuing our long-term objectives, regardless of short-term headwinds.
Moving forward, we remain unwavering in our focus on our long-term
priorities. Despite the short-term headwinds, our commitment to product development and
research and development initiatives remains steadfast. We are dedicated to
commercialising new products for our upcoming Sarigam plant, and I am pleased to inform
you that the work is progressing in full swing. We expect the commissioning of the Sarigam
plant to take place by the end of Q2FY24.
This new facility will be instrumental in further strengthening our
market position and supporting our growth strategy.
Furthermore, we are actively pursuing opportunities to tap into new
markets, particularly in developed ones, such as the US and Europe. Our efforts to expand
our reach and diversify our customer base are in full force. By entering these new
markets, we aim to create additional avenues for growth and create long-term value for our
shareholders.
Despite the short-term challenges, we remain optimistic about the
long-term prospects of our industry. The agrochemical sector has at times experienced
cyclical patterns, and we are confident that demand will eventually rebound. Our focus on
innovation and product development positions us well to capitalise on future market
opportunities. We are continuously investing in research and development initiatives to
ensure that we have a robust pipeline of products that meet the evolving needs of our
customers.
In addition to our product development efforts, we are also investing
in operational efficiency and cost optimization. We believe that by streamlining our
operations and leveraging better technology, we can enhance our competitiveness and
mitigate the impact of external challenges. Our goal is to emerge from this challenging
period as a leaner and more agile organisation.
We understand that you, as our valued shareholders, have placed your
trust in us, and we are committed to delivering sustainable growth and value. We are
focused on optimising our resources, enhancing our operational efficiencies, and expanding
our market presence. Our aim is to create long-term value for our shareholders and ensure
that we are well-positioned to capture growth opportunities when the market conditions
improve.
In conclusion, despite the challenges we faced during the fiscal year
2023, I firmly believe that our Company's strong foundation and long-term focus will
pave the way for sustainable growth and value creation. We are well-positioned to overcome
the current obstacles and emerge even stronger. Thank you for your unwavering commitment
to our Company.
Yours sincerely,
Sadashiv K Shetty
Chairman and Executive Director