Letter to Shareholders & Corporate Information
Dear Shareholders,
OverView
At the outset, fiscal 2024 has been both rewarding and challenging.
While we have made progress in consolidating our operations, we also faced headwinds on
several fronts. Global macro-economic challenges and disrupted supply chains continued to
impact economic stability and recovery across most major markets.
As we reflect on the challenges and triumphs of FY 24, it is evident
that the global economic landscape has continued to evolve rapidly. The year was marked by
geopolitical uncertainties and a volatile demand environment. Despite these headwinds,
Himatsingka has demonstrated resilience and adaptability. Our team's unwavering
commitment, coupled with our strong business fundamentals, has enabled us to navigate the
dynamic movements across markets.
We continue to be optimistic about our prospects as the gradual
normalisation of demand and easing raw material prices provide a favourable backdrop for
our growth. Himatsingka is well-positioned to capitalise on emerging opportunities,
leveraging our integrated manufacturing capabilities, robust intellectual property
portfolio, and industry-leading innovation pipeline.
Manufacturing Platforms
Himatsingka operates four manufacturing plants across two campuses in
the State of Karnataka, India. The plants are vertically integrated, best-in-class and
have capacities that are of global scale. They are equipped to produce a broad assortment
of products with industry-leading efficiencies and response times, while adhering to the
most stringent compliance requirements. We believe our shop floors embody next generation
capabilities that will assist us in operating manufacturing platforms that harness
Industry 4.0 requirements. The confluence of scale, smart, digital, and flexible, will be
key to manufacturing of the future.
On the manufacturing front, FY 24 saw us increase capacity utilisations
across our plants. We are pleased to share that all our facilities have clocked a strong
performance during the fiscal. Our new terry towel facility commissioned during FY 20,
continues to witness increased capacity utilisation levels, paving the way for us to offer
home textiles solutions with much broader and deeper product capabilities.
Our Private Label and Brand Platforms
Our brand and private label platforms are central to our integrated
model. Our global reach and connect are enhanced by the strength of these platforms.
Himatsingka continues to focus on building and consolidating its client-centric product
solutions portfolio, to ensure that its presence is strong across a cross-section of
consumer audiences, markets, price points, and categories.
Our cotton brand portfolio comprising of Pimacott? Gizacott?
HomeGrown Cotton? and Organicott? continues to cement its position in the traceable
cotton space. Our patent-protected Track & Trace Technology for cotton products
continues to be industry-leading and helps us keep our global cotton supply chains
transparent and secure. Our strong retail portfolio comprising Himeya, Atmosphere, Liv,
Bellora, Tommy Hilfiger, and Highland Park (amongst others) is positioned to continue to
grow and garner market share in the jurisdictions they are present in.
The growing demand for home textile products in India is an area of
focus for us, and it will be our endeavour to position ourselves to achieve 1000 crores of
revenues from India over the next 5 years. We currently operate in India with 4 brands and
are positioned to reach consumers across retail formats, price points, and product
categories. Growing our market presence in India will ensure broad basing of revenue
streams and will pave the way for value creation, driven by our firm B2C brands.
We remain focused on enhancing our strength and presence in the global
private label space. Our portfolio of products is truly expansive. Himatsingka customises
products for consumers across geographies, preferences, and age groups. We design and
develop an exhaustive range of home textile products that span diverse aesthetic
signatures across categories and price points.
Himatsingka's strengths in the private label space also continue to
gain traction as we deepen our relationships with global retail majors and their private
label platforms. Our suite of over 8 brands and strong private label portfolios, backed by
advanced manufacturing platforms, will generate differentiated, solutions-based responses
to the dynamic and ever- changing macrocosm of consumer preferences.
Himatsingka brings to consumers an unparalleled suite of brands and
technology-led solutions that secure the transparency of the cotton value chain and fulfil
the consumer's preference for authentic and traceable products.
Our Operating Scorecard
Our operating performance for FY 24 saw business im- provement across
parameters. During the fiscal, total Consolidated Revenues grew by 4.00% year-on-year and
stood at T2,862.58 crores vs T2,752.76 crores in FY 23. The Consolidated EBITDA for FY 24
stood at T617.33 crores vs. T346.04 crores in FY 23, an increase of 78.40%.
Our improved Consolidated EBITDA was driven by the soft- ening of raw
material prices year-on-year, a stable demand environment, enhanced capacity utilisation
levels, and soft- ening of supply chain costs.
Priorities for FY 25
We recognise that we need to sow the seeds of transformation from time
to time, in order to recalibrate and reorient our operating models, to better align with
increasingly dynamic realities. Having built the requisite platforms, we are now focused
on maximising asset and capacity utilisation levels across our facilities.
Our home textile solutions vertical is powered by integrated
manufacturing facilities that are amongst the largest in the world. They address clients
across 35 countries and are designed to cater to multiple retail formats and channels.
It is, therefore, imperative that we continue our efforts to expand and
deepen our geographical presence, whilst adding new clients, in order to de-risk and broad
base global revenue streams.
Our operating performance is positively correlated with our ability to
enhance capacity utilisation levels across our plants, and therefore, we will be focused
on achieving the same. Our focus on increasing utilisation will coincide with our efforts
to create new markets, clients, and channels for our products. With the addition of bath
products to our home textiles solutions portfolio, we are better positioned to augment our
global client base, which will enable us to de-risk and broad base our global revenue
streams.
Himatsingka has also been investing in creating flexible product
portfolios where common infra- structure acts as an enabler for multi-product
capabilities. This flexible plant design will help us stay relevant to our client
preferences as they need to constantly recalibrate product assortments in a high-octane
consumer environment.
Maximising operating performance must be executed with the highest
levels of Environmental and Social responsibility, coupled with a Governance framework
that enables an organisation to adhere to the interest of all stakeholders. Himatsingka is
committed to making ESG central to its operating philosophy and has put in place
initiatives that position it to lead the ESG journey in the future.
De-leveraging our balance sheet, while maximising operating performance
will be an important theme for FY 25 and beyond. While our consolidated net debt has been
range-bound in FY 24, we will endeavour to continue to reduce our debt exposure during FY
25. In tandem with capital structure optimisation, we also aim to improve our capital
efficiency ratios for FY 25.
As a dominant player in the global home textiles space, we aim to stay
relevant by showcasing best-in-class innovation, industry- leading flexibility, and
developing global client networks.
These facets and capabilities are driven by our investments in
infrastructure, technology, and intellectual capital.
With over 10,000 associates, we continue to enrich our intellectual
capital base to support our growth The Himatsingka Way — where courage and
imagination go hand-in-hand in the perennial pursuit of perfection.
The Road Ahead
We believe our initiatives to build scale-oriented manufacturing and
distribution platforms will position us to tap into larger opportunities that will help us
in sustaining growth rates going forward. Himatsingka's operating know-how in the textile
space spans the entire value chain, from source to shelf. We will leverage this to
identify growth opportunities that fit our strategy, are in sync with our values, and give
us the growth trajectory that we require.
Our Gratitude to Stakeholders
All our efforts are incomplete without the support and trust of our
shareholders, employees, bankers, clients, suppliers, the Board, and other stakeholders.
We would like to take this opportunity to express our sincere gratitude for their support
and belief in Himatsingka.
| Sincerely, |
|
| Shrikant Himatsingka |
Dinesh Himatsingka |
| Executive Vice Chairman & Managing Director |
Executive Chairman |