Superhouse Ltd

Starting as a small unit in Unnao, Uttar Pradesh, in the 1980s, we have transformed into a multi-unit organisation today with a growing presence in multiple product categories, including leather footwear and articles, specialised industrial textile garments and workwear products, equestrian products and nonleather footwear."

Mukhtarul Amin

Chairman and Managing Director

Esteemed shareholders,

It gives me pleasure to write to you after a year of satisfactory performance, which attests to our sound strategy, solid financial health, and operational excellence.

As India takes confident strides to become the world's third largest economy by 2029, domestic consumption, external trade, and environment-compatible growth will be the key enablers of this journey.

Superhouse aspires to be a part of the country's progress. We desire to take the lead in leather exports and it is an honour to be recognised by the government by being bestowed with the Best Exporter Award in Leather and Leather Products for the year 2021-22 and also many other such awards in the past. Considering the huge addressable market before us, we want to further cement our position in India and abroad and this is represented in our growth vectors of innovation, efficiency, digitalisation, brands, customer centricity and ESG that will enable continuous transformation and growth.

Executing on our vectors enables us to deliver fair returns to our shareholders, value to our customers, growth opportunities to our suppliers, career progression opportunities to our people, and upliftment avenues to our communities.

An opportunity-filled environment

The leather industry holds a prominent place in India's economy, employing over 4.4 million people and accounting for around 13% of the world's leather production of hides and skins through annual production of about 3 bn sq. ft of leather. The sector is amongst the top-10 foreign exchange earners for the country, with India's leather and footwear products being well-established in the markets of USA, UK, Europe, UAE, China, Hong Kong, etc.

The country's leather industry is aiming to almost double exports to about US$ 10 bn over the next 3 years, from the current level of US$ 5.26 bn. Some of the key trends giving an impetus to the growth optimism comprise government push in exports to improve trade deficit and, particularly, international footwear brands diversifying their sourcing needs in the China+1 strategy. Further, tighter emission norms and net-zero pledges will shift manufacturing towards the developing world. A large livestock population, abundant labour, and lower cost of operations are some of the other factors that will aid India to realise its full potential in leather exports.

Leveraging our growth vectors

Our vectors are critical in the long-term transformation and success of the Company. We have carefully identified these to not only cover every major facet of our operations, but also to continuously strengthen the foundations for future growth.

The year in review was a challenging period, especially the Russia-Ukraine war snowballing into a major global issue that elevated inflation, disrupted supply chains, and fanned geopolitical tensions. With our major export markets being in Europe, we had to repivot our strategy to maintain and consolidate the level of business operations, while seeking opportunity to grow our footwear business both in India and internationally, especially our Allen Cooper brand that has made a strong mark in most of the major leather markets of the world, including India.

This focus was accomplished, with our footwear business achieving creditable sales growth of 28% for the year, which buoyed the overall growth of the Company. Our domestic footwear business also achieved healthy growth of nearly 50% during the year. Combined, revenue from safety and fashion shoes stood at about ' 380 crore, constituting around 60% of the consolidated group turnover.

The textile riding and fashion market, primarily focused towards Europe, was expected to decline with Europe being the epicenter of the crisis. Yet, through continuous customer engagement and serving every growth opportunity, we were able to contain the decline in sales that dropped by around 30%. We believe that with successful conflict resolution, demand will return, especially pent-up demand, with Europe being a naturally fashion-conscious market.

Building on our strengths

Superhouse is a true super-house. I say this in an authentic sense because of our fundamental strengths of being India's largest exporter of leather products, being a manufacturer of the widest range of leather products in India, and having dedicated manufacturing facilities for each product category.

While export earnings from 50+ countries where our products are sold help burnish our made in India credentials and support revenue diversification, our manufacturing of varied leather products such as footwear, technical textiles, equestrian textiles, fashion apparel, leather accessories, nonleather footwear, etc., help protect against particular category slowdown risks. This was the case in 2022-23, as growth in the footwear business helped offset slowdown in textiles demand.

One of the biggest advantages we have is that product planning, procurement, technology development and personnel management are centralised. Yet, our production units have autonomy for the respective managers to take the best day-to-day decisions. Further, the integrated nature of our manufacturing helps fuel scalability, efficiency and cost control.

Growth-ready workforce

We acknowledge the vital role our workforce plays in driving the attainment of our strategic goals. We are cultivating and fostering a growth-ready, forward-thinking workforce by placing focus on learning, upskilling, and professional development.

Over the past, we have strengthened how we cater to the career and growth aspirations of our team members by investing in their success, providing pathways for career enhancement and growth, and ensuring an inclusive and diverse cultural environment where everyone has the opportunity to grow and realise their potential. We are proud to be an employer of choice, contributing to livelihood in the manufacturing sector.

I am proud that Superhouse is a place that includes and supports everyone. We prioritise our diversity, equity and inclusion (DEI) efforts that lead to innovation of thought, fuels our growth as a Company, supports meritocracy and performance, and creates a great place to work for our team members.

I must also mention that in the industry where attrition is common, the loyalty and commitment of our workforce stands out. Through fostering a culture of inclusivity, team spirit, clear communication, and grievance redress, we have been able to retain our valuable talents and ensured their ability to thrive even amidst a high expectations environment.

Dependable value creation

Superhouse's strategic leadership and the tenacity of our dedicated employees is well reflected in the Company's performance year on year. Our efforts remain consistent as we look both in and beyond the business on our journey to create shared value for all our stakeholders.

I am confident that our Company's growth vectors and ability to continue adapting to the ever-changing markets, its focused growth strategy, prudent corporate management, resilient balance sheet, and strong financial position will stand us in good stead as we move forward.

Thanks to all our stakeholders for their valuable support and cooperation.

Best wishes,

Mukhtarul Amin